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Red River Bancshares, Inc. Reports Fourth Quarter and Year-End 2019 Financial Results

ALEXANDRIA, La., Jan. 29, 2020 (GLOBE NEWSWIRE) -- Red River Bancshares, Inc. (the “Company”), (RRBI), the holding company for Red River Bank (the “Bank”), announced today its financial results for the fourth quarter and year ended 2019.

Net income for the fourth quarter of 2019 was $6.7 million, or $0.92 per diluted common share ("EPS"), a decrease of $104,000, or 1.5%, compared to $6.8 million, or $0.93 EPS, for the third quarter of 2019, and an increase of $592,000, or 9.6%, compared to $6.2 million, or $0.91 EPS, for the fourth quarter of 2018.

Net income for the twelve months ended December 31, 2019, was $24.8 million, or $3.49 EPS, an increase of $1.8 million, or 7.7%, compared to $23.1 million, or $3.41 EPS, for the twelve months ended December 31, 2018.

Fourth Quarter 2019 Performance and Operational Highlights

  • Net income was $6.7 million, which was $104,000, or 1.5%, lower compared to the third quarter of 2019. This resulted in a quarterly return on assets of 1.37% and a quarterly return on equity of 10.72%.
  • The fourth quarter of 2019 benefited from a $71,000 dividend from a Small Business Investment Company ("SBIC") limited partnership and $132,000 from nonrecurring operating expense reductions.
  • The net interest margin, fully tax equivalent basis ("FTE"), decreased by five basis points to 3.50% for the fourth quarter of 2019 compared to 3.55% for the prior quarter. The net interest margin was negatively impacted by the three Federal Reserve rate decreases which occurred in the third and fourth quarters of 2019.
  • As of December 31, 2019, the Company had $1.99 billion of assets. Assets increased 2.5% from September 30, 2019, and 6.9% from December 31, 2018.
  • Loans held for investment ("HFI") increased 1.8% from September 30, 2019, and 8.3% from December 31, 2018.
  • Deposits increased 2.6% from September 30, 2019, and 4.6% from December 31, 2018. The increase in deposits during the fourth quarter was primarily attributable to the seasonal inflow of funds from public entity customers.
  • As of December 31, 2019, the loans HFI to deposits ratio was 83.60%, and the noninterest-bearing deposits to total deposits ratio was 33.98%.
  • The nonperforming assets ("NPA(s)") to total assets ratio improved to 0.33% as of December 31, 2019, from 0.41% as of September 30, 2019.
  • The net charge-offs to average loans ratio was 0.02% for the quarter ended December 31, 2019, and 0.03% for the year ended December 31, 2019.
  • The Bank did not have an FDIC insurance assessment for the third or fourth quarters of 2019.
  • As part of our continued Southwest Louisiana market expansion, in the fourth quarter of 2019, we purchased a banking center location and added to our lending team in the Southwest Louisiana market. The purchased property is located in Sulphur, Louisiana. Sulphur encompasses the western portion of the Lake Charles metropolitan statistical area ("MSA") and is home to many major industrial projects, either completed or under construction in Southwest Louisiana, over the past few years. We expect to open a full-service banking center at the Sulphur location late in the first quarter of 2020, pending receipt of all regulatory approvals. The addition to our lending team included hiring an experienced, longtime Southwest Louisiana banker and community leader to join the Red River Bank commercial banking team.

Blake Chatelain, President and Chief Executive Officer stated, "We are pleased with our 2019 accomplishments, growth, and financial results. Our initial public offering and selection to be included in the Russell 2000 Index were significant milestones for our shareholders, customers, and employees. In 2019, we expanded organically throughout Louisiana, increasing our balance sheet to almost $2.0 billion in assets. Net income also increased 7.7% compared to the prior year. We mitigated the impact of the three Federal Reserve rate decreases in the second half of 2019 with diligent balance sheet management and pricing strategies. Also, asset quality levels improved with the NPAs to total assets ratio decreasing to 0.33% as of year end, the lowest it has been in 11 quarters."

Mr. Chatelain added, "Our organic expansion in the Southwest Louisiana market is part of our continued commitment to, and investment in providing banking services throughout Louisiana. We are pleased to have purchased the Sulphur property and to have expanded our banking team in this area. We look forward to opening this property as our second banking center location in southwest Louisiana as quickly as possible and expanding our customer base in this vibrant market."

Net Interest Income and Net Interest Margin (FTE)

Net interest income for the fourth quarter of 2019 was $16.3 million, which was $149,000, or 0.9%, higher than the third quarter of 2019. The increase in net interest income was due to a $146,000 decrease in interest expense. The junior subordinated debentures were paid off in the third quarter of 2019, resulting in a $73,000 reduction in debenture interest expense. Additionally, interest expense relating to interest-bearing deposits decreased by $73,000.

The net interest margin (FTE) was negatively impacted by the three Federal Reserve rate decreases which occurred in the third and fourth quarters of 2019. The net interest margin (FTE) was 3.50% for the fourth quarter of 2019 compared to 3.55% for the prior quarter. The effect of the lower interest rate environment was mitigated by managing loan and deposit pricing strategies and adjusting the investment portfolio composition.

The yield on loans decreased eight basis points due to the impact of the lower interest rate environment on new, renewed, and floating rate loans. As of December 31, 2019, floating rate loans were 15.8% of the loan portfolio. The yield on federal funds sold decreased 54 basis points. Partially offsetting these decreases, the yield on taxable securities improved four basis points due to a portfolio realignment completed in the fourth quarter of 2019. The resulting yield on earning assets was 3.97% for the fourth quarter of 2019 compared to 4.06% for the third quarter of 2019.

The rate on interest-bearing deposits decreased four basis points due to lower rates on new and renewed time deposits, combined with a slight decrease in rates on certain interest-bearing transaction deposit accounts. The cost of deposits was 0.57% for the fourth quarter of 2019 compared to 0.60% for the third quarter of 2019.

Noninterest Income

Noninterest income totaled $4.2 million for the fourth quarter of 2019, a decrease of $197,000, or 4.5%, compared to $4.4 million for the previous quarter. The decrease was mainly due to lower mortgage loan income, partially offset by higher service charges on deposit accounts and a dividend from an SBIC limited partnership.

Mortgage loan income decreased $198,000, or 19.5%, in the fourth quarter of 2019, compared to the previous quarter. This decrease was due in part to a decline in activity related to seasonality of mortgage demand, as well as the stabilization of mortgage rates during the fourth quarter.

Service charges on deposit accounts increased $75,000, or 6.3%, for the fourth quarter of 2019, compared to the prior quarter. This increase was due greater customer volume and activity.

SBIC income increased by $46,000 in the fourth quarter of 2019, or 33.1%, from the third quarter of 2019. This increase was a result of a $71,000 dividend received in the fourth quarter of 2019 from an SBIC limited partnership of which Red River Bank is a member. No dividend was received in the third quarter of 2019.

Operating Expenses

Operating expenses remained consistent at $11.9 million when comparing the third and the fourth quarters of 2019. As a result of our expansion, personnel and occupancy expenses increased. These higher expenses were offset by nonrecurring reductions throughout various expense categories.

Personnel expenses totaled $7.1 million for the fourth quarter of 2019, up $141,000, or 2.0%, from the third quarter of 2019. This increase was due to additional staff resulting from our expansion in the Northshore and Southwest Louisiana markets, annual self-insurance administrative fees, and other compensation adjustments.

Occupancy and equipment expenses totaled $1.3 million for the fourth quarter of 2019, up $69,000, or 5.8%, from the third quarter of 2019. This increase was primarily due to opening the Covington banking center in the Northshore market and normal property maintenance.

Data processing expense totaled $462,000 for the fourth quarter of 2019, down $17,000, or 3.5%, from the third quarter of 2019. This decrease was due to receipt of a $39,000 nonrecurring refund from our data processing center in the fourth quarter.

Other taxes totaled $346,000 for the fourth quarter of 2019, down $79,000, or 18.6%, from the third quarter of 2019. The State of Louisiana bank stock tax expense was lower due to a $53,000 nonrecurring year-end adjustment.

Loan and deposit expenses totaled $247,000 for the fourth quarter of 2019, down $38,000, or 13.3%, from the third quarter of 2019. This decrease was primarily attributed to the receipt of a $40,000 negotiated rebate from a vendor.

Other operating expenses totaled $895,000 for the fourth quarter of 2019, down $45,000, or 4.8%, from the third quarter of 2019. This reduction was primarily related to a $67,000 decrease in expenses associated with other real estate owned.

Loans and Asset Quality

Loans HFI as of December 31, 2019, were $1.44 billion, an increase of $25.8 million, or 1.8%, from September 30, 2019. The increase in loans in the fourth quarter of 2019 was primarily due to normal loan origination activity spread across all of our markets, with our newer markets experiencing the most growth. Energy related credits were 2.2% of loans HFI as of December 31, 2019, compared to 2.3% as of September 30, 2019.

NPAs totaled $6.5 million as of December 31, 2019, down $1.5 million, or 18.9%, from September 30, 2019, primarily due to payoffs received on nonperforming loans. The ratio of NPAs to total assets improved to 0.33% as of December 31, 2019, from 0.41% as of September 30, 2019.

As of December 31, 2019, the allowance for loan losses ("ALL") was $13.9 million, and the ratio of ALL to loans HFI was 0.97%. The net charge-off ratio was 0.02% for the fourth quarter of 2019 and 0.03% for the year ended December 31, 2019. The provision for loan losses was $378,000 for each of the third and fourth quarters of 2019.

Deposits

Deposits as of December 31, 2019, were $1.72 billion, an increase of $44.3 million, or 2.6%, compared to September 30, 2019. Average deposits for the fourth quarter of 2019 were $1.69 billion, an increase of $38.9 million, or 2.4%, from the prior quarter.

Noninterest-bearing deposits totaled $584.9 million as of December 31, 2019, down $30.1 million, or 4.9%, from September 30, 2019, due to normal customer activity. As of December 31, 2019, noninterest-bearing deposits were 33.98% of total deposits.

Interest-bearing deposits totaled $1.14 billion as of December 31, 2019, up $74.4 million, or 7.0%, compared to September 30, 2019. This increase is due to the seasonal inflow of funds from public entity customers.

Junior Subordinated Debentures

All junior subordinated debentures were redeemed during the second and third quarters of 2019, leaving no outstanding long-term debt as of September 30, 2019. There was no interest expense for the junior subordinated debentures in the fourth quarter of 2019 compared to $73,000 for the third quarter of 2019.

Stockholders’ Equity

Total stockholders’ equity increased to $251.9 million as of December 31, 2019, from $245.4 million as of September 30, 2019. The $6.5 million increase in stockholders’ equity during the fourth quarter of 2019 was attributable to $6.7 million of net income, partially offset by $298,000 of other comprehensive loss.

Non-GAAP Disclosure

Our accounting and reporting policies conform to United States generally accepted accounting principles ("GAAP") and the prevailing practices in the banking industry. Certain financial measures used by management to evaluate our operating performance are discussed as supplemental non-GAAP performance measures. In accordance with the Security and Exchange Commission's ("SEC") rules, we classify a financial measure as being a non-GAAP financial measure if that financial measure excludes or includes amounts, or is subject to adjustments that have the effect of excluding or including amounts, that are included or excluded, as the case may be, in the most directly comparable measure calculated and presented in accordance with GAAP as in effect from time to time in the U.S. Non-GAAP financial measures do not include operating and other statistical measures or ratios or statistical measures calculated using exclusively either financial measures calculated in accordance with GAAP, operating measures or other measures that are not non-GAAP financial measures, or both.

Management and the board of directors review tangible book value per share and tangible common equity to tangible assets as part of managing operating performance. However, these non-GAAP financial measures should not be considered in isolation or as a substitute for the most directly comparable or other financial measures calculated in accordance with GAAP. Moreover, the manner in which we calculate the non-GAAP financial measures that are discussed may differ from that of other companies reporting measures with similar names. It is important to understand how such other banking organizations calculate and name their financial measures similar to the non-GAAP financial measures discussed by us when comparing such non-GAAP financial measures.

A reconciliation of non-GAAP financial measures to the comparable GAAP financial measures is included at the end of the financial statement tables.

About Red River Bancshares, Inc.

The Company is the bank holding company for Red River Bank, a Louisiana state-chartered bank established in 1999 that provides a fully integrated suite of banking products and services tailored to the needs of commercial and retail customers. Red River Bank operates from a network of 24 banking centers throughout Louisiana. Banking centers are located in the following Louisiana markets: Central Louisiana, which includes the Alexandria MSA; Northwest Louisiana, which includes the Shreveport-Bossier City MSA; Southeast Louisiana, which includes the Baton Rouge MSA; Southwest Louisiana, which includes the Lake Charles MSA; and the Northshore, which includes Covington.

Forward-Looking Statements

Statements in this news release regarding our expectations and beliefs about our future financial performance and financial condition, as well as trends in our business and markets, are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements often include words such as “believe,” “expect,” “anticipate,” “intend,” “plan,” “estimate,” “project,” “outlook,” or words of similar meaning, or future or conditional verbs such as “will,” “would,” “should,” “could,” or “may.” The forward-looking statements in this news release are based on current information and on assumptions that we make about future events and circumstances that are subject to a number of risks and uncertainties that are often difficult to predict and beyond our control. As a result of those risks and uncertainties, our actual financial results in the future could differ, possibly materially, from those expressed in or implied by the forward-looking statements contained in this news release and could cause us to make changes to our future plans. Additional information regarding these and other risks and uncertainties to which our business and future financial performance are subject is contained in the section titled “Risk Factors” in our Prospectus filed with the SEC on May 3, 2019, relating to our initial public offering, and in other documents that we file with the SEC from time to time. In addition, our actual financial results in the future may differ from those currently expected due to additional risks and uncertainties of which we are not currently aware or which we do not currently view as, but in the future may become, material to our business or operating results. Due to these and other possible uncertainties and risks, readers are cautioned not to place undue reliance on the forward-looking statements contained in this news release or to make predictions based solely on historical financial performance. Any forward-looking statement speaks only as of the date on which it is made, and we do not undertake any obligation to update or review any forward-looking statement, whether as a result of new information, future developments or otherwise, except as required by law. All forward-looking statements, express or implied, included in this news release are qualified in their entirety by this cautionary statement.

Contact:
Isabel V. Carriere, CPA, CGMA
Executive Vice President and Chief Financial Officer
318-561-4023
icarriere@redriverbank.net


FINANCIAL HIGHLIGHTS (UNAUDITED)
 
    As of and for the
Three Months Ended
  As of and for the
Twelve Months Ended
(Dollars in thousands, except per share data)   Dec. 31,
2019
  Sept. 30,
2019
  Dec. 31,
2018
  Dec. 31,
2019
  Dec. 31,
2018
                     
Net Income   $ 6,743     $ 6,847     $ 6,151     $ 24,824     $ 23,056  
                     
Per Common Share Data:                    
Earnings per share, basic   $ 0.92     $ 0.94     $ 0.92     $ 3.51     $ 3.43  
Earnings per share, diluted   $ 0.92     $ 0.93     $ 0.91     $ 3.49     $ 3.41  
Book value per share   $ 34.48     $ 33.59     $ 29.23     $ 34.48     $ 29.23  
Tangible book value per share   $ 34.27     $ 33.37     $ 28.99     $ 34.27     $ 28.99  
Cash dividends per share   $     $     $     $ 0.20     $ 0.15  
Weighted average shares outstanding, basic   7,306,221     7,304,273     6,688,624     7,072,689     6,716,943  
Weighted average shares outstanding, diluted   7,347,602     7,340,498     6,724,669     7,115,514     6,756,102  
                     
Summary Performance Ratios:                    
Return on average assets   1.37 %   1.42 %   1.33 %   1.30 %   1.29 %
Return on average equity   10.72 %   11.20 %   12.77 %   10.86 %   12.46 %
Net interest margin   3.45 %   3.50 %   3.45 %   3.47 %   3.42 %
Net interest margin (FTE)   3.50 %   3.55 %   3.50 %   3.52 %   3.44 %
Efficiency ratio   57.90 %   57.75 %   57.12 %   59.46 %   58.86 %
Loans HFI to deposits ratio   83.60 %   84.27 %   80.73 %   83.60 %   80.73 %
Noninterest-bearing deposits to deposits ratio   33.98 %   36.68 %   33.29 %   33.98 %   33.29 %
Noninterest income to average assets   0.85 %   0.91 %   0.81 %   0.84 %   0.81 %
Operating expense to average assets   2.41 %   2.47 %   2.37 %   2.49 %   2.43 %
                     
Summary Credit Quality Ratios:                    
Nonperforming assets to total assets   0.33 %   0.41 %   0.38 %   0.33 %   0.38 %
Nonperforming loans to loans HFI   0.37 %   0.47 %   0.49 %   0.37 %   0.49 %
Allowance for loan losses to loans HFI   0.97 %   0.98 %   0.94 %   0.97 %   0.94 %
Net charge-offs to average loans   0.02 %   0.00 %   0.02 %   0.03 %   0.03 %
                     
Capital Ratios:                    
Total stockholders' equity to total assets   12.67 %   12.66 %   10.41 %   12.67 %   10.41 %
Tangible common equity to tangible assets   12.60 %   12.59 %   10.34 %   12.60 %   10.34 %
Total risk-based capital to risk-weighted assets   18.02 %   17.76 %   16.55 %   18.02 %   16.55 %
Tier 1 risk-based capital to risk-weighted assets   17.07 %   16.80 %   15.62 %   17.07 %   15.62 %
Common equity tier 1 capital to risk-weighted assets   17.07 %   16.80 %   14.80 %   17.07 %   14.80 %
Tier 1 risk-based capital to average assets   12.82 %   12.77 %   11.40 %   12.82 %   11.40 %


RED RIVER BANCSHARES, INC.
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
 
(in thousands) Dec. 31,
2019
  Sept. 30,
2019
  June 30, 2019   Mar. 31,
2019
  Dec. 31,
2018
ASSETS                  
Cash and due from banks $ 25,937     $ 32,724     $ 29,854     $ 32,371     $ 34,070  
Interest-bearing deposits in other banks 107,355     73,598     71,761     145,593     117,836  
Securities available-for-sale 335,573     341,900     318,082     319,353     307,877  
Equity securities 3,936     3,954     3,924     3,869     3,821  
Nonmarketable equity securities 1,350     1,347     1,342     1,303     1,299  
Loans held for sale 5,089     4,113     6,029     2,210     2,904  
Loans held for investment 1,438,924     1,413,162     1,393,154     1,349,181     1,328,438  
Allowance for loan losses (13,937 )   (13,906 )   (13,591 )   (13,101 )   (12,524 )
Premises and equipment, net 41,744     39,828     40,032     40,033     39,690  
Accrued interest receivable 5,251     4,928     5,570     4,988     5,013  
Bank-owned life insurance 21,845     21,707     21,570     21,434     21,301  
Intangible assets 1,546     1,546     1,546     1,546     1,546  
Right-of-use assets 4,553     4,651     4,748     4,844      
Other assets 9,059     9,302     8,897     8,494     9,317  
Total Assets $ 1,988,225     $ 1,938,854     $ 1,892,918     $ 1,922,118     $ 1,860,588  
                   
LIABILITIES                  
Noninterest-bearing deposits $ 584,915     $ 615,051     $ 576,934     $ 565,757     $ 547,880  
Interest-bearing deposits 1,136,205     1,061,800     1,057,656     1,125,377     1,097,703  
Total Deposits 1,721,120     1,676,851     1,634,590     1,691,134     1,645,583  
Other borrowed funds                  
Junior subordinated debentures         5,155     11,341     11,341  
Accrued interest payable 2,222     1,925     1,998     1,967     1,757  
Lease liabilities 4,603     4,688     4,773     4,856      
Accrued expenses and other liabilities 8,382     10,001     8,491     10,636     8,204  
Total Liabilities 1,736,327     1,693,465     1,655,007     1,719,934     1,666,885  
COMMITMENTS AND CONTINGENCIES                  
STOCKHOLDERS' EQUITY                  
Preferred stock, no par value                  
Common stock, no par value 68,082     68,082     68,082     41,271     41,094  
Additional paid-in capital 1,269     1,205     1,141     1,091     1,042  
Retained earnings 182,571     175,828     168,981     163,443     159,073  
Accumulated other comprehensive income (loss) (24 )   274     (293 )   (3,621 )   (7,506 )
Total Stockholders' Equity 251,898     245,389     237,911     202,184     193,703  
Total Liabilities and Stockholders' Equity $ 1,988,225     $ 1,938,854     $ 1,892,918     $ 1,922,118     $ 1,860,588  


RED RIVER BANCSHARES, INC.  
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)  
                       
    For the Three
Months Ended
  For the Twelve
Months Ended
 
(in thousands)   Dec. 31,
2019
  Sept. 30,
2019
  Dec. 31,
2018
  Dec. 31,
2019
  Dec. 31,
2018
 
 
INTEREST AND DIVIDEND INCOME                      
Interest and fees on loans   $ 16,544     $ 16,578     $ 15,440     $ 64,570     $ 58,747    
Interest on securities   1,894     1,800     1,697     7,241     6,951    
Interest on federal funds sold   150     178     160     753     356    
Interest on deposits in other banks   192     213     375     1,127     798    
Dividends on stock   4     12     8     34     34    
Total Interest and Dividend Income   18,784     18,781     17,680     73,725     66,886    
INTEREST EXPENSE                      
Interest on deposits   2,441     2,514     2,066     9,701     7,084    
Interest on other borrowed funds                   7    
Interest on junior subordinated debentures       73     149     385     558    
Total Interest Expense   2,441     2,587     2,215     10,086     7,649    
NET INTEREST INCOME   16,343     16,194     15,465     63,639     59,237    
Provision for loan losses   378     378     526     1,810     1,990    
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES   15,965     15,816     14,939     61,829     57,247    
NONINTEREST INCOME                      
Service charges on deposit accounts   1,270     1,195     1,096     4,573     4,582    
Debit card income, net   782     833     732     3,095     2,986    
Mortgage loan income   816     1,014     432     3,002     2,107    
Brokerage income   573     561     550     2,125     1,944    
Loan and deposit income   389     404     416     1,521     1,359    
Bank-owned life insurance income   137     137     316     544     732    
Gain (Loss) on equity securities   (19 )   30     37     115     (85 )  
Gain (Loss) on sale of investments   13     5         18     32    
SBIC income   185     139     141     819     509    
Other income   43     68     47     158     365    
Total Noninterest Income   4,189     4,386     3,767     15,970     14,531    
OPERATING EXPENSES                      
Personnel expenses   7,148     7,007     6,839     27,800     26,094    
Occupancy and equipment expenses   1,268     1,199     1,187     4,976     4,500    
Technology expenses   596     595     521     2,293     2,070    
Advertising   204     216     183     1,025     762    
Other business development expenses   281     266     277     1,107     1,127    
Data processing expense   462     479     129     1,882     1,386    
Other taxes   346     425     311     1,579     1,327    
Loan and deposit expenses   247     285     208     1,148     852    
Legal and professional expenses   403     436     372     1,541     1,422    
Regulatory assessment expense   38     37     162     351     642    
Other operating expenses   895     940     797     3,633     3,240    
Total Operating Expenses   11,888     11,885     10,986     47,335     43,422    
INCOME BEFORE INCOME TAX EXPENSE   8,266     8,317     7,720     30,464     28,356    
Income tax expense   1,523     1,470     1,569     5,640     5,300    
NET INCOME   $ 6,743     $ 6,847     $ 6,151     $ 24,824     $ 23,056    


RED RIVER BANCSHARES, INC.
NET INTEREST INCOME AND NET INTEREST MARGIN (UNAUDITED)
 
  For the Three Months Ended
  December 31, 2019   September 30, 2019   December 31, 2018
(dollars in thousands) Average
Balance
Outstanding
  Interest
Earned/
Interest
Paid
  Average
Yield/
Rate
  Average
Balance
Outstanding
  Interest
Earned/
Interest
Paid
  Average
Yield/
Rate
  Average
Balance
Outstanding
  Interest
Earned/
Interest
Paid
  Average
Yield/
Rate
Assets                                  
Interest-earning assets:                                  
Loans(1,2) $ 1,428,978     $ 16,544     4.53 %   $ 1,408,146     $ 16,578     4.61 %   $ 1,339,468     $ 15,440     4.52 %
Securities - taxable 258,491     1,392     2.15 %   255,846     1,352     2.11 %   264,440     1,369     2.07 %
Securities - tax-exempt 85,749     502     2.34 %   77,047     448     2.33 %   57,014     328     2.30 %
Federal funds sold 36,470     150     1.61 %   32,461     178     2.15 %   27,414     160     2.28 %
Interest-bearing balances due from banks 45,565     192     1.65 %   38,676     213     2.16 %   67,139     375     2.19 %
Nonmarketable equity securities 1,346     4     1.19 %   1,342     10     2.99 %   1,295     4     1.15 %
Investment in trusts         %   64     2     10.91 %   341     4     5.20 %
Total interest-earning assets 1,856,599     $ 18,784     3.97 %   1,813,582     $ 18,781     4.06 %   1,757,111     $ 17,680     3.95 %
Allowance for loan losses (13,969 )           (13,755 )           (12,397 )        
Noninterest earning assets 112,130             110,062             90,946          
Total assets $ 1,954,760             $ 1,909,889             $ 1,835,660          
Liabilities and Stockholders’ Equity
Interest-bearing liabilities:                                  
Interest-bearing transaction deposits $ 747,293     $ 968     0.51 %   $ 724,219     $ 972     0.53 %   $ 719,852     $ 827     0.46 %
Time deposits 334,499     1,473     1.75 %   338,330     1,542     1.81 %   327,903     1,239     1.50 %
Total interest-bearing deposits 1,081,792     2,441     0.90 %   1,062,549     2,514     0.94 %   1,047,755     2,066     0.78 %
Junior subordinated debentures         %   2,129     73     13.64 %   11,341     149     5.20 %
Other borrowings         %   22         2.80 %   30         4.84 %
Total interest-bearing liabilities 1,081,792     $ 2,441     0.90 %   1,064,700     $ 2,587     0.96 %   1,059,126     $ 2,215     0.83 %
Noninterest-bearing liabilities:
Noninterest-bearing deposits 606,329             586,664             574,298          
Accrued interest and other liabilities 17,191             16,084             11,065          
Total noninterest-bearing liabilities: 623,520             602,748             585,363          
Stockholders’ equity 249,448             242,441             191,171          
Total liabilities and stockholders’ equity $ 1,954,760             $ 1,909,889             $ 1,835,660          
Net interest income     $ 16,343             $ 16,194             $ 15,465      
Net interest spread         3.07 %           3.10 %           3.12 %
Net interest margin         3.45 %           3.50 %           3.45 %
Net interest margin FTE(3)         3.50 %           3.55 %           3.50 %
Cost of deposits         0.57 %           0.60 %           0.51 %
Cost of funds         0.52 %           0.57 %           0.50 %
                                         
(1)  Includes average outstanding balances of loans held for sale of $4.3 million, $6.0 million, and $2.8 million for the three months ended December 31, 2019, September 30, 2019, and December 31, 2018, respectively.
(2)  Nonaccrual loans are included as loans carrying a zero yield.
(3)  Net interest margin FTE includes an FTE adjustment using a 21% federal income tax rate on tax-exempt securities and tax-exempt loans.



RED RIVER BANCSHARES, INC.
NET INTEREST INCOME AND NET INTEREST MARGIN (UNAUDITED)
 
  For the Twelve Months Ended December 31,
  2019   2018
(dollars in thousands) Average
Balance
Outstanding
  Interest
Earned/
Interest
Paid
  Average
Yield/
Rate
  Average
Balance
Outstanding
  Interest
Earned/
Interest
Paid
  Average
Yield/
Rate
Assets                      
Interest-earning assets:                      
Loans(1,2) $ 1,388,702     $ 64,570     4.59 %   $ 1,312,078     $ 58,747     4.42 %
Securities - taxable 257,090     5,466     2.13 %   277,337     5,624     2.03 %
Securities - tax-exempt 75,385     1,775     2.35 %   57,776     1,327     2.30 %
Federal funds sold 34,637     753     2.14 %   17,790     356     1.97 %
Interest-bearing balances due from banks 51,694     1,127     2.15 %   40,768     798     1.93 %
Nonmarketable equity securities 1,330     23     1.69 %   1,286     18     1.36 %
Investment in trusts 181     11     6.34 %   341     16     4.83 %
Total interest-earning assets 1,809,019     $ 73,725     4.03 %   1,707,376     $ 66,886     3.86 %
Allowance for loan losses (13,444 )           (11,713 )        
Noninterest earning assets 107,390             89,155          
Total assets $ 1,902,965             $ 1,784,818          
Liabilities and Stockholders’ Equity                      
Interest-bearing liabilities:                      
Interest-bearing transaction deposits $ 739,554     $ 3,898     0.53 %   $ 708,818     $ 2,735     0.39 %
Time deposits 335,024     5,803     1.73 %   320,699     4,349     1.36 %
Total interest-bearing deposits 1,074,578     9,701     0.90 %   1,029,517     7,084     0.69 %
Junior subordinated debentures 6,017     385     6.39 %   11,341     558     4.92 %
Other borrowings 5         2.80 %   191     7     3.66 %
Total interest-bearing liabilities 1,080,600     $ 10,086     0.93 %   1,041,049     $ 7,649     0.73 %
Noninterest-bearing liabilities:                      
Noninterest-bearing deposits 577,701             545,547          
Accrued interest and other liabilities 16,118             13,124          
Total noninterest-bearing liabilities: 593,819             558,671          
Stockholders’ equity 228,546             185,098          
Total liabilities and stockholders’ equity $ 1,902,965             $ 1,784,818          
Net interest income     $ 63,639             $ 59,237      
Net interest spread         3.10 %           3.13 %
Net interest margin         3.47 %           3.42 %
Net interest margin FTE(3)         3.52 %           3.44 %
Cost of deposits         0.59 %           0.45 %
Cost of funds         0.56 %           0.45 %
                           
(1)  Includes average outstanding balances of loans held for sale of $4.1 million and $2.9 million for the year ended December 31, 2019 and 2018, respectively.
(2)  Nonaccrual loans are included as loans carrying a zero yield.
(3)  Net interest margin FTE includes an FTE adjustment using a 21% federal income tax rate on tax-exempt securities and tax-exempt loans.



RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
 
(dollars in thousands except per share data) December 31,
2019
  September 30,
 2019
  December 31,
2018
Tangible common equity          
Total stockholders' equity $ 251,898     $ 245,389     $ 193,703  
Adjustments:          
Intangible assets (1,546 )   (1,546 )   (1,546 )
Total tangible common equity $ 250,352     $ 243,843     $ 192,157  
Common shares outstanding 7,306,221     7,306,221     6,627,358  
Book value per common share $ 34.48     $ 33.59     $ 29.23  
Tangible book value per common share $ 34.27     $ 33.37     $ 28.99  
           
Tangible assets          
Total assets $ 1,988,225     $ 1,938,854     $ 1,860,588  
Adjustments:          
Intangible assets (1,546 )   (1,546 )   (1,546 )
Total tangible assets $ 1,986,679     $ 1,937,308     $ 1,859,042  
Total stockholder's equity to assets 12.67 %   12.66 %   10.41 %
Tangible common equity to tangible assets 12.60 %   12.59 %   10.34 %