Red River Bancshares, Inc. · NASDAQ:RRBI
Red River Bancshares — Gulf South Bank Conference 2020
35 slides from Red River Bancshares's conference presentation, Aug 10, 2020
Slide 1: Investor Presentation, Gulf South Bank Conference
Exhibit 99.1 Investor Presentation Gulf South Bank Conference August 10-11, 2020 Nasdaq: RRBI Made in Louisiana. Made for Louisiana.
Slide 2: Forward-Looking Statements and Non-GAAP Information
Forward-Looking Statements and Non-GAAP Information This presentation contains forward-looking statements that are based on various facts and derived utilizing numerous important assumptions and are subject to known and unknown risks, uncertainties, and other factors that may cause Red River Bancsha
Slide 3: Company Overview
COMPANY OVERVIEW
Slide 4: Company Overview
Company Overview . Red River Bancshares, Inc. was established in 1998 in Alexandria, Louisiana; Red River Bank opened its doors in January 1999 Financial Highlights As of and for the Six Months Ended June 30, 2020 . Completed IPO in May 2019 Assets (000s) $2,361,866 . Nasdaq: RRBI Loans Held for Inv
Slide 5: Company Strengths
Company Strengths . Consistent financial results and steady growth . Conservative credit culture with solid asset quality . Stable, low cost core deposit base . Management and directors own 23.6% of outstanding stock as of June 30, 2020, and are aligned with shareholder interest of building share va
Slide 6: Guiding Principles
Guiding Principles . 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 periodic adjustment, of these cor
Slide 7: Leadership Team
Leadership Team • Northwest Market President • President, Chief Executive Officer and Director • Previously Credit Department Manager (Dallas) at • Founding management G. Bridges Hall, IV Hibernia National Bank • Previously Executive Vice President of Rapides Bank & Trust Company, • Joined Red River
Slide 8: Growth and Competitive Landscape
Growth and Competitive Landscape Deposits in Louisiana1 Historical Asset Growth Method As of June 30, 2019 $106.47 billion . Primarily organic growth . Red River Bank has 1.6% of Louisiana . Selective, strategic acquisitions (2003, deposits (as of June 30, 2019) 2013) . One-third of deposits in the
Slide 9: Louisiana Market Overview
Louisiana Market Overview Central Deposit Market Share . Includes Rapides and Avoyelles Parishes; part of the Alexandria As of June 30, 2019 Metropolitan Statistical Area (MSA) . Population: 169,792 Red River 1st Banking Deposit Increase . Major employers in the area include: Procter & Gamble, Crest
Slide 10: Recent Expansion Highlights
Recent Expansion Highlights Southeast Market . 1Q19 - Completed expansion of a new market Headquarters headquarters building in Baton Rouge, Louisiana (Southeast Market) . 2Q19 - Opened a loan production office in Covington, Louisiana and hired an experienced banker, expanding Red River Bank to the
Slide 11: Delivery Channels and Focus
Delivery Channels and Focus . 25 Banking Centers in 5 Louisiana markets RETAIL BRANCH NETWORK . 27 Commercial/Private Banking Officers . 32 ATMs . Average deposits per banking center1 = $82.8 million . Online banking DIGITAL CHANNELS . Mobile banking . Personal Touch 24 . Dedicated team of treasury
Slide 12: Balance Sheet Highlights
BALANCE SHEET HIGHLIGHTS
Slide 13: Basic, Conventional Balance Sheet
Basic, Conventional Balance Sheet Balance Sheet As of June 30, 2020 (in thousands) Assets . Well capitalized with 11.52% leverage Cash and cash equivalents$ 241,351 ratio Securities available-for-sale 413,246 . Strong liquidity Loans held for investment (HFI) 1,615,298 . Noninterest-bearing DDAs/tot
Slide 14: Loan Portfolio Composition
Loan Portfolio Composition Loans HFI Mix . Broad diversification by industry As of June 30, 2020 . Highest industry concentration is in health care at 9.4% (excluding PPP loans) . No health care credits on Watch List . Low levels of commercial real estate (CRE) relative to state, regional, and natio
Slide 15: Loans By Market
Loans By Market . Area of largest loan origination (Central Non-PPP Loans HFI originated by geographic market2 market) has lowest unemployment of As of June 30, 2020 Louisiana’s metro areas1 . All five of our markets have an unemployment rate below state and national averages . Little exposure to th
Slide 16: Asset Quality
Asset Quality Asset Quality Metrics Remain Solid As of and for the quarter ended June 30, 2020 March 31, 2020 Nonperforming assets to total assets 0.18% 0.30% Allowance for loan losses to loans HFI 0.92% 0.99% Allowance for loan losses to non-PPP loans HFI1 1.05% 0.99% Net charge-offs to total avera
Slide 17: Health Care Loans - 9.4% of Non-PPP Loans HFI
Health Care Loans - 9.4% of Non-PPP Loans HFI1 . Largest industry concentration Health Care Loans by Subtype As of June 30, 2020 . Average loan size = $267,000 . No shared national credits, no real estate investment trusts . Health care deferral requests were minimal at 1.6% of non-PPP loans HFI1 an
Slide 18: Energy Loans - 2.0% of Non-PPP Loans HFI
Energy Loans - 2.0% of Non-PPP Loans HFI1 . As of June 30, 2020, the energy portfolio (EP) totaled $28.0 million, or 2.0%, of non-PPP loans HFI1, down from a multi-year high of 4.2% in 2016 . 31.7% of the EP are participations purchased or syndicated credits, totaling $8.9 million, of which 78.1% we
Slide 19: Loan Modifications Related to COVID-19
Loan Modifications Related to COVID-19 Total Deferrals Granted Through Dates Indicated March 31, 2020 April 30, 2020 June 30, 2020 Percent of Percent of Percent of Non-PPP Non-PPP Non-PPP 1,2 1,2 1 (dollars in thousands) Amount Loans HFI Amount Loans HFI Amount Loans HFI Principal and Interest$ 3,37
Slide 20: Loan Categories Most Impacted by COVID-19
Loan Categories Most Impacted by COVID-19 June 30, 2020 . Hotel exposure Loans with Active . Only one property financed in COVID-19 Payment the tourism-driven downtown Loans Deferment Percent of Percent of New Orleans market Non-PPP Non-PPP . The remaining hotel (dollars in thousands) Amount Loans H
Slide 21: Paycheck Protection Program
Paycheck Protection Program Number of Loans PPP Loans Originated Total Fee Percent of Percent of (dollars in thousands) Number PPP Loans Amount PPP Loans (24 months) Loan Size $150 or less 1,118 80.8% $ 48,576 24.4%$ 2,429 Greater than $150 to $350 136 9.8% 31,795 16.0% 1,590 Greater than $350 to le
Slide 22: Attractive Core Deposit Base
Attractive Core Deposit Base Deposit Mix . Noninterest-bearing deposits are 41.48% of total As of June 30, 2020 deposits . Deposits increased $341.5 million, or 19.8%, in the second quarter of 2020. Customers received funds from various government stimulus programs and deposited the proceeds from th
Slide 23: Second Quarter 2020 Financial Results
SECOND QUARTER 2020 FINANCIAL RESULTS
Slide 24: Second Quarter 2020 Financial Results
Second Quarter 2020 Financial Results As of and for the Three Months Ended June 30, March 31, June 30, . Net income increased (dollars in thousands, except per share data) 2020 2020 2019 $109,000 from prior quarter Net income $ 6,854 $ 6,745 $ 5,538 to $6.9 million for 2Q20 Earnings per share, dilut
Slide 25: Net Interest Margin and Net Interest Income
Net Interest Margin and Net Interest Income . Second quarter of 2020 was impacted by full quarter of lower interest rate environment . Net interest margin FTE decreased 29 basis points to 3.12% . Net interest income increased $868,000 during the second quarter of 2020 Loan Yield 5.00% 4.60% 4.61% 4.
Slide 26: Loan Yield and Net Interest Ratios Excluding PPP Loans
Loan Yield and Net Interest Ratios Excluding PPP Loans1 . PPP income = $1.2 million yielding 2.99% . Excluding PPP loans, net interest margin FTE decreased 28 basis points to 3.13%1 For the Three Months Ended June 30, 2020 March 31, 2020 Excluding Excluding Ratios Actual PPP loans1 Actual PPP loans1
Slide 27: Noninterest Income
Noninterest Income . Noninterest income increased $1.1 million from 1Q20 to $5.8 million for 2Q20 . Noninterest Income Mortgage loan income increased For the quarter ended June 30, 2020 $1.1 million from 1Q20 to $1.9 (dollars in thousands) million due to increased refinancing activity . Gain on sale
Slide 28: Operating Expenses
Operating Expenses . Operating expenses increased $919,000 from 1Q20 to $12.9 million for 2Q20 Operating Expenses . 1Q20 had a $311,000 expense For the quarter ended June 30, 2020 reversal for the dissolution of an (dollars in thousands) acquired subsidiary . Personnel expense increased $298,000 due
Slide 29: Future Plans
FUTURE PLANS
Slide 30: Future Plans
Future Plans . Continue building a strong, super-community bank serving Louisiana . Focus on assisting our customers, communities, and employees through the pandemic and economic shutdown . Aggressively monitor asset quality trends and adjust provision expense as appropriate . Monitor markets for op
Slide 31: Summary
Summary Diversified loan portfolio with solid asset quality and allowance Originated $199.0 million of PPP loans in second quarter of 2020 COVID-19 loan deferrals = $42.6 million, 3.0% of non-PPP loans HFI1 (as of July 31, 2020) Continued organic growth opportunity throughout Louisiana Well capitali
Slide 32: Louisiana... Together, We've Got This.
LOUISIANA... TOGETHER, WE’VE GOT THIS. | RED RIVER BANK in Louisiana. Made for Louisiana
Slide 33: Appendix
Appendix 33
Slide 34: Non-GAAP Reconciliation
Non-GAAP Reconciliation As of June 30, As of March 31, As of June 30, (dollars in thousands, except per share data) 2020 2020 2019 Tangible common equity Total stockholders' equity$ 271,117 $ 264,175 $ 237,911 Adjustments: Intangible assets (1,546) (1,546) (1,546) Total tangible common equity (non-G
Slide 35: Non-GAAP Reconciliation
Non-GAAP Reconciliation As of June 30, As of March 31, As of June 30, (dollars in thousands) 2020 2020 2019 Non-PPP loans HFI Loans HFI$ 1,615,298 $ 1,447,362 $ 1,393,154 Adjustments: PPP loans, net (192,655) - - Non-PPP loans HFI (non-GAAP)$ 1,422,643 $ 1,447,362 $ 1,393,154 Assets excluding PPP lo
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