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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the quarterly period ended: March 31, 2024

or
 
Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the transition period from                      to                     

Commission File Number: 001-38888 
Red River Bancshares, Inc.
(Exact name of registrant as specified in its charter)
Louisiana 
72-1412058
(State or Other Jurisdiction of Incorporation or Organization)
(I.R.S. Employer Identification Number)
1412 Centre Court Drive, Suite 301, Alexandria, Louisiana
 71301
(Address of Principal Executive Offices) (Zip Code)

Registrant’s telephone number, including area code: (318) 561-4000
 
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, no par valueRRBIThe Nasdaq Stock Market, LLC
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.    Yes     No  
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes     No  
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filerAccelerated filer
Non-accelerated filerSmaller reporting company
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.  
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes      No  
As of April 30, 2024, the registrant had 6,903,148 shares of common stock, no par value, issued and outstanding. 



TABLE OF CONTENTS
Page
PART I
Financial Information
Item 1.
Item 2.
Item 3.
Item 4.
PART II
Other Information
Item 1.
Item 1A.
Item 2.
Item 3.
Item 4.
Item 5.
Item 6.
2

Table of Contents    
GLOSSARY OF TERMS
Unless the context indicates otherwise, references in this filing to “we,” “our,” “us,” “the Company,” and “our company” refer to Red River Bancshares, Inc., a Louisiana corporation and bank holding company, and its consolidated subsidiaries. All references in this filing to “Red River Bank,” “the bank,” and “the Bank” refer to Red River Bank, our wholly owned bank subsidiary.
Other abbreviations or acronyms used in this filing are defined below.
ABBREVIATION OR ACRONYMDEFINITION
ACLAllowance for credit losses
AFSAvailable-for-sale
AOCIAccumulated other comprehensive income or loss
ASCAccounting Standards Codification
ASUAccounting Standards Update
Basel IIIBasel Committee’s 2010 Regulatory Capital Framework (Third Accord)
BOLIBank-owned life insurance
bp(s)Basis point(s)
CBLRCommunity bank leverage ratio
CECL
Current Expected Credit Losses, related to ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments
CRACommunity Reinvestment Act
Director Compensation ProgramAmended and Restated Director Compensation program, which allows directors of the Company and the Bank an opportunity to select how to receive their annual director fees.
Economic Aid ActEconomic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act
Economic Growth ActEconomic Growth, Regulatory Relief, and Consumer Protection Act
EPSEarnings per share
Exchange ActSecurities Exchange Act of 1934, as amended
FDICFederal Deposit Insurance Corporation
Federal ReserveBoard of Governors of the Federal Reserve System
FHLBFederal Home Loan Bank of Dallas
FOMCFederal Open Market Committee
FTEFully taxable equivalent basis
GAAPGenerally Accepted Accounting Principles in the United States of America
HFIHeld for investment
HFSHeld for sale
HTMHeld-to-maturity
LDPOLoan and deposit production office
MSAMetropolitan statistical area
NOWNegotiable order of withdrawal
NPA(s)Nonperforming asset(s)
Policy StatementFederal Reserve’s Small Bank Holding Company Policy Statement
PPPPaycheck Protection Program
ReportQuarterly Report on Form 10-Q
SBASmall Business Administration
SBICSmall Business Investment Company
Securities ActSecurities Act of 1933, as amended
SECSecurities and Exchange Commission
3

Table of Contents    
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Report contains forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act, which reflect our current views with respect to, among other things, future events and our financial performance. These statements are often, but not always, made through the use of 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 of a future or forward-looking nature. These forward-looking statements are not historical facts and are based on current expectations, estimates and projections about our industry, management’s beliefs, and certain assumptions made by management, many of which, by their nature, are inherently uncertain and beyond our control. Accordingly, we caution you that any such forward-looking statements are not guarantees of future performance and are subject to risks, assumptions, and uncertainties that are difficult to predict. Although we believe 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.
There are or will be important factors that could cause our actual results to differ materially from those indicated in these forward-looking statements, including, but not limited to, the following:
volatility and direction of market interest rates;
business and economic conditions generally, in the financial services industry, nationally, and within our local market areas;
government intervention in the U.S. financial system, including the effects of recent and future legislative, tax, accounting, and regulatory actions and reforms, including the Economic Aid Act, which established the SBA PPP, the Inflation Reduction Act of 2022, and other stimulus legislation or changes in banking, securities, accounting, and tax laws and regulations, and their application by our regulators;
changes in management personnel;
increased competition in the financial services industry, particularly from regional and national institutions;
our ability to maintain important deposit customer relationships and our reputation, and to otherwise avoid liquidity risks;
factors that can impact the performance of our loan portfolio, including real estate values and liquidity in our primary market areas, the financial health of our commercial borrowers, and the success of construction projects that we finance, including any loans acquired in acquisition transactions;
changes in the value of collateral securing our loans;
risks associated with system failures or failures to protect against cybersecurity threats, such as breaches of our network security;
deterioration of our asset quality;
the adequacy of our reserves, including our ACL;
operational risks associated with our business;
natural disasters and adverse weather, acts of terrorism, pandemics, an outbreak of hostilities, including the ongoing military conflicts between Russia and Ukraine and Israel and Hamas, as well as the current tensions with China, or other international or domestic calamities, and other matters beyond our control;
our ability to prudently manage our growth and execute our strategy;
compliance with the extensive regulatory framework that applies to us;
changes in the laws, rules, regulations, interpretations, or policies relating to financial institutions, accounting, tax, trade, monetary, and fiscal matters; and
the risk factors found in “Part I - Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2023, as well as in “Part II - Item 1A. Risk Factors” of this Report and other reports and documents we file from time to time with the SEC.
The foregoing factors should not be construed as exhaustive and should be read together with the other cautionary statements included in this Report. Additional information on these and other risk factors can be found in “Part II - Item 1A. Risk Factors” of this Report and in “Part I - Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2023. If one or more events related to these or other risks or uncertainties materialize, or if our underlying assumptions prove to be incorrect, actual results may differ materially from what we anticipate. Accordingly, you should not place undue reliance on any such forward-looking statements. Any forward-looking statement speaks only as of the date on which it is made, and we do not undertake any obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments, or otherwise, except as required by applicable law. New risks emerge from time to time, and it is not possible for us to predict what risks will arise. In addition, we cannot assess the impact of each factor on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.
4

Table of Contents    
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements

RED RIVER BANCSHARES, INC.
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(in thousands, except share amounts)March 31,
2024
December 31,
2023
ASSETS
Cash and due from banks$19,401 $53,062 
Interest-bearing deposits in other banks210,404 252,364 
Total Cash and Cash Equivalents229,805 305,426 
Securities available-for-sale, at fair value (amortized cost of $611,240 and $632,258, respectively)
545,967 570,092 
Securities held-to-maturity, at amortized cost (fair value of $114,784 and $119,029, respectively)
139,328 141,236 
Equity securities, at fair value2,934 2,965 
Nonmarketable equity securities2,261 2,239 
Loans held for sale1,653 1,306 
Loans held for investment2,038,072 1,992,858 
Allowance for credit losses(21,564)(21,336)
Premises and equipment, net57,539 57,088 
Accrued interest receivable9,995 9,945 
Bank-owned life insurance29,731 29,529 
Intangible assets1,546 1,546 
Right-of-use assets3,091 3,629 
Other assets32,940 32,287 
Total Assets$3,073,298 $3,128,810 
LIABILITIES
Noninterest-bearing deposits$895,439 $916,456 
Interest-bearing deposits1,850,452 1,885,432 
Total Deposits2,745,891 2,801,888 
Accrued interest payable8,959 8,000 
Lease liabilities3,215 3,767 
Accrued expenses and other liabilities15,919 11,304 
Total Liabilities2,773,984 2,824,959 
COMMITMENTS AND CONTINGENCIES  
STOCKHOLDERS’ EQUITY
Preferred stock, no par value:
Authorized - 1,000,000 shares; None Issued and Outstanding
  
Common stock, no par value:
Authorized - 30,000,000 shares;
Issued and Outstanding - 6,892,448 and 7,091,637 shares, respectively
45,177 55,136 
Additional paid-in capital2,485 2,407 
Retained earnings314,352 306,802 
Accumulated other comprehensive income (loss)(62,700)(60,494)
Total Stockholders’ Equity299,314 303,851 
Total Liabilities and Stockholders’ Equity
$3,073,298 $3,128,810 

The accompanying notes are an integral part of these unaudited consolidated financial statements.
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RED RIVER BANCSHARES, INC.
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
For the Three Months Ended March 31, 
(in thousands, except per share data)20242023
INTEREST AND DIVIDEND INCOME
Interest and fees on loans$25,893 $21,764 
Interest on securities4,064 3,567 
Interest on federal funds sold 635 
Interest on deposits in other banks3,039 1,738 
Dividends on stock22 28 
Total Interest and Dividend Income33,018 27,732 
INTEREST EXPENSE
Interest on deposits11,655 4,823 
Total Interest Expense11,655 4,823 
Net Interest Income21,363 22,909 
Provision for credit losses300  
Net Interest Income After Provision for Credit Losses21,063 22,909 
NONINTEREST INCOME
Service charges on deposit accounts1,368 1,393 
Debit card income, net1,022 934 
Mortgage loan income456 275 
Brokerage income987 807 
Loan and deposit income492 477 
Bank-owned life insurance income202 179 
Gain (Loss) on equity securities(31)31 
SBIC income352 180 
Other income (loss)80 64 
Total Noninterest Income4,928 4,340 
OPERATING EXPENSES
Personnel expenses9,550 9,000 
Occupancy and equipment expenses1,616 1,717 
Technology expenses709 748 
Advertising337 281 
Other business development expenses475 436 
Data processing expense347 400 
Other taxes737 686 
Loan and deposit expenses(42)205 
Legal and professional expenses618 516 
Regulatory assessment expenses404 406 
Other operating expenses 1,122 1,093 
Total Operating Expenses15,873 15,488 
Income Before Income Tax Expense10,118 11,761 
Income tax expense
1,930 2,163 
Net Income$8,188 $9,598 
EARNINGS PER SHARE
Basic
$1.16 $1.34 
Diluted
$1.16 $1.33 
The accompanying notes are an integral part of these unaudited consolidated financial statements.
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RED RIVER BANCSHARES, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)
For the Three Months Ended March 31, 
(in thousands)20242023
Net income$8,188 $9,598 
Other comprehensive income (loss):
Unrealized net gain (loss) on securities arising during period(3,107)2,957 
Tax effect653 (620)
Change in unrealized net loss on securities transferred to held-to-maturity314 365 
Tax effect(66)(77)
Total other comprehensive income (loss)(2,206)2,625 
Comprehensive Income (Loss)$5,982 $12,223 
The accompanying notes are an integral part of these unaudited consolidated financial statements.
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RED RIVER BANCSHARES, INC.
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (UNAUDITED)
(dollars in thousands, except per share amounts)Common
Shares Issued
Common
Stock
Additional Paid-In CapitalRetained
Earnings
Accumulated
Other
Comprehensive
Income (Loss)
Total
Stockholders’
Equity
Balance as of December 31, 20227,183,915 $60,050 $2,088 $274,781 $(71,166)$265,753 
Net income— — — 9,598 — 9,598 
Stock incentive plan— — 69 — — 69 
Forfeiture of restricted shares of common stock(1,130)— — — — — 
Issuance of shares of common stock as board compensation1,660 84 — — — 84 
Repurchase of common stock(6,795)(346)— — — (346)
Cash dividend - $0.08 per share
— — — (574)— (574)
Cumulative effect of change in accounting principle— — — (569)— (569)
Other comprehensive income (loss)— — — — 2,625 2,625 
Balance as of March 31, 20237,177,650 $59,788 $2,157 $283,236 $(68,541)$276,640 
Balance as of December 31, 20237,091,637 $55,136 $2,407 $306,802 $(60,494)$303,851 
Net income— — — 8,188 — 8,188 
Stock incentive plan— — 78 — — 78 
Issuance of shares of common stock as board compensation811 41 — — — 41 
Repurchase of common stock(200,000)(10,000)— — — (10,000)
Cash dividend - $0.09 per share
— — — (638)— (638)
Other comprehensive income (loss)— — — — (2,206)(2,206)
Balance as of March 31, 20246,892,448 $45,177 $2,485 $314,352 $(62,700)$299,314 
The accompanying notes are an integral part of these unaudited consolidated financial statements.
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RED RIVER BANCSHARES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
For the Three Months Ended March 31, 
(in thousands)20242023
CASH FLOWS FROM OPERATING ACTIVITIES
Net income$8,188 $9,598 
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation600 546 
Amortization131 174 
Share-based compensation earned78 69 
Share-based board compensation earned23 10 
Net (accretion) amortization on securities AFS329 525 
Net (accretion) amortization on securities HTM(306)(356)
(Gain) Loss on equity securities31 (31)
Provision for credit losses300  
Deferred income tax (benefit) expense587 (351)
Net (increase) decrease in loans HFS(347)(1,528)
Net (increase) decrease in accrued interest receivable(50)433 
Net (increase) decrease in BOLI(202)(179)
Net increase (decrease) in accrued interest payable959 870 
Net increase (decrease) in accrued income taxes payable1,415 2,515 
Other operating activities, net2,683 1,035 
Net cash provided by (used in) operating activities14,419 13,330 
CASH FLOWS FROM INVESTING ACTIVITIES
Activity in securities AFS:
Maturities, principal repayments, and calls37,330 13,800 
Purchases(16,641)(8,755)
Activity in securities HTM:
Maturities, principal repayments, and calls2,214 2,622 
Sale of equity securities 6,000 
Purchase of nonmarketable equity securities (28)
Capital contribution in partnerships(40)(786)
Net (increase) decrease in loans HFI(45,286)(5,657)
Proceeds from sales of foreclosed assets69  
Purchases of premises and equipment(1,051)(1,229)
Net cash provided by (used in) investing activities(23,405)5,967 
CASH FLOWS FROM FINANCING ACTIVITIES
Net increase (decrease) in deposits(55,997)(67,551)
Repurchase of common stock(10,000)(346)
Cash dividends(638)(574)
Net cash provided by (used in) financing activities(66,635)(68,471)
Net change in cash and cash equivalents(75,621)(49,174)
Cash and cash equivalents - beginning of period305,426 278,392 
Cash and cash equivalents - end of period$229,805 $229,218 



The accompanying notes are an integral part of these unaudited consolidated financial statements.
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RED RIVER BANCSHARES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
For the Three Months Ended March 31, 
(in thousands)20242023
SUPPLEMENTAL DISCLOSURES
Cash paid during the year for:
Interest
$10,696 $3,953 
SUPPLEMENTAL INFORMATION FOR NON-CASH INVESTING AND FINANCING ACTIVITIES
Assets acquired in settlement of loans$ $22 
The accompanying notes are an integral part of these unaudited consolidated financial statements.
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RED RIVER BANCSHARES, INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
1.Summary of Significant Accounting Policies
Basis of Presentation
The accompanying unaudited consolidated financial statements of the Company were prepared in accordance with GAAP for interim financial information, general practices within the financial services industry, and instructions for Form 10-Q and Regulation S-X. Accordingly, these interim financial statements do not include all of the information or footnotes required by GAAP for annual financial statements. However, in the opinion of management, all adjustments (consisting of normal recurring adjustments) necessary for a fair presentation of the financial statements have been included. The results of operations for the interim periods disclosed herein are not necessarily indicative of the results that may be expected for the entire fiscal year. These statements should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto for the year ended December 31, 2023, included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023.
Certain prior period amounts have been reclassified to conform to the current period presentation. These changes in presentation did not have a material impact on the Company’s financial condition or results of operations.
Critical Accounting Policies and Estimates
In preparing the financial statements, the Company is required to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. The financial statements reflect all adjustments that are, in the opinion of management, necessary for a fair statement of the Company’s financial condition, results of operations, comprehensive income, changes in stockholders’ equity, and cash flows for the interim period presented. These adjustments are of a normal recurring nature and include appropriate estimated provisions.
Recent Accounting Pronouncements
ASU No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. The guidance issued in this update requires improvement to the disclosures about a public entity’s reportable segments and more detailed information about a reportable segment’s expenses and other segment items. Even though the Company has a single reportable segment, all the disclosures required by this update are required. Under this guidance, public entities are required to disclose segment expenses and other segment items on an annual and interim basis and to provide in interim periods all disclosures about a reportable segment that are currently required annually. The goal of these disclosures is to enable investors to develop more decision-useful financial analyses. This update is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. The Company does not expect the adoption of this standard to have a material impact on the Company’s consolidated financial statements.
ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The guidance in this update provides enhanced transparency and decision usefulness of income tax disclosures. The amendment addresses investor requests for income tax information through improvements to income tax disclosures related to the rate reconciliation and income taxes paid information. The guidance requires public business entities to disclose in their rate reconciliation table additional categories of information about federal, state, and foreign income taxes and to provide more details about the reconciling items in some categories if the items meet a quantitative threshold. The guidance also requires all entities to disclose annually income taxes paid (net of refunds received) disaggregated by federal, state, and foreign taxes and to disaggregate the information by jurisdiction based on a quantitative threshold. Investors anticipate theses disclosures will provide an understanding of an entity’s exposures to changes in tax legislation and allow investors to better assess income tax information that affects cash flow forecasts and capital allocation decisions, as well as identify opportunities to increase future cash flows. The standard is effective for annual periods beginning after December 15, 2024, and interim periods within those annual periods. Early adoption is permitted. The amendments should be applied on a prospective basis, but retrospective application is permitted. The Company does not expect the adoption of this standard to have a material impact on the Company’s consolidated financial statements.
ASU No. 2024-01, Compensation - Stock Compensation (Topic 718): Scope Application of Profits Interest and Similar Awards. The guidance issued in this update was designed to improve GAAP by adding an illustrative example that clarifies when the scope guidance of Topic 718 should be applied, since diversity in practice exists. This ASU does not change existing guidance. The standard is effective for annual periods beginning after December 15, 2024, and interim periods within those annual periods. Early adoption is permitted. The amendments in this update should be applied retrospectively to all prior periods presented or prospectively. The Company does not expect the adoption of this guidance to have a material impact on the Company’s consolidated financial statements.
ASU No. 2024-02, Codification Improvements - Amendments to Remove References to the Concept Statements. The guidance issued in this update amends the codification to remove references to various Financial Accounting Standards Board Concept Statements. The codification will be updated to clarify or correct unintended application of guidance that
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are not expected to have any significant effect on current accounting practice or cost to most entities. The standard is effective for fiscal years beginning after December 15, 2024. Early adoption is permitted. The Company does not expect the adoption of this guidance to have a material impact on the Company’s consolidated financial statements.
2.    Securities
Securities are classified as AFS, HTM, and equity securities. Total securities were $688.2 million as of March 31, 2024.
Securities AFS and Securities HTM
Securities AFS and securities HTM are debt securities. Securities AFS are held for indefinite periods of time and are carried at estimated fair value. As of March 31, 2024, the estimated fair value of securities AFS was $546.0 million. The net unrealized loss on securities AFS increased $3.1 million for the three months ended March 31, 2024, resulting in a net unrealized loss of $65.3 million as of March 31, 2024.
Securities HTM, which the Company has the intent and ability to hold until maturity, are carried at amortized cost. As of March 31, 2024, the amortized cost of securities HTM was $139.3 million.
Investment activity for the three months ended March 31, 2024, included $39.5 million in maturities, principal repayments, and calls, partially offset by $16.6 million of securities purchased. There were no sales of securities AFS, and there were no purchases or sales of securities HTM for the same period.
The amortized cost and estimated fair value of securities AFS and securities HTM are summarized in the following tables:
March 31, 2024
(in thousands)Amortized
Cost
Gross
Unrealized
Gains
Gross
Unrealized
Losses
Fair
Value
Securities AFS:
Mortgage-backed securities$285,517 $220 $(32,229)$253,508 
Municipal bonds209,678 1 (30,172)179,507 
U.S. Treasury securities69,014  (1,246)67,768 
U.S. agency securities47,031 18 (1,865)45,184 
Total Securities AFS$611,240 $239 $(65,512)$545,967 
Securities HTM:
Mortgage-backed securities$138,404 $ $(24,428)$113,976 
U.S. agency securities924  (116)808 
Total Securities HTM$139,328 $ $(24,544)$114,784 
December 31, 2023
(in thousands)Amortized
Cost
Gross
Unrealized
Gains
Gross
Unrealized
Losses
Fair
Value
Securities AFS:
Mortgage-backed securities$288,793 $395 $(31,228)$257,960 
Municipal bonds211,848 13 (27,732)184,129 
U.S. Treasury securities92,054  (1,912)90,142 
U.S. agency securities39,563 5 (1,707)37,861 
Total Securities AFS$632,258 $413 $(62,579)$570,092 
Securities HTM:
Mortgage-backed securities$140,314 $ $(22,098)$118,216 
U.S. agency securities922  (109)813 
Total Securities HTM$141,236 $ $(22,207)$119,029 
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The amortized cost and estimated fair value of securities AFS and securities HTM as of March 31, 2024, by contractual maturity, are shown below. Expected maturities may differ from contractual maturities because issuers have the right to call or repay obligations with or without call or prepayment penalties.
March 31, 2024
(in thousands)Amortized
Cost
Fair
Value
Securities AFS:
Within one year$72,721 $71,568 
After one year but within five years37,179 35,768 
After five years but within ten years109,548 102,109 
After ten years391,792 336,522 
Total Securities AFS$611,240 $545,967 
Securities HTM:
Within one year$ $ 
After one year but within five years  
After five years but within ten years924 808 
After ten years138,404 113,976 
Total Securities HTM$139,328 $114,784 
Accounting for Credit Losses – Securities AFS and Securities HTM
The Company evaluates securities AFS for impairment when there has been a decline in fair value below the amortized cost basis of a security to determine whether there is a credit loss associated with the decline in fair value on at least a quarterly basis, and more frequently when economic or market concerns warrant such evaluation. Due to the zero credit loss assumption and the considerations applied to the securities AFS, there was no ACL recorded for securities AFS as of March 31, 2024 and December 31, 2023. Also, as part of the Company’s evaluation of its intent and ability to hold investments for a period of time sufficient to allow for any anticipated recovery in the market, the Company considers its investment strategy, cash flow needs, liquidity position, capital adequacy, and interest rate risk position. Management does not intend to sell these securities prior to recovery, and it is more likely than not that the Company will have the ability to hold them, primarily due to adequate liquidity, until each security has recovered its cost basis.
Due to the zero credit loss assumption on the securities HTM portfolio, there was no ACL recorded for securities HTM as of March 31, 2024 and December 31, 2023.
Accrued interest receivable totaled $2.9 million and $3.0 million as of March 31, 2024 and December 31, 2023, respectively, for securities AFS and securities HTM and was reported in accrued interest receivable on the consolidated balance sheets.
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Information pertaining to securities AFS and securities HTM with gross unrealized losses as of March 31, 2024 and December 31, 2023, aggregated by investment category and length of time that individual securities have been in a continuous loss position, is described as follows:
March 31, 2024
Less than twelve monthsTwelve months or more
(in thousands)Gross
Unrealized
Losses
Fair
Value
Gross
Unrealized
Losses
Fair
Value
Securities AFS:
Mortgage-backed securities$(174)$27,769 $(32,055)$201,151 
Municipal bonds(26)2,241 (30,146)175,367 
U.S. Treasury securities  (1,246)67,768 
U.S. agency securities(80)21,740 (1,785)13,763 
Total Securities AFS$(280)$51,750 $(65,232)$458,049 
Securities HTM:
Mortgage-backed securities$ $ $(24,428)$113,976 
U.S. agency securities  (116)808 
Total Securities HTM$ $ $(24,544)$114,784 
December 31, 2023
Less than twelve monthsTwelve months or more
(in thousands)Gross
Unrealized
Losses
Fair
Value
Gross
Unrealized
Losses
Fair
Value
Securities AFS:
Mortgage-backed securities$(35)$19,383 $(31,193)$206,518 
Municipal bonds(83)4,815 (27,649)176,098 
U.S. Treasury securities  (1,912)90,142 
U.S. agency securities(82)19,301 (1,625)14,475 
Total Securities AFS$(200)$43,499 $(62,379)$487,233 
Securities HTM:
Mortgage-backed securities$ $ $(22,098)$118,216 
U.S. agency securities  (109)813 
Total Securities HTM$ $ $(22,207)$119,029 
As of March 31, 2024, the Company held 547 securities AFS and securities HTM that were in unrealized loss positions. The aggregate unrealized loss of these securities as of March 31, 2024, was 12.00% of the amortized cost basis of total debt securities.
For the three months ended March 31, 2024 and 2023, there were no proceeds from sales and calls of debt securities.
Equity Securities
Equity securities are an investment in a CRA mutual fund, consisting primarily of bonds. Equity securities are carried at fair value on the consolidated balance sheets with periodic changes in value recorded through the consolidated statements of income. As of March 31, 2024, equity securities had a fair value of $2.9 million with a recognized loss of $31,000 for the three months ended March 31, 2024. As of December 31, 2023, equity securities had a fair value of $3.0 million with a recognized loss of $14,000 for the year ended December 31, 2023.
Pledged Securities
Securities with carrying values of approximately $254.2 million and $230.9 million were used as collateral as of March 31, 2024 and December 31, 2023, respectively.
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3.    Loans and Asset Quality
Loans
Loans HFI by category and loans HFS are summarized below:
(in thousands)March 31, 2024December 31, 2023
Real estate:
Commercial real estate$870,085 $851,582 
One-to-four family residential608,617 599,487 
Construction and development116,181 125,238 
Commercial and industrial347,094 315,327 
Tax-exempt67,548 72,913 
Consumer28,547 28,311 
Total loans HFI$2,038,072 $1,992,858 
Total loans HFS$1,653 $1,306 
Accrued interest receivable on loans HFI totaled $6.9 million and $6.8 million as of March 31, 2024 and December 31, 2023, respectively, and was reported in accrued interest receivable on the accompanying consolidated balance sheets.
Allowance for Credit Losses
Effective January 1, 2023, the Company adopted the provisions of ASC 326 using the modified retrospective method. The Company maintains an ACL on all loans that reflects management’s estimate of expected credit losses for the full life of the loan portfolio.
The following table summarizes the activity in the ACL by category for the three months ended March 31, 2024:
(in thousands)
Beginning Balance December 31, 2023
Provision for Credit LossesCharge-offsRecoveries
Ending Balance March 31, 2024
Real Estate:
Commercial real estate$9,118 $115 $ $ $9,233 
One-to-four family residential7,484 49  3 7,536 
Construction and development1,309 (117)  1,192 
Commercial and industrial2,553 258 (51)15 2,775 
Tax-exempt575 (50)  525 
Consumer297 45 (80)41 303 
Total allowance for credit losses$21,336 $300 $(131)$59 $21,564 
The following table summarizes the activity in the ACL by category for the twelve months ended December 31, 2023:
(in thousands)
Beginning
Balance December 31, 2022
Impact of ASC 326 Adoption
Provision
for Credit
Losses
 Charge-offs RecoveriesEnding
Balance December 31, 2023
Real estate:
Commercial real estate$7,720 $876 $522 $ $ $9,118 
One-to-four family residential5,682 1,231 584 (23)10 7,484 
Construction and development1,654 (444)108 (9) 1,309 
Commercial and industrial4,350 (822)(947)(58)30 2,553 
Tax-exempt751 (427)251   575 
Consumer471 (136)217 (383)128 297 
Total allowance for credit losses$20,628 $278 $735 $(473)$168 $21,336 
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Nonaccrual and Past Due Loans
The following table presents nonaccrual loans as of March 31, 2024:
(in thousands)Nonaccrual with No ACLNonaccrual with ACLTotal Nonaccrual
Real estate:
Commercial real estate$ $711 $711 
One-to-four family residential 568 568 
Construction and development   
Commercial and industrial706 138 844 
Tax-exempt   
Consumer 134 134 
Total loans HFI$706 $1,551 $2,257 
The following table presents nonaccrual loans as of December 31, 2023:
(in thousands)Nonaccrual with No ACLNonaccrual with ACLTotal Nonaccrual
Real estate:
Commercial real estate$ $714 $714 
One-to-four family residential 269 269 
Construction and development   
Commercial and industrial709 135 844 
Tax-exempt   
Consumer 132 132 
Total loans HFI$709 $1,250 $1,959 
No material interest income was recognized in the consolidated statements of income on nonaccrual loans for the three months ended March 31, 2024 and 2023.
The following table presents the aging analysis of the past due loans and loans 90 days or more past due and still accruing interest by loan category as of March 31, 2024:
Past Due
(in thousands)30-59 Days60-89 Days90 Days or MoreCurrentTotal Loans HFI90 Days or More Past Due and Accruing
Real estate:
Commercial real estate$ $ $678 $869,407 $870,085 $ 
One-to-four family residential427 238 663 607,289 608,617 260 
Construction and development884   115,297 116,181  
Commercial and industrial509 35 810 345,740 347,094 8 
Tax-exempt   67,548 67,548  
Consumer35 14 53 28,445 28,547 5 
Total loans HFI$1,855 $287 $2,204 $2,033,726 $2,038,072 $273 
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The following table presents the aging analysis of the past due loans and loans 90 days or more past due and still accruing interest by loan category as of December 31, 2023:
Past Due
(in thousands)30-59 Days60-89 Days90 Days or MoreCurrentTotal Loans HFI90 Days or More Past Due and Accruing
Real estate:
Commercial real estate$36 $ $678 $850,868 $851,582 $ 
One-to-four family residential392 251 409 598,435 599,487 260 
Construction and development  265 124,973 125,238 265 
Commercial and industrial132 60 847 314,288 315,327 45 
Tax-exempt   72,913 72,913  
Consumer27 16 46 28,222 28,311 4 
Total loans HFI$587 $327 $2,245 $1,989,699 $1,992,858 $574 
Loan Modifications
Modifications are made to a borrower experiencing financial difficulty, and the modified terms are in the form of principal forgiveness, interest rate reduction, other-than-insignificant payment delay, or a term extension in the current reporting period.
As of March 31, 2024, the amortized cost basis of loans that were modified to borrowers experiencing financial difficulty during the three months ended March 31, 2024, was as follows:
(dollars in thousands)Term ExtensionPercent of Loan CategoryFinancial Effect
Real estate:
Commercial real estate$  %
One-to-four family residential235  %
Amortization period was extended by a weighted-average of 4.72 years
Construction and development  %
Commercial and industrial  %
Tax-exempt  %
Consumer  %
Total loans modified$235  %
As of March 31, 2023, no loan modifications were made to borrowers experiencing financial difficulty during the three months ended March 31, 2023.
Credit Quality Indicators
Loans are categorized based on the degree of risk inherent in the credit and the ability of the borrower to service the debt. A description of the general characteristics of the Bank’s risk rating grades follows:
Pass - These loans are of satisfactory quality and do not require a more severe classification.
Special mention - This category includes loans with potential weaknesses that deserve management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan. However, the loss potential does not warrant substandard classification.
Substandard - Loans in this category have well-defined weaknesses that jeopardize normal repayment of principal and interest. Prompt corrective action is required to reduce exposure and to assure adequate remedial actions are taken by the borrower. If these weaknesses do not improve, loss is possible.
Doubtful - Loans in this category have well-defined weaknesses that make full collection improbable.
Loss - Loans classified in this category are considered uncollectible and charged-off to the ACL.
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As of March 31, 2024, the Company had no loans classified as doubtful or loss. The following table summarizes loans by risk rating and year of origination as of March 31, 2024:
Year of Origination
(in thousands)20242023202220212020Prior YearsRevolving LinesTotal
Real estate:
Commercial real estate
Pass$42,266 $125,320 $258,747 $233,896 $74,648 $107,172 $17,429 $859,478 
Special mention 73  3,155  5,036  8,264 
Substandard 184 769 679  711  2,343 
Total$42,266 $125,577 $259,516 $237,730 $74,648 $112,919 $17,429 $870,085 
One-to-four family residential
Pass$26,614 $119,106 $132,242 $123,959 $87,673 $99,639 $16,846 $606,079 
Special mention     259  259 
Substandard  183 44 36 1,206 810 2,279 
Total$26,614 $119,106 $132,425 $124,003 $87,709 $101,104 $17,656 $608,617 
Construction and development
Pass$13,842 $57,249 $35,567 $4,860 $1,660 $2,393 $345 $115,916 
Special mention        
Substandard     265  265 
Total$13,842 $57,249 $35,567 $4,860 $1,660 $2,658 $345 $116,181 
Commercial and industrial
Pass$25,699 $69,171 $43,628 $46,930 $12,834 $6,724 $130,526 $335,512 
Special mention 1,159 914 4,518  675 3,356 10,622 
Substandard 4  54 4 102 796 960 
Total$25,699 $70,334 $44,542 $51,502 $12,838 $7,501 $134,678 $347,094 
Tax-exempt
Pass$707 $933 $14,976 $6,759 $13,334 $30,839 $ $67,548 
Special mention        
Substandard