Document


 
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): July 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 501
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 July 29, 2020, Red River Bancshares, Inc. (the "Company") issued a press release announcing its unaudited financial results for the second quarter ended June 30, 2020. 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: July 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
Exhibit 99.1
https://cdn.kscope.io/cea962a07e5a3eca50daed3de6155a90-bancshareslogo.jpg
FOR IMMEDIATE RELEASE

Red River Bancshares, Inc. Reports Second Quarter 2020 Financial Results
Alexandria, Louisiana, July 29, 2020, (GLOBE NEWSWIRE) -- Red River Bancshares, Inc. (the “Company”), (Nasdaq: RRBI), the holding company for Red River Bank (the “Bank”), announced today its unaudited financial results for the second quarter of 2020.
Net income for the second quarter of 2020 was $6.9 million, or $0.93 per diluted common share ("EPS"), an increase of $109,000, or 1.6%, compared to $6.7 million, or $0.92 EPS, for the first quarter of 2020, and an increase of $1.3 million, or 23.8%, compared to $5.5 million, or $0.78 EPS, for the second quarter of 2019.
Net income for the six months ended June 30, 2020, was $13.6 million, or $1.85 EPS, an increase of $2.4 million, or 21.1%, compared to $11.2 million, or $1.63 EPS, for the six months ended June 30, 2019.
Second Quarter 2020 Performance and Operational Highlights
The second quarter of 2020 was dominated by the continuation of the novel coronavirus ("COVID-19") pandemic, the implementation of the Small Business Administration ("SBA") Paycheck Protection Program ("PPP"), the government-mandated economic shutdowns, and the resulting economic challenges.
Red River Bank participated in the SBA PPP and originated $199.0 million of PPP loans at 1.0% interest during the second quarter of 2020. These loans resulted in $730,000 of origination fees recognized as income in the second quarter of 2020 and $6.3 million in deferred income as of June 30, 2020.
The quarterly return on assets was 1.20%, and the quarterly return on equity was 10.30%.
Assets, loans held for investment ("HFI"), and deposits increased significantly in the second quarter of 2020 as a result of the new PPP loans and higher deposit balances. Deposits increased due to customers receiving funds from various government stimulus programs and depositing the proceeds from their PPP loans, as well as higher deposit account opening activity.
The net interest margin for the second quarter of 2020 was negatively impacted by the low interest rate environment throughout the entire second quarter. The net interest margin, fully tax equivalent ("FTE") for the second quarter of 2020 was 3.12%, compared to 3.41% for the prior quarter.
Mortgage loan income for the second quarter of 2020 was a Company high of $1.9 million due to the low mortgage interest rate environment resulting in increased mortgage refinancing activity.
In the second quarter of 2020, we declared and paid a quarterly cash dividend of $0.06 per common share.
Our investment group began a conversion of our registered broker-dealer relationship to LPL Financial. This conversion is expected to support future growth as well as provide better technology and benefits to our customers and investment group.
Blake Chatelain, President and Chief Executive Officer stated, "The second quarter of 2020 was challenging for the Company, our customers, communities, and employees. The highlight of the quarter was our performance with PPP loans. The Red River Bank PPP team worked together to help borrowers through the PPP process, with approximately 95% of our applicants receiving their PPP funds during the first round, and the remaining 5% of our applicants receiving their funding quickly in the second round. These funds were crucial to helping our borrowers operate and pay their employees during the pandemic-caused shutdown.
"In the second quarter of 2020, we assessed the possible impact of the economic shutdown on our loan portfolio and increased the provision for loan loss expense by $1.0 million compared to the prior quarter. As of June 30, 2020, our asset quality metrics remained solid; however, we recognize the uncertainty relating to the economic damage caused by the shutdown and the future risks associated with the continuing COVID-19 pandemic. We continue to monitor loan payment status closely, and we will adjust the provision for loan losses as needed in the third and fourth quarters of 2020.
"Due to the pandemic and the related economic shutdown, customer banking transactions were lower than normal, commercial loan demand was weak, and income in selected categories was reduced. These challenges were offset by robust mortgage refinancing activity resulting in higher mortgage income, accomplished in spite of new, challenging complexities in the mortgage market.
"Also in the second quarter of 2020, deposit balances increased 19.8%, and we experienced record-high new deposit account opening activity. We believe that our banking reputation benefited from our simple, digital PPP process that was quickly available to borrowers. We have, and are still gaining, new banking relationships due to our focus on serving our customers quickly, efficiently, and professionally. Times like these provide us the opportunity to build value with our customers and our communities. Community

1


banks are the lifeline of the small business economy, and the PPP was possible due to community banks like Red River Bank. We are preparing for the PPP forgiveness process and plan to support our borrowers with this important next step. We are optimistic about the recovery; however, we realize that it is likely to be a longer and more volatile path than originally expected."
Net Interest Income and Net Interest Margin FTE
Net interest income and net interest margin FTE for the second quarter of 2020 were impacted by having a full quarter of the lower interest rate environment stemming from the 150 basis point ("bp(s)") decrease to the target federal funds rate by the Federal Reserve in March 2020.
Net interest income for the second quarter of 2020 was $17.0 million, which was $868,000, or 5.4%, higher than the first quarter of 2020, due to a $443,000 increase in interest and dividend income, combined with a $425,000 decrease in interest expense. Interest and dividend income increased due to $1.2 million of PPP loan income recorded during the second quarter, partially offset by the lower interest rate environment impact on variable rate earning assets. For the second quarter of 2020, average short-term liquid assets increased $105.6 million compared to the prior quarter, while interest income on short-term liquid assets decreased $250,000 for the same period, due to the lower interest rate environment. The increase in the average short-term liquid assets was due to an increase in deposits as customers received funds from various government stimulus programs and deposited the proceeds from their PPP loans, as well as higher deposit account opening activity. Interest expense decreased as a result of our decision to reduce interest rates on deposits in the second quarter.
The net interest margin FTE decreased 29 bps to 3.12% for the second quarter of 2020, compared to 3.41% for the prior quarter, mainly due to the significant Federal Reserve rate decreases in March 2020. The yield on loans decreased 29 bps to 4.21% due to both the impact of the lower interest rate environment on new, renewed, and floating rate loans and the impact of the lower rate PPP loans added during the second quarter. As of June 30, 2020, floating rate loans were 13.5% of loans HFI. The yield on federal funds sold decreased 114 bps, whereas the yield on interest-bearing balances due from banks decreased 125 bps due to the lower interest rate environment. The resulting yield on interest-earning assets was 3.45% for the second quarter of 2020, compared to 3.89% for the first quarter of 2020. The cost of deposits was 0.41% for the second quarter of 2020, compared to 0.58% for the prior quarter. The cost of deposits was lower during the second quarter due to average noninterest-bearing deposits increasing $228.2 million, or 38.7%, combined with a 19 bp decrease in the rate on interest-bearing deposits during the same period as a result of our adjustments to deposit rates.
To assist with funding PPP loans, on April 15, 2020, the Company borrowed $50.0 million from the Federal Home Loan Bank of Dallas at a rate of 0.35% under our existing line of credit. Due to having adequate liquidity, the $50.0 million advance was paid off on May 19, 2020.
Red River Bank originated $199.0 million of PPP loans in the second quarter of 2020 at an interest rate of 1.0%. Under the terms of the PPP, we received loan origination fees from the SBA ranging from 1.0% to 5.0% of the initial principal amount of the loans. Our PPP origination fees were $7.0 million, or 3.52%, of originated PPP loans and are being recorded to interest income over the 24-month loan term. For the second quarter of 2020, PPP loan interest and fees totaled $1.2 million resulting in a 2.99% yield.
Excluding PPP loan income, net interest income (non-GAAP) for the second quarter of 2020 was $15.8 million(1), which was $285,000, or 1.8%, lower than the first quarter of 2020. Also, with PPP loans excluded for the second quarter of 2020, the yield on non-PPP loans (non-GAAP) was 4.34%(1), and the net interest margin FTE (non-GAAP) was 3.13%(1). PPP loans had a 13 bp dilutive impact to the yield on loans and a one bp dilutive impact to the net interest margin FTE.
Provision for Loan Losses
The provision for loan losses for the second quarter of 2020 was $1.5 million which was $1.0 million higher than $503,000 for the prior quarter, due to expected economic pressures relating to the continuing COVID-19 pandemic.
Noninterest Income
Noninterest income totaled $5.8 million for the second quarter of 2020, an increase of $1.1 million, or 23.1%, compared to $4.7 million for the previous quarter. The increase was mainly due to higher mortgage loan income, a larger gain on the sale of securities, and higher loan and deposit income, partially offset by a decrease in service charges on deposit accounts and lower brokerage income.
Mortgage loan income for the second quarter of 2020 was $1.9 million, an increase of $1.1 million, or 119.0%, from the previous quarter's total of $889,000. The growth in mortgage loan income was driven by increased refinancing activity as a result of continued low mortgage interest rates.
The gain on the sale of securities was $840,000 for the second quarter of 2020, compared to a $383,000 gain in the first quarter. In the second quarter of 2020, we executed an additional portfolio restructuring transaction in response to the lower interest rate environment which complemented the restructuring performed in the prior quarter.

____________________
(1) Non-GAAP financial measure. Calculations of this measure and reconciliations to GAAP are included in the schedules accompanying this release.
2


Loan and deposit income totaled $627,000 for the second quarter of 2020, an increase of $327,000, or 109.0%, from the previous quarter. This increase was primarily due to $230,000 of nonrecurring commercial real estate loan fees in the second quarter of 2020.
Service charges on deposit accounts totaled $718,000 for the second quarter of 2020, a decrease of $510,000, or 41.5%, compared to $1.2 million for the prior quarter. This decrease was due to lower customer deposit transaction activity and reduced deposit fees. In order to assist our customers during the COVID-19 pandemic, we temporarily reduced our non-sufficient funds fee by 50% and suspended other deposit fees. These second quarter fee adjustments resulted in approximately $168,000 in lower deposit fees.
Brokerage income for the second quarter of 2020 was $395,000, a decrease of $349,000, or 46.9%, compared to $744,000 in the previous quarter. The decrease was primarily due to the combination of a Company high level of brokerage income reported in the first quarter of 2020, and a reduction in normal brokerage activity and revenue resulting from the conversion work associated with our migration to a new Red River Bank investment group broker-dealer partner beginning in the second quarter.
Operating Expenses
Operating expenses for the second quarter of 2020 totaled $12.9 million, an increase of $919,000, or 7.7%, compared to $12.0 million for the first quarter of 2020. The increase was mainly due to higher other operating expenses, personnel expenses, regulatory assessment expense, and legal and professional expenses.
Other operating expenses increased $355,000 to $976,000 for the second quarter of 2020, returning to normal operating levels compared to the first quarter. In the first quarter of 2020, we recorded a nonrecurring $311,000 expense reduction related to the dissolution of an acquired subsidiary.
Personnel expenses totaled $7.6 million for the second quarter of 2020, up $298,000, or 4.1%, from the first quarter of 2020. This increase was due to annual merit increases effective April 2020 and increased revenue-based commission compensation due to higher mortgage commissions, partially offset by lower brokerage commissions.
Regulatory assessment expense increased $113,000, or 434.6%, to $139,000 for the second quarter of 2020 compared to $26,000 for the first quarter of 2020. This increase was due to a $113,000 increase in our FDIC insurance assessment expense. The Bank was notified by the FDIC that it would again have an FDIC insurance assessment starting in the second quarter of 2020, compared to no FDIC insurance assessment for the prior quarter.
Legal and professional expenses totaled $605,000 for the second quarter of 2020, up $110,000, or 22.2%, from the first quarter of 2020. This increase was due to increased loan collection, audit, and compliance expenses in the second quarter of 2020.
Asset Overview
Assets increased $351.2 million, or 17.5%, to $2.36 billion as of June 30, 2020, compared to $2.01 billion as of March 31, 2020. This increase was primarily due to reporting $192.7 million of PPP loans, net of deferred income, as of June 30, 2020, compared to none at March 31, 2020, combined with a $160.9 million increase in short-term liquid assets as a result of deposit growth outpacing loan growth. The loans HFI to deposits ratio was 78.06% as of June 30, 2020, compared to 83.77% as of March 31, 2020.
Excluding $192.7 million of PPP loans, net of deferred income, assets (non-GAAP) increased $158.5 million, or 7.9%, to $2.17 billion(1) as of June 30, 2020, compared to $2.01 billion as of March 31, 2020. The non-PPP loans HFI to deposits ratio (non-GAAP) was 68.75%(1) as of June 30, 2020, compared to 83.77% as of March 31, 2020.
Loans
Loans HFI as of June 30, 2020, were $1.62 billion, an increase of $167.9 million, or 11.6%, from March 31, 2020. The increase in loans was primarily due to the origination of PPP loans.
In the second quarter of 2020, Red River Bank originated 1,384 PPP loans totaling $199.0 million. As of June 30, 2020, unamortized PPP origination fees were $6.3 million, resulting in $192.7 million of PPP loans, net of deferred income, or 11.9% of loans HFI. The average PPP loan size was $144,000.
As of June 30, 2020, loans HFI excluding $192.7 million of PPP loans (non-GAAP), net of deferred income, were $1.42 billion(1), a decrease of $24.7 million, or 1.7%, from March 31, 2020. The decrease in non-PPP loans was attributable to a decline in new loan growth resulting from the COVID-19 pandemic economic shutdowns.
In the first quarter of 2020, we began granting 90-day loan payment deferments for requesting borrowers impacted by pandemic-related economic shutdowns. Loan payment deferments were granted on $113.4 million of loans as of March 31, 2020, and on $246.3 million of loans as of April 30, 2020. Through June 30, 2020, loan payment deferments were granted on 554 loans totaling

____________________
(1) Non-GAAP financial measure. Calculations of this measure and reconciliations to GAAP are included in the schedules accompanying this release.
3


$272.2 million, or 19.1% of non-PPP loans HFI (non-GAAP). By the end of June 2020, $119.4 million, or 43.9%, of the original deferrals granted were expired.
As of June 30, 2020, 289 loans totaling $152.8 million, or 10.7% of non-PPP loans HFI (non-GAAP), remained on active deferral. Deferrals of principal and interest payments were 5.4% of non-PPP loans HFI (non-GAAP) and deferrals of principal only payments were 5.3% of non-PPP loans HFI (non-GAAP). As of July 20, 2020, $10.5 million, or 3.9%, of the original deferrals granted have requested and been approved for a second 90-day deferral term.
We have identified certain sectors within our portfolio that we believe have a heightened overall level of risk due to pandemic-related macro-economic conditions. The following table shows non-PPP loans HFI (non-GAAP) in these sectors:
 
June 30, 2020
 
Loans
 
Loans with Active COVID-19 Payment Deferment
(dollars in thousands)
Amount
 
Percent of Non-PPP Loans HFI (non-GAAP)
 
Amount
 
Percent of Non-PPP Loans HFI (non-GAAP)
Hospitality services:
 
 
 
 
 
 
 
Hotels and other overnight lodging
$
25,330

 
1.8
%
 
$
23,830

 
1.7
%
Restaurants - full service
9,314

 
0.7
%
 
2,010

 
0.1
%
Restaurants - limited service
12,635

 
0.9
%
 
51

 
%
Other
3,642

 
0.2
%
 
426

 
%
Total hospitality services
$
50,921

 
3.6
%
 
$
26,317

 
1.8
%
 
 
 
 
 
 
 

Retail trade:
 
 
 
 
 
 
 
Automobile dealers
$
36,696

 
2.6
%
 
$
2,874

 
0.2
%
Other retail
23,767

 
1.7
%
 
1,377

 
0.1
%
Total retail trade
$
60,463

 
4.3
%
 
$
4,251

 
0.3
%
 
 
 
 
 
 
 
 
Energy
$
27,952

 
2.0
%
 
$
5,505

 
0.4
%
The following table shows non-PPP loans HFI (non-GAAP) in other non-industry specific areas that we believe may be affected by the pandemic:
 
June 30, 2020
(dollars in thousands)
Amount
 
Percent of Non-PPP Loans HFI (non-GAAP)
Loans collateralized by non-owner occupied properties leased to retail establishments
$
37,653

 
2.6
%
 
 
 
 
Credit card loans:
 
 
 
Commercial
$
1,253

 
0.1
%
Consumer
841

 
0.1
%
Total credit card loans
$
2,094

 
0.2
%
As of June 30, 2020, health care credits were 9.4% of non-PPP loans HFI (non-GAAP), with an average loan size of $267,000. This is a diversified portfolio of health care providers. Health care deferral requests were minimal at 1.6% of non-PPP loans HFI (non-GAAP) as of June 30, 2020, and concentrated with smaller independent physician and dental practices, which appear to have weathered the temporary economic shutdowns with minimal long-term issues anticipated.The nursing and residential care portfolio had no deferrals. As of June 30, 2020, health care credits with active deferrals were 0.3% of non-PPP loans HFI (non-GAAP).

____________________
(1) Non-GAAP financial measure. Calculations of this measure and reconciliations to GAAP are included in the schedules accompanying this release.
4


Asset Quality and Allowance for Loan Losses
Nonperforming assets ("NPA(s)") totaled $4.3 million as of June 30, 2020, down $1.8 million, or 29.7%, from March 31, 2020, primarily due to the partial paydown and ultimate charge-off of a nonaccrual energy credit. The ratio of NPAs to total assets improved to 0.18% as of June 30, 2020, from 0.30% as of March 31, 2020.
As of June 30, 2020, the allowance for loan losses ("ALL") was $14.9 million. The ratio of ALL to loans HFI was 0.92% as of June 30, 2020, and 0.99% as of March 31, 2020. As of June 30, 2020, the ratio of ALL to non-PPP loans HFI (non-GAAP) was 1.05%(1).
The net charge-off ratio was 0.06% for the second quarter of 2020 and 0.00% for the first quarter of 2020. Due to economic uncertainties related to the pandemic shutdowns and future risks associated with the continuing COVID-19 pandemic, we are closely monitoring asset quality and will adjust the provision for loan losses as needed in the third and fourth quarters of 2020.
Deposits
Deposits as of June 30, 2020, were $2.07 billion, an increase of $341.5 million, or 19.8%, compared to March 31, 2020. Average deposits for the second quarter of 2020 were $1.99 billion, an increase of $269.2 million, or 15.6%, from the prior quarter. This increase was a result of customers receiving funds from various government stimulus programs and depositing the proceeds from their PPP loans, as well as higher deposit account opening activity.
Noninterest-bearing deposits totaled $858.4 million as of June 30, 2020, up $251.1 million, or 41.3%, from March 31, 2020. As of June 30, 2020, noninterest-bearing deposits were 41.48% of total deposits.
Interest-bearing deposits totaled $1.21 billion as of June 30, 2020, up $90.5 million, or 8.1%, compared to March 31, 2020.
Stockholders’ Equity
Total stockholders’ equity increased to $271.1 million as of June 30, 2020, from $264.2 million as of March 31, 2020. The $6.9 million increase in stockholders’ equity during the second quarter of 2020 was attributable to $6.9 million of net income and a $432,000, net of tax, market adjustment to accumulated other comprehensive income related to available-for-sale securities, partially offset by $440,000 in cash dividends. We paid our second quarterly cash dividend of $0.06 per share on June 25, 2020.
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 Securities 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.
Management and the board of directors review tangible book value per share, tangible common equity to tangible assets, and PPP-adjusted metrics as part of managing operating performance. However, these non-GAAP financial measures should not be considered in isolation or as a substitute for the most directly comparable or other financial measures calculated in accordance with GAAP. Moreover, the manner in which we calculate the non-GAAP financial measures that are discussed may differ from that of other companies reporting measures with similar names. It is important to understand how such other banking organizations calculate and name their financial measures similar to the non-GAAP financial measures discussed by us when comparing such non-GAAP financial measures.
A reconciliation of non-GAAP financial measures to the comparable GAAP financial measures is included at the end of the financial statement tables.

____________________
(1) Non-GAAP financial measure. Calculations of this measure and reconciliations to GAAP are included in the schedules accompanying this release.
5


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 25 banking centers throughout Louisiana. Banking centers are located in the following Louisiana 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; 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 most recent Annual Report on Form 10-K and any subsequent quarterly reports on Form 10-Q, and in other documents that we file with the SEC from time to time. In addition, our actual financial results in the future may differ from those currently expected due to additional risks and uncertainties of which we are not currently aware or which we do not currently view as, but in the future may become, material to our business or operating results. Due to these and other possible uncertainties and risks, readers are cautioned not to place undue reliance on the forward-looking statements contained in this news release or to make predictions based solely on historical financial performance. Any forward-looking statement speaks only as of the date on which it is made, and we do not undertake any obligation to update or review any forward-looking statement, whether as a result of new information, future developments or otherwise, except as required by law. All forward-looking statements, express or implied, included in this news release are qualified in their entirety by this cautionary statement.
Contact:
Isabel V. Carriere, CPA, CGMA
Executive Vice President and Chief Financial Officer
318-561-4023
icarriere@redriverbank.net

6


FINANCIAL HIGHLIGHTS (UNAUDITED)
 
 
 
As of and for the
Three Months Ended
 
As of and for the
Six Months Ended
(Dollars in thousands, except per share data)
 
June 30,
2020
 
March 31,
2020
 
June 30,
2019
 
June 30,
2020
 
June 30,
2019
 
 
 
 
 
 
 
 
 
 
 
Net Income
 
$
6,854

 
$
6,745

 
$
5,538

 
$
13,599

 
$
11,234

 
 
 
 
 
 
 
 
 
 
 
Per Common Share Data:
 
 
 
 
 
 
 
 
 
 
Earnings per share, basic
 
$
0.94

 
$
0.92

 
$
0.79

 
$
1.86

 
$
1.64

Earnings per share, diluted
 
$
0.93

 
$
0.92

 
$
0.78

 
$
1.85

 
$
1.63

Book value per share
 
$
37.03

 
$
36.08

 
$
32.59

 
$
37.03

 
$
32.59

Tangible book value per share(1)
 
$
36.81

 
$
35.87

 
$
32.38

 
$
36.81

 
$
32.38

Cash dividends per share
 
$
0.06

 
$
0.06

 
$

 
$
0.12

 
$
0.20

Weighted average shares outstanding, basic
 
7,322,532

 
7,313,279

 
7,037,834

 
7,317,906

 
6,836,278

Weighted average shares outstanding, diluted
 
7,348,772

 
7,351,409

 
7,074,769

 
7,350,910

 
6,874,560

 
 
 
 
 
 
 
 
 
 
 
Summary Performance Ratios:
 
 
 
 
 
 
 
 
 
 
Return on average assets
 
1.20
%
 
1.36
%
 
1.18
%
 
1.27
%
 
1.21
%
Return on average equity
 
10.30
%
 
10.53
%
 
9.92
%
 
10.41
%
 
10.74
%
Net interest margin
 
3.07
%
 
3.36
%
 
3.46
%
 
3.20
%
 
3.47
%
Net interest margin FTE
 
3.12
%
 
3.41
%
 
3.51
%
 
3.26
%
 
3.52
%
Efficiency ratio
 
56.50
%
 
57.40
%
 
62.81
%
 
56.93
%
 
61.20
%
Loans HFI to deposits ratio
 
78.06
%
 
83.77
%
 
85.23
%
 
78.06
%
 
85.23
%
Noninterest-bearing deposits to deposits ratio
 
41.48
%
 
35.15
%
 
35.30
%
 
41.48
%
 
35.30
%
Noninterest income to average assets
 
1.02
%
 
0.95
%
 
0.87
%
 
0.99
%
 
0.80
%
Operating expense to average assets
 
2.26
%
 
2.41
%
 
2.65
%
 
2.33
%
 
2.54
%
 
 
 
 
 
 
 
 
 
 
 
Summary Credit Quality Ratios:
 
 
 
 
 
 
 
 
 
 
Nonperforming assets to total assets
 
0.18
%
 
0.30
%
 
0.70
%
 
0.18
%
 
0.70
%
Nonperforming loans to loans HFI
 
0.21
%
 
0.36
%
 
0.87
%
 
0.21
%
 
0.87
%
Allowance for loan losses to loans HFI
 
0.92
%
 
0.99
%
 
0.98
%
 
0.92
%
 
0.98
%
Net charge-offs to average loans
 
0.06
%
 
0.00
%
 
0.00
%
 
0.07
%
 
0.00
%
 
 
 
 
 
 
 
 
 
 
 
Capital Ratios:
 
 
 
 
 
 
 
 
 
 
Total stockholders' equity to total assets
 
11.48
%
 
13.14
%
 
12.57
%
 
11.48
%
 
12.57
%
Tangible common equity to tangible assets(1)
 
11.42
%
 
13.07
%
 
12.50
%
 
11.42
%
 
12.50
%
Total risk-based capital to risk-weighted assets
 
18.22
%
 
18.18
%
 
17.90
%
 
18.22
%
 
17.90
%
Tier 1 risk-based capital to risk-weighted assets
 
17.25
%
 
17.21
%
 
16.95
%
 
17.25
%
 
16.95
%
Common equity Tier 1 capital to risk-weighted assets
 
17.25
%
 
17.21
%
 
16.60
%
 
17.25
%
 
16.60
%
Tier 1 risk-based capital to average assets
 
11.52
%
 
12.89
%
 
12.83
%
 
11.52
%
 
12.83
%
(1) 
Non-GAAP financial measure. Calculations of this measure and reconciliations to GAAP are included in the schedules accompanying this release.


7


RED RIVER BANCSHARES, INC.
CONSOLIDATED BALANCE SHEETS
 
 
(Unaudited)
 
(Unaudited)
 
(Audited)
 
(Unaudited)
 
(Unaudited)
(in thousands)
June 30,
2020
 
March 31,
2020
 
December 31,
2019
 
September 30,
2019
 
June 30,
2019
ASSETS
 
 
 
 
 
 
 
 
 
Cash and due from banks
$
31,097

 
$
31,858

 
$
25,937

 
$
32,724

 
$
29,854

Interest-bearing deposits in other banks
210,254

 
48,605

 
107,355

 
73,598

 
71,761

Securities available-for-sale
413,246

 
401,944

 
335,573

 
341,900

 
318,082

Equity securities
4,032

 
3,998

 
3,936

 
3,954

 
3,924

Nonmarketable equity securities
3,441

 
1,354

 
1,350

 
1,347

 
1,342

Loans held for sale
14,578

 
6,597

 
5,089

 
4,113

 
6,029

Loans held for investment
1,615,298

 
1,447,362

 
1,438,924

 
1,413,162

 
1,393,154

Allowance for loan losses
(14,882
)
 
(14,393
)
 
(13,937
)
 
(13,906
)
 
(13,591
)
Premises and equipment, net
41,465

 
41,711

 
41,744

 
39,828

 
40,032

Accrued interest receivable
6,492

 
5,240

 
5,251

 
4,928

 
5,570

Bank-owned life insurance
22,131

 
21,987

 
21,845

 
21,707

 
21,570

Intangible assets
1,546

 
1,546

 
1,546

 
1,546

 
1,546

Right-of-use assets
4,355

 
4,454

 
4,553

 
4,651

 
4,748

Other assets
8,813

 
8,438

 
9,059

 
9,302

 
8,897

Total Assets 
$
2,361,866

 
$
2,010,701

 
$
1,988,225

 
$
1,938,854

 
$
1,892,918

 
 
 
 
 
 
 
 
 
 
LIABILITIES
 
 
 
 
 
 
 
 
 
Noninterest-bearing deposits
$
858,397

 
$
607,322

 
$
584,915

 
$
615,051

 
$
576,934

Interest-bearing deposits
1,210,925

 
1,120,460

 
1,136,205

 
1,061,800

 
1,057,656

Total Deposits
2,069,322

 
1,727,782

 
1,721,120

 
1,676,851

 
1,634,590

Junior subordinated debentures

 

 

 

 
5,155

Accrued interest payable
1,994

 
2,307

 
2,222

 
1,925

 
1,998

Lease liabilities
4,419

 
4,511

 
4,603

 
4,688

 
4,773

Accrued expenses and other liabilities
15,014

 
11,926

 
8,382

 
10,001

 
8,491

Total Liabilities
2,090,749

 
1,746,526

 
1,736,327

 
1,693,465

 
1,655,007

COMMITMENTS AND CONTINGENCIES

 

 

 

 

STOCKHOLDERS' EQUITY
 
 
 
 
 
 
 
 
 
Preferred stock, no par value

 

 

 

 

Common stock, no par value
68,177

 
68,177

 
68,082

 
68,082

 
68,082

Additional paid-in capital
1,429

 
1,333

 
1,269

 
1,205

 
1,141

Retained earnings
195,291

 
188,877

 
182,571

 
175,828

 
168,981

Accumulated other comprehensive income (loss)
6,220

 
5,788

 
(24
)
 
274

 
(293
)
Total Stockholders' Equity
271,117

 
264,175

 
251,898

 
245,389

 
237,911

Total Liabilities and Stockholders' Equity 
$
2,361,866

 
$
2,010,701

 
$
1,988,225

 
$
1,938,854

 
$
1,892,918


8


 
RED RIVER BANCSHARES, INC.
 
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
For the Three Months Ended
 
For the Six
Months Ended
 
(in thousands)
 
June 30,
2020
 
March 31,
2020
 
June 30,
2019
 
June 30,
2020
 
June 30,
2019
 
 
INTEREST AND DIVIDEND INCOME
 
 
 
 
 
 
 
 
 
 
 
Interest and fees on loans
 
$
17,076

 
$
16,466

 
$
15,945

 
$
33,542

 
$
31,448

 
Interest on securities
 
1,876

 
1,791

 
1,784

 
3,667

 
3,547

 
Interest on federal funds sold
 
37

 
113

 
212

 
150

 
425

 
Interest on deposits in other banks
 
32

 
206

 
306

 
238

 
722

 
Dividends on stock
 
2

 
4

 
9

 
6

 
19

 
Total Interest and Dividend Income
 
19,023

 
18,580

 
18,256

 
37,603

 
36,161

 
INTEREST EXPENSE
 
 
 
 
 
 
 
 
 
 
 
Interest on deposits
 
2,051

 
2,492

 
2,449

 
4,543

 
4,746

 
Interest on other borrowed funds
 
16

 

 

 
16

 

 
Interest on junior subordinated debentures
 

 

 
156

 

 
312

 
Total Interest Expense
 
2,067

 
2,492

 
2,605

 
4,559

 
5,058

 
Net Interest Income
 
16,956

 
16,088

 
15,651

 
33,044

 
31,103

 
Provision for loan losses
 
1,525

 
503

 
529

 
2,028

 
1,055

 
Net Interest Income After Provision for Loan Losses
 
15,431

 
15,585

 
15,122

 
31,016

 
30,048

 
NONINTEREST INCOME
 
 
 
 
 
 
 
 
 
 
 
Service charges on deposit accounts
 
718

 
1,228

 
1,083

 
1,946

 
2,109

 
Debit card income, net
 
896

 
755

 
785

 
1,651

 
1,481

 
Mortgage loan income
 
1,947

 
889

 
657

 
2,835

 
1,171

 
Brokerage income
 
395

 
744

 
626

 
1,139

 
991

 
Loan and deposit income
 
627

 
300

 
382

 
927

 
727

 
Bank-owned life insurance income
 
144

 
142

 
137

 
287

 
270

 
Gain (Loss) on equity securities
 
33

 
63

 
56

 
96

 
104

 
Gain (Loss) on sale of securities
 
840

 
383

 

 
1,223

 

 
SBIC income
 
190

 
178

 
376

 
368

 
496

 
Other income (loss)
 
33

 
49

 
(3
)
 
82

 
46

 
Total Noninterest Income
 
5,823

 
4,731

 
4,099

 
10,554

 
7,395

 
OPERATING EXPENSES
 
 
 
 
 
 
 
 
 
 
 
Personnel expenses
 
7,646

 
7,348

 
7,005

 
14,995

 
13,645

 
Occupancy and equipment expenses
 
1,235

 
1,185

 
1,334

 
2,419

 
2,509

 
Technology expenses
 
615

 
586

 
558

 
1,202

 
1,101

 
Advertising
 
215

 
261

 
396

 
476

 
605

 
Other business development expenses
 
256

 
295

 
277

 
551

 
560

 
Data processing expense
 
471

 
450

 
483

 
921

 
942

 
Other taxes
 
438

 
437

 
455

 
875

 
808

 
Loan and deposit expenses
 
273

 
246

 
392

 
519

 
615

 
Legal and professional expenses
 
605

 
495

 
383

 
1,100

 
702

 
Regulatory assessment expenses
 
139

 
26

 
133

 
164

 
275

 
Other operating expenses
 
976

 
621

 
988

 
1,597

 
1,800

 
Total Operating Expenses
 
12,869

 
11,950

 
12,404

 
24,819

 
23,562

 
Income Before Income Tax Expense
 
8,385

 
8,366

 
6,817

 
16,751

 
13,881

 
Income tax expense
 
1,531

 
1,621

 
1,279

 
3,152

 
2,647

 
Net Income
 
$
6,854

 
$
6,745

 
$
5,538

 
$
13,599

 
$
11,234


9


RED RIVER BANCSHARES, INC.
NET INTEREST INCOME AND NET INTEREST MARGIN (UNAUDITED)
 
 
For the Three Months Ended
 
June 30, 2020
 
March 31, 2020
 
June 30, 2019
(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)
$
1,606,436

 
$
17,076

 
4.21
%
 
$
1,449,995

 
$
16,466

 
4.50
%
 
$
1,372,020

 
$
15,945

 
4.60
%
Securities - taxable
266,139

 
1,217

 
1.83
%
 
262,417

 
1,267

 
1.93
%
 
252,742

 
1,344

 
2.13
%
Securities - tax-exempt
110,026

 
659

 
2.39
%
 
86,891

 
524

 
2.41
%
 
73,863

 
440

 
2.38
%
Federal funds sold
81,253

 
37

 
0.18
%
 
34,030

 
113

 
1.32
%
 
35,390

 
212

 
2.37
%
Interest-bearing balances due from banks
118,090

 
32

 
0.11
%
 
59,756

 
206

 
1.36
%
 
52,477

 
306

 
2.31
%
Nonmarketable equity securities
3,116

 
2

 
0.31
%
 
1,351

 
4

 
1.07
%
 
1,333

 
4

 
1.30
%
Investment in trusts

 

 
%
 

 

 
%
 
324

 
5

 
5.99
%
Total interest-earning assets
2,185,060

 
$
19,023

 
3.45
%
 
1,894,440

 
$
18,580

 
3.89
%
 
1,788,149

 
$
18,256

 
4.05
%
Allowance for loan losses
(14,494
)
 
 
 
 
 
(14,078
)
 
 
 
 
 
(13,299
)
 
 
 
 
Noninterest earning assets
124,625

 
 
 
 
 
115,245

 
 
 
 
 
105,677

 
 
 
 
Total assets
$
2,295,191

 
 
 
 
 
$
1,995,607

 
 
 
 
 
$
1,880,527

 
 
 
 
Liabilities and Stockholders’ Equity
Interest-bearing liabilities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest-bearing transaction deposits
$
838,802

 
$
611

 
0.29
%
 
$
795,390

 
$
986

 
0.50
%
 
$
733,328

 
$
995

 
0.54
%
Time deposits
333,285

 
1,440

 
1.74
%
 
335,629

 
1,506

 
1.81
%
 
332,474

 
1,454

 
1.75
%
Total interest-bearing deposits
1,172,087

 
2,051

 
0.70
%
 
1,131,019

 
2,492

 
0.89
%
 
1,065,802

 
2,449

 
0.92
%
Junior subordinated debentures

 

 
%
 

 

 
%
 
10,763

 
156

 
5.81
%
Other borrowings
18,681

 
16

 
0.35
%
 
80

 

 
0.55
%
 

 

 
%
Total interest-bearing liabilities
1,190,768

 
$
2,067

 
0.70
%
 
1,131,099

 
$
2,492

 
0.89
%
 
1,076,565

 
$
2,605

 
0.97
%
Noninterest-bearing liabilities:
Noninterest-bearing deposits
818,528

 
 
 
 
 
590,370

 
 
 
 
 
564,911

 
 
 
 
Accrued interest and other liabilities
18,155

 
 
 
 
 
16,584

 
 
 
 
 
15,158

 
 
 
 
Total noninterest-bearing liabilities
836,683

 
 
 
 
 
606,954

 
 
 
 
 
580,069

 
 
 
 
Stockholders’ equity
267,740

 
 
 
 
 
257,554

 
 
 
 
 
223,893

 
 
 
 
Total liabilities and stockholders’ equity
$
2,295,191

 
 
 
 
 
$
1,995,607

 
 
 
 
 
$
1,880,527

 
 
 
 
Net interest income
 
 
$
16,956

 
 
 
 
 
$
16,088

 
 
 
 
 
$
15,651

 
 
Net interest spread
 
 
 
 
2.75
%
 
 
 
 
 
3.00
%
 
 
 
 
 
3.08
%
Net interest margin
 
 
 
 
3.07
%
 
 
 
 
 
3.36
%
 
 
 
 
 
3.46
%
Net interest margin FTE(3)
 
 
 
 
3.12
%
 
 
 
 
 
3.41
%
 
 
 
 
 
3.51
%
Cost of deposits
 
 
 
 
0.41
%
 
 
 
 
 
0.58
%
 
 
 
 
 
0.60
%
Cost of funds
 
 
 
 
0.38
%
 
 
 
 
 
0.53
%
 
 
 
 
 
0.58
%
(1) 
Includes average outstanding balances of loans held for sale of $11.2 million, $4.2 million, and $3.6 million for the three months ended June 30, 2020, March 31, 2020, and June 30, 2019, 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.


10


RED RIVER BANCSHARES, INC.
LOAN INTEREST INCOME AND NET INTEREST RATIOS EXCLUDING PPP LOANS (NON-GAAP) (UNAUDITED)
 
The following table presents interest income for total loans, PPP loans, and total non-PPP loans (non-GAAP), as well as net interest ratios excluding PPP loans (non-GAAP) for the three months ended June 30, 2020, March 31, 2020, and June 30, 2019.
 
 
 
For the Three Months Ended
 
June 30, 2020
 
March 31, 2020
 
June 30, 2019
(dollars in thousands)
Average
Balance
Outstanding
 
Interest/Fees
Earned
 
Average
Yield
 
Average
Balance
Outstanding
 
Interest/Fees
Earned
 
Average
Yield
 
Average
Balance
Outstanding
 
Interest/Fees
Earned
 
Average
Yield
Loans(1,2)
$
1,606,436

 
$
17,076

 
4.21
%
 
$
1,449,995

 
$
16,466

 
4.50
%
 
$
1,372,020

 
$
15,945

 
4.60
%
Less: PPP loans, net
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Average
154,400

 
 
 
 
 

 
 
 
 
 

 
 
 
 
Interest
 
 
423

 
 
 
 
 

 
 
 
 
 

 
 
Fees
 
 
730

 
 
 
 
 

 
 
 
 
 

 
 
Total PPP loans, net
154,400

 
1,153

 
2.99
%
 

 

 
%
 

 

 
%
Non-PPP loans (non-GAAP)(4)
$
1,452,036

 
$
15,923

 
4.34
%
 
$
1,449,995

 
$
16,466

 
4.50
%
 
$
1,372,020

 
$
15,945

 
4.60
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Ratios excluding PPP loans, net (non-GAAP)(4)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net interest spread
 
 
 
 
2.79
%
 
 
 
 
 
3.00
%
 
 
 
 
 
3.08
%
Net interest margin
 
 
 
 
3.08
%
 
 
 
 
 
3.36
%
 
 
 
 
 
3.46
%
Net interest margin FTE(3)
 
 
 
3.13
%
 
 
 
 
 
3.41
%
 
 
 
 
 
3.51
%
(1) 
Includes average outstanding balances of loans held for sale of $11.2 million, $4.2 million, and $3.6 million for the three months ended June 30, 2020, March 31, 2020, and June 30, 2019, 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.
(4) 
Non-GAAP financial measure.


11


RED RIVER BANCSHARES, INC.
NET INTEREST INCOME AND NET INTEREST MARGIN (UNAUDITED)
 
 
For the Six Months Ended June 30, 
 
2020
 
2019
(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)
$
1,528,216

 
$
33,542

 
4.35
%
 
$
1,358,347

 
$
31,448

 
4.61
%
Securities - taxable
264,278

 
2,485

 
1.88
%
 
257,010

 
2,723

 
2.12
%
Securities - tax-exempt
98,458

 
1,182

 
2.40
%
 
69,272

 
824

 
2.38
%
Federal funds sold
57,642

 
150

 
0.51
%
 
34,812

 
425

 
2.43
%
Interest-bearing balances due from banks
88,923

 
238

 
0.53
%
 
61,425

 
722

 
2.34
%
Nonmarketable equity securities
2,233

 
6

 
0.54
%
 
1,316

 
9

 
1.29
%
Investment in trusts

 

 
%
 
332

 
10

 
6.08
%
Total interest-earning assets
2,039,750

 
$
37,603

 
3.65
%
 
1,782,514

 
$
36,161

 
4.04
%
Allowance for loan losses
(14,286
)
 
 
 
 
 
(13,018
)
 
 
 
 
Noninterest earning assets
119,935

 
 
 
 
 
103,623

 
 
 
 
Total assets
$
2,145,399

 
 
 
 
 
$
1,873,119

 
 
 
 
Liabilities and Stockholders’ Equity
 
 
 
 
 
 
 
 
 
 
 
Interest-bearing liabilities:
 
 
 
 
 
 
 
 
 
 
 
Interest-bearing transaction deposits
$
817,096

 
$
1,597

 
0.39
%
 
$
743,416

 
$
1,958

 
0.53
%
Time deposits
334,457

 
2,946

 
1.77
%
 
333,611

 
2,788

 
1.69
%
Total interest-bearing deposits
1,151,553

 
4,543

 
0.79
%
 
1,077,027

 
4,746

 
0.89
%
Junior subordinated debentures

 

 
%
 
11,050

 
312

 
5.69
%
Other borrowings
9,381

 
16

 
0.35
%
 

 

 
%
Total interest-bearing liabilities
1,160,934

 
$
4,559

 
0.79
%
 
1,088,077

 
$
5,058

 
0.94
%
Noninterest-bearing liabilities:
 
 
 
 
 
 
 
 
 
 
 
Noninterest-bearing deposits
704,449

 
 
 
 
 
558,593

 
 
 
 
Accrued interest and other liabilities
17,369

 
 
 
 
 
15,589

 
 
 
 
Total noninterest-bearing liabilities
721,818

 
 
 
 
 
574,182

 
 
 
 
Stockholders’ equity
262,647

 
 
 
 
 
210,860

 
 
 
 
Total liabilities and stockholders’ equity
$
2,145,399

 
 
 
 
 
$
1,873,119

 
 
 
 
Net interest income
 
 
$
33,044

 
 
 
 
 
$
31,103

 
 
Net interest spread
 
 
 
 
2.86
%
 
 
 
 
 
3.10
%
Net interest margin
 
 
 
 
3.20
%
 
 
 
 
 
3.47
%
Net interest margin FTE(3)
 
 
 
 
3.26
%
 
 
 
 
 
3.52
%
Cost of deposits
 
 
 
 
0.49
%
 
 
 
 
 
0.59
%
Cost of funds
 
 
 
 
0.45
%
 
 
 
 
 
0.57
%
(1) 
Includes average outstanding balances of loans held for sale of $7.7 million and $3.1 million for the six months ended June 30, 2020 and 2019, 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.


12


RED RIVER BANCSHARES, INC.
LOAN INTEREST INCOME AND NET INTEREST RATIOS EXCLUDING PPP LOANS (NON-GAAP) (UNAUDITED)
 
The following table presents interest income for total loans, PPP loans, and total non-PPP loans (non-GAAP), as well as net interest ratios excluding PPP loans (non-GAAP) for the six months ended June 30, 2020 and 2019.
 
 
 
For the Six Months Ended June 30, 
 
2020
 
2019
(dollars in thousands)
Average
Balance
Outstanding
 
Interest/Fees
Earned
 
Average
Yield
 
Average
Balance
Outstanding
 
Interest/Fees
Earned
 
Average
Yield
Loans(1,2)
$
1,528,216

 
$
33,542

 
4.35
%
 
$
1,358,347

 
$
31,448

 
4.61
%
Less: PPP loans, net
 
 
 
 
 
 
 
 
 
 
 
Average
77,200

 
 
 
 
 

 
 
 
 
Interest
 
 
423

 
 
 
 
 

 
 
Fees
 
 
730

 
 
 
 
 

 
 
Total PPP loans, net
77,200

 
1,153

 
2.99
%
 

 

 
%
Non-PPP loans (non-GAAP)(4)
$
1,451,016

 
$
32,389

 
4.42
%
 
$
1,358,347

 
$
31,448

 
4.61
%
 
 
 
 
 
 
 
 
 
 
 
 
Ratios excluding PPP loans, net (non-GAAP)(4)
 
 
 
 
 
 
 
 
 
 
 
Net interest spread
 
 
 
 
2.89
%
 
 
 
 
 
3.10
%
Net interest margin
 
 
 
 
3.21
%
 
 
 
 
 
3.47
%
Net interest margin FTE(3)
 
 
 
 
3.27
%
 
 
 
 
 
3.52
%
(1) 
Includes average outstanding balances of loans held for sale of $7.7 million and $3.1 million for the six months ended June 30, 2020 and 2019, 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.
(4) 
Non-GAAP financial measure.


13


RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (UNAUDITED)
 
(dollars in thousands, except per share data)
June 30, 2020
 
March 31, 2020
 
June 30, 2019
Tangible common equity
 
 
 
 
 
Total stockholders' equity
$
271,117

 
$
264,175

 
$
237,911

Adjustments:
 
 
 
 
 
Intangible assets
(1,546
)
 
(1,546
)
 
(1,546
)
Total tangible common equity (non-GAAP)
$
269,571

 
$
262,629

 
$
236,365

Common shares outstanding
7,322,532

 
7,322,532

 
7,300,246

Book value per common share
$
37.03