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”), (Nasdaq: RRBI), the holding company for Red River Bank (the “Bank”), announced today its financial results for the fourth quarter and year ended 2019.

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

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

Fourth Quarter 2019 Performance and Operational Highlights

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

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

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

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 banks107,355  73,598  71,761  145,593  117,836 
Securities available-for-sale335,573  341,900  318,082  319,353  307,877 
Equity securities3,936  3,954  3,924  3,869  3,821 
Nonmarketable equity securities1,350  1,347  1,342  1,303  1,299 
Loans held for sale5,089  4,113  6,029  2,210  2,904 
Loans held for investment1,438,924  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, net41,744  39,828  40,032  40,033  39,690 
Accrued interest receivable5,251  4,928  5,570  4,988  5,013 
Bank-owned life insurance21,845  21,707  21,570  21,434  21,301 
Intangible assets1,546  1,546  1,546  1,546  1,546 
Right-of-use assets4,553  4,651  4,748  4,844   
Other assets9,059  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 deposits1,136,205  1,061,800  1,057,656  1,125,377  1,097,703 
Total Deposits1,721,120  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 payable2,222  1,925  1,998  1,967  1,757 
Lease liabilities4,603  4,688  4,773  4,856   
Accrued expenses and other liabilities8,382  10,001  8,491  10,636  8,204 
Total Liabilities1,736,327  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 value68,082  68,082  68,082  41,271  41,094 
Additional paid-in capital1,269  1,205  1,141  1,091  1,042 
Retained earnings182,571  175,828  168,981  163,443  159,073 
Accumulated other comprehensive income (loss)(24) 274  (293) (3,621) (7,506)
Total Stockholders' Equity251,898  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 - taxable258,491  1,392  2.15% 255,846  1,352  2.11% 264,440  1,369  2.07%
Securities - tax-exempt85,749  502  2.34% 77,047  448  2.33% 57,014  328  2.30%
Federal funds sold36,470  150  1.61% 32,461  178  2.15% 27,414  160  2.28%
Interest-bearing balances due from banks45,565  192  1.65% 38,676  213  2.16% 67,139  375  2.19%
Nonmarketable equity securities1,346  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 assets1,856,599  $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 assets112,130      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 deposits334,499  1,473  1.75% 338,330  1,542  1.81% 327,903  1,239  1.50%
Total interest-bearing deposits1,081,792  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 liabilities1,081,792  $2,441  0.90% 1,064,700  $2,587  0.96% 1,059,126  $2,215  0.83%
Noninterest-bearing liabilities:
Noninterest-bearing deposits606,329      586,664      574,298     
Accrued interest and other liabilities17,191      16,084      11,065     
Total noninterest-bearing liabilities:623,520      602,748      585,363     
Stockholders’ equity249,448      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 - taxable257,090  5,466  2.13% 277,337  5,624  2.03%
Securities - tax-exempt75,385  1,775  2.35% 57,776  1,327  2.30%
Federal funds sold34,637  753  2.14% 17,790  356  1.97%
Interest-bearing balances due from banks51,694  1,127  2.15% 40,768  798  1.93%
Nonmarketable equity securities1,330  23  1.69% 1,286  18  1.36%
Investment in trusts181  11  6.34% 341  16  4.83%
Total interest-earning assets1,809,019  $73,725  4.03% 1,707,376  $66,886  3.86%
Allowance for loan losses(13,444)     (11,713)    
Noninterest earning assets107,390      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 deposits335,024  5,803  1.73% 320,699  4,349  1.36%
Total interest-bearing deposits1,074,578  9,701  0.90% 1,029,517  7,084  0.69%
Junior subordinated debentures6,017  385  6.39% 11,341  558  4.92%
Other borrowings5    2.80% 191  7  3.66%
Total interest-bearing liabilities1,080,600  $10,086  0.93% 1,041,049  $7,649  0.73%
Noninterest-bearing liabilities:           
Noninterest-bearing deposits577,701      545,547     
Accrued interest and other liabilities16,118      13,124     
Total noninterest-bearing liabilities:593,819      558,671     
Stockholders’ equity228,546      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 outstanding7,306,221  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 assets12.67% 12.66% 10.41%
Tangible common equity to tangible assets12.60% 12.59% 10.34%