Red River Bancshares, Inc. Reports Second Quarter 2019 Earnings
Net income for the second quarter of 2019 was
Net income for the six months ended
On
Second Quarter 2019 Performance and Operational Highlights
- The Company's stock was selected to be included in the Russell 2000 Index.
- Net income was
$5.5 million , which is$158,000 , or 2.8%, lower compared to the first quarter of 2019 and was consistent with the second quarter of 2018.
- Loans held for investment ("HFI") increased 3.3% from
March 31, 2019 , and 4.9% fromDecember 31, 2018 .
- Deposits decreased 3.3% from
March 31, 2019 . The first quarter of 2019 included seasonally high public entity deposit balances and a large, temporary deposit.
- As of
June 30, 2019 , the loans HFI to deposits ratio was 85.23% and the noninterest-bearing deposits to total deposits ratio was 35.30%.
- Net interest margin, fully tax equivalent basis ("FTE"), decreased by one basis point to 3.51% for the second quarter of 2019 from 3.52% for the first quarter of 2019.
- The cost of deposits was 0.60% for the second quarter of 2019, three basis points higher than 0.57% for the prior quarter.
- The net charge-offs to average loans ratio for both the quarter and six months ended
June 30, 2019 , were 0.00%.
- Nonperforming assets represented 0.70% of total assets as of
June 30, 2019 .
- As planned, a portion of the proceeds from the IPO are being used to redeem the
$11.3 million of junior subordinated debentures. InJune 2019 ,$6.2 million of the junior subordinated debentures with an average rate at payoff of 5.21% were redeemed, and the two related business trusts were terminated. The Company incurred approximately$50,000 of nonrecurring expenses in the second quarter of 2019 relating to these redemptions.
- We completed the expansion of a new market headquarters building in
Baton Rouge, Louisiana , providing a central office for commercial, mortgage, and investment department operations. In the second quarter of 2019, nonrecurring expenses of approximately$130,000 related to this location were incurred.
- On
April 3, 2019 , we opened a loan production office in a new market,Covington, Louisiana . As a result, the second quarter of 2019 included a full quarter of lending services and the related personnel and operating expenses for this location.
With regard to second quarter activities, Mr. Chatelain said, "In the second quarter, the Company had steady banking activity while investing for future growth in new markets and personnel. The new
Net Interest Income and Net Interest Margin (FTE)
Net interest income for the second quarter of 2019 was
The yield on total loans decreased one basis point to 4.60% for the second quarter of 2019 compared to the prior quarter. The loan yield for the first quarter of 2019 included higher interest income on nonaccrual loans than in the second quarter of 2019. The yield on accruing loans increased by four basis points in the second quarter.
The cost of deposits increased three basis points to 0.60% for the second quarter of 2019 compared to the prior quarter primarily as a result of increasing time deposit rates in the second quarter.
Noninterest Income
Noninterest income totaled
Brokerage income totaled
Mortgage loan income for the second quarter of 2019 totaled
Other income increased by
Operating Expense
Operating expense for the second quarter 2019 totaled
Personnel expenses totaled
Advertising expense increased by
Loan and deposit expenses totaled
Occupancy and equipment expenses for the second quarter of 2019 totaled
In conjunction with the redemption of the junior subordinated debentures in the second quarter, the Company incurred
Loans and Asset Quality
Loans HFI as of
Nonperforming assets ("NPAs") totaled
As of
Deposits
Deposits as of
Noninterest-bearing deposits totaled
Interest-bearing deposits totaled
Junior Subordinated Debentures
As planned, during the second quarter 2019, we redeemed
Stockholders’ Equity
Total stockholders’ equity increased to
Non-GAAP Disclosure
Our accounting and reporting policies conform to
The non-GAAP financial measures that we discuss 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.
We provide these measures in addition to, not as a substitute for, net income and earnings per share, which are reported in adherence to GAAP. Management and the board of directors review tangible book value per share and tangible common equity to tangible assets as part of managing operating performance. We believe that these non-GAAP performance measures, while not substitutes for GAAP net income, earnings per share, and total expenses, are useful for both management and investors when evaluating underlying operating and financial performance and its available resources.
A reconciliation of non-GAAP financial measures to the comparable GAAP financial measures is included at the end of the financial statement tables.
About
The Company is the bank holding company for
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 the Private Securities Litigation Reform Act of 1995. 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 Prospectus filed with the
FINANCIAL HIGHLIGHTS (UNAUDITED) | ||||||||||||||||||||
(Dollars in thousands, except per share data) | ||||||||||||||||||||
As of and for the three months ended |
As of and for the six months ended |
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June 30, | Mar. 31, | June 30, | June 30, | June 30, | ||||||||||||||||
2019 | 2019 | 2018 | 2019 | 2018 | ||||||||||||||||
Per Common Share Data:(1) | ||||||||||||||||||||
Earnings per share, basic | $ | 0.79 | $ | 0.86 | $ | 0.82 | $ | 1.64 | $ | 1.60 | ||||||||||
Earnings per share, diluted | $ | 0.78 | $ | 0.85 | $ | 0.82 | $ | 1.63 | $ | 1.59 | ||||||||||
Book value per share | $ | 32.59 | $ | 30.46 | $ | 27.37 | $ | 32.59 | $ | 27.37 | ||||||||||
Tangible book value per share | $ | 32.38 | $ | 30.23 | $ | 27.14 | $ | 32.38 | $ | 27.14 | ||||||||||
Cash dividends per share | $ | — | $ | 0.20 | — | $ | 0.20 | $ | 0.15 | |||||||||||
Weighted average shares outstanding, basic | 7,037,834 | 6,632,482 | 6,725,246 | 6,836,278 | 6,723,235 | |||||||||||||||
Weighted average shares outstanding, diluted | 7,074,769 | 6,668,029 | 6,769,458 | 6,874,560 | 6,768,648 | |||||||||||||||
Summary Performance Ratios: | ||||||||||||||||||||
Return on average assets | 1.18 | % | 1.24 | % | 1.26 | % | 1.21 | % | 1.24 | % | ||||||||||
Return on average equity | 9.92 | % | 11.69 | % | 12.22 | % | 10.74 | % | 12.02 | % | ||||||||||
Net interest margin | 3.46 | % | 3.47 | % | 3.41 | % | 3.47 | % | 3.37 | % | ||||||||||
Net interest margin (FTE) | 3.51 | % | 3.52 | % | 3.45 | % | 3.52 | % | 3.42 | % | ||||||||||
Efficiency ratio | 62.81 | % | 59.52 | % | 60.05 | % | 61.20 | % | 60.21 | % | ||||||||||
Loans HFI to deposits ratio | 85.23 | % | 79.78 | % | 85.02 | % | 85.23 | % | 85.02 | % | ||||||||||
Noninterest income to average assets | 0.87 | % | 0.72 | % | 0.83 | % | 0.80 | % | 0.78 | % | ||||||||||
Operating expense to average assets | 2.65 | % | 2.43 | % | 2.48 | % | 2.54 | % | 2.44 | % | ||||||||||
Summary Credit Quality Ratios: | ||||||||||||||||||||
Nonperforming assets to total assets | 0.70 | % | 0.34 | % | 0.70 | % | 0.70 | % | 0.70 | % | ||||||||||
Nonperforming loans to loans HFI | 0.87 | % | 0.46 | % | 0.84 | % | 0.87 | % | 0.84 | % | ||||||||||
Allowance for loan losses to loans HFI | 0.98 | % | 0.97 | % | 0.89 | % | 0.98 | % | 0.89 | % | ||||||||||
Net charge-offs to average loans outstanding | 0.00 | % | 0.00 | % | 0.00 | % | 0.00 | % | 0.01 | % | ||||||||||
Capital Ratios: | ||||||||||||||||||||
Total stockholders' equity to total assets | 12.57 | % | 10.52 | % | 10.43 | % | 12.57 | % | 10.43 | % | ||||||||||
Tangible common equity to tangible assets | 12.50 | % | 10.45 | % | 10.35 | % | 12.50 | % | 10.35 | % | ||||||||||
Total risk-based capital to risk weighted assets | 17.90 | % | 16.52 | % | 16.44 | % | 17.90 | % | 16.44 | % | ||||||||||
Tier 1 risk-based capital to risk-weighted assets | 16.95 | % | 15.57 | % | 15.54 | % | 16.95 | % | 15.54 | % | ||||||||||
Common equity tier 1 capital to risk-weighted assets | 16.60 | % | 14.78 | % | 14.69 | % | 16.60 | % | 14.69 | % | ||||||||||
Tier 1 risk-based capital to average assets | 12.83 | % | 11.50 | % | 11.41 | % | 12.83 | % | 11.41 | % |
(1) 2018 amounts adjusted to give effect to a 2-for-1 stock split with a record date of
RED RIVER BANCSHARES, INC. | ||||||||||||||||
CONSOLIDATED BALANCE SHEETS | ||||||||||||||||
(in thousands) | June 30, | Mar. 31, | Dec. 31, | June 30, | ||||||||||||
2019 | 2019 | 2018 | 2018 | |||||||||||||
ASSETS | (Unaudited) | (Unaudited) | (Audited) | (Unaudited) | ||||||||||||
Cash and due from banks | $ | 29,854 | $ | 32,371 | $ | 34,070 | $ | 28,239 | ||||||||
Interest-bearing deposits in other banks | 71,761 | 145,593 | 117,836 | 21,917 | ||||||||||||
Securities available-for-sale | 318,082 | 319,353 | 307,877 | 309,492 | ||||||||||||
Securities held-to-maturity | — | — | — | 7,749 | ||||||||||||
Equity securities | 3,924 | 3,869 | 3,821 | 3,813 | ||||||||||||
Nonmarketable equity securities | 1,342 | 1,303 | 1,299 | 1,292 | ||||||||||||
Loans held for sale | 6,029 | 2,210 | 2,904 | 4,220 | ||||||||||||
Loans held for investment | 1,393,154 | 1,349,181 | 1,328,438 | 1,326,552 | ||||||||||||
Allowance for loans losses | (13,591 | ) | (13,101 | ) | (12,524 | ) | (11,756 | ) | ||||||||
Premises and equipment, net | 40,032 | 40,033 | 39,690 | 36,296 | ||||||||||||
Accrued interest receivable | 5,570 | 4,988 | 5,013 | 4,758 | ||||||||||||
Bank-owned life insurance | 21,570 | 21,434 | 21,301 | 21,713 | ||||||||||||
Intangible assets | 1,546 | 1,546 | 1,546 | 1,546 | ||||||||||||
Right-of-use assets | 4,748 | 4,844 | — | — | ||||||||||||
Other assets | 8,897 | 8,494 | 9,317 | 8,937 | ||||||||||||
Total Assets | $ | 1,892,918 | $ | 1,922,118 | $ | 1,860,588 | $ | 1,764,768 | ||||||||
LIABILITIES | ||||||||||||||||
Noninterest-bearing deposits | $ | 576,934 | $ | 565,757 | $ | 547,880 | $ | 546,684 | ||||||||
Interest-bearing deposits | 1,057,656 | 1,125,377 | 1,097,703 | 1,013,655 | ||||||||||||
Total Deposits | 1,634,590 | 1,691,134 | 1,645,583 | 1,560,339 | ||||||||||||
Other borrowed funds | — | — | — | 92 | ||||||||||||
Junior subordinated debentures | 5,155 | 11,341 | 11,341 | 11,341 | ||||||||||||
Accrued interest payable | 1,998 | 1,967 | 1,757 | 1,374 | ||||||||||||
Lease liabilities | 4,773 | 4,856 | — | — | ||||||||||||
Accrued expenses and other liabilities | 8,491 | 10,636 | 8,204 | 7,575 | ||||||||||||
Total Liabilities | 1,655,007 | 1,719,934 | 1,666,885 | 1,580,721 | ||||||||||||
COMMITMENTS AND CONTINGENCIES | — | — | — | — | ||||||||||||
STOCKHOLDERS' EQUITY | ||||||||||||||||
Preferred stock, no par value | — | — | — | — | ||||||||||||
Common stock, no par value | 68,082 | 41,271 | 41,094 | 45,660 | ||||||||||||
Retained earnings | 170,122 | 164,534 | 160,115 | 147,722 | ||||||||||||
Accumulated other comprehensive income (loss) | (293 | ) | (3,621 | ) | (7,506 | ) | (9,335 | ) | ||||||||
Total Stockholders' Equity | 237,911 | 202,184 | 193,703 | 184,047 | ||||||||||||
Total Liabilities and Stockholders' Equity | $ | 1,892,918 | $ | 1,922,118 | $ | 1,860,588 | $ | 1,764,768 | ||||||||
RED RIVER BANCSHARES, INC. | ||||||||||||||||||||
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) | ||||||||||||||||||||
Three months ended | Six months ended | |||||||||||||||||||
(in thousands) | June 30, | Mar. 31, | June 30, | June 30, | June 30, | |||||||||||||||
2019 | 2019 | 2018 | 2019 | 2018 | ||||||||||||||||
INTEREST AND DIVIDEND INCOME | ||||||||||||||||||||
Interest and fees on loans | $ | 15,945 | $ | 15,504 | $ | 14,435 | $ | 31,448 | $ | 28,022 | ||||||||||
Interest on securities | 1,784 | 1,763 | 1,744 | 3,547 | 3,565 | |||||||||||||||
Interest on federal funds sold | 212 | 212 | 64 | 425 | 114 | |||||||||||||||
Interest on deposits in other banks | 306 | 416 | 119 | 722 | 226 | |||||||||||||||
Dividends on stock | 9 | 9 | 7 | 19 | 13 | |||||||||||||||
Total Interest and Dividend Income | 18,256 | 17,904 | 16,369 | 36,161 | 31,940 | |||||||||||||||
INTEREST EXPENSE | ||||||||||||||||||||
Interest on deposits | 2,449 | 2,296 | 1,665 | 4,746 | 3,200 | |||||||||||||||
Interest on other borrowed funds | — | — | 2 | — | 4 | |||||||||||||||
Interest on junior subordinated debentures | 156 | 156 | 136 | 312 | 260 | |||||||||||||||
Total Interest Expense | 2,605 | 2,452 | 1,803 | 5,058 | 3,464 | |||||||||||||||
NET INTEREST INCOME | 15,651 | 15,452 | 14,566 | 31,103 | 28,476 | |||||||||||||||
Provision for loan losses | 529 | 526 | 526 | 1,055 | 937 | |||||||||||||||
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES | 15,122 | 14,926 | 14,040 | 30,048 | 27,539 | |||||||||||||||
NONINTEREST INCOME | ||||||||||||||||||||
Service charges on deposit accounts | 1,083 | 1,026 | 1,124 | 2,109 | 2,324 | |||||||||||||||
Debit card income, net | 785 | 695 | 764 | 1,481 | 1,468 | |||||||||||||||
Mortgage loan income | 657 | 514 | 706 | 1,171 | 1,052 | |||||||||||||||
Brokerage income | 626 | 365 | 590 | 991 | 925 | |||||||||||||||
Loan and deposit income | 382 | 346 | 329 | 727 | 597 | |||||||||||||||
Bank-owned life insurance income | 137 | 133 | 139 | 270 | 276 | |||||||||||||||
Gain (Loss) on equity securities | 56 | 48 | (93 | ) | 104 | (93 | ) | |||||||||||||
Gain on sale of investments | — | — | — | — | 41 | |||||||||||||||
Other income | 373 | 169 | 106 | 542 | 233 | |||||||||||||||
Total Noninterest Income | 4,099 | 3,296 | 3,665 | 7,395 | 6,823 | |||||||||||||||
OPERATING EXPENSES | ||||||||||||||||||||
Personnel expenses | 7,005 | 6,640 | 6,489 | 13,645 | 12,631 | |||||||||||||||
Occupancy and equipment expenses | 1,334 | 1,175 | 1,081 | 2,509 | 2,161 | |||||||||||||||
Technology expenses | 558 | 544 | 536 | 1,101 | 1,042 | |||||||||||||||
Advertising | 396 | 209 | 211 | 605 | 386 | |||||||||||||||
Other business development expenses | 277 | 282 | 241 | 560 | 547 | |||||||||||||||
Data processing expense | 483 | 459 | 427 | 942 | 820 | |||||||||||||||
Other taxes | 455 | 353 | 349 | 808 | 691 | |||||||||||||||
Loan and deposit expenses | 392 | 223 | 222 | 615 | 402 | |||||||||||||||
Legal and professional expenses | 383 | 319 | 344 | 702 | 668 | |||||||||||||||
Other operating expenses | 1,121 | 954 | 1,047 | 2,075 | 1,907 | |||||||||||||||
Total Operating Expenses | 12,404 | 11,158 | 10,947 | 23,562 | 21,255 | |||||||||||||||
INCOME BEFORE INCOME TAX EXPENSE | 6,817 | 7,064 | 6,758 | 13,881 | 13,107 | |||||||||||||||
Income tax expense | 1,279 | 1,368 | 1,226 | 2,647 | 2,344 | |||||||||||||||
NET INCOME | $ | 5,538 | $ | 5,696 | $ | 5,532 | $ | 11,234 | $ | 10,763 | ||||||||||
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES | ||||||||||||
(dollars in thousands except per share data) | June 30, | Mar. 31, | June 30, | |||||||||
2019 | 2019 | 2018 | ||||||||||
Tangible common equity | ||||||||||||
Total stockholders' equity | $ | 237,911 | $ | 202,184 | $ | 184,047 | ||||||
Adjustments: | ||||||||||||
Intangible assets | (1,546 | ) | (1,546 | ) | (1,546 | ) | ||||||
Total tangible common equity | $ | 236,365 | $ | 200,638 | $ | 182,501 | ||||||
Common shares outstanding(1) | 7,300,246 | 6,636,926 | 6,725,598 | |||||||||
Book value per common share(1) | $ | 32.59 | $ | 30.46 | $ | 27.37 | ||||||
Tangible book value per common share(1) | $ | 32.38 | $ | 30.23 | $ | 27.14 | ||||||
Tangible assets | ||||||||||||
Total assets | $ | 1,892,918 | $ | 1,922,118 | $ | 1,764,768 | ||||||
Adjustments: | ||||||||||||
Intangible assets | (1,546 | ) | (1,546 | ) | (1,546 | ) | ||||||
Total tangible assets | $ | 1,891,372 | $ | 1,920,572 | $ | 1,763,222 | ||||||
Total stockholder's equity to assets | 12.57 | % | 10.52 | % | 10.43 | % | ||||||
Tangible common equity to tangible assets | 12.50 | % | 10.45 | % | 10.35 | % |
(1)
SOURCE:
318-561-4023