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)
(Exact name of Registrant as Specified in Charter)
(State or Other Jurisdiction of Incorporation) | (Commission File Number) | (IRS Employer Identification No.) | ||||||
(Address of Principal Executive Offices) | (Zip Code) | |||||||
(318 ) 561-5028
Registrant's telephone number, including area code
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:
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
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 April 29, 2021, Red River Bancshares, Inc. (the "Company") issued a press release announcing its unaudited financial results for the first quarter ended March 31, 2021. A copy of the press release is attached hereto as Exhibit 99.1, which is incorporated herein by reference.
Item. 7.01 Regulation FD Disclosure.
The Company intends to participate in the 2021 Gulf South Bank Conference which will be held virtually on May 3-4, 2021. During this conference, members of the Company's executive management team will meet virtually with investors and analysts. Attached as Exhibit 99.2 is the presentation to be reviewed with investors. The presentation is also available on the Investor Relations page of the Company's website at www.redriverbank.net.
All information included in the presentation is presented as of the dates indicated, and the Company does not assume any obligation to correct or update such information in the future. In addition, the Company disclaims any inferences regarding the materiality of such information which otherwise may arise as a result of it furnishing such information under Item 7.01 of this Current Report on Form 8-K.
As provided in General Instruction B.2 to Form 8-K, the information furnished in Item 2.02, Item 7.01, Exhibit 99.1, and Exhibit 99.2 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 | ||||||||
| 99.2 | ||||||||
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) | |||||||
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 hereunto duly authorized.
Dated: April 29, 2021
| 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 First Quarter 2021 Financial Results
ALEXANDRIA, Louisiana., April 29, 2021, (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 first quarter of 2021.
Net income for the first quarter of 2021 was $8.1 million, or $1.10 per diluted common share ("EPS"), an increase of $804,000, or 11.1%, compared to $7.3 million, or $0.99 EPS, for the fourth quarter of 2020, and an increase of $1.3 million, or 19.6%, compared to $6.7 million, or $0.92 EPS, for the first quarter of 2020. For the first quarter of 2021, the quarterly return on assets was 1.20% and the quarterly return on equity was 11.36%.
First Quarter 2021 Performance and Operational Highlights
The first quarter of 2021 included record-high quarterly net income, the implementation of the Small Business Administration ("SBA") Paycheck Protection Program ("PPP") Second Draw loans, an increase to the quarterly cash dividend, stock repurchase activity, and executive management and board member changes. Economic activity in Louisiana improved due to an easing of the Louisiana COVID-19 pandemic restrictions, the rollout of COVID-19 vaccines, and the distribution of additional government stimulus funds.
•Net income for the first quarter of 2021 was $8.1 million, $804,000 higher than the prior quarter primarily due to lower provision for loan loss expense, partially offset by lower PPP loan income.
•Assets increased $178.0 million in the first quarter of 2021 to $2.82 billion as of March 31, 2021, driven by a $174.9 million increase in deposits. Deposits increased as a result of customers receiving funds from government stimulus programs, customers depositing the proceeds from their PPP Second Draw ("PPP2") loans, and customers maintaining larger deposit balances, partially offset by the normal seasonal drawdowns as public entity customers distributed their year-end funds to other organizations.
•Red River Bank has participated in the SBA PPP. In the first quarter of 2021, forgiveness of PPP First Draw ("PPP1") loans was offset by the issuance of PPP2 loans. Total PPP loans outstanding were consistent between March 31, 2021 and December 31, 2020. PPP loan income for the first quarter of 2021 was $2.1 million, $891,000 lower than $3.0 million for the prior quarter.
•The net interest margin fully tax equivalent ("FTE") for the first quarter of 2021 was 2.76%, compared to 3.08% for the prior quarter. The net interest margin for the first quarter of 2021 was negatively impacted by a higher level of low yielding short-term liquid assets, combined with lower PPP loan income.
•Mortgage loan production remained strong with the low mortgage interest rate environment resulting in continued mortgage refinancing activity. Mortgage loan income for the first quarter of 2021 was $2.9 million, $203,000 higher than the prior quarter.
•Brokerage income for the first quarter of 2021 was $834,000, a quarterly record-high level.
•Nonperforming assets ("NPA(s)") decreased $602,000 in the first quarter and were $3.6 million, or 0.13% of assets as of March 31, 2021. Due to positive asset quality trends, the rollout of COVID-19 vaccines, and the easing of pandemic-related restrictions on businesses, the provision for loan losses for the first quarter of 2021 was $1.5 million, compared to $2.7 million for the prior quarter. As of March 31, 2021, the allowance for loan losses ("ALL") was $19.4 million, or 1.21% of loans held for investment ("HFI") and 1.31%(1) of non-PPP loans HFI (non-GAAP).
•We increased the quarterly cash dividend to $0.07 per common share.
•In accordance with the stock repurchase program implemented in the third quarter of 2020, we repurchased 19,661 shares of our common stock in the first quarter of 2021 at an aggregate cost of $1.0 million.
•Various executive management changes at Red River Bank occurred. Jeffrey R. Theiler stepped down as Senior Vice President and Chief Operations Officer for Red River Bank. Bridges Hall transitioned from being Northwest Market President to Senior Vice President and Credit Policy Officer. Jennifer Elliott joined Red River Bank as the Northwest Market President.
•Various changes occurred with the Boards of Directors of the Company and Red River Bank. Anna Brasher Moreau, DDS, MS, was appointed to the boards of the Company and Red River Bank. John C. Simpson transitioned from his role as Chairman of the Board of the Company and Red River Bank to Chair Emeritus and is also remaining a member on both boards. Teddy R. Price was elected by the board to serve as Chair of the Board of the Company and Red River Bank.
•In April 2021, the Company decided to invest in the JAM FINTOP Banktech, L.P. fund to strategically develop partnerships as we build the Bank's digital offerings.
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(1) Non-GAAP financial measure. Calculations of this measure and reconciliations to GAAP are included in the schedules accompanying this release.
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Blake Chatelain, President and Chief Executive Officer, stated, "The first quarter of 2021 was busy on many fronts. Economic activity in our markets is slowly returning to pre-COVID-19 levels, our mortgage and brokerage volume was solid, lending activity picked up, and core relationship growth was steady. Mortgage loan activity and income continues at high levels. Our lenders processed PPP1 loan forgiveness applications while also implementing the PPP2 loan program. In keeping with our long-term relationship approach, we experienced robust deposit growth which was driven by both our legacy and new customers.
"We are pleased with the record-high earnings and solid balance sheet growth in the first quarter of 2021. Due to our financial results and capital levels, we increased the quarterly cash dividend to $0.07 per share for the first quarter of 2021 and were active with the stock buyback program.
"We are pleased to welcome Bridges Hall back to the Credit Policy Officer position, a position he had previously held for 2 years. We also welcome Jennifer Elliott as our new Northwest Market President. Jennifer has over 20 years of banking experience and knows the northwest Louisiana region very well.
"We also had various board member changes in the first quarter. We welcome Dr. Anna Moreau as a new board member and believe that she will add great value to our Company with her perspective and insight. Also, after 22 years as chair of our board, John Simpson passed along that responsibility. We are deeply grateful for his leadership, knowledge, and dedication to our Company since its founding. Teddy Price, also a founding board member, was elected as our new board chair, and we look forward to his guidance and leadership.
"All of us are hopeful that the transition to pre-COVID-19 normal life continues in 2021. Loan demand, while increasing, is still tepid and liquidity levels are high for most banks. Our first quarter results are encouraging, and we are cautiously optimistic that by the end of the year, the economy will have returned to pre-pandemic levels."
Net Interest Income and Net Interest Margin FTE
Net interest income and net interest margin FTE for the first quarter of 2021 were negatively impacted by lower PPP loan income. The net interest margin FTE was also impacted by a higher level of low yielding short-term liquid assets. For the first quarter of 2021, deposit growth resulted in additional liquidity which was deployed primarily into interest-bearing deposits in other banks and also into securities.
Average PPP loans outstanding, net of deferred income, for the first quarter of 2021 were $108.3 million, which was $52.8 million lower than the prior quarter. PPP loans have a 1.0% interest rate, and PPP origination fees totaled $9.5 million, or 3.73% of originated PPP loans. PPP loan origination fees are recorded to interest income over the 24- or 60-month loan term, for PPP1 and PPP2, respectively, or until the loans are forgiven by the SBA. When PPP loan forgiveness payments are received in full, the remaining portion of origination fees are recorded to income. Through March 31, 2021, we had received $132.1 million in SBA forgiveness and borrower payments on 78.6% of the 1,384 PPP1 loans originated. For the first quarter of 2021, PPP loan interest and fees totaled $2.1 million, resulting in a 7.97% yield, compared to $3.0 million in interest and fees and a 7.45% yield for the prior quarter.
Net interest income for the first quarter of 2021 was $17.6 million, which was $1.1 million, or 5.7%, lower than the fourth quarter of 2020, due to a $1.3 million decrease in interest and dividend income, partially offset by a $278,000 decrease in interest expense. The decrease in interest and dividend income was primarily due to an $891,000 decrease in PPP loan income and a $549,000 decrease in non-PPP loan income for the first quarter of 2021 compared to the prior quarter. PPP loan income decreased primarily due to lower origination fees recorded as a result of a decrease in PPP loan forgiveness payments received in the first quarter of 2021, compared to the fourth quarter of 2020. Non-PPP loan income decreased due to a lower yield on loans compared to the prior quarter. Interest expense decreased as a result of our adjustments to rates on interest-bearing deposits in the first quarter of 2021.
The net interest margin FTE decreased 32 basis points ("bp(s)") to 2.76% for the first quarter of 2021, compared to 3.08% for the prior quarter. Contributing to this decrease was a 16 bp decrease in the yield on loans due to an $891,000 decrease in PPP loan income compared to the prior quarter, combined with the continued impact of the lower interest rate environment on new and renewed non-PPP loans. The net interest margin FTE was also impacted by additional funds that were deployed into interest-bearing deposits in other banks at low yields during the first quarter. Average interest-bearing deposits in other banks, yielding 0.09%, were $447.3 million which was $207.3 million, or 86.4%, higher than the prior quarter and were 17.1% of average earning assets. The yield on tax-exempt securities decreased 17 bps as a result of purchasing tax-exempt municipal securities during the first quarter with lower yields which further impacted the net interest margin FTE. The resulting yield on interest-earning assets was 2.94% for the first quarter of 2021, compared to 3.32% for the fourth quarter of 2020. The cost of deposits was 0.27% for the first quarter of 2021, compared to 0.33% for the prior quarter. The cost of deposits was lower for the first quarter due to a 12 bp decrease in the rate on interest-bearing deposits as a result of our adjustments to deposit rates.
Excluding PPP loan income, net interest income (non-GAAP) for the first quarter of 2021 was $15.5 million,(1) which was $179,000, or 1.1%, lower than the fourth quarter of 2020. Also, with PPP loans excluded for the first quarter of 2021, the yield on non-PPP loans (non-GAAP) was 4.05%,(1) and the net interest margin FTE (non-GAAP) was 2.53%.(1) PPP loans had a 26 bp accretive impact to the yield on loans and a 23 bp accretive impact to the net interest margin FTE in the first quarter of 2021.
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(1) Non-GAAP financial measure. Calculations of this measure and reconciliations to GAAP are included in the schedules accompanying this release.
2
Provision for Loan Losses
The provision for loan losses for the first quarter of 2021 was $1.5 million, which was $1.2 million lower than $2.7 million for the prior quarter. This decrease was due to positive asset quality trends, the availability of COVID-19 vaccines, and the easing of pandemic restrictions on businesses in Louisiana. As we continue to monitor the economy for signs that recovery is underway, we expect to return to pre-COVID-19 provision expense levels.
Noninterest Income
Noninterest income totaled $6.8 million for the first quarter of 2021, an increase of $582,000, or 9.4%, compared to $6.2 million for the previous quarter. The increase was mainly due to increased brokerage income, higher mortgage loan income, and higher loan and deposit income.
Brokerage income for the first quarter of 2021 was a quarterly record-high of $834,000, an increase of $236,000, or 39.5%, compared to $598,000 for the previous quarter. This increase was primarily due to an increase in sales activity and additional funds invested by existing clients.
Mortgage loan income for the first quarter of 2021 was $2.9 million, an increase of $203,000, or 7.6%, compared to $2.7 million in the previous quarter. Due to the low mortgage interest rate environment, mortgage activity continued at high levels.
Loan and deposit income totaled $473,000 for the first quarter of 2021, an increase of $112,000, or 31.0%, from the prior quarter. This increase was primarily related to $110,000 of nonrecurring commercial real estate loan fees in the first quarter of 2021.
Operating Expenses
Operating expenses for the first quarter of 2021 totaled $13.2 million, a decrease of $173,000, or 1.3%, compared to $13.3 million for the previous quarter. This decrease was mainly due to lower legal and professional expenses and data processing expense, partially offset by an increase in other taxes.
Legal and professional expenses totaled $368,000 for the first quarter of 2021, down $186,000, or 33.6%, from the previous quarter. This decrease was due to lower attorney, compliance, and accounting expenses in the first quarter of 2021.
Data processing expense decreased $108,000, or 21.9%, to $385,000 for the first quarter of 2021 compared to $493,000 for the previous quarter. This decrease was mainly due to receipt of a $173,000 nonrecurring refund from our data processing center in the first quarter of 2021.
Other taxes totaled $525,000 for the first quarter of 2021, up $100,000, or 23.5%, from the previous quarter. This increase was due to a $101,000 increase in State of Louisiana bank stock tax resulting from higher deposit account balances and higher net income for the applicable tax years.
Asset Overview
As of March 31, 2021, assets totaled $2.82 billion, which was $178.0 million, or 6.7%, higher than $2.64 billion as of December 31, 2020. This increase was primarily due to a $174.9 million increase in deposits in the first quarter. Because deposit growth exceeded loan growth, excess funds were deployed primarily into interest-bearing deposits in other banks and also into securities. Interest-bearing deposits in other banks increased $148.5 million to $566.1 million and were 20.9% of earning assets as of March 31, 2021. Securities available-for-sale increased $17.7 million to $515.9 million and were 19.0% of earning assets as of March 31, 2021. The loans HFI to deposits ratio was 63.69% as of March 31, 2021, compared to 67.87% as of December 31, 2020.
Assets excluding PPP loans, net of deferred income (non-GAAP) as of March 31, 2021, totaled $2.70 billion(1) which was $177.1 million, or 7.0%, higher than $2.52 billion(1) as of December 31, 2020. The non-PPP loans HFI to deposits ratio (non-GAAP) was 58.95%(1) as of March 31, 2021, compared to 62.81%(1) as of December 31, 2020.
Loans
Loans HFI as of March 31, 2021, were $1.60 billion, an increase of $13.6 million, or 0.9%, from December 31, 2020. As of March 31, 2021, PPP loans totaled $119.4 million, net of $3.4 million in deferred income, and were 7.5% of loans HFI. As of March 31, 2021, non-PPP loans were $1.48 billion,(1) an increase of $12.7 million, or 0.9%, from December 31, 2020.
In the second quarter of 2020, Red River Bank originated 1,384 PPP1 loans totaling $199.0 million, with an average loan size of $144,000. We began accepting PPP1 loan forgiveness applications on September 14, 2020, and in the fourth quarter of 2020, we began receiving PPP1 loan forgiveness payments from the SBA. As of March 31, 2021, we had received $132.1 million in SBA forgiveness and borrower payments on 78.6% of the 1,384 PPP1 loans originated. Through April 20, 2021, we had received $137.4 million in SBA forgiveness and borrower payments on 80.1% of the 1,384 PPP1 loans originated.
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(1) Non-GAAP financial measure. Calculations of this measure and reconciliations to GAAP are included in the schedules accompanying this release.
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With the passing of the Economic Aid Act in December of 2020, Red River Bank issued additional PPP1 loans and new PPP2 loans in the first quarter of 2021. As of March 31, 2021, new PPP1 loans were minimal, and we originated 436 PPP2 loans totaling $52.6 million, with an average size of $121,000. PPP2 loans resulted in $2.4 million of gross origination fees, yielding 4.64%.
During 2020, we began granting loan payment deferments for requesting borrowers impacted by pandemic-related economic shutdowns. As of March 31, 2021, $9.7 million, or 0.7% of non-PPP loans HFI (non-GAAP), remained on active deferral and were deferrals of principal payments only, compared to $12.5 million, or 0.8% of non-PPP loans HFI (non-GAAP), as of December 31, 2020.
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:
| March 31, 2021 | |||||||||||
| Loans | |||||||||||
| (dollars in thousands) | Amount | Percent of Non-PPP Loans HFI (non-GAAP) | |||||||||
| Hospitality services: | |||||||||||
| Hotels and other overnight lodging | $ | 26,477 | 1.8 | % | |||||||
| Restaurants - full service | 12,258 | 0.8 | % | ||||||||
| Restaurants - limited service | 12,235 | 0.8 | % | ||||||||
| Other | 7,130 | 0.5 | % | ||||||||
| Total hospitality services | $ | 58,100 | 3.9 | % | |||||||
| Retail trade (excluding automobile dealers) | $ | 21,336 | 1.4 | % | |||||||
| Energy | $ | 29,916 | 2.0 | % | |||||||
Loan payment deferments in the hospitality services sector represent 86.2% of our active deferrals. As of March 31, 2021, active deferrals in the hospitality services sector were $8.4 million, or 0.6% of non-PPP loans HFI (non-GAAP), compared to $8.1 million, or 0.6% of non-PPP loans HFI (non-GAAP), as of December 31, 2020.
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:
| March 31, 2021 | |||||||||||
| (dollars in thousands) | Amount | Percent of Non-PPP Loans HFI (non-GAAP) | |||||||||
| Loans collateralized by non-owner occupied properties leased to retail establishments | $ | 42,681 | 2.9 | % | |||||||
| Credit card loans: | |||||||||||
| Commercial | $ | 1,752 | 0.1 | % | |||||||
| Consumer | 913 | 0.1 | % | ||||||||
| Total credit card loans | $ | 2,665 | 0.2 | % | |||||||
Our health care loans are made up of a diversified portfolio of health care providers. As of March 31, 2021, health care credits were 9.8% of non-PPP loans HFI (non-GAAP), with nursing and residential care loans and loans to physician and dental practices of 4.0% and 5.7%, of non-PPP loans HFI (non-GAAP), respectively. The average loan size was $294,000. Health care deferral requests were minimal, and as of March 31, 2021, there were no health care credits with active deferrals.
Asset Quality and Allowance for Loan Losses
NPAs totaled $3.6 million as of March 31, 2021, down $602,000, or 14.3%, from December 31, 2020, primarily due to the payoff of nonaccrual loans and the sale of foreclosed assets. The ratio of NPAs to total assets improved to 0.13% as of March 31, 2021, from 0.16% as of December 31, 2020.
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(1) Non-GAAP financial measure. Calculations of this measure and reconciliations to GAAP are included in the schedules accompanying this release.
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As of March 31, 2021, the ALL was $19.4 million. The ratio of ALL to loans HFI was 1.21% as of March 31, 2021, and 1.13% as of December 31, 2020. The ratio of ALL to non-PPP loans HFI (non-GAAP) was 1.31%(1) as of March 31, 2021, and 1.22%(1) as of December 31, 2020. The net charge-off ratio was 0.00% for the first quarter of 2021 and 0.06% for the fourth quarter of 2020.
Deposits
Deposits as of March 31, 2021, were $2.52 billion, an increase of $174.9 million, or 7.5%, compared to December 31, 2020. Average deposits for the first quarter of 2021 were $2.42 billion, an increase of $177.0 million, or 7.9%, from the prior quarter. This increase was a result of customers receiving funds from government stimulus programs, customers depositing the proceeds from their PPP2 loans, and customers maintaining larger deposit balances, partially offset by the normal seasonal drawdowns as public entity customers distributed their year-end funds to other organizations. Noninterest-bearing deposits totaled $1.02 billion as of March 31, 2021, up $71.7 million, or 7.6%, from December 31, 2020. As of March 31, 2021, noninterest-bearing deposits were 40.37% of total deposits. Interest-bearing deposits totaled $1.50 billion as of March 31, 2021, up $103.2 million, or 7.4%, compared to December 31, 2020.
Stockholders’ Equity
Total stockholders’ equity decreased to $284.9 million as of March 31, 2021, from $285.5 million as of December 31, 2020. The $567,000 decrease in stockholders’ equity during the first quarter of 2021 was attributable to a $7.3 million, net of tax, market adjustment to accumulated other comprehensive income related to securities available-for-sale, the repurchase of 19,661 shares of common stock for $1.0 million, and $511,000 in cash dividends, partially offset by $8.1 million of net income and $149,000 of stock compensation. We paid a quarterly cash dividend of $0.07 per share on March 25, 2021.
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.
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(1) Non-GAAP financial measure. Calculations of this measure and reconciliations to GAAP are included in the schedules accompanying this release.
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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 and one combined loan and deposit production office in Lafayette, Louisiana. Banking centers are located in the following Louisiana markets: Central, which includes the Alexandria metropolitan statistical area ("MSA"); Northwest, which includes the Shreveport-Bossier City MSA; Capital, which includes the Baton Rouge MSA; Southwest, which includes the Lake Charles MSA; 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
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| FINANCIAL HIGHLIGHTS (UNAUDITED) | ||||||||||||||||||||
| As of and for the Three Months Ended | ||||||||||||||||||||
| (Dollars in thousands, except per share data) | March 31, 2021 | December 31, 2020 | March 31, 2020 | |||||||||||||||||
| Net Income | $ | 8,065 | $ | 7,261 | $ | 6,745 | ||||||||||||||
| Per Common Share Data: | ||||||||||||||||||||
| Earnings per share, basic | $ | 1.10 | $ | 0.99 | $ | 0.92 | ||||||||||||||
| Earnings per share, diluted | $ | 1.10 | $ | 0.99 | $ | 0.92 | ||||||||||||||
| Book value per share | $ | 38.99 | $ | 38.97 | $ | 36.08 | ||||||||||||||
Tangible book value per share(1) | $ | 38.78 | $ | 38.76 | $ | 35.87 | ||||||||||||||
Cash dividends per share | $ | 0.07 | $ | 0.06 | $ | 0.06 | ||||||||||||||
| Shares outstanding | 7,306,747 | 7,325,333 | 7,322,532 | |||||||||||||||||
Weighted average shares outstanding, basic | 7,317,995 | 7,325,333 | 7,313,279 | |||||||||||||||||
Weighted average shares outstanding, diluted | 7,337,151 | 7,343,859 | 7,351,409 | |||||||||||||||||
| Summary Performance Ratios: | ||||||||||||||||||||
Return on average assets | 1.20 | % | 1.13 | % | 1.36 | % | ||||||||||||||
Return on average equity | 11.36 | % | 10.23 | % | 10.53 | % | ||||||||||||||
Net interest margin | 2.69 | % | 3.01 | % | 3.36 | % | ||||||||||||||
Net interest margin FTE | 2.76 | % | 3.08 | % | 3.41 | % | ||||||||||||||
Efficiency ratio | 54.02 | % | 53.66 | % | 57.40 | % | ||||||||||||||
Loans HFI to deposits ratio | 63.69 | % | 67.87 | % | 83.77 | % | ||||||||||||||
Noninterest-bearing deposits to deposits ratio | 40.37 | % | 40.32 | % | 35.15 | % | ||||||||||||||
Noninterest income to average assets | 1.01 | % | 0.97 | % | 0.95 | % | ||||||||||||||
Operating expense to average assets | 1.96 | % | 2.08 | % | 2.41 | % | ||||||||||||||
| Summary Credit Quality Ratios: | ||||||||||||||||||||
Nonperforming assets to total assets | 0.13 | % | 0.16 | % | 0.30 | % | ||||||||||||||
Nonperforming loans to loans HFI | 0.18 | % | 0.21 | % | 0.36 | % | ||||||||||||||
Allowance for loan losses to loans HFI | 1.21 | % | 1.13 | % | 0.99 | % | ||||||||||||||
Net charge-offs to average loans | 0.00 | % | 0.06 | % | 0.00 | % | ||||||||||||||
Capital Ratios: | ||||||||||||||||||||
Total stockholders' equity to total assets | 10.10 | % | 10.80 | % | 13.14 | % | ||||||||||||||
Tangible common equity to tangible assets(1) | 10.05 | % | 10.75 | % | 13.07 | % | ||||||||||||||
Total risk-based capital to risk-weighted assets | 18.87 | % | 18.68 | % | 18.18 | % | ||||||||||||||
Tier 1 risk-based capital to risk-weighted assets | 17.66 | % | 17.55 | % | 17.21 | % | ||||||||||||||
Common equity Tier 1 capital to risk-weighted assets | 17.66 | % | 17.55 | % | 17.21 | % | ||||||||||||||
Tier 1 risk-based capital to average assets | 10.43 | % | 10.92 | % | 12.89 | % | ||||||||||||||
(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) | |||||||||||||||||||||||||||||
| (in thousands) | March 31, 2021 | December 31, 2020 | September 30, 2020 | June 30, 2020 | March 31, 2020 | ||||||||||||||||||||||||
ASSETS | |||||||||||||||||||||||||||||
| Cash and due from banks | $ | 36,856 | $ | 29,537 | $ | 31,422 | $ | 31,097 | $ | 31,858 | |||||||||||||||||||
| Interest-bearing deposits in other banks | 566,144 | 417,664 | 239,466 | 210,254 | 48,605 | ||||||||||||||||||||||||
| Securities available-for-sale | 515,942 | 498,206 | 467,744 | 413,246 | 401,944 | ||||||||||||||||||||||||
| Equity securities | 3,951 | 4,021 | 4,032 | 4,032 | 3,998 | ||||||||||||||||||||||||
| Nonmarketable equity securities | 3,447 | 3,447 | 3,445 | 3,441 | 1,354 | ||||||||||||||||||||||||
| Loans held for sale | 18,449 | 29,116 | 23,358 | 14,578 | 6,597 | ||||||||||||||||||||||||
| Loans held for investment | 1,602,086 | 1,588,446 | 1,649,272 | 1,615,298 | 1,447,362 | ||||||||||||||||||||||||
| Allowance for loan losses | (19,377) | (17,951) | (16,192) | (14,882) | (14,393) | ||||||||||||||||||||||||
| Premises and equipment, net | 46,950 | 46,924 | 44,501 | 41,465 | 41,711 | ||||||||||||||||||||||||
| Accrued interest receivable | 6,460 | 6,880 | 6,617 | 6,492 | 5,240 | ||||||||||||||||||||||||
| Bank-owned life insurance | 22,546 | 22,413 | 22,270 | 22,131 | 21,987 | ||||||||||||||||||||||||
| Intangible assets | 1,546 | 1,546 | 1,546 | 1,546 | 1,546 | ||||||||||||||||||||||||
| Right-of-use assets | 4,053 | 4,154 | 4,255 | 4,355 | 4,454 | ||||||||||||||||||||||||
| Other assets | 11,619 | 8,231 | 9,192 | 8,813 | 8,438 | ||||||||||||||||||||||||
Total Assets | $ | 2,820,672 | $ | 2,642,634 | $ | 2,490,928 | $ | 2,361,866 | $ | 2,010,701 | |||||||||||||||||||
| LIABILITIES | |||||||||||||||||||||||||||||
| Noninterest-bearing deposits | $ | 1,015,350 | $ | 943,615 | $ | 923,286 | $ | 858,397 | $ | 607,322 | |||||||||||||||||||
| Interest-bearing deposits | 1,499,925 | 1,396,745 | 1,270,654 | 1,210,925 | 1,120,460 | ||||||||||||||||||||||||
| Total Deposits | 2,515,275 | 2,340,360 | 2,193,940 | 2,069,322 | 1,727,782 | ||||||||||||||||||||||||
| Accrued interest payable | 1,699 | 1,774 | 1,805 | 1,994 | 2,307 | ||||||||||||||||||||||||
| Lease liabilities | 4,138 | 4,233 | 4,327 | 4,419 | 4,511 | ||||||||||||||||||||||||
| Accrued expenses and other liabilities | 14,649 | 10,789 | 12,778 | 15,014 | 11,926 | ||||||||||||||||||||||||
| Total Liabilities | 2,535,761 | 2,357,156 | 2,212,850 | 2,090,749 | 1,746,526 | ||||||||||||||||||||||||
| COMMITMENTS AND CONTINGENCIES | — | — | — | — | — | ||||||||||||||||||||||||
| STOCKHOLDERS' EQUITY | |||||||||||||||||||||||||||||
| Preferred stock, no par value | — | — | — | — | — | ||||||||||||||||||||||||
| Common stock, no par value | 67,093 | 68,055 | 68,055 | 68,177 | 68,177 | ||||||||||||||||||||||||
| Additional paid-in capital | 1,638 | 1,545 | 1,487 | 1,429 | 1,333 | ||||||||||||||||||||||||
| Retained earnings | 216,511 | 208,957 | 202,136 | 195,291 | 188,877 | ||||||||||||||||||||||||
Accumulated other comprehensive income (loss) | (331) | 6,921 | 6,400 | 6,220 | 5,788 | ||||||||||||||||||||||||
| Total Stockholders' Equity | 284,911 | 285,478 | 278,078 | 271,117 | 264,175 | ||||||||||||||||||||||||
Total Liabilities and Stockholders' Equity | $ | 2,820,672 | $ | 2,642,634 | $ | 2,490,928 | $ | 2,361,866 | $ | 2,010,701 | |||||||||||||||||||
8
| RED RIVER BANCSHARES, INC. | ||||||||||||||||||||
| CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) | ||||||||||||||||||||
| For the Three Months Ended | ||||||||||||||||||||
| (in thousands) | March 31, 2021 | December 31, 2020 | March 31, 2020 | |||||||||||||||||
| INTEREST AND DIVIDEND INCOME | ||||||||||||||||||||
| Interest and fees on loans | $ | 17,165 | $ | 18,605 | $ | 16,466 | ||||||||||||||
| Interest on securities | 1,890 | 1,834 | 1,791 | |||||||||||||||||
| Interest on federal funds sold | 22 | 28 | 113 | |||||||||||||||||
| Interest on deposits in other banks | 100 | 58 | 206 | |||||||||||||||||
| Dividends on stock | 1 | 1 | 4 | |||||||||||||||||
| Total Interest and Dividend Income | 19,178 | 20,526 | 18,580 | |||||||||||||||||
| INTEREST EXPENSE | ||||||||||||||||||||
| Interest on deposits | 1,587 | 1,865 | 2,492 | |||||||||||||||||
| Total Interest Expense | 1,587 | 1,865 | 2,492 | |||||||||||||||||
| Net Interest Income | 17,591 | 18,661 | 16,088 | |||||||||||||||||
| Provision for loan losses | 1,450 | 2,675 | 503 | |||||||||||||||||
| Net Interest Income After Provision for Loan Losses | 16,141 | 15,986 | 15,585 | |||||||||||||||||
| NONINTEREST INCOME | ||||||||||||||||||||
| Service charges on deposit accounts | 1,059 | 1,107 | 1,228 | |||||||||||||||||
| Debit card income, net | 1,046 | 1,011 | 755 | |||||||||||||||||
| Mortgage loan income | 2,882 | 2,679 | 889 | |||||||||||||||||
| Brokerage income | 834 | 598 | 744 | |||||||||||||||||
| Loan and deposit income | 473 | 361 | 300 | |||||||||||||||||
| Bank-owned life insurance income | 133 | 143 | 142 | |||||||||||||||||
| Gain (Loss) on equity securities | (70) | (11) | 63 | |||||||||||||||||
| Gain (Loss) on sale of securities | 159 | 93 | 383 | |||||||||||||||||
| SBIC income | 241 | 207 | 178 | |||||||||||||||||
| Other income | 18 | 5 | 49 | |||||||||||||||||
| Total Noninterest Income | 6,775 | 6,193 | 4,731 | |||||||||||||||||
| OPERATING EXPENSES | ||||||||||||||||||||
| Personnel expenses | 8,021 | 8,089 | 7,348 | |||||||||||||||||
| Occupancy and equipment expenses | 1,278 | 1,367 | 1,185 | |||||||||||||||||
| Technology expenses | 665 | 680 | 586 | |||||||||||||||||
| Advertising | 183 | 216 | 261 | |||||||||||||||||
| Other business development expenses | 299 | 238 | 295 | |||||||||||||||||
| Data processing expense | 385 | 493 | 450 | |||||||||||||||||
| Other taxes | 525 | 425 | 437 | |||||||||||||||||
| Loan and deposit expenses | 255 | 244 | 246 | |||||||||||||||||
| Legal and professional expenses | 368 | 554 | 495 | |||||||||||||||||
| Regulatory assessment expenses | 201 | 201 | 26 | |||||||||||||||||
| Other operating expenses | 983 | 829 | 621 | |||||||||||||||||
| Total Operating Expenses | 13,163 | 13,336 | 11,950 | |||||||||||||||||
| Income Before Income Tax Expense | 9,753 | 8,843 | 8,366 | |||||||||||||||||
| Income tax expense | 1,688 | 1,582 | 1,621 | |||||||||||||||||
| Net Income | $ | 8,065 | $ | 7,261 | $ | 6,745 | ||||||||||||||
9
| RED RIVER BANCSHARES, INC. | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| NET INTEREST INCOME AND NET INTEREST MARGIN (UNAUDITED) | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| For the Three Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| March 31, 2021 | December 31, 2020 | March 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||
| (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) | $ | 1,594,796 | $ | 17,165 | 4.31 | % | $ | 1,635,103 | $ | 18,605 | 4.47 | % | $ | 1,449,995 | $ | 16,466 | 4.50 | % | |||||||||||||||||||||||||||||||||||
| Securities - taxable | 295,501 | 862 | 1.17 | % | 303,689 | 873 | 1.15 | % | 262,417 | 1,267 | 1.93 | % | |||||||||||||||||||||||||||||||||||||||||
| Securities - tax-exempt | 195,406 | 1,028 | 2.10 | % | 169,621 | 961 | 2.27 | % | 86,891 | 524 | 2.41 | % | |||||||||||||||||||||||||||||||||||||||||
| Federal funds sold | 77,484 | 22 | 0.11 | % | 80,175 | 28 | 0.14 | % | 34,030 | 113 | 1.32 | % | |||||||||||||||||||||||||||||||||||||||||
| Interest-bearing balances due from banks | 447,265 | 100 | 0.09 | % | 239,953 | 58 | 0.09 | % | 59,756 | 206 | 1.36 | % | |||||||||||||||||||||||||||||||||||||||||
| Nonmarketable equity securities | 3,447 | 1 | 0.13 | % | 3,446 | 1 | 0.13 | % | 1,351 | 4 | 1.07 | % | |||||||||||||||||||||||||||||||||||||||||
| Total interest-earning assets | 2,613,899 | $ | 19,178 | 2.94 | % | 2,431,987 | $ | 20,526 | 3.32 | % | 1,894,440 | $ | 18,580 | 3.89 | % | ||||||||||||||||||||||||||||||||||||||
| Allowance for loan losses | (18,669) | (16,653) | (14,078) | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Noninterest earning assets | 133,381 | 131,220 | 115,245 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Total assets | $ | 2,728,611 | $ | 2,546,554 | $ | 1,995,607 | |||||||||||||||||||||||||||||||||||||||||||||||
Liabilities and Stockholders’ Equity | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Interest-bearing liabilities: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Interest-bearing transaction deposits | $ | 1,124,341 | $ | 479 | 0.17 | % | $ | 983,992 | $ | 610 | 0.25 | % | $ | 795,390 | $ | 986 | 0.50 | % | |||||||||||||||||||||||||||||||||||
| Time deposits | 340,705 | 1,108 | 1.32 | % | 333,575 | 1,255 | 1.50 | % | 335,629 | 1,506 | 1.81 | % | |||||||||||||||||||||||||||||||||||||||||
| Total interest-bearing deposits | 1,465,046 | 1,587 | 0.44 | % | 1,317,567 | 1,865 | 0.56 | % | 1,131,019 | 2,492 | 0.89 | % | |||||||||||||||||||||||||||||||||||||||||
| Other borrowings | — | — | — | % | — | — | — | % | 80 | — | 0.55 | % | |||||||||||||||||||||||||||||||||||||||||
| Total interest-bearing liabilities | 1,465,046 | $ | 1,587 | 0.44 | % | 1,317,567 | $ | 1,865 | 0.56 | % | 1,131,099 | $ | 2,492 | 0.89 | % | ||||||||||||||||||||||||||||||||||||||
| Noninterest-bearing liabilities: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Noninterest-bearing deposits | 956,612 | 927,123 | 590,370 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Accrued interest and other liabilities | 18,187 | 19,468 | 16,584 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Total noninterest-bearing liabilities: | 974,799 | 946,591 | 606,954 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Stockholders’ equity | 288,766 | 282,396 | 257,554 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Total liabilities and stockholders’ equity | $ | 2,728,611 | $ | 2,546,554 | $ | 1,995,607 | |||||||||||||||||||||||||||||||||||||||||||||||
| Net interest income | $ | 17,591 | $ | 18,661 | $ | 16,088 | |||||||||||||||||||||||||||||||||||||||||||||||
| Net interest spread | 2.50 | % | 2.76 | % | 3.00 | % | |||||||||||||||||||||||||||||||||||||||||||||||
| Net interest margin | 2.69 | % | 3.01 | % | 3.36 | % | |||||||||||||||||||||||||||||||||||||||||||||||
Net interest margin FTE(3) | 2.76 | % | 3.08 | % | 3.41 | % | |||||||||||||||||||||||||||||||||||||||||||||||
| Cost of deposits | 0.27 | % | 0.33 | % | 0.58 | % | |||||||||||||||||||||||||||||||||||||||||||||||
| Cost of funds | 0.25 | % | 0.31 | % | 0.53 | % | |||||||||||||||||||||||||||||||||||||||||||||||
(1)Includes average outstanding balances of loans held for sale of $11.1 million, $17.1 million, and $4.2 million for the three months ended March 31, 2021, December 31, 2020, and March 31, 2020, 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 March 31, 2021, December 31, 2020, and March 31, 2020. | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| For the Three Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| March 31, 2021 | December 31, 2020 | March 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||
| (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) | $ | 1,594,796 | $ | 17,165 | 4.31 | % | $ | 1,635,103 | $ | 18,605 | 4.47 | % | $ | 1,449,995 | $ | 16,466 | 4.50 | % | |||||||||||||||||||||||||||||||||||
| Less: PPP loans, net | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Average | 108,334 | 161,109 | — | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Interest | 284 | 419 | — | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Fees | 1,848 | 2,604 | — | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Total PPP loans, net | 108,334 | 2,132 | 7.97 | % | 161,109 | 3,023 | 7.45 | % | — | — | — | % | |||||||||||||||||||||||||||||||||||||||||
Non-PPP loans (non-GAAP)(4) | $ | 1,486,462 | $ | 15,033 | 4.05 | % | $ | 1,473,994 | $ | 15,582 | 4.14 | % | $ | 1,449,995 | $ | 16,466 | 4.50 | % | |||||||||||||||||||||||||||||||||||
Ratios excluding PPP loans, net (non-GAAP)(4) | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net interest spread | 2.28 | % | 2.47 | % | 3.00 | % | |||||||||||||||||||||||||||||||||||||||||||||||
| Net interest margin | 2.47 | % | 2.70 | % | 3.36 | % | |||||||||||||||||||||||||||||||||||||||||||||||
Net interest margin FTE(3) | 2.53 | % | 2.77 | % | 3.41 | % | |||||||||||||||||||||||||||||||||||||||||||||||
(1)Includes average outstanding balances of loans held for sale of $11.1 million, $17.1 million, and $4.2 million for the three months ended March 31, 2021, December 31, 2020, and March 31, 2020, 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
| RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (UNAUDITED) | |||||||||||||||||
| (dollars in thousands, except per share data) | March 31, 2021 | December 31, 2020 | March 31, 2020 | ||||||||||||||
| Tangible common equity | |||||||||||||||||
| Total stockholders' equity | $ | 284,911 | $ | 285,478 | $ | 264,175 | |||||||||||
| Adjustments: | |||||||||||||||||
| Intangible assets | (1,546) | (1,546) | (1,546) | ||||||||||||||
| Total tangible common equity (non-GAAP) | $ | 283,365 | $ | 283,932 | $ | 262,629 | |||||||||||
| Common shares outstanding | 7,306,747 | 7,325,333 | 7,322,532 | ||||||||||||||
| Book value per common share | $ | 38.99 | $ | 38.97 | $ | 36.08 | |||||||||||
| Tangible book value per common share (non-GAAP) | $ | 38.78 | $ | 38.76 | $ | 35.87 | |||||||||||
| Tangible assets | |||||||||||||||||
| Total assets | $ | 2,820,672 | $ | 2,642,634 | $ | 2,010,701 | |||||||||||
| Adjustments: | |||||||||||||||||
| Intangible assets | (1,546) | (1,546) | (1,546) | ||||||||||||||
| Total tangible assets (non-GAAP) | $ | 2,819,126 | $ | 2,641,088 | $ | 2,009,155 | |||||||||||
| Total stockholders' equity to assets | 10.10 | % | 10.80 | % | 13.14 | % | |||||||||||
| Tangible common equity to tangible assets (non-GAAP) | 10.05 | % | 10.75 | % | 13.07 | % | |||||||||||
| Non-PPP loans HFI | |||||||||||||||||
| Loans HFI | $ | 1,602,086 | $ | 1,588,446 | $ | 1,447,362 | |||||||||||
| Adjustments: | |||||||||||||||||
| PPP loans, net | (119,358) | (118,447) | — | ||||||||||||||
| Non-PPP loans HFI (non-GAAP) | $ | 1,482,728 | $ | 1,469,999 | $ | 1,447,362 | |||||||||||
| Assets excluding PPP loans, net | |||||||||||||||||
| Assets | $ | 2,820,672 | $ | 2,642,634 | $ | 2,010,701 | |||||||||||
| Adjustments: | |||||||||||||||||
| PPP loans, net | (119,358) | (118,447) | — | ||||||||||||||
| Assets excluding PPP loans, net (non-GAAP) | $ | 2,701,314 | $ | 2,524,187 | $ | 2,010,701 | |||||||||||
| Allowance for loan losses | $ | 19,377 | $ | 17,951 | $ | 14,393 | |||||||||||
| Deposits | $ | 2,515,275 | $ | 2,340,360 | $ | 1,727,782 | |||||||||||
| Loans HFI to deposits ratio | 63.69 | % | 67.87 | % | 83.77 | % | |||||||||||
| Non-PPP loans HFI to deposits ratio (non-GAAP) | 58.95 | % | 62.81 | % | 83.77 | % | |||||||||||
| Allowance for loan losses to loans HFI | 1.21 | % | 1.13 | % | 0.99 | % | |||||||||||
| Allowance for loan losses to non-PPP loans HFI (non-GAAP) | 1.31 | % | 1.22 | % | 0.99 | % | |||||||||||
12
Investor Presentation As of March 31, 2021 Nasdaq: RRBI Made in Louisiana. Made for Louisiana. Exhibit 99.2
2 COMPANY OVERIEW Forward‐Looking Statements and Non‐GAAP Information This presentation contains forward‐looking statements that are based on various facts and derived utilizing numerous important assumptions and are subject to known and unknown risks, uncertainties, and other factors that may cause Red River Bancshares, Inc.’s (the “Company,” “RRBI,” “Red River,” “we,” or “our”) actual results, performance, or achievements to be materially different from any future results, performance, or achievements expressed or implied by such forward‐looking statements. Forward‐looking statements include the information concerning our future financial performance, business and growth strategy, projected plans and objectives, as well as projections of macroeconomic and industry trends, which are inherently unreliable due to the multiple factors that impact economic trends. Words or phrases such as “may,” “should,” “could,” “predict,” “potential,” “believe,” “will likely result,” “expect,” “continue,” “will,” “anticipate,” “seek,” “estimate,” “intend,” “plan,” “projection,” “would,” and “outlook,” or the negative version of those words, or such other comparable words or phrases are intended to identify forward‐looking statements but are not the exclusive means of identifying such statements. These forward‐looking statements are not historical facts, and are based on current expectations, estimates, and projections about the Company’s industry, management’s beliefs, and certain assumptions made by management, many of which, by their nature, are inherently uncertain and beyond the Company’s control. Accordingly, you are cautioned that any such forward‐looking statements are not guarantees of future performance and are subject to certain risks, assumptions, and uncertainties that are difficult to predict. Although the Company believes that the expectations reflected in these forward‐looking statements are reasonable as of the date made, actual results may prove to be materially different from the results expressed or implied by the forward‐looking statements. Unless required by law, the Company also disclaims any obligation to update any forward‐looking statements. Interested parties should not place undue reliance on any forward‐looking statement and should carefully consider the risks and other factors that the Company faces. For a discussion of these risks and other factors, please see the sections titled “Cautionary Note Regarding Forward‐Looking Statements” and “Risk Factors” in the Company’s 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 Securities and Exchange Commission (“SEC”) from time to time. This presentation includes industry and trade association data, forecasts, and information that we have prepared based, in part, upon data, forecasts, and information obtained from independent trade associations, industry publications and surveys, government agencies, and other information publicly available to us, which information may be specific to particular markets or geographic locations. Some data is also based on our good faith estimates, which are derived from management’s knowledge of the industry and independent sources. Industry publications, surveys, and forecasts generally state that the information contained therein has been obtained from sources believed to be reliable. Statements as to our market position are based on market data currently available to us. Although we believe these sources are reliable, we have not independently verified the information. While we are not aware of any misstatements regarding our industry data presented herein, our estimates involve risks and uncertainties and are subject to change based on various factors. Similarly, we believe our internal research is reliable, even though such research has not been verified by any independent sources. This presentation contains non‐GAAP financial measures, including tangible book value per share, tangible common equity to tangible assets, and PPP‐adjusted metrics. The non‐GAAP financial measures that we discuss in this presentation should not be considered in isolation or as a substitute for the most directly comparable or other financial measures calculated in accordance with GAAP. A reconciliation of the non‐GAAP financial measures used in this presentation to the most directly comparable GAAP measures is provided in the Appendix to this presentation.
3 Company Overview Red River Bancshares, Inc. was established in 1998 in Alexandria, Louisiana; Red River Bank opened its doors in January 1999 Completed IPO in May 2019 Nasdaq: RRBI On Russell 2000 Index Third largest Louisiana headquartered bank based on assets as of December 31, 2020 Relationship‐based approach has yielded a diverse loan portfolio and core deposits During 2020 and 1Q21, provided full banking services amid ongoing pandemic Stock buyback plan in place Consistent quarterly dividend Participating in JAM FINTOP Banktech, L.P. to strategically develop partnerships to enhance digital offerings Financial Highlights As of and for the Three Months Ended March 31, 2021 (dollars in thousands, except per share data) ¹Non‐GAAP measure. See “Forward‐Looking Statements and Non‐GAAP Information” on slide 2 and “Non‐GAAP Reconciliation” slides in the Appendix for additional information. Assets $2,820,672 Loans Held for Investment (HFI) $1,602,086 Deposits $2,515,275 Stockholders' Equity $284,911 Tangible Common Equity¹ $283,365 Stockholders' Equity / Assets 10.10% Tangible Common Equity / Tangible Assets¹ 10.05% Leverage Ratio 10.43% Total Risk‐Based Capital Ratio 18.87% Nonperforming Assets / Assets 0.13% Net Charge‐offs / Average Loans 0.00% Allowance for Loan Losses to Loans HFI 1.21% Net Income $8,065 Return on Average Assets 1.20% Return on Average Equity 11.36% Net Interest Margin Fully Tax Equivalent (FTE) 2.76% Efficiency Ratio 54.02% Earnings Per Share, Diluted $1.10 Book Value Per Share $38.99 Tangible Book Value Per Share¹ $38.78 Cash Dividends Per Share $0.07
4 Community Bank Focused on Louisiana
5 Company Strengths Consistent financial results and steady growth Robust deposit and balance sheet growth in 2020 and 1Q21 Conservative credit culture with solid asset quality Stable, low cost core deposit base Management and directors own 21.58% of outstanding stock as of March 31, 2021, and are aligned with shareholder interest of building share value Continuity of leadership ‐ four of our top executives are part of the founding management team Proven ability to grow organically Focused on Louisiana markets that offer growth opportunity and loan diversification Disciplined acquisition strategy – successfully integrated two acquisitions and positioned to capitalize on future opportunities Strong capital and liquidity positions
6 Recent Expansion Highlights Purchased existing banking center buildings then rebranded as Red River Bank. Cost effective and fast expansion method 4Q19 – Purchased an existing banking center location in Sulphur, Louisiana (Southwest market) 1Q20 ‐ Opened a new banking center in Sulphur, Louisiana 3Q20 – Entered Lafayette, Louisiana (Acadiana market). Hired an experienced banker as Market President. Opened a new loan and deposit production office 4Q20 – Purchased an existing banking center location in Lafayette, Louisiana Fall 2021 – Planned opening as the 27th Red River Bank banking center 4Q20 – Purchased an existing banking center location in Lake Charles, Louisiana (Southwest market) 2Q21 – Planned opening as the 26th Red River Bank banking center Sulphur Banking Center Lafayette Banking Center Lake Charles Banking Center Under Renovation Under Renovation
7 Executive Management and Board of Directors Update 1Q21 Chief Credit Policy Officer Gary Merrifield passed away 2Q20 Recruited new Northwest Market President Jennifer Elliott Previous Northwest Market President G. Bridges Hall, named as Credit Policy Officer Chief Operations Officer for Red River Bank Jeffrey R. Theiler resigned Red River Bancshares, Inc. board member, William Hackmeyer, Jr. passed away 1Q21 Anna Brasher Moreau, DDS, MS appointed to the Red River Bancshares, Inc. and Red River Bank boards of directors John C. Simpson transitioned from role of Chairman of the Board of the Company and Red River Bank. Will remain a member on both boards, serving as Chair Emeritus Teddy R. Price elected as Chair of the Board of the Company and Red River Bank Executive Management Board of Directors
8 Competitive Landscape 1Source: FDIC, Deposits as of June 30, 2020. 2IberiaBank merged with First Horizon Bank, headquartered in Memphis, TN, in July 2020. Deposits in Louisiana1 As of June 30, 2020 $124.1 billion Red River Bank has 1.7% of Louisiana deposits (as of June 30, 2020) One‐third of deposits in the state are held by large national banks, which are reducing their Louisiana banking center networks Red River Bank Markets 1st Banking Center Opened Deposits ($M) Banking Centers Market Rank Deposit Market Share1 Central 1999 $1,257 9 1st 36.2% Northwest 2006 $426 7 9th 4.8% Capital 2013 $387 6 8th 1.9% Southwest 2018 $14 2 16th 0.3% Northshore 2019 $10 1 24th 0.2% Louisiana 1999 $2,094 25 8th 1.7% Deposit Market Share As of June 30, 2020
9 First Quarter 2021 Financial Results Record‐high quarterly net income increased $804,000 from prior quarter to $8.1 million for 1Q21 EPS (diluted) was $1.10 and ROA was 1.20% for 1Q21 Assets increased 6.7%, or $178.0 million, to $2.82 billion Deposits increased 7.5%, or $174.9 million, to $2.52 billion Net interest margin FTE decreased 32 basis points to 2.76% Nonperforming assets to assets ratio decreased to 0.13% Allowance for loan losses to loans HFI ratio = 1.21% March 31, December 31, March 31, (dollars in thousands, except per share data) 2021 2020 2020 Net income 8,065$ 7,261$ 6,745$ Earnings per share, diluted 1.10$ 0.99$ 0.92$ Cash dividends per share 0.07$ 0.06$ 0.06$ Return on average assets 1.20% 1.13% 1.36% Return on average equity 11.36% 10.23% 10.53% Net interest margin FTE 2.76% 3.08% 3.41% Efficiency ratio 54.02% 53.66% 57.40% Total assets 2,820,672$ 2,642,634$ 2,010,701$ Loans held for investment 1,602,086$ 1,588,446$ 1,447,362$ Noninterest‐bearing deposits 1,015,350$ 943,615$ 607,322$ Total deposits 2,515,275$ 2,340,360$ 1,727,782$ Loans HFI to deposits ratio 63.69% 67.87% 83.77% Noninterest‐bearing deposits to deposits ratio 40.37% 40.32% 35.15% Nonperforming assets to total assets 0.13% 0.16% 0.30% Net charge‐offs to average loans 0.00% 0.06% 0.00% Allowance for loan losses to loans HFI 1.21% 1.13% 0.99% Leverage ratio 10.43% 10.92% 12.89% Book value per share 38.99$ 38.97$ 36.08$ As of and for the Three Months Ended
10 Basic, Conservative Balance Sheet Increasing liquidity. Overnight liquidity/earning assets = 20.9% Conservative securities portfolio. Securities/earning assets = 19.0% Noninterest‐bearing DDAs/total deposits = 40.37% Loans HFI/Deposits = 63.69% No brokered deposits No subordinated debt or other borrowings Minimal intangible assets Well capitalized with 10.43% leverage ratio $3.0 million stock buyback plan available. $1.1 million repurchased through March 31, 2021 Quarterly dividend increased in 1Q21 Balance Sheet As of March 31, 2021 (in thousands) Assets Cash and cash equivalents 603,000$ Securities available‐for‐sale 515,942 Loans held for investment 1,602,086 Loans held for sale 18,449 Allowance for loan losses (19,377) Intangible assets 1,546 Premises and equipment, net 46,950 Other assets 52,076 Total Assets 2,820,672$ Liabilities Noninterest‐bearing deposits 1,015,350$ Interest‐bearing deposits 1,499,925 Total Deposits 2,515,275 Other liabilities 20,486 Total Liabilities 2,535,761$ Stockholders' Equity Total Stockholders' Equity 284,911 Total Liabilities and Stockholders' Equity 2,820,672$
11 $354.3 $307.9 $335.6 $498.2 $515.9 2017 2018 2019 2020 1Q21 MBS Agency Treasury Muni ‐ AFS Muni ‐ HTM Securities Portfolio ‐ Conservative Securities ($M) Securities Mix As of March 31, 2021 19.0% of earning assets FTE yield ‐ 1.76% Effective duration ‐ 4.49 years Average life ‐ 6 years Mortgage‐backed securities: Average life ‐ 6.04 years Effective duration ‐ 5.07 years Key strengths of municipal portfolio: Geographic diversification 67% of portfolio carries support through insurance or state enhancements Credit quality is strong with 100% of the portfolio either having an overall rating of A or better, or is pre‐refunded Effective duration ‐ 4.08 years
12 1.6% 1.6% 2.0% 2.2% 3.2% 3.8% 3.9% 4.2% 4.5% 9.8% Manufacturing Finance and Insurance Energy Religious and Other Nonprofit Public Administration Retail Trade Hospitality Services Investor 1‐to‐4 and Multifamily Construction Health Care Loan Portfolio Overview Broad diversification by industry Highest industry concentration is in health care at 9.8% (excluding PPP loans) Loans indexed to LIBOR were $59.5 million, or 3.7%, of loans HFI as of March 31, 2021 Total Loans HFI ($M) Largest Industry Concentrations As of March 31, 2021 (excluding PPP Loans) Loans HFI Mix As of March 31, 2021 $1,248 $1,328 $1,439 $1,588 $1,602 2017 2018 2019 2020 1Q21 CRE 1‐4 Family Residential C&D C&I Tax‐Exempt Consumer PPP
13 5.1% 6.8% 6.3% 7.4% 4.8% 5.8% 7.1% 6.6% C en tr al N o rt h w es t C ap it al So u th w es t N o rt h sh o re Lo u is ia n a U n it ed S ta te s A ca d ia n a Loans By Market Five of our six markets have unemployment rates below state average Four of our markets have unemployment rates below national average Little exposure to the tourism and energy driven areas of Louisiana Focus on major MSA’s in Louisiana Unemployment Rate (February 20211) Non‐PPP Loans HFI originated by geographic market2 As of March 31, 2021 1Source: Louisiana Workforce Commission data for February 2021 2Non‐GAAP measure. See “Forward‐Looking Statements and Non‐GAAP Information” on slide 2 and “Non‐GAAP Reconciliation” slides in the Appendix for additional information.
14 Health Care Loans Health care loans as of March 31, 2021 totaled $145.1 million, or 9.8%, of non‐PPP loans HFI1 Largest industry concentration Average loan size = $294,000 No shared national credits, no real estate investment trusts, no assisted living facilities No health care credits on Watch List Nursing care facilities operate under a certificate of need system in Louisiana Health Care Loans by Subtype As of March 31, 2021 ¹Non‐GAAP measure. See “Forward‐Looking Statements and Non‐GAAP Information” on slide 2 and “Non‐GAAP Reconciliation” slides in the Appendix for additional information.
15 3.4% 2.9% 2.2% 1.4% 2.0% 2017 2018 2019 2020 1Q21 (dollars in thousands) Amount Percent Amount Percent Amount Percent Performing 27,400$ 91.6% 1,730$ 5.8% 29,130$ 97.4% Nonperforming ‐ 0.0% 786 2.6% 786 2.6% Total EP 27,400$ 91.6% 2,516$ 8.4% 29,916$ 100.0% Not criticized 22,083$ 73.8% 1,730$ 5.8% 23,813$ 79.6% Criticized 5,317 17.8% 786 2.6% 6,103 20.4% Total EP 27,400$ 91.6% 2,516$ 8.4% 29,916$ 100.0% Originated by Red River Bank Other banks Total Energy Portfolio Loans Energy portfolio (EP) loans as of March 31, 2021 totaled $29.9 million, or 2.0%, of non‐PPP loans HFI1 Average loan size = $575,000 Charge‐offs since 2017 were $2.8 million Nonperforming EP continues to decline No reserve based lending Energy Portfolio As of March 31, 2021 10.8% 5.0% 5.3% 3.9% 2.6% 1Q20 2Q20 3Q20 4Q20 1Q21 ¹Non‐GAAP measure. See “Forward‐Looking Statements and Non‐GAAP Information” on slide 2 and “Non‐GAAP Reconciliation” slides in the Appendix for additional information. EP/Non‐PPP Loans HFI1 Nonperforming EP/Total EP
16 19.3% 20.3% 20.9% 20.1% 19.9% 13.7% 13.9% 16.1% 14.9% 15.2% 2017 2018 2019 2020 1Q21 Owner occupied Non‐owner occupied Commercial Real Estate Loans Commercial Real Estate (CRE) loans were $562.6 million, or 35.1%, of Loans HFI as March 31, 2021 Low levels of CRE relative to state, regional, and national peers CRE concentration ratios as a % of risk‐based capital are well below bank regulatory guidelines Construction & Development Ratio = 42.0% Commercial Real Estate Ratio = 129.0% CRE criticized loans were $4.2 million, or 0.8%, of total CRE loans; 0.3% of loans HFI CRE nonperforming loans were $1.4 million, or 0.3%, of total CRE loans; 0.1% of loans HFI CRE/Loans HFI
17 Paycheck Protection Program PPP First Draw (PPP1) Loans Loan payments for 78.6% of the 1,384 PPP1 loans and 66.4% of the $199.0 million originated have been received 73.8% of the $7.0 million original deferred fees have been recognized Additional PPP1 loans for $3.3 million originated in the first quarter of 2021 PPP Second Draw (PPP2) Loans Began taking applications January 20, 2021 As of March 31, 2021, 436 loans originated for $52.6 million with an average size of $121,000 Loans fees of $2.4 million are deferred (dollars in thousands) Originated Received Outstanding Amount 199,047$ 132,146$ 66,901$ Number of Loans 1,384 1,087 297 Deferred Fees 7,014$ 959$ Average Size 144$ Gross Fee Yield (24 mo) 3.52% Original PPP1 Loan Status As of March 31, 2021 PPP2 Loan StatusAdditional PPP1 Loan Status Total PPP Loan Quarterly Income PPP Income Yield 2Q20 1,153$ 2.99% 3Q20 1,386$ 2.84% 4Q20 3,023$ 7.45% 1Q21 2,132$ 7.97% (dollars in thousands) Originated Amount 52,559$ Number of Loans 436 Deferred Fees 2,437$ Average Size 121$ Gross Fee Yield (60 mo) 4.64% (dollars in thousands) Originated Amount 3,289$ Number of Loans 6 Deferred Fees 60$ Average Size 548$ Gross Fee Yield (60 mo) 1.81%
18 0.30% 0.18% 0.21% 0.16% 0.13% 1Q20 2Q20 3Q20 4Q20 1Q21 Asset Quality Nonperforming Assets – decreased due to payoff of nonaccrual loans and sale of foreclosed assets Provision for loan loss expense – decreased compared to 4Q20. Asset quality improved, pandemic‐ related economic restrictions were eased ALL to non‐PPP loans HFI1 = 1.31% as of March 31, 2021 The need for additional ALL is diminishing COVID‐19 Loan Modifications – Active deferrals continue to decline and were $9.7 million, or 0.7%, of non‐PPP loans HFI1 as of March 31, 2021 (dollars in thousands) 1Q20 2Q20 3Q20 4Q20 1Q21 Nonperforming Loans (NPLs) 5,235$ 3,442$ 4,387$ 3,310$ 2,811$ NPLs to Loans HFI 0.36% 0.21% 0.27% 0.21% 0.18% NPLs to Non‐PPP Loans HFI1 0.36% 0.24% 0.30% 0.23% 0.19% Nonperforming Assets (NPAs) 6,104$ 4,294$ 5,215$ 4,206$ 3,604$ NPAs to total assets 0.30% 0.18% 0.21% 0.16% 0.13% Criticized Loans (CL) 19,663$ 17,550$ 18,295$ 12,607$ 12,482$ CLs to Loans HFI 1.36% 1.09% 1.11% 0.79% 0.78% Provision Expense 503$ 1,525$ 1,590$ 2,675$ 1,450$ ALL to loans HFI 0.99% 0.92% 0.98% 1.13% 1.21% ALL to Non‐PPP Loans HFI1 0.99% 1.05% 1.11% 1.22% 1.31% 0.00% 0.06% 0.02% 0.06% 0.00% Net Charge‐offs to Average Loans (QTR) As of and for the quarter ended Asset Quality Metrics NPAs/Total Assets ¹Non‐GAAP measure. See “Forward‐Looking Statements and Non‐GAAP Information” on slide 2 and “Non‐GAAP Reconciliation” slides in the Appendix for additional information.
19 Loan Categories Most Impacted by COVID‐19 Hotel exposure Only one property financed in the tourism‐driven downtown New Orleans market The remaining hotel properties in our portfolio are located throughout Louisiana in areas that are not primarily tourism‐driven Restaurant exposure Not located in tourism‐driven areas Loans collateralized by non‐owner occupied properties leased to retail establishments totaled $42.7 million, or 2.9% of non‐PPP loans HFI1 ¹Non‐GAAP measure. See “Forward‐Looking Statements and Non‐GAAP Information” on slide 2 and “Non‐GAAP Reconciliation” slides in the Appendix for additional information. (dollars in thousands) Amount By Industry: Hospitality services: Hotels and other overnight lodging 26,477$ 1.8% Restaurants ‐ full service 12,258 0.8% Restaurants ‐ limited service 12,235 0.8% Other 7,130 0.5% Total hospitality services 58,100$ 3.9% Hospitality services average loan size 447$ Retail trade (excluding auto dealers) 21,336$ 1.4% Retail trade average loan size 160$ Energy 29,916$ 2.0% Energy average loan size 575$ Total sectors 109,352$ 7.3% March 31, 2021 % Non‐PPP Loans HFI1
20 2017 2018 2019 2020 1Q21 DDA NOW Money Market Savings Time <= 250k Time > 250k 2017 2018 2019 2020 1Q21 Attractive Core Deposit Base $1,526 $1,646 $1,721 $2,340 Total Deposits ($M) Noninterest‐bearing Deposits ($M) Deposits increased $174.9 million, or 7.5%, in the first quarter of 2021 due to funds received from government stimulus programs, proceeds of PPP2 loans, and customers maintaining higher deposit balances Cost of deposits was 0.27% for the three months ended March 31, 2021 No brokered deposits $585 $944 $2,515 $1,015 $504 $548 Deposit Mix As of March 31, 2021
21 0.95 1.29 1.30 1.22 1.20 2017 2018 2019 2020 1Q21 62.69 58.86 59.46 55.77 54.02 2017 2018 2019 2020 1Q21 $2.48 $3.41 $3.49 $3.83 $1.10 2017 2018 2019 2020 2021 Q1 Q2 Q3 Q4 Tax Reform $16,215 $23,056 $24,824 $28,145 $8,065 2017 2018 2019 2020 2021 Q1 Q2 Q3 Q4 Tax Reform Profitability Trends Earnings Per Share (Diluted)1,2 Return on Average Assets (%)1 1 2017 Adjusted for $2.2 million write‐down of deferred tax assets associated with changes in tax legislation 2 2017 EPS data adjusted for 2‐for‐1 stock split with a record date of October 1, 2018 Efficiency Ratio (%) Net Income ($000)1
22 1.26% 0.06% 0.09% 0.09% 0.08% 0.58% 0.41% 0.37% 0.33% 0.27% 4.50% 4.21% 4.04% 4.47% 4.31% 3.41% 3.12% 3.02% 3.08% 2.76% 0.00% 1.00% 2.00% 3.00% 4.00% 5.00% 1Q20 2Q20 3Q20 4Q20 1Q21 Average Effective Fed Funds Rate Cost of Deposits Loan Yield Net Interest Margin ‐ FTE Net Interest Margin FTE (1Q21) Net interest margin FTE decreased 32 basis points to 2.76% for 1Q21 Net interest income decreased $1.1 million to $17.6 million for 1Q21 First quarter 2021 decreased due to having high levels of low yielding short‐term liquid assets and lower PPP loan income NIM Challenges Higher liquidity levels and deployment Lower security yield on new securities Timing of PPP loan forgiveness payments NIM Opportunity Lower cost of deposits Loan growth opportunity in new markets Explore ways to reduce short‐term liquid assets
23 Loan Yield and Net Interest Ratios Excluding PPP Loans1 (1Q21) Non‐PPP loan income = $15.0 million yielding 4.05% for the three months ended March 31, 2021 Excluding PPP loans, net interest margin FTE decreased 24 basis points to 2.53%1 ¹Non‐GAAP measure. See “Forward‐Looking Statements and Non‐GAAP Information” on slide 2 and “Non‐GAAP Reconciliation” slides in the Appendix for additional information. Ratios Actual Excluding PPP loans1 Actual Excluding PPP loans1 Loan Yield 4.31% 4.05% 4.47% 4.14% Net Interest Spread 2.50% 2.28% 2.76% 2.47% Net Interest Margin 2.69% 2.47% 3.01% 2.70% Net Interest Margin FTE 2.76% 2.53% 3.08% 2.77% For the Three Months Ended March 31, 2021 December 31, 2020
24 Noninterest Income Noninterest income increased $582,000 from 4Q20 to $6.8 million for 1Q21 Brokerage income ‐ quarterly record‐high of $834,000 due to increase in sales activity and additional funds invested by existing clients Assets under management ‐ $704.8 million Mortgage income ‐ increased $203,000 to $2.9 million with continued mortgage activity Loan and deposit income ‐ totaled $473,000, an increase of $112,000 from prior quarter primarily due to $110,000 of nonrecurring commercial real estate loan fees Noninterest Income For the quarter ended March 31, 2021 (dollars in thousands)
25 Operating Expenses Operating expenses decreased $173,000 from 4Q20 to $13.2 million for 1Q21 Legal and professional expenses ‐ decreased $186,000 to $368,000 due to lower attorney, compliance, and accounting expenses Data processing expense ‐ decreased $108,000 to $385,000 due to receipt of $173,000 nonrecurring refund from data processing center Other taxes ‐ increased $100,000 to $525,000 due to increase in State of Louisiana bank stock tax from higher deposit balances and net income for applicable years Operating Expenses For the quarter ended March 31, 2021 (dollars in thousands)
26 Future Plans Continue building a strong, Louisiana based, super community bank Open our new Lake Charles and Lafayette banking centers and expand market share in these new markets Prudently deploy liquidity in loans and investments Continue to expand mortgage operations and investments division across Louisiana Focus on assisting our customers and communities during the reopening of the economy Aggressively monitor asset quality trends and maintain appropriate level of ALL Monitor markets for opportunity for organic growth or key acquisitions Seek to take advantage of disruption in the marketplace due to mergers and acquisitions and branch closures/limited service by larger national banks Continue to invest in digital banking tools as needed in order to serve our target customer base Focus on capital management by paying dividends and repurchasing stock
Made in Louisiana. Made for Louisiana. Summary Managing $119.4 million of PPP loans as of March 31, 2021 Diversified loan portfolio with solid asset quality and allowance Record‐high quarterly net income of $8.1 million Well capitalized with 10.43% leverage ratio as of March 31, 2021 27 Consistent returns through March 31, 2021, with YTD ROA = 1.20% and YTD ROE = 11.36%
28
Appendix 29
30 Non‐GAAP Reconciliation As of March 31, As of December 31, As of March 31, (dollars in thousands, except per share data) 2021 2020 2020 Tangible common equity Total stockholders' equity 284,911$ 285,478$ 264,175$ Adjustments: Intangible assets (1,546) (1,546) (1,546) Total tangible common equity (non‐GAAP) 283,365$ 283,932$ 262,629$ Common shares outstanding 7,306,747 7,325,333 7,322,532 Book value per common share 38.99$ 38.97$ 36.08$ Tangible book value per common share (non‐GAAP) 38.78$ 38.76$ 35.87$ Tangible assets Total assets 2,820,672$ 2,642,634$ 2,010,701$ Adjustments: Intangible assets (1,546) (1,546) (1,546) Total tangible assets (non‐GAAP) 2,819,126$ 2,641,088$ 2,009,155$ Total stockholders' equity to assets 10.10% 10.80% 13.14% Tangible common equity to tangible assets (non‐GAAP) 10.05% 10.75% 13.07%
31 Non‐GAAP Reconciliation As of March 31, As of December 31, As of March 31, (dollars in thousands) 2021 2020 2020 Non‐PPP loans HFI Loans HFI 1,602,086$ 1,588,446$ 1,447,362$ Adjustments: PPP loans, net (119,358) (118,447) ‐ Non‐PPP loans HFI (non‐GAAP) 1,482,728$ 1,469,999$ 1,447,362$ Assets excluding PPP loans, net Assets 2,820,672$ 2,642,637$ 2,010,701$ Adjustments: PPP loans, net (119,358) (118,447) ‐ Assets excluding PPP loans, net (non‐GAAP) 2,701,314$ 2,524,190$ 2,010,701$ Allowance for Loan Losses 19,377$ 17,951$ 14,393$ Deposits 2,515,275$ 2,340,360$ 1,727,782$ Loans HFI to deposits ratio 63.69% 67.87% 83.77% Non‐PPP loans HFI to deposits ratio (non‐GAAP) 58.95% 62.81% 83.77% Allowance for loans losses to loans HFI 1.21% 1.13% 0.99% Allowance for loans losses to non‐PPP loans HFI (non‐GAAP) 1.31% 1.22% 0.99%