rrbi-s1.htm

 

 

 

As filed with the Securities and Exchange Commission on April 10, 2019

 

Registration No. 333-

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM S-1
REGISTRATION STATEMENT

UNDER THE SECURITIES ACT OF 1933

 

Red River Bancshares, Inc.

(Exact name of registrant as specified in its charter)

Louisiana

6022

72-1412058

(State or other jurisdiction of
incorporation or organization)

(Primary Standard Industrial Classification Code Number)

(I.R.S. Employer
Identification Number)

 

1412 Centre Court Drive, Suite 402

Alexandria, Louisiana 71301

(318) 561-5028

(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)

 

R. Blake Chatelain

President and Chief Executive Officer

Red River Bancshares, Inc.

1412 Centre Court Drive, Suite 402

Alexandria, Louisiana 71301

(318) 561-5028

(Name, address, including zip code, and telephone number, including area code, of agent for service)

 

Copies to:

Lowell W. Harrison, Esq.

Stephanie E. Kalahurka, Esq.
Brent Standefer, Jr., Esq.

Fenimore, Kay, Harrison & Ford, LLP  
812 San Antonio Street, Suite 600
Austin, Texas 78701
(512) 583-5900  
(512) 583-5940 (facsimile)

Todd H. Eveson, Esq.

Jonathan A. Greene, Esq.

Lorna A. Knick, Esq.

Wyrick Robbins Yates & Ponton LLP

4101 Lake Boone Trail, Suite 300

Raleigh, North Carolina 27607

(919) 781-4000

(919) 781-4865 (facsimile)

 

Approximate date of commencement of proposed sale to the public:  As soon as practicable after this Registration Statement becomes effective.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box:  

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non−accelerated filer, a smaller reporting company or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b−2 of the Exchange Act.

 

Large accelerated filer

Accelerated filer

Emerging growth company

Non−accelerated filer

Smaller reporting company

 

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)B) of the Securities Act.  

 

CALCULATION OF REGISTRATION FEE

Title of Each Class of

Securities to be Registered

Proposed Maximum  
Aggregate Offering  
Price(1)(2)

Amount of  
Registration Fee(2)

Common stock, no par value per share

$30,000,000

$3,636.00

 

(1)   Includes shares of common stock to be sold by the selling shareholders and shares of common stock that the underwriters have the option to purchase from the registrant. See “Underwriting.”

(2)   Estimated solely for purposes of calculating the registration fee in accordance with Rule 457(o) under the Securities Act of 1933.

The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement will thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, or until this registration statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.


 

The information in this preliminary prospectus is not complete and may be changed. Neither we nor the selling shareholders may sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell nor does it seek an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

SUBJECT TO COMPLETION, DATED APRIL 10, 2019

 

PRELIMINARY PROSPECTUS

 

        Shares

Common Stock

 

This prospectus relates to the initial public offering of Red River Bancshares, Inc.’s common stock. We are a bank holding company for Red River Bank, a state-chartered bank based in Alexandria, Louisiana. We are offering                shares of our common stock. The selling shareholders identified in this prospectus are offering an additional                 shares of our common stock. We will not receive any proceeds from sales of shares by the selling shareholders.

Prior to this offering, there has been no established public market for our common stock. We currently estimate that the public offering price per share of our common stock will be between $        and $        per share. We have applied to list our common stock on the Nasdaq Global Select Market under the symbol “RRBI.”

Investing in our common stock involves a high degree of risk. See “Risk Factors,” beginning on page 24, for a discussion of certain risks that you should consider before investing in our common stock.

 

Neither the Securities and Exchange Commission, nor any other state securities commission, nor any other regulatory body has approved or disapproved of these securities or passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense.

We are an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012, and are subject to reduced public company reporting requirements. See “Implications of Being an Emerging Growth Company.”

Our common stock is not a deposit or savings account of any of our bank or non-bank subsidiaries and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other governmental agency.

 

 

 

 

Per Share

 

 

Total

 

Initial public offering price

 

$

 

 

 

$

 

 

Underwriting discounts(1)

 

$

 

 

 

$

 

 

Proceeds to us, before expenses

 

$

 

 

 

$

 

 

Proceeds to the selling shareholders, before expenses

 

$

 

 

 

$

 

 

 

(1)

See “Underwriting” for additional information regarding underwriting compensation.

This offering is being underwritten on a firm commitment basis. The underwriters have an option for a period of 30 days to purchase up to an additional           shares of our common stock from us on the same terms set forth above.

The underwriters expect to deliver the shares of our common stock to purchasers on or about                , 2019, subject to customary closing conditions.

FIG Partners, LLC

 

Stephens Inc.

Prospectus dated                       , 2019


 

 


 

table of contents

 

Page

About This Prospectus

ii

Industry and Market Data

ii

Implications of Being an Emerging Growth Company

iii

Prospectus Summary

1

The Offering

20

Selected Historical Consolidated Financial Information

22

Risk Factors

24

Cautionary Note Regarding Forward-Looking Statements

46

Use of Proceeds

48

Dividend Policy

49

Capitalization

49

Dilution

51

Price Range of Our Common Stock

53

Management’s Discussion and Analysis of Financial Condition and Results of Operations

54

Business

88

Management

108

Executive Compensation

117

Principal and Selling Shareholders

125

Certain Relationships and Related Party Transactions

127

Description of Capital Stock

129

Shares Eligible for Future Sale

132

Supervision and Regulation

134

Certain Material U.S. Federal Income Tax Consequences for Non-U.S. Holders of Common Stock

144

Underwriting

147

Legal Matters

151

Experts

151

Where You Can Find More Information

151

Index to Financial Statements

F-1

 

 

 


 

About this Prospectus

Unless the context indicates otherwise, references in this prospectus to “we,” “our,” “us,” “the Company,” and “our company” refer to Red River Bancshares, Inc., a Louisiana corporation, and its consolidated subsidiaries. All references in this prospectus to “Red River Bank,” the “bank,” and the “Bank” refer to Red River Bank, our wholly owned bank subsidiary.

You should rely only on the information contained in this prospectus. The Company, the selling shareholders, and the underwriters have not authorized anyone to provide you with information different from that contained in this prospectus. If anyone provides you with additional, different, or inconsistent information, you should not rely on it. The Company, the selling shareholders, and the underwriters take no responsibility for, and can provide no assurance as to the reliability of, any other information that others may give you. This prospectus is an offer to sell only the shares of our common stock offered hereby, and only under circumstances and in jurisdictions where it is lawful to do so. The Company, the selling shareholders, and the underwriters are not making an offer of shares of our common stock in any state, country, or other jurisdiction where the offer is not permitted. You should not assume that the information in this prospectus or any free writing prospectus is accurate as of any date other than the date of the applicable document regardless of its time of delivery or the time of any sales of our common stock. Our business, financial condition, results of operations, and cash flows may have changed since the date of the applicable document.

Neither we, any of our officers, directors, agents, representatives, the selling shareholders, nor the underwriters, make any representation to you about the legality of an investment in our common stock. You should not interpret the contents of this prospectus or any free writing prospectus to be legal, business, investment, or tax advice. You should consult with your own advisors for that type of advice and consult with them about the legal, tax, business, financial, and other issues that you should consider before investing in our common stock.

This prospectus describes the specific details regarding this offering and the terms and conditions of our common stock being offered hereby and the risks of investing in our common stock. For additional information, please see the section entitled “Where You Can Find More Information.”

Unless otherwise stated, all information in this prospectus gives effect to a 2-for-1 stock split, which was accomplished by a stock dividend with a record date of October 1, 2018 whereby each holder of our common stock received one additional share of common stock for each share owned as of such date. This transaction is referred to in this prospectus as the “2018 2-for-1 stock split.”

Industry and Market Data

This prospectus includes industry and market data that we obtained from periodic industry publications, third-party studies and surveys prepared for other purposes, filings of public companies in our industry, and internal company surveys. These sources include government and industry sources. Industry publications and surveys generally state that the information contained therein has been obtained from sources believed to be reliable. Although we are responsible for all of the disclosure contained in this prospectus and we believe the industry and market data to be reliable as of the date of this prospectus, this information could prove to be inaccurate. Industry and market data could be wrong due to the method by which sources obtained their data and because information cannot always be verified with complete certainty due to the limits on the availability and reliability of raw data, the voluntary nature of the data gathering process, and other limitations and uncertainties. In addition, we do not know all of the assumptions regarding general economic conditions or growth that were used in preparing the forecasts by the sources relied upon or cited herein. Forward-looking information obtained from these sources is subject to the same qualifications and the additional uncertainties regarding the other forward-looking statements in this prospectus. Trademarks used in this prospectus are the property of their respective owners, although for presentational convenience, we may not use the ® or the symbols to identify such trademarks.

ii


 

Implications of Being an Emerging Growth Company

As a company with less than $1.07 billion in gross revenue during our last fiscal year, we qualify as an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012 (“JOBS Act”). An emerging growth company may take advantage of reduced regulatory and reporting requirements that are otherwise generally applicable to public companies. As an emerging growth company:

 

we may present only two years of audited financial statements and only two years of related Management’s Discussion and Analysis of Financial Condition and Results of Operations;

 

we are exempt from the requirement to obtain an attestation and report from our auditors on management’s assessment of our internal controls over financial reporting under the Sarbanes-Oxley Act of 2002 (“Sarbanes-Oxley Act”);

 

we are permitted to provide less extensive disclosure about our executive compensation arrangements;  and

 

we are not required to hold non-binding advisory votes on executive compensation or golden parachute arrangements.

In this prospectus we have elected to take advantage of the reduced disclosure requirements relating to the presentation and discussion of our audited financial statements and executive compensation, and in the future we may take advantage of any or all of these exemptions for so long as we remain an emerging growth company. We will remain an emerging growth company until the earliest of (i) the end of the fiscal year during which we have total annual gross revenues of $1.07 billion or more, (ii) the last day of the fiscal year following the fifth anniversary of the completion of this offering, (iii) the date on which we have, during the previous three-year period, issued more than $1.0 billion in non-convertible debt securities, and (iv) the date on which we are deemed to be a “large accelerated filer” under the Securities Exchange Act of 1934, as amended (“Exchange Act”).

In addition to the relief described above, the JOBS Act permits an emerging growth company to take advantage of an extended transition period for complying with new or revised accounting standards affecting public companies. However, we have elected not to take advantage of this extended transition period, which means that the financial statements included in this prospectus, as well as any financial statements that we file in the future, will be subject to all new or revised accounting standards generally applicable to public companies. Our election not to take advantage of the extended transition period is irrevocable.

 

 

iii


 

Prospectus Summary

This summary highlights selected information contained elsewhere in this prospectus and may not contain all of the information that you should consider before investing in our common stock. You should carefully read the entire prospectus, including the sections entitled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” together with our consolidated financial statements and the related notes, before making an investment decision.

Our Company

We are a bank holding company headquartered in Alexandria, Louisiana. Through our wholly owned subsidiary, Red River Bank, a Louisiana state-chartered bank, we provide a fully integrated suite of banking products and services tailored to the needs of our commercial and retail customers. We operate from a network of 23 banking centers throughout the state and one loan production office in Covington, Louisiana. Banking centers are located in the following markets: Central Louisiana, which includes the Alexandria metropolitan statistical area (“MSA”); Northwest Louisiana, which includes the Shreveport-Bossier City MSA; Southeast Louisiana, which includes the Baton Rouge MSA; and Southwest Louisiana, which includes the Lake Charles MSA. As of December 31, 2018, we were the fifth largest financial institution headquartered in Louisiana based on assets, with total assets of $1.86 billion, total loans of $1.33 billion, total deposits of $1.65 billion, and total stockholders’ equity of $193.7 million.

Our priority is to drive shareholder value through the establishment of a market-leading commercial banking franchise in Louisiana. We provide superior service through highly qualified, relationship-oriented bankers who are committed to their customers and the communities in which we offer our products and services. Our strategy is to expand geographically through the establishment of de novo banking centers in new markets and, to a lesser extent, through the acquisition of financial institutions with customer-oriented, compatible philosophies and in desirable geographic areas.

Our Banking Philosophy and Business Strategy

Our goal is to offer the best products and services delivered through a personal, customer-focused, integrity-centered culture. Our culture is “top down,” emphasizing the importance of exceptional customer service and strong relationships at every level. We are dedicated to the success and satisfaction of our customers and this commitment ensures our own continued success and allows us to deliver consistent performance to our shareholders. We credit our twenty-year track record of achievement to a disciplined implementation of this clear and focused banking philosophy.

Our mission is to be the premier statewide banking organization in Louisiana. We strive to differentiate ourselves from our competitors by providing the best of “relationship-based” banking that is tailored to meet the needs of the small and medium-sized businesses operating within our banking markets, as well as the owners and employees of those businesses, and executives, professionals and individuals with strong ties to our banking markets. In our experience, these customers place a high value on the type of long-term, personal relationship with their bank and banker that we provide. We grow our business one customer at a time through this relationship-driven approach.

In addition to being dedicated to service excellence, we are committed to the Louisiana communities we serve. We believe our community connections help us maintain a level of brand recognition, and a respected reputation, well beyond what would be typical for a bank of our size. This commitment to our communities builds a loyal customer base, and this loyal customer base helps us achieve strong organic growth and sustained profitability.

We attribute our success to incorporating this customer-driven banking philosophy into our business strategy. The key components of our business strategy include:

Commercial Banking. We are primarily a business-focused banking organization, delivering specialized services to our commercial customers. We target privately-owned commercial and industrial operating companies for both credit and treasury management services, while also providing owners and key employees with the same customized personal service for their individual financial needs. We attribute our long history of superior asset

1


 

quality to our credit culture, which is built on a foundation of lending to businesses and management teams with established, proven track records. We offer these customers sophisticated products and services similar to those of much larger banks, but delivered by bankers who can provide local and responsive decision-making, personal assistance, and an interest in the success of their businesses. Key components of our commercial banking business include:

 

Real Estate Loans.

 

o

Commercial Real Estate Loans (Owner Occupied). Given our strategy of focusing on the banking needs of established operating companies within our geographic footprint, 20.3% of our total portfolio consists of owner occupied office and industrial real estate loans. In addition to a proven management team and track record, we focus on businesses with a history of strong, recurring cash flows. In particular, we target wholesale and professional service companies, as well as businesses with unique strengths in niche markets. Loans are conservatively underwritten and typically carry the personal guarantee of the business owners. We believe this portfolio segment is well-diversified by industry type.

 

o

Commercial Real Estate Loans (Non-Owner Occupied). Our pursuit of non-owner occupied commercial real estate properties is secondary, and reserved primarily for developers and other persons or entities of influence in our local markets who present additional business and personal relationship opportunities. This strategy is evidenced by our modest level of commercial real estate loans relative to our capital, which has been consistent for many years. We target property types with a greater ability to withstand changes in market forces. Our underwriting criteria for non-owner occupied properties is even more conservative than our underwriting criteria for owner occupied properties due to the higher inherent risks generally associated with the former. Our target rate of return is also higher for non-owner occupied commercial real estate loans. As of December 31, 2018, our non-owner occupied commercial real estate loans, including construction and development loans, were 21.8% of our loan portfolio and represented 137.0% of the Bank’s total risk-based capital.

 

Commercial Loans. We have expertise in meeting the financing needs of commercial operating companies. This expertise is a key strength of ours, both in terms of our front-line bankers and our credit approval personnel and processes. Our specialists in these areas understand the cash cycle, working capital, and the fixed asset acquisition needs of businesses, and this allows us to deliver customizable and effective financing solutions. Leveraging the knowledge base and experience of our bankers and executives, we recommend and utilize sound commercial and industrial loan structures that limit our risks as a lender, while also helping to drive the success of our clients’ businesses. Commercial loans comprised 20.8% of the loan portfolio as of December 31, 2018.

 

Treasury Management Services. Many of our clients and prospective clients have sophisticated depository needs, including ACH, sweep, and remote deposit capture services. We have a dedicated team of Treasury Management Officers (“TMOs”) who partner with our commercial and private bankers to meet those needs. Our TMOs analyze clients’ account activity and cash utilization, and then recommend and implement solutions that enhance our clients’ efficiency, mitigate risks to their businesses, and maximize their earnings on available liquidity. Our treasury management offerings and technological sophistication are core strengths, especially when combined with our ability to troubleshoot and resolve customer issues. Our TMOs provide in-person assistance with the initial setup of treasury services, as well as on-going client support post-implementation.

Personal Banking. Our personal banking business supports our commercial banking focus, provides attractive customer diversification, and enhances our growing base of core deposits. Key components of our personal banking business include our retail banking network, private banking services, residential mortgage lending, and investment services.

 

Retail Banking Network. A strategically placed network of banking centers in our markets is a fundamental element of our personal banking strategy. Our convenient network attracts customers, encouraging them to seek personal service and interact with our bankers, allowing us to deliver

2


 

 

personal, relationship-based banking. This also supports the continued growth of our core deposit base. We are purposeful in choosing banking center locations and have sought out key locations in Central, Northwest, Southeast, and Southwest Louisiana through de novo development, as well as through two whole-bank acquisitions. We have a footprint of 23 banking centers in growing and stable communities. Our banking centers strengthen our brand recognition and reputation across our markets. Our emphasis on having a strategic network of banking centers, staffed by experienced bankers, differentiates us from our national and regional bank competitors, who are increasingly moving their customers to digital banking platforms only with limited personal service. Our network of banking locations and their dates of opening is described below under the heading “Our Historical Growth and Consistent Performance.”

 

Private Banking. Private banking is a crucial part of our personal banking strategy. Through our private banking group, we provide specialized deposit and loan products and services to high net worth individuals, business owners, and professionals. Consistent with our overall business philosophy, we seek to develop long-term relationships with our private banking customers through an emphasis on personal service and products tailored to their specific needs. From checking and savings products to sophisticated financing structures, we work to meet our clients’ changing needs with innovative solutions. Our private bankers are highly accessible for their clients, offering flexible scheduling for business meetings and loan closings. This level of flexibility and service is sought out and valued by our private banking clients, many of whom are busy professionals with inflexible or on-call schedules. Our private banking group’s loan portfolio primarily consists of consumer home equity loans, portfolio mortgage loans, and commercial loans, and its deposit base primarily consists of consumer checking accounts, money market accounts, and time deposits. 

 

Residential Mortgage Loans. Our mortgage lending group provides home mortgage loans that are sold on the secondary market. Loan types include conventional, VA, FHA and Rural Development. In addition, the mortgage lending department plays a critical role in meeting our community reinvestment and fair lending goals. The mortgage group has a community specialist in each market focused on low-income and first-time home buyers, and we participate in various down payment assistance and low-income home loan programs to ensure the needs of our entire banking community are satisfied. We combine the power of local decision-making and in-house underwriting with the industry’s best mortgage lending products and services. We believe this approach helps differentiate us from our competitors. For the year ended December 31, 2018, our mortgage group originated $99.1 million in home mortgage loans.

 

Investment Services. We offer a broad range of products and services designed to meet the investment needs of all of our customers through our investment group and our strategic partnership with Cetera Investment Services LLC, a registered broker-dealer, registered investment advisor, and licensed insurance agent. Our investment group executives, who are located in each of our markets and have an average of 19 years of industry experience, strive to fully understand each client’s unique financial situation, deliver a comprehensive plan, and provide the appropriate products to meet their needs. Our investment products include stocks, bonds, mutual funds, alternative investments, annuities, and insurance products. Our investment group also provides investment advisory services, financial planning services, and a comprehensive suite of retirement plans. The amount of investment assets under management by our investment group has experienced sustained growth, and was approximately $492.6 million as of December 31, 2018.


3


 

Our Historical Growth and Consistent Performance

Red River Bancshares, Inc. was founded in 1998 by a group of experienced bankers and business leaders dedicated to delivering the best banking products and services while staying true to the ideals of community banking. Red River Bank opened for banking services on January 14, 1999. Two decades later, we have expanded across the state of Louisiana, and we remain dedicated to our founding commitments. We have been rewarded with continued growth and expansion, consistent returns, and a loyal customer base. We know and understand each of our markets. Since inception, we have pursued a growth strategy focused on organic growth through de novo banking center expansion into favorable banking markets, and to a lesser extent, by partnering with select Louisiana financial institutions through two whole-bank acquisitions.

After opening our main office in January 1999, Red River Bank subsequently established three full-service de novo banking centers in Rapides Parish, in the Alexandria MSA and a part of our Central Louisiana market, opening one each in 1999, 2000, and 2001. In 2003, we acquired Bank of Lecompte also in Rapides Parish. Through this acquisition, we added two locations, one in Lecompte and one in Forest Hill, as well as $33.0 million in deposits and $19.3 million in loans. In 2004, Red River Bank opened the Downtown Banking Center in Alexandria. In 2006, we began an expansion effort into the Northwest Louisiana market with the opening of our Market Street Banking Center in downtown Shreveport, Caddo Parish, which was quickly followed with the opening of our East Kings Banking Center and our Provenance Banking Center in 2007, also in Shreveport. In that same year, we opened the Highway 28 West Banking Center in Alexandria. In 2008, we added our Marksville Banking Center in Avoyelles Parish, a part of our Central Louisiana market area, and our East Texas Banking Center and our Airline Banking Center, both in Bossier City, Bossier Parish, a part of our Northwest Louisiana market. We continued our growth in Northwest Louisiana in 2011 with the opening of our Uptown Banking Center on Line Avenue in Shreveport.

In 2013, we expanded into the Baton Rouge market through our acquisition of Fidelity Bancorp, Inc. and its banking subsidiary, Fidelity Bank. Through this acquisition, we acquired $110.3 million in deposits, $83.2 million in loans, and Fidelity’s four banking locations in Baton Rouge, East Baton Rouge Parish, and one banking center in Geismar, Ascension Parish, all a part of the Baton Rouge MSA and in our Southeast Louisiana market. In 2014, we purchased our Essen Lane Banking Center in Baton Rouge and relocated the Perkins Banking Center to that location. We subsequently expanded our presence in Baton Rouge through the establishment of the South Acadian Thruway Banking Center in 2016.

In 2017, we expanded our banking network in Northwest Louisiana with the opening of our Stonewall Banking Center in Stonewall, DeSoto Parish, adjacent to the Shreveport metropolitan area. Also in 2017, we began plans for further banking center expansion in Southeast Louisiana with the purchase of property south of Baton Rouge in the Highland Park Marketplace. That same year we began expansion into the Southwest Louisiana market with the opening of a loan production office (“LPO”) in Lake Charles, Calcasieu Parish. This office was closed when we opened our Lake Street Banking Center in 2018, also in Lake Charles. Currently, we are searching for property in Calcasieu Parish for the development of an additional banking center in the Southwest Louisiana market area. Also in 2018, we expanded our Essen Lane Banking Center in Baton Rouge, adding office space to accommodate our growing needs and presence in this market. Most recently, in November of 2018, we purchased property and an existing branch building on Highway 21 in Covington, St. Tammany Parish, for future banking center expansion.

 

4


 

Our growth has been supported by five successful equity offerings. We raised gross proceeds of approximately $12.4 million through the initial private placement offering of our common stock in 1998. Responding to continued demand for our common equity, we raised an additional $4.0 million in 2000 when we completed a second private placement offering. In 2006, as a part of our expansion into Northwest Louisiana, we completed a third private offering of our common stock, which expanded our shareholder base in this part of the state. Our 2006 offering resulted in gross proceeds of approximately $5.0 million. In 2009, we completed a fourth private common stock offering, which resulted in gross proceeds of approximately $7.4 million. Finally, in 2017, we completed the most recent private placement offering of our common stock, resulting in gross proceeds of approximately $12.1 million. In our 2017 offering, we received total subscriptions to purchase approximately $21.7 million of our common stock, resulting in a $9.6 million oversubscription amount that was returned to prospective investors in the offering. This last offering increased our shareholder base across the state, particularly in our Southeast Louisiana market. The milestones in our growth history are shown on the chart below.

5


 

The primary objective of our expansion strategy is to provide steady and consistent financial results for our shareholders. Since beginning banking operations in 1999, we have experienced steady balance sheet growth, consistent profitability, and steadily increasing shareholder value. This focus on steady growth, coupled with a disciplined credit culture, has enabled us to achieve consistent results, even through market downturns, and without having to make significant adjustments to our business plan in response to changing, and often challenging, market conditions.

Over the past 20 years, we have experienced asset growth at a compound annual growth rate of 18.2%, resulting in $1.86 billion in total assets as of December 31, 2018. Of the $1.86 billion in total assets, approximately $1.70 billion, or 91.4%, is attributable to organic growth and the remaining 8.6% is from two acquisitions.

 

We have maintained exceptional asset quality levels since inception through a disciplined credit culture. For the years 2003 through 2018, our average ratio of nonperforming assets to total assets was 0.26% and our average net charge-off ratio was 0.08%.

In addition to balance sheet growth and maintaining strong asset quality, we endeavor to achieve consistent profitability and returns for our shareholders. Our 2018 return on average assets (“ROA”) was 1.29%. For the years 2014 through 2018, average ROA (with 2017 adjusted ROA excluding $2.2 million of tax expense attributable to the Tax Cuts and Jobs Act of 2017 [“Tax Reform Act”]) was 1.02%. Our average ROA between 2001 (excluding the first two years of operations) and 2018 (with 2017 adjusted ROA) was 1.00%. We believe we are well-positioned to maintain and even improve upon our historical level of returns given increasing loan balances, a higher net interest margin, and a lower effective federal income tax rate.

6


 

To enhance internally generated capital and to support our growth over the past 20 years, we raised approximately $40.9 million of new capital through five private offerings. Our equity offerings expanded our shareholder base in our key markets statewide and provided capital to support future growth. As shown in the following graph, since the opening of the Bank in 1999 our tangible book value per share increased at a 12.5% compound annual growth rate. The graph below has been adjusted to give effect to the 15-for-1 split of our common stock with a record date of November 30, 2005 and the 2018 2-for-1 stock split.

 

Our Markets

Red River Bank currently conducts business through 23 banking centers located in Central, Northwest, Southeast, and Southwest Louisiana, and a loan production office in Covington, Louisiana. Our long-term strategic focus is to be the premier statewide banking organization in Louisiana. We believe our four current markets offer us an attractive combination of growth opportunities and core deposit stability, as well as loan diversity. We operate nine banking centers, including our main office, in the Central Louisiana market, which we define to include Rapides and Avoyelles Parishes. We operate seven banking centers in our Northwest Louisiana market, which we define to include Caddo, Bossier, and DeSoto Parishes. In our Southeast Louisiana market, which we define to include East Baton Rouge and Ascension Parishes, we operate six banking centers. We operate one banking center in our Southwest Louisiana market, which we define to include Calcasieu Parish.

We believe our current markets provide ample opportunities for the continued growth of our customer base, loans, and deposits, as well as the expansion of our overall market share in each area. Our goal is to replicate this growth in new markets as we continue to expand and implement our long-term development strategy. Our current markets, which are in diverse parts of Louisiana, are economic centers that provide for natural credit diversification and a hedge against industry downturns relative to other Louisiana-based financial institutions which do not enjoy a similarly diverse geographic and industry footprint. We seek to locate our banking centers and offices in the downtown and suburban areas of our markets, which contain our target customers of small to medium-sized businesses and retail customers.

7


 

In our Central Louisiana market, where our headquarters is located, we rank first in deposit market share with approximately 33.7% of all deposits as of June 30, 2018. In each of our Northwest and Southeast Louisiana markets, we ranked among the top ten financial institutions for deposit market share as of June 30, 2018. The table below highlights certain statistics within the primary markets that we serve.

 

Market(1)

 

Year

Entered

 

# of

Banking

Centers

 

 

# of

Bankers(2)

 

 

Total

Deposits

($000)(3)

 

 

Total Deposits in

Market

($000)(3)

 

 

Population(4)

 

 

Median

Household

Income(5)

 

Central

 

1999

 

 

9

 

 

 

224

 

 

$

993,331

 

 

$

2,943,231

 

 

 

172,628

 

 

$

42,655

 

Northwest

 

2006

 

 

7

 

 

 

43

 

 

$

322,035

 

 

$

7,548,377

 

 

 

401,555

 

 

$

40,391

 

Southeast

 

2013

 

 

6

 

 

 

49

 

 

$

260,292

 

 

$

17,563,495

 

 

 

569,216

 

 

$

51,436

 

Southwest

 

2017

 

 

1

 

 

 

4

 

 

$

1,271

 

 

$

4,051,863

 

 

 

202,445

 

 

$

48,219

 

 

(1)

For purposes of the demographic information in this table, we define our markets geographically as follows: Our Central market includes Rapides and Avoyelles Parishes; our Northwest market includes Caddo, Bossier and DeSoto Parishes; our Southeast market includes East Baton Rouge and Ascension Parishes; and our Southwest market includes Calcasieu Parish.

(2)

Full-time equivalent employees as of December 31, 2018.

(3)

Source: FDIC Deposit Market Share Report as of June 30, 2018.

(4)

Source: U.S. Census Bureau population estimates for 2017.

(5)

Source: U.S. Census Bureau’s 2013–2017 American Community Survey 5-year estimates. Includes data for the following parishes within each market: Central market reflects median income data for Rapides Parish; Northwest market reflects median income data for Caddo Parish; Southeast market reflects median income data for East Baton Rouge Parish; and Southwest market reflects median income data for Calcasieu Parish.

Central Louisiana. Our legacy market of Central Louisiana is located in the region that contains the Alexandria MSA. Employment in the region is bolstered by a significant government presence, including nearby Fort Polk, which has the largest military installation in the state. The region boasts a diverse group of significant employers, including Proctor & Gamble, Union Tank Car, Cleco, Crest Industries, and Roy O. Martin Lumber. The Louisiana Economic Outlook Study for 2019–2020, published by the Economics and Policy Research Group at Louisiana State University (the “Economic Outlook Study”), provides an encouraging outlook for the region. While growth during 2019 is expected to be relatively flat, over 500 new jobs are projected for 2020. The above-named firms and others support this projected job growth by providing a solid base of employment for the community.

Northwest Louisiana. Our Northwest Louisiana market is located in the region containing the Shreveport-Bossier City MSA. Since our entry into this market in 2006, the economy throughout the region has remained stable and provided consistent growth. According to the 2016 KPMG Competitive Alternatives Study, Shreveport was regarded as the most cost-friendly city to do business among the 27 U.S. metropolitan areas with a population of less than 750,000. The area provides ready access to other parts of Louisiana and adjacent states through I-20, I-49 and the planned I-69. It offers a variety of multimodal transportation options, including Class 1 rail, airports, and port transportation. Top business sectors throughout the region include healthcare, finance, government, manufacturing, and telecommunications. Northwest Louisiana includes portions of the Haynesville Shale formation from which natural gas production continues to occur. The area is also home to Barksdale Air Force Base and boasts the state’s largest and most successful casino market. The MSA has also welcomed General Dynamics IT and Glovis America as more recent employers, which have together added approximately 1,256 new jobs in the area. Northwest Louisiana has the largest concentration of durable goods manufacturing in the state. Among those manufacturers are a major steel mill and a steel components manufacturer located at the Port of Caddo-Bossier. Northwest Louisiana’s diversified economy and low cost of doing business has helped create a pro-business environment throughout the region. According to the Economic Outlook Study, the Shreveport-Bossier City MSA is expected to add approximately 600 jobs per year in 2019 and 2020.

Southeast Louisiana. Our Southeast Louisiana market is located in the region containing the Baton Rouge MSA. Baton Rouge is the capital of Louisiana and is the second-largest city in Louisiana by population. As the capital city, Baton Rouge is the political hub for Louisiana with the state government as the city’s largest employer. Baton Rouge is the farthest inland port on the Mississippi River that can accommodate ocean-going tankers and cargo carriers. As a result, Baton Rouge’s largest industry is petrochemical production and manufacturing. The ExxonMobil facility in Baton Rouge is one of the largest oil refineries in the country. Albemarle Corporation and Dow Chemical Company have large plants in the area, and Methanex relocated two methanol plants from Chile to

8


 

the Baton Rouge MSA in 2014. This MSA is also home to an emerging high-tech sector, led by Electronic Arts game company and a large IBM facility. In addition, Baton Rouge hosts a number of businesses from other diverse economic sectors, including healthcare, education, finance and motion pictures. Two major state universities, Louisiana State University and Southern University, are located in Baton Rouge, along with Baton Rouge Community College, which is one of Louisiana’s largest community colleges. The Economic Outlook Study projects renewed growth in the Baton Rouge MSA over the next two years, including 6,000 new jobs in 2019 and 8,100 new jobs in 2020. This growth is expected to be fueled largely by a revival of industrial construction in the area.

Southwest Louisiana. Our newest market in Southwest Louisiana is located in the region of the state containing the Lake Charles MSA. Major economic sectors in this area include the petrochemical industry, the gaming industry, and aircraft repair. Located in the far southwest corner of the state, the Lake Charles region has recently experienced rapid growth. According to the Economic Outlook Study, the Lake Charles MSA has been the fastest-growing MSA in the state of Louisiana for five straight years, and between 2013 and 2018 it has been the fastest growing MSA in the United States. The growth in the Lake Charles MSA has been fueled by over $117.0 billion in projects announced since 2012. Those projects include investments by employers such as Cheniere Energy, Sempra, Sasol, Driftwood, Trunkline, and G2 Energy. The Economic Outlook Study projects that the Lake Charles MSA will continue in its role as the fastest growing MSA in the state, adding 4,000 jobs in 2019 and another 5,300 jobs in 2020. The investment and resulting infrastructure in this area has created a thriving economy that we believe will support our future expansion in this market.

We believe that our commitment to the communities in which we operate will enable us to continue to gain scale and market share. We endeavor to become the leading community bank in each market that we serve, and we believe we are well-positioned to continue to grow relationships throughout our geographic footprint.

9


 

Our Competitive Strengths

We believe that our competitive strengths set us apart from many other similarly sized financial institutions, and that the following attributes are key to our success:

Cohesive and Experienced Management Team

We are led by an executive management team with an average of 29 years of professional experience covering the relevant disciplines of finance, lending, credit, risk, strategy, legal, and banking operations. Our executive team has been in their respective roles with our organization for an average of 14 years each, with a majority having worked together at Red River Bank for well over a decade. Collectively, they have been responsible for executing our strategic plan and driving our growth. Our executive management team includes:

 

Name

 

Age

 

Position with Red River
Bancshares, Inc.

 

Position with 

Red River Bank

 

Years of Banking Experience

 

Years with Red River Bank

R. Blake Chatelain

 

55

 

President and Chief Executive Officer

 

President and Chief Executive Officer

 

37

 

20

Isabel V. Carriere, CPA, CGMA

 

52

 

Executive Vice President, Treasurer, Chief Financial Officer, and Assistant Secretary

 

Executive Vice President, Controller, and Assistant Secretary

 

27

 

20

Amanda W. Barnett, JD

 

55

 

Senior Vice President, General Counsel, and Corporate Secretary

 

Senior Vice President, General Counsel, and Corporate Secretary

 

30

(legal)

 

9

Andrew B. Cutrer

 

45

 

Senior Vice President

 

Senior Vice President and Director of Human Resources

 

20

 

18

Bryon C. Salazar

 

46

 

-

 

Executive Vice President – Chief Lending Officer

 

24

 

20

Tammi R. Salazar

 

49

 

-

 

Executive Vice President – Private Banking, Mortgage, and Investments

 

26

 

20

G. Bridges Hall, IV

 

45

 

-

 

Market President – Shreveport/Bossier City Region

 

14

 

13

David K. Thompson

 

53

 

-

 

Market President – Baton Rouge Region

 

29

 

4

Harold W. Turner

 

69

 

-

 

Executive Vice President and Chief Corporate Development Officer

 

46

 

13

Debbie B. Triche

 

48

 

-

 

Senior Vice President and Retail Administrator

 

25

 

19

Gary A. Merrifield

 

56

 

-

 

Senior Vice President and Credit Policy Officer

 

33

 

4

Jeffrey R. Theiler

 

54

 

-

 

Senior Vice President and Chief Operations Officer

 

31

 

4

In addition to our experienced executive management team, our board of directors consists of well-regarded career bankers, professionals, entrepreneurs, and business and community leaders with collective depth and experience in commercial banking, finance, real estate, and manufacturing.

We also have a demonstrated ability to grow our company organically through the recruitment of talented bankers. We seek out and hire bankers with significant in-market experience who are naturally committed to high standards of productivity and excellence. This strategy enhances our existing business model and creates a pool of qualified executive and middle management talent, supporting scalability.

10


 

Consistent, Quality Growth Across an Attractive Geographic Footprint

We have proven our ability to consistently grow our business organically by expanding our geographic footprint in attractive markets across the state of Louisiana. Over the past 20 years, we have experienced asset growth at a compound annual growth rate of 18.2%, resulting in $1.86 billion in total assets as of December 31, 2018. As shown on the following graph, of the $1.86 billion in total assets, 91.4% is attributable to organic growth.  

 

Asset Growth

Our approach to growth and expansion has been strategic and purposeful. We identify and enter markets we believe will provide us with an advantage in terms of growing our loans and deposits, increasing profitability, and building shareholder value. We believe our market areas offer a beneficial combination of growth opportunities and industry diversity, as they have favorable economic environments and ample business lending and deposit prospects within our target client base. Our legacy market in Central Louisiana provides a stable economic climate, and our strong brand recognition in this market enables us to continue to build our loan portfolio and our low-cost core deposit franchise. Our Northwest and Southeast Louisiana banking markets represent major metropolitan areas and the opportunity for significant growth across all segments of our customer base. Our expansion most recently into the Lake Charles area presents us with the opportunity for significant growth and investment.

Customers within our markets have responded, and continue to respond, to our brand of banking and bankers, allowing us to continue to gain market share and provide consistent financial results. We believe we are well-positioned to continue this tradition of consistent, quality growth and success in the long-term.

Conservative Credit Culture

Throughout the last 20 years we have experienced sustained growth while also maintaining our disciplined and conservative credit culture, enabling us historically to maintain strong levels of asset quality. This, in turn, has produced stable and consistent results, despite market downturns during this time frame. We believe our dedication to strong credit quality fuels long-term lending relationships with our customers and fosters balance sheet diversity.

We are not dependent upon higher-risk lending categories. Our loan portfolio is not highly concentrated in non-owner occupied commercial real estate, the construction and development sector, or the energy sector. These sectors generally exhibit a higher level of risk than certain other lending sectors, such as owner occupied commercial real estate or residential real estate.

11


 

As of December 31, 2018, our non-owner occupied commercial real estate loans, construction and development loans, and non-real estate secured loans financing commercial real estate activities totaled $289.4 million, or approximately 21.8% of our total loan portfolio, and represented 137.0% of the Bank’s total risk-based capital. Non-owner occupied commercial real estate loans were $184.6 million, or 13.9% of total loans, and represented 87.4% of the Bank’s total risk-based capital as of December 31, 2018. Construction and development loans were $102.9 million, or 7.7% of total loans, and represented 48.7% of the Bank’s total risk-based capital as of December 31, 2018. Additionally, non-real estate secured loans financing commercial real estate activities were $1.9 million, or 0.2% of total loans, and represented 0.9% of the Bank’s total risk-based capital as of December 31, 2018.  

Our total loans to the energy sector, which we generally define to include companies involved in crude, petroleum, or natural gas extraction, were approximately $38.9 million, or approximately 2.9% of our total loans, as of December 31, 2018.

The following chart illustrates the diversification of our loans held for investment by major category as of December 31, 2018.

 

Loan Mix

 

Stable Core Deposit Franchise

Our banking philosophy, which is grounded in our commitment to integrity, personal relationships, service excellence, and a team-driven culture, attracts a loyal customer base. As a result, we have a valuable deposit franchise supported by a high level of noninterest-bearing accounts and a substantial level of core deposits. We define core deposits as all deposits excluding time deposits exceeding $250,000. Our time deposits exceeding $250,000 are held by a historically loyal customer base and are not brokered. As of December 31, 2018, core deposits were 95.0% of our total deposits, noninterest-bearing deposits were 33.3% of total deposits and our loan to deposit ratio was 80.9%. We do not have any internet-sourced or brokered deposits, and we have not historically used these types of deposits as a source of funding. We believe that our robust core deposit generation is powered by our emphasis on banking relationships over transactional banking and by our personal service, visibility in our communities, broad commercial banking and treasury management product offerings, and convenient services such as remote deposit capture and commercial internet banking. The following chart illustrates the diversification of our deposit base among our various product offerings as of December 31, 2018.


12


 

Deposit Mix

Strong Brand Recognition in our Communities and Markets

We developed a brand that exemplifies our core values of integrity and service excellence. We believe that part of providing service excellence is having strategically placed banking centers where customers can go to begin a relationship, seek advice and assistance, and engage with our bankers. To promote our organic growth, in both our current and new markets, we locate banking centers in strategic sites after consultation and study by expert outside consultants who examine metropolitan areas for optimal locations. Our banking centers strengthen our brand recognition and reputation across our markets. Red River Bank has been voted “best bank” in the Central Louisiana market for nine years by Cenla Focus Magazine, “top 50 best places to work” in the Southeast Louisiana market for four years by the Baton Rouge Business Report, and “best bank” in the Northwest Louisiana market for two years by SB Magazine. Members of our executive management have extensive personal networks and ties to all major metropolitan areas of Louisiana. Consequently, we believe we are poised to replicate our brand and valued reputation in these important areas all across the state. We are “Red River Bank: A bank made in Louisiana. A bank made for Louisiana.”

Robust Infrastructure and Investments in Technology Provide a Scalable Platform for Growth

We believe that our management, employees, and credit infrastructure provide a solid foundation for future growth. We built our banking platform to be scalable and accommodating to a growing customer base. Investment in technology is a key component of this overall strategy. We believe our emphasis on “both people and technology” allows us to compete effectively with much larger institutions, maintain our relationship-based banking philosophy, and provide for future efficiencies. Our customers’ expectations are evolving as they seek to adopt new forms of digital banking. We increasingly find that service excellence equates to real-time, digital offerings, and so we have invested, and expect to continue to invest, in the technology necessary to deliver those products and services. At the same time, we have invested in related risk management processes and the protection of the technology underpinning our platforms. We believe these investments will create operational efficiencies across our markets, reducing operational expenses. They also provide a scalable infrastructure to accommodate our expected future growth and further strengthen our “high tech/high touch” platform.

13


 

Growth and Expansion Strategy

Our mission is to be the premier statewide banking organization in Louisiana. We strive to differentiate ourselves from our competitors by providing the best of “relationship-based” banking that is tailored to meet the needs of the small and medium-sized businesses operating within our banking markets, as well as the owners and employees of those businesses, and executives, professionals, and individuals with strong ties to our banking markets. In our experience, these customers place a high value on the type of long-term relationship with their bank and banker that we provide. Through this relationship-driven approach, we grow our business one customer at a time. Since inception, we concentrated our efforts on building our market presence in key metropolitan markets within the state of Louisiana where our target customers are underserved and well-suited for the commercial, retail, and private banking products and services that we provide. We intend to leverage our competitive strengths to take advantage of what we believe are significant growth opportunities within our existing footprint and other strategic market areas that we believe complement our strategic plan. Our growth strategy includes the following:

Identify and Recruit Talented Bankers

We believe that competition for customers starts with the competition for the best bankers. Whether we expand our presence in our existing markets, enter new markets organically, or make opportunistic acquisitions, adding talented bankers with extensive in-market experience is one of our primary strategies for continued success. In our experience, our brand of banking is attractive to motivated bankers from smaller institutions that lack the platform to engage in sophisticated transactions and also to bankers from larger institutions that lack our relationship-based approach to banking. We are committed to the continual development of talent within our company through continuing education and promotions. We find that hiring committed, talented bankers, and providing development and advancement opportunities, leads to long-term continuity in our workforce as well as a strong and talented employee base with which to fuel the long-term potential of our bank.

Expand Market Share in Existing Markets

We want to be the market leader and have a significant market share in all the communities we serve. Organic growth is our primary focus, which may be supplemented with strategic, targeted acquisitions when and if appropriate. We intend to expand our banking center network by opening additional banking centers in our existing markets to provide our customers with more convenient banking locations. We understand that relationships are our strategic advantage and we continually seek to identify and recruit experienced bankers with broad relationship networks within our existing markets. We then strengthen those relationships by offering personalized products and services. We also attract new customers through personal outreach by our bankers, with targeted marketing campaigns, and by advertising in a variety of traditional media and in social media. We also reach new customers by filling the void left by competitors who are closing banking offices. Other outreach activities include helping our communities during times of need and by having a presence at community events, such as with our branded ice cream trucks that give out free frozen treats. We encourage our bankers to take leadership roles in our communities, and we are well represented in a wide variety of non-profit, volunteer organizations across all our markets.

Opportunistic New Market Expansion

When evaluating potential new market opportunities, our standard due diligence includes both an assessment of the local economy as well as an analysis of the local banking landscape. We concluded that an opportunity existed in Lake Charles, Calcasieu Parish, in Southwestern Louisiana, for a community bank with the strength and scale of Red River Bank to carve out a meaningful market share position over the long term. Lake Charles is the fastest-growing MSA in the state of Louisiana, and one of the fastest growing in the southeastern U.S. Much of this growth is industrial in nature and is driven by growth in the liquefied natural gas sector. In keeping with our established strategy of disciplined and thoughtful de novo expansion into new markets, we opened an LPO in Lake Charles in the third quarter of 2017. We evaluated this move for 12–24 months prior to commencement of formal operations.

In April of 2018, after operating the LPO for approximately eight months, we closed it and opened a business-focused banking center in Lake Charles, the Lake Street Banking Center. The Lake Street Banking Center is located in a new office and retail development, and it utilizes a concierge-type service desk, rather than traditional teller lines and is the first of its kind for our company. We are actively scouting potential sites in Southwest Louisiana for the construction of a traditional full-service banking center, with complete ATM and drive-through capability.

14


 

Disciplined Acquisition Strategy  

Our primary focus continues to be on organic expansion, however, we will identify and evaluate opportunities for strategic business acquisitions as they may arise. Our historic approach to potential acquisitions has been strategic and disciplined. Since inception, we completed two whole-bank acquisitions of institutions with customer-oriented, compatible philosophies and in desirable geographic areas. These acquisitions provided us the opportunity to expand the delivery of our relationship-driven brand of banking. The first acquisition in our bank’s history was the acquisition of Bank of Lecompte in 2003. This acquisition allowed us to further strengthen our foothold in the Central Louisiana market by adding two banking centers, approximately $38.9 million in total assets, and $33.0 million in deposits. Our second transaction in 2013, the acquisition of Fidelity Bancorp, Inc. and Fidelity Bank in Baton Rouge, Louisiana, was the catalyst for our expansion into the Baton Rouge metropolitan area. This acquisition provided us with five additional banking centers with approximately $120.5 million in total assets and $110.3 million in deposits. We will continue to emphasize organic expansion going forward, and we are not currently a party to any formal or informal acquisition arrangements. We will, however, carefully consider acquisition opportunities, primarily within the state of Louisiana, that we believe are consistent with our mission and which can provide opportunities for improved profitability and to gain market share.

Our Challenges

There are a number of risks that you should consider before investing in our common stock. These risks are discussed more fully in the section titled “Risk Factors,” beginning on page 24, and include, but are not limited to:

 

 

The geographic concentration of our markets in Louisiana makes us sensitive to adverse changes in the local economy;

 

As a business operating in the financial services industry, our business and operations may be adversely affected in numerous and complex ways by weak economic conditions;

 

We rely heavily on our executive management team and other key employees, and we could be adversely affected by an unexpected loss of their service;

 

We face significant competition to attract and retain customers, which could impair our growth, decrease our profitability, or result in loss of market share;

 

Because a significant portion of our loan portfolio consists of real estate loans, negative changes in the economy affecting real estate values could impair the value of collateral securing our real estate loans and result in loan and other losses;

 

We may not be able to adequately measure and limit our credit risk, which could lead to unexpected losses;

 

We operate in a highly regulated environment and the laws and regulations that govern our operations, corporate governance, executive compensation, and accounting principles, or changes in them, or our failure to comply with them, could subject us to regulatory action or penalties;

 

An active, liquid market for our common stock may not develop or be sustained following this offering; and

 

The market price of our common stock may be subject to substantial fluctuations, which may make it difficult to sell shares at the volumes, prices, or times desired.


15


 

Recent Developments

Preliminary Selected Financial Results

The following tables contain selected preliminary unaudited financial information regarding our performance and financial position as of and for the periods indicated. For the period ended March 31, 2019, the amounts and results set forth below are what we expect to report; however, these are preliminary estimates and subject to additional procedures, which we expect to complete after the completion of this offering. These additional procedures could result in material changes to our preliminary estimates during the course of our preparation of condensed consolidated financial statements as of and for the three-month period ended March 31, 2019.

The following estimates constitute forward-looking statements and are subject to risks and uncertainties, including those described under “Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements.” The following information should be read together with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and notes thereto included elsewhere in this prospectus. Our independent registered public accounting firm has not audited or reviewed the preliminary financial information, and as such, does not express an opinion with respect to this preliminary financial information.

 

 

As of

 

 

Change from

December 31, 2018

to March 31, 2019

 

 

 

March 31, 2019

 

 

December 31, 2018

 

 

$
Change

 

 

% Change

 

 

 

(Dollars in thousands)

 

Selected Period End Balance Sheet Data:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total assets

 

$

1,922,118

 

 

$

1,860,588

 

 

$

61,530

 

 

 

3.3

%

Cash and due from banks

 

 

32,371

 

 

 

34,070

 

 

 

(1,699

)

 

 

(5.0

)

Interest-bearing deposits in other banks

 

 

145,593

 

 

 

117,836

 

 

 

27,757

 

 

 

23.6

 

Securities available-for-sale

 

 

319,353

 

 

 

307,877

 

 

 

11,476

 

 

 

3.7

 

Loans held for sale

 

 

2,210

 

 

 

2,904

 

 

 

(694

)

 

 

(23.9

)

Loans held for investment

 

 

1,349,181

 

 

 

1,328,438

 

 

 

20,743

 

 

 

1.6

 

Allowance for loan losses

 

 

13,101

 

 

 

12,524

 

 

 

577

 

 

 

4.6

 

Noninterest-bearing deposits

 

 

565,757

 

 

 

547,880

 

 

 

17,877

 

 

 

3.3

 

Interest-bearing deposits

 

 

1,125,377

 

 

 

1,097,703

 

 

 

27,674

 

 

 

2.5

 

Total deposits

 

 

1,691,134

 

 

 

1,645,583

 

 

 

45,551

 

 

 

2.8

 

Junior subordinated debentures

 

 

11,341

 

 

 

11,341

 

 

 

 

 

 

 

Total stockholders’ equity

 

 

202,184

 

 

 

193,703

 

 

 

8,481

 

 

 

4.4

 

 

 

 

For the Three Months Ended

March 31,

 

 

Increase (Decrease)

 

 

 

2019

 

 

2018

 

 

$
Change

 

 

% Change

 

 

 

(Dollars in thousands)

 

Selected Income Statement Data:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest and dividend income

 

$

17,904

 

 

$

15,572

 

 

 

2,332

 

 

 

15.0

%

Interest expense

 

 

2,452

 

 

 

1,662

 

 

790

 

 

 

47.5

 

Net interest income

 

 

15,452

 

 

 

13,910

 

 

 

1,542

 

 

 

11.1

 

Provision for loan losses

 

 

526

 

 

 

411

 

 

115

 

 

 

28.0

 

Noninterest income

 

 

3,296

 

 

 

3,157

 

 

 

139

 

 

 

4.4

 

Operating expenses

 

 

11,158

 

 

 

10,307

 

 

851

 

 

 

8.3

 

Income before income tax

 

 

7,064

 

 

 

6,349

 

 

 

715

 

 

 

11.3

 

Income tax expense

 

 

1,368

 

 

 

1,118

 

 

 

250

 

 

 

22.4

 

Net income

 

$

5,696

 

 

$

5,231

 

 

 

465

 

 

 

8.9

 

Common stock cash dividends

 

$

1,326

 

 

$

1,009

 

 

 

317

 

 

 

31.4

 


16


 

 

 

 

As of and for the Three Months Ended

March 31,

 

 

 

 

2019

 

 

2018

 

 

Per Common Share Data:

 

 

 

 

 

 

 

 

 

Earnings per share, basic

 

$

0.86

 

 

$

0.78

 

 

Earnings per share, diluted

 

 

0.85

 

 

 

0.77

 

 

Book value per share

 

 

30.46

 

 

 

26.64

 

 

Tangible book value per share

 

 

30.23

 

 

 

26.41

 

 

Cash dividends per share

 

 

0.20

 

 

 

0.15

 

 

Weighted average shares outstanding, basic

 

 

6,632,482

 

 

 

6,721,200

 

 

Weighted average shares outstanding, diluted

 

 

6,668,029

 

 

 

6,765,277

 

 

 

 

 

 

 

 

 

 

 

 

Summary Performance Ratios:

 

 

 

 

 

 

 

 

 

Return on average assets

 

 

1.24

%

 

 

1.22

%

 

Return on average equity

 

 

11.69

 

 

 

11.88

 

 

Net interest margin (FTE)

 

 

3.50

 

 

 

3.37

 

 

Efficiency ratio

 

 

59.52

 

 

 

60.39

 

 

Loans to deposits ratio

 

 

79.91

 

 

 

81.98

 

 

Noninterest income to average assets

 

 

0.72

 

 

 

0.74

 

 

Operating expense to average assets

 

 

2.43

 

 

 

2.40

 

 

 

 

 

 

 

 

 

 

 

 

Summary Credit Quality Ratios:

 

 

 

 

 

 

 

 

 

Nonperforming assets to total assets

 

 

0.34

%

 

 

0.57

%

 

Nonperforming loans to total loans

 

 

0.46

 

 

 

0.71

 

 

Allowance for loan losses to nonperforming loans

 

 

212.64

 

 

 

124.61

 

 

Allowance for loan losses to total loans

 

 

0.97

 

 

 

0.88

 

 

Net charge-offs to average loans outstanding

 

 

0.00

 

 

 

0.00

 

 

 

 

 

 

 

 

 

 

 

 

Capital Ratios:

 

 

 

 

 

 

 

 

 

Total stockholders’ equity to total assets

 

 

10.52

%

 

 

10.16

%

 

Tangible common equity to tangible assets

 

 

10.45

 

 

 

10.08

 

 

Total risk-based capital to risk-weighted assets

 

 

16.39

 

*

 

15.99

 

 

Tier 1 risk-based capital to risk-weighted assets

 

 

15.45

 

*

 

15.12

 

 

Common equity tier 1 capital to risk-weighted assets

 

 

14.66

 

*

 

14.28

 

 

Tier 1 risk-based capital to average assets

 

 

11.50

 

*

 

11.28

 

* Preliminary and estimated ratios – subject to change.

Performance Summary as of and for the Quarter Ended March 31, 2019

Overview

In the first quarter of 2019, the Company showed continued growth in total assets, higher profitability compared to the first quarter of 2018, and improved asset quality results. On January 14, 2019, we celebrated 20 years since Red River Bank opened for banking services. Also in the first quarter of 2019, we declared and paid a cash dividend of $0.20 per common share.

As part of our organic expansion plan, in November 2018, we purchased an existing banking center location in Covington, Louisiana (St. Tammany Parish), for future expansion. In the first quarter of 2019, we hired an experienced banker with extensive knowledge of the St. Tammany community to become our area president and, effective April 3, 2019, we opened a temporary loan production office in Covington. During the second quarter of 2019, we intend to remodel and update the banking center location purchased in 2018. While these renovations are being completed, we will operate from the LPO in a leased office a short distance from the permanent banking center. After the renovations are completed, which we expect will be in the third quarter of 2019, our plans are to close the LPO and shift our operations into the permanent, full-service banking center.

17


 

Comparison of Financial Condition as of March 31, 2019 and December 31, 2018

As of March 31, 2019, assets totaled $1.92 billion, which was $61.5 million, or 3.3% higher than total assets of $1.86 billion as of December 31, 2018. Within assets, loans increased by $20.0 million and securities increased by $11.5 million. The balance sheet growth was funded by a $45.6 million increase in deposits, which resulted in a 79.91% loan to deposit ratio as of March 31, 2019.

Loans increased $20.0 million, or 1.5%, to $1.35 billion as of March 31, 2019 from $1.33 billion at December 31, 2018. New loan origination activity was normal for the first quarter, and spread across all of our markets, with our newer markets experiencing the most growth. The loan portfolio was also impacted by problem loan pay downs, including a substandard energy loan that was paid off in full during the first quarter. Energy related credits were 2.6% of the loan portfolio as of March 31, 2019, compared to 2.9% as of December 31, 2018. The available-for-sale securities portfolio increased $11.5 million, or 3.7%, to $319.4 million as of March 31, 2019 from $307.9 million as of December 31, 2018. This increase is due to investing short-term liquid assets into higher yielding securities during the quarter. Deposits increased $45.6 million, or 2.8%, to $1.69 billion as of March 31, 2019 from $1.65 billion at December 31, 2018. Noninterest-bearing deposits increased by $17.9 million, or 3.3%, due to normal fluctuations in customer account balances. NOW accounts increased by $15.4 million, or 5.0%, with increases in Interest on Lawyers Trust Accounts (“IOLTA”) NOW balances and decreases in public entity NOW balances. IOLTA NOW balances were driven higher at the end of the first quarter due to a large legal settlement received by a law firm customer. These funds are expected to be reduced in the second quarter of 2019 as disbursements are made to third parties. The decrease in public entity NOW balances is a result of normal seasonal drawdowns as public entity customers distribute their year-end funds to other organizations. Noninterest-bearing deposits as a percentage of total deposits were consistent at 33.5% as of March 31, 2019 compared to 33.3% as of December 31, 2018. Stockholders’ equity increased $8.5 million to $202.2 million, as a result of $5.7 million of first quarter 2019 net income, a $3.9 million increase in accumulated other comprehensive income, partially offset by $1.3 million in cash dividends.

Asset quality levels improved in the first quarter of 2019 with positive activity related to other real estate owned. The nonperforming assets to assets ratio was 0.34% as of March 31, 2019 compared to 0.38% as of December 31, 2018. The net charge-off ratio for the quarter ended March 31, 2019 was 0.00%.

Comparison of Operating Results for the Three Months Ended March 31, 2019 and March 31, 2018  

Net income for the three months ended March 31, 2019 was $5.7 million, an increase of $465,000, or 8.9% from $5.2 million for the three months ended March 31, 2018. The increase in net income was primarily due to increased net interest income partially offset by higher operating expenses. As a result of higher net income for the three months ended March 31, 2019, diluted earnings per share increased by $0.08, or 10.4%, to $0.85 from $0.77 for the three months ended March 31, 2018.

Net interest income increased by $1.5 million, or 11.1%, to $15.5 million for the three months ended March 31, 2019 from $13.9 million for the three months ended March 31, 2018. Net interest income improved as a result of a 13 basis point increase in the net interest margin, on a fully tax-equivalent basis, to 3.50% for the three months ended March 31, 2019 from 3.37% for the three months ended March 31, 2018, combined with a $114.9 million, or 6.9%, increase in average interest earning assets between the first quarter of 2019 and 2018. The net interest margin benefited from the higher interest rate environment in the first quarter of 2019 compared to the first quarter of 2018. The average yield on interest-earning assets for the three months ended March 31, 2019 was 4.03%, a 28 basis point increase from 3.75% for the three months ended March 31, 2018, while the average cost of deposits for the three months ended March 31, 2019 was 0.57%, 17 basis points higher from the 0.40% cost of deposits for the three months ended March 31, 2018.

The provision for loan losses for the three months ended March 31, 2019 was $526,000, an increase of $115,000, or 28.0%, from $411,000 for the three months ended March 31, 2018. The provision for loan losses increased primarily as a result of the growth of the loan portfolio. The allowance for loan losses to total loans ratio was 0.97% at March 31, 2019 compared to 0.88% at March 31, 2018.

Noninterest income increased $139,000, or 4.4%, to $3.3 million for the three months ended March 31, 2019 compared to $3.2 million for the three months ended March 31, 2018. The increase in noninterest income was mainly due to higher mortgage loan income, which was partially offset by lower deposit income. Mortgage loan

18


 

income increased $168,000, or 48.6%, to $514,000 for the three months ended March 31, 2019 compared to $346,000 for the three months ended March 31, 2018 as a result of a higher number of mortgage loan applications in the first quarter of 2019. Deposit income decreased $174,000, or 14.5%, to $1.0 million for the three months ended March 31, 2019 compared to $1.2 million for the three months ended March 31, 2018. In the fourth quarter of 2018, a system change relating to overdraft processing on electronic transactions was made which resulted in lower deposit income in the first quarter of 2019. Management is evaluating other deposit fees to replace the decrease in deposit revenue.

Operating expenses increased $851,000, or 8.3%, to $11.2 million for the three months ended March 31, 2019 compared to $10.3 million for the three months ended March 31, 2018, mainly due to higher personnel and occupancy expenses. Personnel expenses increased $498,000, or 8.1%, to $6.6 million for the three months ended March 31, 2019 compared to $6.1 million for the three months ended March 31, 2018. As of March 31, 2019 and 2018, we had 321 and 309 full-time equivalent employees, respectively, an increase of 12 full time-equivalent employees. The increase in personnel related to an increase in back office staff to support increasing volumes and to prepare to operate as a public company, as well as personnel for the Covington LPO. Occupancy expense increased $96,000, or 8.9%, to $1.2 million for the three months ended March 31, 2019 compared to $1.1 million for the three months ended March 31, 2018, due to new expenses in the Southwest Louisiana market related to the opening of a new banking center in the second quarter of 2018 and increased property and equipment expenses across the Company.

Corporate Information

Our principal executive offices are located at 1412 Centre Court Drive, Suite 402, Alexandria, Louisiana 71301, and our telephone number is (318) 561-5028. Our corporate Internet site is www.redriverbank.net. The information contained on or accessible from our corporate Internet site does not constitute a part of this prospectus and is not incorporated by reference herein.

 

19


 

The Offering

 

Common stock offered by us

 

          shares

 

 

 

Common stock offered by the selling shareholders

 

          shares

 

 

 

Underwriter overallotment

 

          shares

 

 

 

Common stock outstanding after completion of the offering

 

          shares

           shares if the underwriters exercise their overallotment option in full

 

 

 

Use of proceeds

 

Assuming an initial public offering price of $          per share, which is the midpoint of the offering price range set forth on the cover page of this prospectus, we estimate that the net proceeds to us from the sale of our common stock in this offering will be $          million, (or $          million if the underwriters exercise in full their option to purchase additional shares of common stock from us), after deducting the estimated underwriting discount and offering expenses which are payable by us. We intend to use the net proceeds to us from this offering for general corporate purposes and investment in our bank subsidiary, which may include the support of our balance sheet growth, repayment of our junior subordinated debentures, the acquisition of other banks or financial institutions to the extent such opportunities arise, and the maintenance of our capital and liquidity ratios, and the ratios of our bank, at acceptable levels. We will not receive any proceeds from the sale of shares of our common stock by the selling shareholders. See “Use of Proceeds.”

 

 

 

Dividends

 

Prior to May 2018, we did not historically pay dividends. In May 2018, we paid our first cash dividend of $0.15 per common share (adjusted to give effect to the 2018 2-for-1 stock split), and in February 2019, we paid our second cash dividend of $0.20 per common share. Any future determination relating to dividends will be made at the discretion of our board of directors and will depend on a number of factors, including our historical and projected financial condition, liquidity and results of operations; our capital levels and needs; any acquisitions or potential acquisitions that we are considering; contractual, statutory, and regulatory prohibitions and other limitations; general economic conditions; and other factors deemed relevant by our board of directors. See “Dividend Policy.”

 

 

 

20


 

Directed Share Program

 

At our request, the underwriters have reserved up to                   
              shares of our common stock offered by this prospectus for sale, at the initial public offering price, to certain of our business associates and other

persons designated by us who have expressed an interest in purchasing our common stock in this offering. We will offer these reserved shares to the extent permitted under applicable laws and regulations in the United States under a directed share program. The number of shares available for sale to the general public in the offering will be reduced to the extent these persons purchase the reserved shares. Any reserved shares not so purchased will be offered by the underwriters to the general public on the same terms as the other shares of our common stock offered by this prospectus.

 

 

 

Nasdaq Global Select Market listing

 

We have applied to list our common stock on the Nasdaq Global Select Market under the symbol “RRBI.”

 

 

 

Risk factors

 

Investing in our common stock involves risks. See “Risk Factors,” beginning on page 24, for a discussion of factors that you should carefully consider before making an investment decision.

 

Except as otherwise indicated, all information in this prospectus:

 

assumes an initial public offering of $          per share, which is the midpoint of the price range set forth on the cover page of this prospectus;

 

assumes no exercise by the underwriters of their option to purchase additional shares of our common stock;

 

does not attribute to any director, officer, or principal shareholder any purchases of shares of our common stock in this offering;

 

excludes 28,000 shares of our common stock issuable upon the exercise of outstanding stock options with a weighted exercise price of $14.85 per share, as of December 31, 2018; and

 

gives effect to the 2018 2-for-1 stock split.

 

 

21


 

Selected Historical Consolidated Financial Information

The following tables set forth selected historical consolidated financial information for each of the periods indicated. The historical financial information as of and for the years ended December 31, 2018 and 2017, except for the selected ratios, is derived from our audited consolidated financial statements included elsewhere in this prospectus. The historical financial information as of and for the years ended December 31, 2016, 2015, and 2014, except for the selected ratios, is derived from our audited consolidated financial statements that are not included in this prospectus. Our historical results may not be indicative of our future performance.

You should read the selected historical consolidated financial and operating data set forth below in conjunction with the sections titled “Capitalization” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” as well as our consolidated financial statements and the related notes included elsewhere in this prospectus. The selected historical consolidated financial information presented below contains financial measures that are not presented in accordance with generally accepted accounting principles (“GAAP”) and have not been audited. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Non-GAAP Financial Measures.”

 

 

 

As of and for the Years Ended December 31,

 

 

 

2018

 

 

2017

 

 

2016

 

 

2015

 

 

2014

 

 

 

(Dollars in thousands, except per share data)

 

Selected Period End Balance Sheet Data:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total assets

 

$

1,860,588

 

 

$

1,724,264

 

 

$

1,644,877

 

 

$

1,492,702

 

 

$

1,398,261

 

Cash and due from banks

 

 

34,070

 

 

 

29,819

 

 

 

27,588

 

 

 

19,297

 

 

 

24,403

 

Interest-bearing deposits in other banks

 

 

117,836

 

 

 

29,848

 

 

 

92,921

 

 

 

72,946

 

 

 

46,151

 

Securities available-for-sale

 

 

307,877

 

 

 

345,344

 

 

 

304,766

 

 

 

294,885

 

 

 

303,874

 

Securities held-to-maturity

 

 

 

 

8,991

 

 

 

10,193

 

 

 

11,310

 

 

 

15,373

 

Loans held for sale

 

 

2,904

 

 

 

1,867

 

 

 

3,146

 

 

 

3,604

 

 

 

8,007

 

Loans held for investment

 

 

1,328,438

 

 

 

1,247,666

 

 

 

1,146,675

 

 

 

1,032,597

 

 

 

943,530

 

Allowance for loan losses

 

 

12,524

 

 

 

10,895

 

 

 

10,544

 

 

 

9,511

 

 

 

8,798

 

Noninterest-bearing deposits

 

 

547,880

 

 

 

504,286

 

 

 

475,164

 

 

 

394,672

 

 

 

356,367

 

Interest-bearing deposits

 

 

1,097,703

 

 

 

1,021,699

 

 

 

997,725

 

 

 

936,129

 

 

 

893,179

 

Total deposits

 

 

1,645,583

 

 

 

1,525,985

 

 

 

1,472,889

 

 

 

1,330,801

 

 

 

1,249,546

 

Junior subordinated debentures

 

 

11,341

 

 

 

11,341

 

 

 

11,341

 

 

 

11,341

 

 

 

11,341

 

Total stockholders’ equity

 

 

193,703

 

 

 

178,103

 

 

 

151,823

 

 

 

142,380

 

 

 

129,160

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selected Income Statement Data:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest and dividend income

 

$

66,886

 

 

$

58,405

 

 

$

54,256

 

 

$

50,383

 

 

$

48,327

 

Interest expense

 

 

7,649

 

 

 

6,560

 

 

 

6,430

 

 

 

6,271

 

 

 

6,433

 

Net interest income

 

 

59,237

 

 

 

51,845

 

 

 

47,826

 

 

 

44,112

 

 

 

41,894

 

Provision for loan losses

 

 

1,990

 

 

 

1,555

 

 

 

1,658

 

 

 

946

 

 

 

320

 

Noninterest income

 

 

14,531

 

 

 

12,714

 

 

 

12,902

 

 

 

11,736

 

 

 

10,226

 

Operating expenses

 

 

43,422

 

 

 

40,473

 

 

 

38,361

 

 

 

36,294

 

 

 

34,441

 

Income before income tax

 

 

28,356

 

 

 

22,531

 

 

 

20,709

 

 

 

18,608

 

 

 

17,359

 

Income tax expense

 

 

5,300

 

 

 

8,546

 

 

 

5,607

 

 

 

4,652

 

 

 

4,290

 

Net income

 

$

23,056

 

 

$

13,985

 

 

$

15,102

 

 

$

13,956

 

 

$

13,069

 

Common stock cash dividends

 

$

1,009

 

 

$

 

 

$

 

 

$

 

 

$

 

 

22


 

 

 

 

As of and for the Years Ended December 31,

 

 

 

2018

 

 

2017

 

 

2016

 

 

2015

 

 

2014

 

Per Common Share Data:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per share, basic

 

$

3.43

 

 

$

2.16

 

 

$

2.37

 

 

$

2.19

 

 

$

2.05

 

Earnings per share, diluted

 

 

3.41

 

 

 

2.14

 

 

 

2.35

 

 

 

2.17

 

 

 

2.04

 

Book value per share(1)

 

 

29.23

 

 

 

26.50

 

 

 

23.86

 

 

 

22.28

 

 

 

20.27

 

Tangible book value per share(2)

 

 

28.99

 

 

 

26.27

 

 

 

23.62

 

 

 

22.03

 

 

 

20.00

 

Cash dividend per share

 

 

0.15

 

 

 

 

 

 

 

 

 

Weighted average shares

   outstanding, basic

 

 

6,716,943

 

 

 

6,483,959

 

 

 

6,378,568

 

 

 

6,382,411

 

 

 

6,364,007

 

Weighted average shares

   outstanding, diluted

 

 

6,736,085

 

 

 

6,503,907

 

 

 

6,397,112

 

 

 

6,403,027

 

 

 

6,385,054

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Summary Performance Ratios:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Return on average assets

 

 

1.29

%

 

 

0.82

%

 

 

0.95

%

 

 

0.95

%

 

 

0.95

%

Return on average equity

 

 

12.46

 

 

 

8.45

 

 

 

10.09

 

 

 

10.27

 

 

 

10.88

 

Net interest margin (FTE)(3)

 

 

3.44

 

 

 

3.20

 

 

 

3.21

 

 

 

3.23

 

 

 

3.32

 

Efficiency ratio(4)

 

 

58.86

 

 

 

62.69

 

 

 

63.17

 

 

 

64.99

 

 

 

66.08

 

Loans to deposits ratio

 

 

80.90

 

 

 

81.88

 

 

 

78.07

 

 

 

77.86

 

 

 

76.15

 

Noninterest income to average assets

 

 

0.81

 

 

 

0.74

 

 

 

0.81

 

 

 

0.80

 

 

 

0.75

 

Operating expense to average assets

 

 

2.43

 

 

 

2.37

 

 

 

2.42

 

 

 

2.47

 

 

 

2.51

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Summary Credit Quality Ratios:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nonperforming assets to total assets

 

 

0.38

%

 

 

0.60

%

 

 

0.36

%

 

 

0.42

%

 

 

0.40

%

Nonperforming loans to total loans