Slide 1: Investor Presentation September Conferences
INVESTOR PRESENTATION September Conferences As of June 30, 2023 Nasdaq: RRBI
Slide 2: Forward-Looking Statements and Non-GAAP Information
Forward-Looking Statements and Non-GAAP Information Statements in this presentation 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 Section 27A
Slide 3: Glossary of Terms
Glossary of Terms ■ 1Q22 – First Quarter of 2022 ■ CECL – Current Expected Credit Losses ■ LIBOR – London Inter-Bank Offered Rate ■ 2Q22 – Second Quarter of 2022 ■ CGMA – Chartered Global Management ■ LPO – Loan production office Accountant ■ 3Q22 – Third Quarter of 2022 ■ L.L.C. – Limited liability
Slide 4: Strong. Stable.
Strong. Stable. We’re your people. ae RED RIVER BANK redriverbank.net DIC
Slide 5: Company Overview
Company Overview ■ Established in 1998 in Alexandria, Louisiana ■ Completed IPO in May 2019 ■ Nasdaq: RRBI ■ Included in Russell 2000 Index ■ As of June 30, 2023: ■ Assets = $3.03 billion ■ Loans HFI = $1.95 billion ■ Securities = $739.0 million ■ Deposits = $2.66 billion ■ Market capitalization = $
Slide 6: Company Strengths
Company Strengths ■ Consistent, long-term track record of financial results and steady growth ■ Conservative credit culture with solid asset quality ■ Granular, diversified, relationship-based loan and deposit portfolios ■ Solid liquidity position ■ No internet-sourced or brokered deposits ■ Minimal
Slide 7: History & Strategy
History & Strategy ae RED RIVER BANCSHARES, INC.
Slide 8: Company History
Company History Completed first stock offering of $12.4M 1998 Red River Bank opened in Rapides Parish 1999 Completed stock offering of $4.0M 2000 Acquired Bank of Lecompte in Central Louisiana 2003 Expanded into Northwest Market via banking center, and completed stock offering of $5.0M 2006 Complete
Slide 9: Book Value Growth
Book Value Growth 55.00 Realized Book Value Per Share1,2 $49.21 50.00 45.00 Book Value Per Share2 $39.49 40.00 Tangible Book Value Per Share1,2 35.00 $39.28 30.00 25.00 20.00 15.00 10.00 CAGR 10.6% 5.00 0.00 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 20
Slide 10: Leadership Team
Leadership Team R. Blake Chatelain ■ President, Chief Executive Officer, and Director ■ Founding management G. Bridges Hall, IV ■ Previously Executive Vice President of Rapides Bank & Trust ■ Senior Vice President and Chief Credit Policy Officer1 Company, a subsidiary of First Commerce Corporation ■
Slide 11: Growth Strategies
Growth Strategies Historical Asset Growth Method De Novo Growth Strategies As of June 30, 2023 ■ Disciplined, targeted investments for smart growth ■ Target markets with significant disruption by competitors ■ Concentrate on urban markets with growth potential Organic Organic ■ Focus on markets wher
Slide 12: Guiding Principles - Relationship-Based Lending
Guiding Principles - Relationship-Based Lending Conservative Credit Culture ■ Our founding management team developed the initial credit culture, predicated upon conservative underwriting principles carried over from regional bank experience. This same team has overseen the implementation and periodi
Slide 13: Digital Banking - Embracing Digital Innovation
Digital Banking - Embracing Digital Innovation Strategies and Recent Systems ■ Robust commercial treasury systems ■ P2P payments platform provided by Zelle® ■ Online and mobile banking channels: mobile deposit, digital receipts, Apple Pay, mobile wallet, and debit card controls ■ Launched redesigned
Slide 14: Competitive Landscape
Competitive Landscape ■ Red River Bank holds 2.0% of Louisiana deposits1 ■ 60.0% of Louisiana deposits are held by large national or regional banks1 ■ Large banks de-emphasizing markets we serve ■ TD Bank Group announced an agreement to purchase First Horizon in 1Q22. This potential merger was cance
Slide 15: 2022 Overview
2022 Overview ae RED RIVER BANCSHARES, INC.
Slide 16: 2022 Financial and Operational Highlights
2022 Financial and Operational Highlights ■ Assets decreased 4.4% to $3.08 billion ■ Record high net income of $36.9 million for 2022 ■ Non-PPP loans HFI1 increased 15.0% to $1.92 billion ■ EPS (diluted) was $5.13 and ROA was 1.18% ■ Deposits decreased 3.8% to $2.80 billion ■ Net interest income for
Slide 17: 2022 Selected Income Comparison
2022 Selected Income Comparison For the Year Ended Variance (dollars in thousands) 12/31/22 12/31/21 $ % 1 Interest and Dividend Income, excluding SBA PPP $ 93,705 $ 71,566 $ 22,139 30.9 % SBA PPP Loan Income 670 5,773 (5,103) (88.4)% Total Interest and Dividend Income $ 94,375 $ 77,339 $ 17,036 22.
Slide 18: Second Quarter 2023
second Quarter 2023 ae RED RIVER BANCSHARES, INC.
Slide 19: Second Quarter 2023 Financial Results
Second Quarter 2023 Financial Results ■ Consistent assets (dollars in thousands, except per share data) 2Q23 1Q23 2Q22 Net Income $ 8,968 $ 9,598 $ 9,147 ■ Higher loans EPS, Diluted $ 1.25 $ 1.33 $ 1.27 Book Value Per Share $ 39.49 $ 38.54 $ 35.34 ■ Lower deposits Tangible Book Value Per Share1 $ 39
Slide 20: Balance Sheet
Balance Sheet As of (dollars in thousands) 6/30/23 3/31/23 12/31/22 ■ Assets consistent at $3.03 billion ASSETS Cash and due from banks $ 36,662 $ 34,491 $ 37,824 ■ Loans HFI increased $25.8 million, or Interest-bearing deposits in other banks 185,409 194,727 240,568 1.3%, to $1.95 billion Securitie
Slide 21: Liquidity and Borrowing Availability
Liquidity and Borrowing Availability Liquidity ■ Liquid Assets1 = $222.1 million, or 7.34% of assets, as of 6/30/23 with $182.0 million average for 2Q23 ■ Securities AFS pledged to secure public entity deposits = $189.4 million ■ Estimated cash flows from securities, assuming consistent interest rat
Slide 22: Securities
Securities Key Securities Metrics as of June 30, 2023 ■ Securities AFS portfolio at fair value = $588.5 million, net of Securities $73.0 million unrealized loss (end of period) (in millions) ■ Securities HTM portfolio at amortized cost = $146.6 million $776.1 ■ Unrealized loss on HTM portfolio = $22
Slide 23: Deposits
Deposits ■ Deposits were $2.66 billion for 2Q23, a decrease of $67.2 million, or 2.5%, compared to 1Q23, due to the changing interest rate environment impacting customer deposit movement and activity, combined with normal tax payments ■ Noninterest-bearing deposits to deposits ratio = 37.14% Deposit
Slide 24: Deposit Characteristics
Deposit Characteristics ■ Granular, diversified deposit portfolio and customer base throughout Louisiana Deposits by Customer Type As of June 30, 2023 (dollars in millions) ■ Average deposit account size = $27,000 ■ Public entity deposits ■ Relationship-based Louisiana public entities ■ Public entit
Slide 25: Loan Portfolio Overview
Loan Portfolio Overview Largest Industry Concentrations ■ Loans HFI = $1.95 billion As of June 30, 2023 ■ Broad diversification by industry Health Care 8.2% Investor 1-to-4 and Multifamily 4.8% ■ Highest industry concentration = Health Care at 8.2% Retail Trade 3.8% Construction 3.7% ■ Average loan
Slide 26: Health Care Loans
Health Care Loans ■ Largest industry concentration ■ Health Care loans = $159.6 million, or 8.2%, of loans HFI ■ Average loan size = $338,000 ■ No shared national credits, real estate investment trusts, or assisted living facilities ■ Skilled nursing care facilities operate under a certificate of ne
Slide 27: Commercial Real Estate Loans
Commercial Real Estate Loans ■ CRE = $819.3 million, or 42.1% of loans HFI ■ Investor-owned office properties = $56.3 million, or 6.9% of CRE ■ C&D = $138.5 million, or 7.1% of loans HFI ■ Low levels of CRE relative to state, regional, and national peers ■ CRE concentration ratios as a % of risk-bas
Slide 28: CECL Update
CECL Update Adopted CECL methodology as of January 1, 2023 1Q23 Impact ■ $278,000 increase to ACL ■ Established a $442,000 reserve for unfunded commitments ■ Combined 3.5% increase to December 31, 2022 allowance for loan losses ■ One-time $569,000, net of tax, decrease to stockholders’ equity ■ No p
Slide 29: Loans by Market
Loans by Market ■ Expanding operations in Southwest, Acadiana, Northshore, and Capital Markets ■ Opened an LDPO and a full-service banking center in the New Orleans Market Opportunities and Challenges to Future Loans Loans HFI Opportunities Originated by Geographic Market As of June 30, 2023 ■ Expan
Slide 30: Asset Quality
Asset Quality ■ NPAs decreased slightly to $2.0 million NPAs / Assets (end of period) ■ NPAs to Assets = 0.07% 0.09% 0.08% 0.08% ■ Provision expense totaled $300,000 in 2Q23 0.07% ■ ACL to loans HFI = 1.08% 0.03% ■ Net charge-offs to average loans since Red River Bank’s opening in 1999 = 0.06% 2Q22
Slide 31: Capital
Capital ■ Well capitalized position ■ Includes $69.7 million of net unrealized losses on securities AFS and HTM, 24.6% of capital as of June 30, 2023 ■ Stock repurchase programs ■ Repurchase Program renewed February 4, 2022 for $5.0 million and expired December 31, 2022 ■ 2022 – Repurchased 4,465 sh
Slide 32: Stockholders’ Equity Trends
Stockholders’ Equity Trends Total Stockholders’ Equity (dollars in millions) $300.0 $298.7 $298.2 $284.9 $292.9 2021 $280.0 $283.4 2023 $276.6 2022 $260.0 $264.9 $265.8 $253.6 $240.0 $243.4 Q1 Q2 Q3 Q4 Realized Stockholders’ Equity1 (dollars in millions) $360.0 2023 $353.1 $340.0 $345.2 $336.9 $320.
Slide 33: Profitability Trends
Profitability Trends Net Income Earnings Per Share (Diluted) (in thousands) $36,916 $5.13 $32,952 $4.51 $28,145 $24,824 $3.83 $3.49 $18,566 $2.58 2019 2020 2021 2022 1H23 2019 2020 2021 2022 1H23 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Efficiency Ratio Return on Average Assets 59.46% 1.30% 57.74% 56.39% 56.60% 1.24
Slide 34: Net Interest Margin FTE (2Q23 vs. 1Q23)
Net Interest Margin FTE (2Q23 vs. 1Q23) ■ NIM FTE decreased 17 bps to 2.96% for 2Q23 due to higher deposit rates resulting from deposit rate pressures ■ Increased selected deposit rates to retain and attract customers ■ Customers moved deposits from lower yielding accounts to higher yielding account
Slide 35: Net Interest Margin Update
Net Interest Margin Update Average Yield / Rate Basis Points Beta 2Q23 1Q23 Increase (Decrease) 2Q23 Loans 4.68% 4.54% 14 30% Total interest-earning assets 3.86% 3.73% 13 28% Interest-bearing transaction deposits 1.30% 0.93% 37 78% Time deposits 2.70% 1.99% 71 150% Cost of deposits 1.03% 0.71% 32 68
Slide 36: Noninterest Income (2Q23 vs. 1Q23)
Noninterest Income (2Q23 vs. 1Q23) Noninterest Income ■ Noninterest income increased $1.7 million to $6.0 million for For the quarter ended June 30, 2023 2Q23 (dollars in thousands) ■ SBIC income increased $1.2 million to $1.4 million for 2Q23 Other Income due to the sale of an investment by the SBI
Slide 37: Operating Expenses (2Q23 vs. 1Q23)
Operating Expenses (2Q23 vs. 1Q23) Operating Expenses ■ Operating expenses increased $644,000 to $16.1 million For the quarter ended June 30, 2023 for 2Q23 (dollars in thousands) ■ Personnel expenses increased $547,000 to $9.5 million for 2Q23 due to annual merit raises, higher personnel health insu
Slide 38: Expansion Highlights
Expansion Highlights Southwest Market – Lake Charles, Louisiana ■ 3Q22 – Expanded the Country Club Banking Center with a 3,600 square-foot addition ■ 1Q23 – Closed Lake Street and consolidated staff to the Country Club Banking Center Acadiana Market – Lafayette, Louisiana ■ 1Q22 – Remodeled and open
Slide 39: Strategic Outlook
Strategic Outlook ■ Continue building a strong, Louisiana-based, super-community bank by leveraging existing infrastructure and creating strong brand loyalty ■ Continue disciplined capital management ■ Focus on liquidity ■ Manage deposit pricing due to intensified rate pressure ■ Manage net interest
Slide 40: Summary
Summary Well positioned for the future Well capitalized with 11.48% leverage ratio as of June 30, 2023 Stockholders’ equity to assets = 9.36% Tangible common equity to tangible assets1 = 9.31% Granular, diversified deposit portfolio Diversified loan portfolio with good asset quality Strong liquidity
Slide 41: Appendix
ae RED RIVER BANCSHARES, INC. APPENDIX
Slide 42: Non-GAAP Reconciliation
Non-GAAP Reconciliation As of (dollars in thousands, except per share data) 6/30/23 3/31/23 12/31/22 6/30/22 12/31/21 Tangible common equity Total stockholders’ equity $ 283,372 $ 276,640 $ 265,753 $ 253,596 $ 298,150 Adjustments: Intangible assets (1,546) (1,546) (1,546) (1,546) (1,546) Total tangi
Slide 43: Non-GAAP Reconciliation (continued)
Non-GAAP Reconciliation (continued) As of (dollars in thousands) 9/30/22 6/30/22 3/31/22 Realized common equity Total stockholders’ equity $ 243,413 $ 253,596 $ 264,874 Adjustments: Accumulated other comprehensive (income) loss 83,744 63,804 43,819 Total realized common equity (non-GAAP) $ 327,157 $