UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K | ||
CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 | ||
Date of report (Date of earliest event reported): January 29, 2020 | ||
Red River Bancshares, Inc. (Exact name of registrant as specified in its charter) | ||
Louisiana | 001-38888 | 72-1412058 |
(State or other jurisdiction of incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) |
1412 Centre Court Drive, Suite 402 Alexandria, Louisiana | 71301 | |
(Address of principal executive offices) | (Zip code) | |
Registrant’s telephone number, including area code: (318) 561-5028 | ||
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Exchange Act:
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
Common Stock, no par value | RRBI | The Nasdaq Stock Market, LLC | ||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth 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 13(a) of the Exchange Act ☒
Item. 2.02 Results of Operations and Financial Condition.
On January 29, 2020, Red River Bancshares, Inc. (the "Company") issued a press release announcing its financial results for the fourth quarter and year ended December 31, 2019. A copy of the press release is attached hereto as Exhibit 99.1, which is incorporated herein by reference.
As provided in General Instruction B.2 to Form 8-K, the information furnished in Item 2.02 and Exhibit 99.1 of this Current Report on Form 8-K shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, and such information shall not be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
Item. 9.01 Financial Statements and Exhibits.
(d) Exhibits. The following is furnished as an exhibit to this Current Report on Form 8-K.
Exhibit Number | Description of Exhibit | |
99.1 | ||
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Dated: January 29, 2020
RED RIVER BANCSHARES, INC. | ||
By: | /s/ Isabel V. Carriere | |
Isabel V. Carriere, CPA, CGMA | ||
Executive Vice President and Chief Financial Officer | ||
(Principal Financial Officer and Principal Accounting Officer) | ||
Exhibit 99.1
FOR IMMEDIATE RELEASE
Red River Bancshares, Inc. Reports Fourth Quarter and Year-End 2019 Financial Results
Alexandria, Louisiana, January 29, 2020, (GLOBE NEWSWIRE) -- Red River Bancshares, Inc. (the “Company”), (Nasdaq: RRBI), the holding company for Red River Bank (the “Bank”), announced today its financial results for the fourth quarter and year ended 2019.
Net income for the fourth quarter of 2019 was $6.7 million, or $0.92 per diluted common share ("EPS"), a decrease of $104,000, or 1.5%, compared to $6.8 million, or $0.93 EPS, for the third quarter of 2019, and an increase of $592,000, or 9.6%, compared to $6.2 million, or $0.91 EPS, for the fourth quarter of 2018.
Net income for the twelve months ended December 31, 2019, was $24.8 million, or $3.49 EPS, an increase of $1.8 million, or 7.7%, compared to $23.1 million, or $3.41 EPS, for the twelve months ended December 31, 2018.
Fourth Quarter 2019 Performance and Operational Highlights
• | Net income was $6.7 million, which was $104,000, or 1.5%, lower compared to the third quarter of 2019. This resulted in a quarterly return on assets of 1.37% and a quarterly return on equity of 10.72%. |
• | The fourth quarter of 2019 benefited from a $71,000 dividend from a Small Business Investment Company ("SBIC") limited partnership and $132,000 from nonrecurring operating expense reductions. |
• | The net interest margin, fully tax equivalent basis ("FTE"), decreased by five basis points to 3.50% for the fourth quarter of 2019 compared to 3.55% for the prior quarter. The net interest margin was negatively impacted by the three Federal Reserve rate decreases which occurred in the third and fourth quarters of 2019. |
• | As of December 31, 2019, the Company had $1.99 billion of assets. Assets increased 2.5% from September 30, 2019, and 6.9% from December 31, 2018. |
• | Loans held for investment ("HFI") increased 1.8% from September 30, 2019, and 8.3% from December 31, 2018. |
• | Deposits increased 2.6% from September 30, 2019, and 4.6% from December 31, 2018. The increase in deposits during the fourth quarter was primarily attributable to the seasonal inflow of funds from public entity customers. |
• | As of December 31, 2019, the loans HFI to deposits ratio was 83.60%, and the noninterest-bearing deposits to total deposits ratio was 33.98%. |
• | The nonperforming assets ("NPA(s)") to total assets ratio improved to 0.33% as of December 31, 2019, from 0.41% as of September 30, 2019. |
• | The net charge-offs to average loans ratio was 0.02% for the quarter ended December 31, 2019, and 0.03% for the year ended December 31, 2019. |
• | The Bank did not have an FDIC insurance assessment for the third or fourth quarters of 2019. |
• | As part of our continued Southwest Louisiana market expansion, in the fourth quarter of 2019, we purchased a banking center location and added to our lending team in the Southwest Louisiana market. The purchased property is located in Sulphur, Louisiana. Sulphur encompasses the western portion of the Lake Charles metropolitan statistical area ("MSA") and is home to many major industrial projects, either completed or under construction in Southwest Louisiana, over the past few years. We expect to open a full-service banking center at the Sulphur location late in the first quarter of 2020, pending receipt of all regulatory approvals. The addition to our lending team included hiring an experienced, longtime Southwest Louisiana banker and community leader to join the Red River Bank commercial banking team. |
Blake Chatelain, President and Chief Executive Officer stated, "We are pleased with our 2019 accomplishments, growth, and financial results. Our initial public offering and selection to be included in the Russell 2000 Index were significant milestones for our shareholders, customers, and employees. In 2019, we expanded organically throughout Louisiana, increasing our balance sheet to almost $2.0 billion in assets. Net income also increased 7.7% compared to the prior year. We mitigated the impact of the three Federal Reserve rate decreases in the second half of 2019 with diligent balance sheet management and pricing strategies. Also, asset quality levels improved with the NPAs to total assets ratio decreasing to 0.33% as of year end, the lowest it has been in 11 quarters."
Mr. Chatelain added, "Our organic expansion in the Southwest Louisiana market is part of our continued commitment to, and investment in providing banking services throughout Louisiana. We are pleased to have purchased the Sulphur property and to have expanded our banking team in this area. We look forward to opening this property as our second banking center location in southwest Louisiana as quickly as possible and expanding our customer base in this vibrant market."
1
Net Interest Income and Net Interest Margin (FTE)
Net interest income for the fourth quarter of 2019 was $16.3 million, which was $149,000, or 0.9%, higher than the third quarter of 2019. The increase in net interest income was due to a $146,000 decrease in interest expense. The junior subordinated debentures were paid off in the third quarter of 2019, resulting in a $73,000 reduction in debenture interest expense. Additionally, interest expense relating to interest-bearing deposits decreased by $73,000.
The net interest margin (FTE) was negatively impacted by the three Federal Reserve rate decreases which occurred in the third and fourth quarters of 2019. The net interest margin (FTE) was 3.50% for the fourth quarter of 2019 compared to 3.55% for the prior quarter. The effect of the lower interest rate environment was mitigated by managing loan and deposit pricing strategies and adjusting the investment portfolio composition.
The yield on loans decreased eight basis points due to the impact of the lower interest rate environment on new, renewed, and floating rate loans. As of December 31, 2019, floating rate loans were 15.8% of the loan portfolio. The yield on federal funds sold decreased 54 basis points. Partially offsetting these decreases, the yield on taxable securities improved four basis points due to a portfolio realignment completed in the fourth quarter of 2019. The resulting yield on earning assets was 3.97% for the fourth quarter of 2019 compared to 4.06% for the third quarter of 2019.
The rate on interest-bearing deposits decreased four basis points due to lower rates on new and renewed time deposits, combined with a slight decrease in rates on certain interest-bearing transaction deposit accounts. The cost of deposits was 0.57% for the fourth quarter of 2019 compared to 0.60% for the third quarter of 2019.
Noninterest Income
Noninterest income totaled $4.2 million for the fourth quarter of 2019, a decrease of $197,000, or 4.5%, compared to $4.4 million for the previous quarter. The decrease was mainly due to lower mortgage loan income, partially offset by higher service charges on deposit accounts and a dividend from an SBIC limited partnership.
Mortgage loan income decreased $198,000, or 19.5%, in the fourth quarter of 2019, compared to the previous quarter. This decrease was due in part to a decline in activity related to seasonality of mortgage demand, as well as the stabilization of mortgage rates during the fourth quarter.
Service charges on deposit accounts increased $75,000, or 6.3%, for the fourth quarter of 2019, compared to the prior quarter. This increase was due greater customer volume and activity.
SBIC income increased by $46,000 in the fourth quarter of 2019, or 33.1%, from the third quarter of 2019. This increase was a result of a $71,000 dividend received in the fourth quarter of 2019 from an SBIC limited partnership of which Red River Bank is a member. No dividend was received in the third quarter of 2019.
Operating Expenses
Operating expenses remained consistent at $11.9 million when comparing the third and the fourth quarters of 2019. As a result of our expansion, personnel and occupancy expenses increased. These higher expenses were offset by nonrecurring reductions throughout various expense categories.
Personnel expenses totaled $7.1 million for the fourth quarter of 2019, up $141,000, or 2.0%, from the third quarter of 2019. This increase was due to additional staff resulting from our expansion in the Northshore and Southwest Louisiana markets, annual self-insurance administrative fees, and other compensation adjustments.
Occupancy and equipment expenses totaled $1.3 million for the fourth quarter of 2019, up $69,000, or 5.8%, from the third quarter of 2019. This increase was primarily due to opening the Covington banking center in the Northshore market and normal property maintenance.
Data processing expense totaled $462,000 for the fourth quarter of 2019, down $17,000, or 3.5%, from the third quarter of 2019. This decrease was due to receipt of a $39,000 nonrecurring refund from our data processing center in the fourth quarter.
Other taxes totaled $346,000 for the fourth quarter of 2019, down $79,000, or 18.6%, from the third quarter of 2019. The State of Louisiana bank stock tax expense was lower due to a $53,000 nonrecurring year-end adjustment.
Loan and deposit expenses totaled $247,000 for the fourth quarter of 2019, down $38,000, or 13.3%, from the third quarter of 2019. This decrease was primarily attributed to the receipt of a $40,000 negotiated rebate from a vendor.
2
Other operating expenses totaled $895,000 for the fourth quarter of 2019, down $45,000, or 4.8%, from the third quarter of 2019. This reduction was primarily related to a $67,000 decrease in expenses associated with other real estate owned.
Loans and Asset Quality
Loans HFI as of December 31, 2019, were $1.44 billion, an increase of $25.8 million, or 1.8%, from September 30, 2019. The increase in loans in the fourth quarter of 2019 was primarily due to normal loan origination activity spread across all of our markets, with our newer markets experiencing the most growth. Energy related credits were 2.2% of loans HFI as of December 31, 2019, compared to 2.3% as of September 30, 2019.
NPAs totaled $6.5 million as of December 31, 2019, down $1.5 million, or 18.9%, from September 30, 2019, primarily due to payoffs received on nonperforming loans. The ratio of NPAs to total assets improved to 0.33% as of December 31, 2019, from 0.41% as of September 30, 2019.
As of December 31, 2019, the allowance for loan losses ("ALL") was $13.9 million, and the ratio of ALL to loans HFI was 0.97%. The net charge-off ratio was 0.02% for the fourth quarter of 2019 and 0.03% for the year ended December 31, 2019. The provision for loan losses was $378,000 for each of the third and fourth quarters of 2019.
Deposits
Deposits as of December 31, 2019, were $1.72 billion, an increase of $44.3 million, or 2.6%, compared to September 30, 2019. Average deposits for the fourth quarter of 2019 were $1.69 billion, an increase of $38.9 million, or 2.4%, from the prior quarter.
Noninterest-bearing deposits totaled $584.9 million as of December 31, 2019, down $30.1 million, or 4.9%, from September 30, 2019, due to normal customer activity. As of December 31, 2019, noninterest-bearing deposits were 33.98% of total deposits.
Interest-bearing deposits totaled $1.14 billion as of December 31, 2019, up $74.4 million, or 7.0%, compared to September 30, 2019. This increase is due to the seasonal inflow of funds from public entity customers.
Junior Subordinated Debentures
All junior subordinated debentures were redeemed during the second and third quarters of 2019, leaving no outstanding long-term debt as of September 30, 2019. There was no interest expense for the junior subordinated debentures in the fourth quarter of 2019 compared to $73,000 for the third quarter of 2019.
Stockholders’ Equity
Total stockholders’ equity increased to $251.9 million as of December 31, 2019, from $245.4 million as of September 30, 2019. The $6.5 million increase in stockholders’ equity during the fourth quarter of 2019 was attributable to $6.7 million of net income, partially offset by $298,000 of other comprehensive loss.
Non-GAAP Disclosure
Our accounting and reporting policies conform to United States generally accepted accounting principles ("GAAP") and the prevailing practices in the banking industry. Certain financial measures used by management to evaluate our operating performance are discussed as supplemental non-GAAP performance measures. In accordance with the Security and Exchange Commission's ("SEC") rules, we classify a financial measure as being a non-GAAP financial measure if that financial measure excludes or includes amounts, or is subject to adjustments that have the effect of excluding or including amounts, that are included or excluded, as the case may be, in the most directly comparable measure calculated and presented in accordance with GAAP as in effect from time to time in the U.S. Non-GAAP financial measures do not include operating and other statistical measures or ratios or statistical measures calculated using exclusively either financial measures calculated in accordance with GAAP, operating measures or other measures that are not non-GAAP financial measures, or both.
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. However, these non-GAAP financial measures should not be considered in isolation or as a substitute for the most directly comparable or other financial measures calculated in accordance with GAAP. Moreover, the manner in which we calculate the non-GAAP financial measures that are discussed may differ from that of other companies reporting measures with similar names. It is important to understand how such other banking organizations calculate and name their financial measures similar to the non-GAAP financial measures discussed by us when comparing such non-GAAP financial measures.
3
A reconciliation of non-GAAP financial measures to the comparable GAAP financial measures is included at the end of the financial statement tables.
About Red River Bancshares, Inc.
The Company is the bank holding company for Red River Bank, a Louisiana state-chartered bank established in 1999 that provides a fully integrated suite of banking products and services tailored to the needs of commercial and retail customers. Red River Bank operates from a network of 24 banking centers throughout Louisiana. Banking centers are located in the following Louisiana markets: Central Louisiana, which includes the Alexandria MSA; Northwest Louisiana, which includes the Shreveport-Bossier City MSA; Southeast Louisiana, which includes the Baton Rouge MSA; Southwest Louisiana, which includes the Lake Charles MSA; and the Northshore, which includes Covington.
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 SEC on May 3, 2019, relating to our initial public offering, and in other documents that we file with the SEC from time to time. In addition, our actual financial results in the future may differ from those currently expected due to additional risks and uncertainties of which we are not currently aware or which we do not currently view as, but in the future may become, material to our business or operating results. Due to these and other possible uncertainties and risks, readers are cautioned not to place undue reliance on the forward-looking statements contained in this news release or to make predictions based solely on historical financial performance. Any forward-looking statement speaks only as of the date on which it is made, and we do not undertake any obligation to update or review any forward-looking statement, whether as a result of new information, future developments or otherwise, except as required by law. All forward-looking statements, express or implied, included in this news release are qualified in their entirety by this cautionary statement.
Contact:
Isabel V. Carriere, CPA, CGMA
Executive Vice President and Chief Financial Officer
318-561-4023
icarriere@redriverbank.net
4
FINANCIAL HIGHLIGHTS (UNAUDITED) | ||||||||||||||||||||
As of and for the Three Months Ended | As of and for the Twelve Months Ended | |||||||||||||||||||
(Dollars in thousands, except per share data) | Dec. 31, 2019 | Sept. 30, 2019 | Dec. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | |||||||||||||||
Net Income | $ | 6,743 | $ | 6,847 | $ | 6,151 | $ | 24,824 | $ | 23,056 | ||||||||||
Per Common Share Data: | ||||||||||||||||||||
Earnings per share, basic | $ | 0.92 | $ | 0.94 | $ | 0.92 | $ | 3.51 | $ | 3.43 | ||||||||||
Earnings per share, diluted | $ | 0.92 | $ | 0.93 | $ | 0.91 | $ | 3.49 | $ | 3.41 | ||||||||||
Book value per share | $ | 34.48 | $ | 33.59 | $ | 29.23 | $ | 34.48 | $ | 29.23 | ||||||||||
Tangible book value per share | $ | 34.27 | $ | 33.37 | $ | 28.99 | $ | 34.27 | $ | 28.99 | ||||||||||
Cash dividends per share | $ | — | $ | — | $ | — | $ | 0.20 | $ | 0.15 | ||||||||||
Weighted average shares outstanding, basic | 7,306,221 | 7,304,273 | 6,688,624 | 7,072,689 | 6,716,943 | |||||||||||||||
Weighted average shares outstanding, diluted | 7,347,602 | 7,340,498 | 6,724,669 | 7,115,514 | 6,756,102 | |||||||||||||||
Summary Performance Ratios: | ||||||||||||||||||||
Return on average assets | 1.37 | % | 1.42 | % | 1.33 | % | 1.30 | % | 1.29 | % | ||||||||||
Return on average equity | 10.72 | % | 11.20 | % | 12.77 | % | 10.86 | % | 12.46 | % | ||||||||||
Net interest margin | 3.45 | % | 3.50 | % | 3.45 | % | 3.47 | % | 3.42 | % | ||||||||||
Net interest margin (FTE) | 3.50 | % | 3.55 | % | 3.50 | % | 3.52 | % | 3.44 | % | ||||||||||
Efficiency ratio | 57.90 | % | 57.75 | % | 57.12 | % | 59.46 | % | 58.86 | % | ||||||||||
Loans HFI to deposits ratio | 83.60 | % | 84.27 | % | 80.73 | % | 83.60 | % | 80.73 | % | ||||||||||
Noninterest-bearing deposits to deposits ratio | 33.98 | % | 36.68 | % | 33.29 | % | 33.98 | % | 33.29 | % | ||||||||||
Noninterest income to average assets | 0.85 | % | 0.91 | % | 0.81 | % | 0.84 | % | 0.81 | % | ||||||||||
Operating expense to average assets | 2.41 | % | 2.47 | % | 2.37 | % | 2.49 | % | 2.43 | % | ||||||||||
Summary Credit Quality Ratios: | ||||||||||||||||||||
Nonperforming assets to total assets | 0.33 | % | 0.41 | % | 0.38 | % | 0.33 | % | 0.38 | % | ||||||||||
Nonperforming loans to loans HFI | 0.37 | % | 0.47 | % | 0.49 | % | 0.37 | % | 0.49 | % | ||||||||||
Allowance for loan losses to loans HFI | 0.97 | % | 0.98 | % | 0.94 | % | 0.97 | % | 0.94 | % | ||||||||||
Net charge-offs to average loans | 0.02 | % | 0.00 | % | 0.02 | % | 0.03 | % | 0.03 | % | ||||||||||
Capital Ratios: | ||||||||||||||||||||
Total stockholders' equity to total assets | 12.67 | % | 12.66 | % | 10.41 | % | 12.67 | % | 10.41 | % | ||||||||||
Tangible common equity to tangible assets | 12.60 | % | 12.59 | % | 10.34 | % | 12.60 | % | 10.34 | % | ||||||||||
Total risk-based capital to risk-weighted assets | 18.02 | % | 17.76 | % | 16.55 | % | 18.02 | % | 16.55 | % | ||||||||||
Tier 1 risk-based capital to risk-weighted assets | 17.07 | % | 16.80 | % | 15.62 | % | 17.07 | % | 15.62 | % | ||||||||||
Common equity tier 1 capital to risk-weighted assets | 17.07 | % | 16.80 | % | 14.80 | % | 17.07 | % | 14.80 | % | ||||||||||
Tier 1 risk-based capital to average assets | 12.82 | % | 12.77 | % | 11.40 | % | 12.82 | % | 11.40 | % | ||||||||||
5
RED RIVER BANCSHARES, INC. | |||||||||||||||||||
CONSOLIDATED BALANCE SHEETS (UNAUDITED) | |||||||||||||||||||
(in thousands) | Dec. 31, 2019 | Sept. 30, 2019 | June 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | ||||||||||||||
ASSETS | |||||||||||||||||||
Cash and due from banks | $ | 25,937 | $ | 32,724 | $ | 29,854 | $ | 32,371 | $ | 34,070 | |||||||||
Interest-bearing deposits in other banks | 107,355 | 73,598 | 71,761 | 145,593 | 117,836 | ||||||||||||||
Securities available-for-sale | 335,573 | 341,900 | 318,082 | 319,353 | 307,877 | ||||||||||||||
Equity securities | 3,936 | 3,954 | 3,924 | 3,869 | 3,821 | ||||||||||||||
Nonmarketable equity securities | 1,350 | 1,347 | 1,342 | 1,303 | 1,299 | ||||||||||||||
Loans held for sale | 5,089 | 4,113 | 6,029 | 2,210 | 2,904 | ||||||||||||||
Loans held for investment | 1,438,924 | 1,413,162 | 1,393,154 | 1,349,181 | 1,328,438 | ||||||||||||||
Allowance for loan losses | (13,937 | ) | (13,906 | ) | (13,591 | ) | (13,101 | ) | (12,524 | ) | |||||||||
Premises and equipment, net | 41,744 | 39,828 | 40,032 | 40,033 | 39,690 | ||||||||||||||
Accrued interest receivable | 5,251 | 4,928 | 5,570 | 4,988 | 5,013 | ||||||||||||||
Bank-owned life insurance | 21,845 | 21,707 | 21,570 | 21,434 | 21,301 | ||||||||||||||
Intangible assets | 1,546 | 1,546 | 1,546 | 1,546 | 1,546 | ||||||||||||||
Right-of-use assets | 4,553 | 4,651 | 4,748 | 4,844 | — | ||||||||||||||
Other assets | 9,059 | 9,302 | 8,897 | 8,494 | 9,317 | ||||||||||||||
Total Assets | $ | 1,988,225 | $ | 1,938,854 | $ | 1,892,918 | $ | 1,922,118 | $ | 1,860,588 | |||||||||
LIABILITIES | |||||||||||||||||||
Noninterest-bearing deposits | $ | 584,915 | $ | 615,051 | $ | 576,934 | $ | 565,757 | $ | 547,880 | |||||||||
Interest-bearing deposits | 1,136,205 | 1,061,800 | 1,057,656 | 1,125,377 | 1,097,703 | ||||||||||||||
Total Deposits | 1,721,120 | 1,676,851 | 1,634,590 | 1,691,134 | 1,645,583 | ||||||||||||||
Other borrowed funds | — | — | — | — | — | ||||||||||||||
Junior subordinated debentures | — | — | 5,155 | 11,341 | 11,341 | ||||||||||||||
Accrued interest payable | 2,222 | 1,925 | 1,998 | 1,967 | 1,757 | ||||||||||||||
Lease liabilities | 4,603 | 4,688 | 4,773 | 4,856 | — | ||||||||||||||
Accrued expenses and other liabilities | 8,382 | 10,001 | 8,491 | 10,636 | 8,204 | ||||||||||||||
Total Liabilities | 1,736,327 | 1,693,465 | 1,655,007 | 1,719,934 | 1,666,885 | ||||||||||||||
COMMITMENTS AND CONTINGENCIES | — | — | — | — | — | ||||||||||||||
STOCKHOLDERS' EQUITY | |||||||||||||||||||
Preferred stock, no par value | — | — | — | — | — | ||||||||||||||
Common stock, no par value | 68,082 | 68,082 | 68,082 | 41,271 | 41,094 | ||||||||||||||
Additional paid-in capital | 1,269 | 1,205 | 1,141 | 1,091 | 1,042 | ||||||||||||||
Retained earnings | 182,571 | 175,828 | 168,981 | 163,443 | 159,073 | ||||||||||||||
Accumulated other comprehensive income (loss) | (24 | ) | 274 | (293 | ) | (3,621 | ) | (7,506 | ) | ||||||||||
Total Stockholders' Equity | 251,898 | 245,389 | 237,911 | 202,184 | 193,703 | ||||||||||||||
Total Liabilities and Stockholders' Equity | $ | 1,988,225 | $ | 1,938,854 | $ | 1,892,918 | $ | 1,922,118 | $ | 1,860,588 | |||||||||
6
RED RIVER BANCSHARES, INC. | |||||||||||||||||||||
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) | |||||||||||||||||||||
For the Three Months Ended | For the Twelve Months Ended | ||||||||||||||||||||
(in thousands) | Dec. 31, 2019 | Sept. 30, 2019 | Dec. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | ||||||||||||||||
INTEREST AND DIVIDEND INCOME | |||||||||||||||||||||
Interest and fees on loans | $ | 16,544 | $ | 16,578 | $ | 15,440 | $ | 64,570 | $ | 58,747 | |||||||||||
Interest on securities | 1,894 | 1,800 | 1,697 | 7,241 | 6,951 | ||||||||||||||||
Interest on federal funds sold | 150 | 178 | 160 | 753 | 356 | ||||||||||||||||
Interest on deposits in other banks | 192 | 213 | 375 | 1,127 | 798 | ||||||||||||||||
Dividends on stock | 4 | 12 | 8 | 34 | 34 | ||||||||||||||||
Total Interest and Dividend Income | 18,784 | 18,781 | 17,680 | 73,725 | 66,886 | ||||||||||||||||
INTEREST EXPENSE | |||||||||||||||||||||
Interest on deposits | 2,441 | 2,514 | 2,066 | 9,701 | 7,084 | ||||||||||||||||
Interest on other borrowed funds | — | — | — | — | 7 | ||||||||||||||||
Interest on junior subordinated debentures | — | 73 | 149 | 385 | 558 | ||||||||||||||||
Total Interest Expense | 2,441 | 2,587 | 2,215 | 10,086 | 7,649 | ||||||||||||||||
NET INTEREST INCOME | 16,343 | 16,194 | 15,465 | 63,639 | 59,237 | ||||||||||||||||
Provision for loan losses | 378 | 378 | 526 | 1,810 | 1,990 | ||||||||||||||||
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES | 15,965 | 15,816 | 14,939 | 61,829 | 57,247 | ||||||||||||||||
NONINTEREST INCOME | |||||||||||||||||||||
Service charges on deposit accounts | 1,270 | 1,195 | 1,096 | 4,573 | 4,582 | ||||||||||||||||
Debit card income, net | 782 | 833 | 732 | 3,095 | 2,986 | ||||||||||||||||
Mortgage loan income | 816 | 1,014 | 432 | 3,002 | 2,107 | ||||||||||||||||
Brokerage income | 573 | 561 | 550 | 2,125 | 1,944 | ||||||||||||||||
Loan and deposit income | 389 | 404 | 416 | 1,521 | 1,359 | ||||||||||||||||
Bank-owned life insurance income | 137 | 137 | 316 | 544 | 732 | ||||||||||||||||
Gain (Loss) on equity securities | (19 | ) | 30 | 37 | 115 | (85 | ) | ||||||||||||||
Gain (Loss) on sale of investments | 13 | 5 | — | 18 | 32 | ||||||||||||||||
SBIC income | 185 | 139 | 141 | 819 | 509 | ||||||||||||||||
Other income | 43 | 68 | 47 | 158 | 365 | ||||||||||||||||
Total Noninterest Income | 4,189 | 4,386 | 3,767 | 15,970 | 14,531 | ||||||||||||||||
OPERATING EXPENSES | |||||||||||||||||||||
Personnel expenses | 7,148 | 7,007 | 6,839 | 27,800 | 26,094 | ||||||||||||||||
Occupancy and equipment expenses | 1,268 | 1,199 | 1,187 | 4,976 | 4,500 | ||||||||||||||||
Technology expenses | 596 | 595 | 521 | 2,293 | 2,070 | ||||||||||||||||
Advertising | 204 | 216 | 183 | 1,025 | 762 | ||||||||||||||||
Other business development expenses | 281 | 266 | 277 | 1,107 | 1,127 | ||||||||||||||||
Data processing expense | 462 | 479 | 129 | 1,882 | 1,386 | ||||||||||||||||
Other taxes | 346 | 425 | 311 | 1,579 | 1,327 | ||||||||||||||||
Loan and deposit expenses | 247 | 285 | 208 | 1,148 | 852 | ||||||||||||||||
Legal and professional expenses | 403 | 436 | 372 | 1,541 | 1,422 | ||||||||||||||||
Regulatory assessment expense | 38 | 37 | 162 | 351 | 642 | ||||||||||||||||
Other operating expenses | 895 | 940 | 797 | 3,633 | 3,240 | ||||||||||||||||
Total Operating Expenses | 11,888 | 11,885 | 10,986 | 47,335 | 43,422 | ||||||||||||||||
INCOME BEFORE INCOME TAX EXPENSE | 8,266 | 8,317 | 7,720 | 30,464 | 28,356 | ||||||||||||||||
Income tax expense | 1,523 | 1,470 | 1,569 | 5,640 | 5,300 | ||||||||||||||||
NET INCOME | $ | 6,743 | $ | 6,847 | $ | 6,151 | $ | 24,824 | $ | 23,056 | |||||||||||
7
RED RIVER BANCSHARES, INC. | ||||||||||||||||||||||||||||||||
NET INTEREST INCOME AND NET INTERST MARGIN (UNAUDITED) | ||||||||||||||||||||||||||||||||
For the Three Months Ended | ||||||||||||||||||||||||||||||||
December 31, 2019 | September 30, 2019 | December 31, 2018 | ||||||||||||||||||||||||||||||
(dollars in thousands) | Average Balance Outstanding | Interest Earned/ Interest Paid | Average Yield/ Rate | Average Balance Outstanding | Interest Earned/ Interest Paid | Average Yield/ Rate | Average Balance Outstanding | Interest Earned/ Interest Paid | Average Yield/ Rate | |||||||||||||||||||||||
Assets | ||||||||||||||||||||||||||||||||
Interest-earning assets: | ||||||||||||||||||||||||||||||||
Loans(1,2) | $ | 1,428,978 | $ | 16,544 | 4.53 | % | $ | 1,408,146 | $ | 16,578 | 4.61 | % | $ | 1,339,468 | $ | 15,440 | 4.52 | % | ||||||||||||||
Securities - taxable | 258,491 | 1,392 | 2.15 | % | 255,846 | 1,352 | 2.11 | % | 264,440 | 1,369 | 2.07 | % | ||||||||||||||||||||
Securities - tax-exempt | 85,749 | 502 | 2.34 | % | 77,047 | 448 | 2.33 | % | 57,014 | 328 | 2.30 | % | ||||||||||||||||||||
Federal funds sold | 36,470 | 150 | 1.61 | % | 32,461 | 178 | 2.15 | % | 27,414 | 160 | 2.28 | % | ||||||||||||||||||||
Interest-bearing balances due from banks | 45,565 | 192 | 1.65 | % | 38,676 | 213 | 2.16 | % | 67,139 | 375 | 2.19 | % | ||||||||||||||||||||
Nonmarketable equity securities | 1,346 | 4 | 1.19 | % | 1,342 | 10 | 2.99 | % | 1,295 | 4 | 1.15 | % | ||||||||||||||||||||
Investment in trusts | — | — | — | % | 64 | 2 | 10.91 | % | 341 | 4 | 5.20 | % | ||||||||||||||||||||
Total interest-earning assets | 1,856,599 | $ | 18,784 | 3.97 | % | 1,813,582 | $ | 18,781 | 4.06 | % | 1,757,111 | $ | 17,680 | 3.95 | % | |||||||||||||||||
Allowance for loan losses | (13,969 | ) | (13,755 | ) | (12,397 | ) | ||||||||||||||||||||||||||
Noninterest earning assets | 112,130 | 110,062 | 90,946 | |||||||||||||||||||||||||||||
Total assets | $ | 1,954,760 | $ | 1,909,889 | $ | 1,835,660 | ||||||||||||||||||||||||||
Liabilities and Stockholders’ Equity | ||||||||||||||||||||||||||||||||
Interest-bearing liabilities: | ||||||||||||||||||||||||||||||||
Interest-bearing transaction deposits | $ | 747,293 | $ | 968 | 0.51 | % | $ | 724,219 | $ | 972 | 0.53 | % | $ | 719,852 | $ | 827 | 0.46 | % | ||||||||||||||
Time deposits | 334,499 | 1,473 | 1.75 | % | 338,330 | 1,542 | 1.81 | % | 327,903 | 1,239 | 1.50 | % | ||||||||||||||||||||
Total interest-bearing deposits | 1,081,792 | 2,441 | 0.90 | % | 1,062,549 | 2,514 | 0.94 | % | 1,047,755 | 2,066 | 0.78 | % | ||||||||||||||||||||
Junior subordinated debentures | — | — | — | % | 2,129 | 73 | 13.64 | % | 11,341 | 149 | 5.20 | % | ||||||||||||||||||||
Other borrowings | — | — | — | % | 22 | — | 2.80 | % | 30 | — | 4.84 | % | ||||||||||||||||||||
Total interest-bearing liabilities | 1,081,792 | $ | 2,441 | 0.90 | % | 1,064,700 | $ | 2,587 | 0.96 | % | 1,059,126 | $ | 2,215 | 0.83 | % | |||||||||||||||||
Noninterest-bearing liabilities: | ||||||||||||||||||||||||||||||||
Noninterest-bearing deposits | 606,329 | 586,664 | 574,298 | |||||||||||||||||||||||||||||
Accrued interest and other liabilities | 17,191 | 16,084 | 11,065 | |||||||||||||||||||||||||||||
Total noninterest-bearing liabilities: | 623,520 | 602,748 | 585,363 | |||||||||||||||||||||||||||||
Stockholders’ equity | 249,448 | 242,441 | 191,171 | |||||||||||||||||||||||||||||
Total liabilities and stockholders’ equity | $ | 1,954,760 | $ | 1,909,889 | $ | 1,835,660 | ||||||||||||||||||||||||||
Net interest income | $ | 16,343 | $ | 16,194 | $ | 15,465 | ||||||||||||||||||||||||||
Net interest spread | 3.07 | % | 3.10 | % | 3.12 | % | ||||||||||||||||||||||||||
Net interest margin | 3.45 | % | 3.50 | % | 3.45 | % | ||||||||||||||||||||||||||
Net interest margin FTE(3) | 3.50 | % | 3.55 | % | 3.50 | % | ||||||||||||||||||||||||||
Cost of deposits | 0.57 | % | 0.60 | % | 0.51 | % | ||||||||||||||||||||||||||
Cost of funds | 0.52 | % | 0.57 | % | 0.50 | % | ||||||||||||||||||||||||||
(1) | Includes average outstanding balances of loans held for sale of $4.3 million, $6.0 million, and $2.8 million for the three months ended December 31, 2019, September 30, 2019, and December 31, 2018, respectively. |
(2) | Nonaccrual loans are included as loans carrying a zero yield. |
(3) | Net interest margin FTE includes an FTE adjustment using a 21% federal income tax rate on tax-exempt securities and tax-exempt loans. |
8
RED RIVER BANCSHARES, INC. | |||||||||||||||||||||
NET INTEREST INCOME AND NET INTEREST MARGIN (UNAUDITED) | |||||||||||||||||||||
For the Twelve Months Ended December 31, | |||||||||||||||||||||
2019 | 2018 | ||||||||||||||||||||
(dollars in thousands) | Average Balance Outstanding | Interest Earned/ Interest Paid | Average Yield/ Rate | Average Balance Outstanding | Interest Earned/ Interest Paid | Average Yield/ Rate | |||||||||||||||
Assets | |||||||||||||||||||||
Interest-earning assets: | |||||||||||||||||||||
Loans(1,2) | $ | 1,388,702 | $ | 64,570 | 4.59 | % | $ | 1,312,078 | $ | 58,747 | 4.42 | % | |||||||||
Securities - taxable | 257,090 | 5,466 | 2.13 | % | 277,337 | 5,624 | 2.03 | % | |||||||||||||
Securities - tax-exempt | 75,385 | 1,775 | 2.35 | % | 57,776 | 1,327 | 2.30 | % | |||||||||||||
Federal funds sold | 34,637 | 753 | 2.14 | % | 17,790 | 356 | 1.97 | % | |||||||||||||
Interest-bearing balances due from banks | 51,694 | 1,127 | 2.15 | % | 40,768 | 798 | 1.93 | % | |||||||||||||
Nonmarketable equity securities | 1,330 | 23 | 1.69 | % | 1,286 | 18 | 1.36 | % | |||||||||||||
Investment in trusts | 181 | 11 | 6.34 | % | 341 | 16 | 4.83 | % | |||||||||||||
Total interest-earning assets | 1,809,019 | $ | 73,725 | 4.03 | % | 1,707,376 | $ | 66,886 | 3.86 | % | |||||||||||
Allowance for loan losses | (13,444 | ) | (11,713 | ) | |||||||||||||||||
Noninterest earning assets | 107,390 | 89,155 | |||||||||||||||||||
Total assets | $ | 1,902,965 | $ | 1,784,818 | |||||||||||||||||
Liabilities and Stockholders’ Equity | |||||||||||||||||||||
Interest-bearing liabilities: | |||||||||||||||||||||
Interest-bearing transaction deposits | $ | 739,554 | $ | 3,898 | 0.53 | % | $ | 708,818 | $ | 2,735 | 0.39 | % | |||||||||
Time deposits | 335,024 | 5,803 | 1.73 | % | 320,699 | 4,349 | 1.36 | % | |||||||||||||
Total interest-bearing deposits | 1,074,578 | 9,701 | 0.90 | % | 1,029,517 | 7,084 | 0.69 | % | |||||||||||||
Junior subordinated debentures | 6,017 | 385 | 6.39 | % | 11,341 | 558 | 4.92 | % | |||||||||||||
Other borrowings | 5 | — | 2.80 | % | 191 | 7 | 3.66 | % | |||||||||||||
Total interest-bearing liabilities | 1,080,600 | $ | 10,086 | 0.93 | % | 1,041,049 | $ | 7,649 | 0.73 | % | |||||||||||
Noninterest-bearing liabilities: | |||||||||||||||||||||
Noninterest-bearing deposits | 577,701 | 545,547 | |||||||||||||||||||
Accrued interest and other liabilities | 16,118 | 13,124 | |||||||||||||||||||
Total noninterest-bearing liabilities: | 593,819 | 558,671 | |||||||||||||||||||
Stockholders’ equity | 228,546 | 185,098 | |||||||||||||||||||
Total liabilities and stockholders’ equity | $ | 1,902,965 | $ | 1,784,818 | |||||||||||||||||
Net interest income | $ | 63,639 | $ | 59,237 | |||||||||||||||||
Net interest spread | 3.10 | % | 3.13 | % | |||||||||||||||||
Net interest margin | 3.47 | % | 3.42 | % | |||||||||||||||||
Net interest margin FTE(3) | 3.52 | % | 3.44 | % | |||||||||||||||||
Cost of deposits | 0.59 | % | 0.45 | % | |||||||||||||||||
Cost of funds | 0.56 | % | 0.45 | % | |||||||||||||||||
(1) | Includes average outstanding balances of loans held for sale of $4.1 million and $2.9 million for the year ended December 31, 2019 and 2018, respectively. |
(2) | Nonaccrual loans are included as loans carrying a zero yield. |
(3) | Net interest margin FTE includes an FTE adjustment using a 21% federal income tax rate on tax-exempt securities and tax-exempt loans. |
9
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES | |||||||||||
(dollars in thousands except per share data) | December 31, 2019 | September 30, 2019 | December 31, 2018 | ||||||||
Tangible common equity | |||||||||||
Total stockholders' equity | $ | 251,898 | $ | 245,389 | $ | 193,703 | |||||
Adjustments: | |||||||||||
Intangible assets | (1,546 | ) | (1,546 | ) | (1,546 | ) | |||||
Total tangible common equity | $ | 250,352 | $ | 243,843 | $ | 192,157 | |||||
Common shares outstanding | 7,306,221 | 7,306,221 | 6,627,358 | ||||||||
Book value per common share | $ | 34.48 | $ | 33.59 | $ | 29.23 | |||||
Tangible book value per common share | $ | 34.27 | $ | 33.37 | $ | 28.99 | |||||
Tangible assets | |||||||||||
Total assets | $ | 1,988,225 | $ | 1,938,854 | $ | 1,860,588 | |||||
Adjustments: | |||||||||||
Intangible assets | (1,546 | ) | (1,546 | ) | (1,546 | ) | |||||
Total tangible assets | $ | 1,986,679 | $ | 1,937,308 | $ | 1,859,042 | |||||
Total stockholder's equity to assets | 12.67 | % | 12.66 | % | 10.41 | % | |||||
Tangible common equity to tangible assets | 12.60 | % | 12.59 | % | 10.34 | % | |||||
10