Red River Bancshares, Inc. · NASDAQ:RRBI
Red River Bancshares — Gulf South Bank Conference 2022
44 slides from Red River Bancshares's conference presentation, Apr 29, 2022
Slide 1: Investor Presentation Gulf South Bank Conference
INVESTOR PRESENTATION GULF SOUTH BANK CONFERENCE MAY 2 - 3, 2022 As of March 31, 2022 Nasdaq: RRBI Exhibit 99.1
Slide 2: Forward-Looking Statements
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 of the Securities Act of 1933, as amended, and Sect
Slide 3: Glossary of Terms
Glossary of Terms 1Q22 – First Quarter of 2022 2Q22 – Second Quarter of 2022 1Q21 – First Quarter of 2021 2Q21 – Second Quarter of 2021 3Q21 – Third Quarter of 2021 4Q21 – Fourth Quarter of 2021 2Q20 – Second Quarter of 2020 3Q20 – Third Quarter of 2020 4Q20 – Fourth Quarter of 2020 1-4 FR – One-to-
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Slide 5: Company Overview
Company Overview 1Source: Based on filings made with the SEC, as reported by S&P Capital IQ Pro Third largest Louisiana-headquartered bank based on assets as of December 31, 2021 Established in 1998 in Alexandria, Louisiana Completed IPO in May 2019 Nasdaq: RRBI Included in Russell 2000 Index As of
Slide 6: Company History
1998 20022000 20062004 20182008 2010 2012 2014 2016 Tangible Book Value Per Share1,2 CAGR of 11.7% Company History 1998 •Completed first stock offering of $12.4M 1999 •Red River Bank opened in Rapides Parish 2000 •Completed stock offering of $4.0M 2003 •Acquired Bank of Lecompte in Central Louisiana
Slide 7: Tangible Book Value Growth
$2.00 $8.00 $14.00 $20.00 $26.00 $32.00 $38.00 $44.00 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 1Q22 Tangible Book Value Growth Note: Each year on the Tangible Book Value Graph represents year-end financial data. 1Non-GAAP meas
Slide 8: Company Strengths
Consistent, long-term track record of financial results and steady growth Primarily de novo growth strategy with selective strategic expansion into new markets Conservative credit culture with solid asset quality Stable, low-cost core deposit base Strategic banking center network Operating in the la
Slide 9: Executive Management Team
R. Blake Chatelain • President, Chief Executive Officer, and Director • Founding management • Previously Executive Vice President of Rapides Bank & Trust Company, a subsidiary of First Commerce Corporation • B.S. in Finance from Louisiana State University Isabel V. Carriere, CPA, CGMA Tammi R. Salaz
Slide 10: Growth Strategies
Establish presence initially with a LDPO then build or buy and remodel a banking center Successfully integrated two acquisitions and positioned to capitalize on future opportunities Growth Strategies Historical Asset Growth Method As of March 31, 2022 Disciplined, targeted investments for smart grow
Slide 11: Competitive Landscape
Regions 6.3% First Horizon 7.2% Hancock Whitney 12.8% JP Morgan Chase 17.2% Capital One 18.4% First Bank and Trust 0.8% b1BANK 2.6% Origin Bank 1.9% Investar Bank 1.3% Home Bank 1.6% Red River Bank 1.9% Others 28.0% 1Source: FDIC, Deposits as of June 30, 2021 Red River Bank has 1.9% of Louisiana dep
Slide 12: Deposit Market Share
1Source: FDIC, Deposits as of June 30, 2021 Deposit Market Share as of June 30, 2021 1 Markets . Rank .2 % .3 ($M) .4 .($M). Central Market 1 st 36.94% 1,484$ 4,017$ Northwest Market 6 th 5.41% 556$ 10,280$ Capital Market 8 th 2.11% 480$ 22,777$ Southwest Market 14 th 0.63% 43$ 6,814$ Northshore Mar
Slide 13: Expansion Highlights
Pinhook Banking Center Southwest Market – Lake Charles, Louisiana 4Q20 – Purchased an existing banking center in Lake Charles, Louisiana 3Q21 – Remodeled and opened the third location in the Southwest market as the 26th Red River Bank banking center on July 6, 2021 Expansion Highlights Country Club
Slide 14: Expansion Highlights (continued)
Essen Banking Center Northshore Market – Covington, Louisiana 2019 – Entered Northshore Market via LPO, opened a full- service banking center, and hired a market president 4Q21 – Hired an additional, experienced commercial lender Covington Banking Center Capital Market – Baton Rouge, Louisiana 2019
Slide 15: Expansion Highlights (continued) New Orleans
New Orleans LDPO Expansion Highlights (continued) New Orleans Market – New Orleans, Louisiana 3Q21 – Hired an experienced banker, with knowledge of the New Orleans market, as market president 4Q21 – Hired seven additional local bankers and opened a LDPO in downtown New Orleans 1Q22 – Purchased land
Slide 16: Guiding Principles - Relationship-Based Lending
Guiding Principles – Relationship-Based Lending 2 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 17: Digital Banking - Embracing Digital Innovation
Strategies and Recent Systems Robust commercial treasury systems P2P payments platform provided by Zelle® Online deposit account opening and mortgage applications Online and mobile banking channels: Mobile deposit, digital receipts, Apple Pay, mobile wallet, and debit card controls Mobile, automated
Slide 18: 2021 Financial and Operational Highlights
Non-GAAP measure. See “Forward-Looking Statements and Non-GAAP Information” on slide 2 and “Non-GAAP Reconciliation” slides in the Appendix for additional information. 1 2021 Financial and Operational Highlights 2021 Assets increased 22.0%, or $582.1 million, to $3.22 billion Non-PPP loans HFI1 incr
Slide 19: 2021 Selected Income Comparison
(do l l ars i n thousands) 12/31/21 .. 12/31/20 . $ … . % … Net Income 32,952$ 28,145$ 4,807$ 17.1% Net Interest Income 71,722$ 69,000$ 2,722$ 3.9% PPP Loan Income 5,773$ 5,562$ 211$ 3.8% Net Interest Income (excluding PPP loan income) 1 65,949$ 63,438$ 2,511$ 4.0% Mortgage Loan Income 8,676$ 8,398$
Slide 20: First Quarter 2022 Financial Results
Assets consistent at $3.21 billion Improved asset mix Net income decreased $1.1 million from 4Q21 to $7.4 million for 1Q22 Lower PPP income Lower mortgage income Loss on equity securities Higher securities AFS income NIM FTE excluding PPP loans1 increased 3 bps to 2.41% NPAs to assets ratio consiste
Slide 21: Quarterly Selected Income Comparison
(do l l ars i n thousands) 3/31/22 .. 12/31/21 . $ … . % … Net Income 7,392$ 8,510$ (1,118)$ (13.1%) Net Interest Income 18,728$ 18,775$ (47)$ (0.3%) PPP Loan Income 485$ 1,212$ (727)$ (60.0%) Net Interest Income (excluding PPP loan income) 1 18,243$ 17,563$ 680$ 3.9% Mortgage Loan Income 1,127$ 1,6
Slide 22: Balance Sheet
Balance Sheet Deployed funds into securities and loans Securities AFS portfolio increased 23.0%, or $151.6 million, to $810.8 million Unrealized loss on Securities AFS increased $50.7 million, to $55.5 million Non-PPP loans(1) increased 4.1%, or $68.3 million, to $1.73 billion New lenders in expansi
Slide 23: Liquidity and Securities
Liquidity and Securities Liquidity as of March 31, 2022 Interest-bearing deposits in other banks = $507.0 million, 15.8% of assets Investment Activity 1Q22 Total securities purchased = $232.7 million, yield of 1.69%, and consisting of primarily short duration securities $193.1 million was growth of
Slide 24: Liquidity and Securities (continued)
18.3% 17.8% 18.8% 20.4% 25.2% 20.1% 22.0% 23.0% 23.6% 15.8% 1Q21 2Q21 3Q21 4Q21 1Q22 Securities Overnight Liquidity MBS 56.9% Muni 26.3% U.S. Agency 0.9% U.S. Treasury 15.9% 2018 2019 2020 2021 1Q22 MBS Muni U.S. Agency U.S. Treasury Liquidity and Securities (continued) Securities AFS Securities AFS
Slide 25: Loan Portfolio Overview
Consumer 1.4% $7 Tax-Exempt 4.6% $1,588 Construction & Development 6.8% $340 PPP Loans 0.4% $355 Commercial & Industrial 17.4% $67 One-to-Four Family Residential 27.8% $207 Commercial Real Estate 41.6% $891 Loan Portfolio Overview Loans HFI % and Average $ Size Mix As of March 31, 2022 (in thousands
Slide 26: Loans By Market
Central $613,274 35.4% Capital $478,255 27.6% Northwest $352,512 20.3% Southwest $119,254 6.9% Northshore $97,528 5.6% Acadiana $36,592 2.1% New Orleans $37,214 2.1% 1Non-GAAP measure. See “Forward-Looking Statements and Non-GAAP Information” on slide 2 and “Non-GAAP Reconciliation” slides in the Ap
Slide 27: Health Care Loans
Physicians & Dental Practices 46.6% Nursing & Residential Care Facilities 51.9% Hospitals 1.5% 1Non-GAAP measure. See “Forward-Looking Statements and Non-GAAP Information” on slide 2 and “Non-GAAP Reconciliation” slides in the Appendix for additional information. Health Care Loans Health Care Loans
Slide 28: Energy Portfolio Loans
Energy loans = $20.6 million, or 1.2%, of non-PPP loans HFI1 No nonperforming energy loans Average loan size = $666,000 Charge-offs since 2017 were $2.8 million No reserve-based lending 2.9% 2.2% 1.3% 1.2% 1.2% 2018 2019 2020 2021 1Q22 ¹Non-GAAP measure. See “Forward-Looking Statements and Non-GAAP
Slide 29: Commercial Real Estate Loans
CRE loans = $723.4 million, or 41.6%, of loans HFI ; C&D = $117.5 million, or 6.8% of loans HFI Low levels of CRE relative to state, regional, and national peers CRE concentration ratios as a % of risk-based capital are well below bank regulatory guidelines C&D Ratio = 37.5% CRE Ratio = 158.8% CRE c
Slide 30: Asset Quality
NPAs decreased slightly due to payments to nonaccrual loans Provision for loan loss expense consistent since 2Q21 due to favorable asset quality metrics and eased pandemic- related economic restrictions Reserve build correlates to loan growth ALL to non-PPP loans HFI1 = 1.11% ¹Non-GAAP measure. See
Slide 31: CECL Update
CECL replaces the current incurred loss methodology with a life-of-loan concept Effective for RRBI on January 1, 2023 Requires consideration of historical loss experience and current conditions adjusted for economic forecasts CECL system implementation in process Pro forma results expected in 3Q22 C
Slide 32: Paycheck Protection Program
Paycheck Protection Program PPP Loans = $6.4 million, or 0.4% of total loans HFI $169,000 in deferred fees remain outstanding PPP forgiveness and income decreased in 4Q21 and 1Q22 from the prior quarter Expect PPP loan forgiveness to be completed in 2Q22 1 Average Balance . PPP Income . 2 Yield NIM
Slide 33: Deposits
Deposits Deposits consistent at $2.93 billion Cost of deposits consistent at 0.18% Attractive core deposit base No brokered deposits Deposit Mix As of March 31, 2022 Total Deposits (in millions) $1,646 $1,721 $2,340 $2,910 $2,928 2018 2019 2020 2021 1Q22 DDA NOW Money Market Savings Time ≤ 250k Time
Slide 34: Capital
10.10% 10.18% 9.89% 9.25% 8.25% 17.66% 17.90% 17.60% 16.76% 16.26% 18.87% 19.10% 18.74% 17.83% 17.28% 10.43% 10.13% 10.21% 9.67% 9.51% 7.00% 9.00% 11.00% 13.00% 15.00% 17.00% 19.00% 21.00% 1Q21 2Q21 3Q21 4Q21 1Q22 Total Risk-Based Capital Tier 1 Risk-Based Capital Total Stockholders' Equity to Total
Slide 35: Profitability Trends
58.86% 59.46% 55.77% 56.39% 60.80% 2018 2019 2020 2021 1Q22 1.29% 1.30% 1.22% 1.13% 0.93% 2018 2019 2020 2021 1Q22 Profitability Trends Earnings Per Share (Diluted) Efficiency Ratio Return on Average Assets Net Income (in thousands) $23,056 $24,824 $28,145 $32,952 $7,392 2018 2019 2020 2021 1Q22 Q1
Slide 36: Net Interest Margin
0.08% 0.07% 0.09% 0.08% 0.12% 0.27% 0.22% 0.20% 0.18% 0.18% 4.31% 4.00% 4.11% 4.13% 3.97% 2.76% 2.54% 2.60% 2.52% 2.46% 1.17% 1.38% 1.39% 1.27% 1.35% 2.10% 2.07% 2.05% 2.03% 2.01% -1.00% 0.00% 1.00% 2.00% 3.00% 4.00% 5.00% 1 Q 2 1 2 Q 2 1 3 Q 2 1 4 Q 2 1 1 Q 2 2 Loan Yield NIM - FTE Securities - Tax
Slide 37: Noninterest Income
Service Charges on Deposit Accounts $1,308 25.5% Debit Card Income, net $936 18.2% Mortgage Loan Income $1,127 22.0% Brokerage Income $775 15.1% Loan and Deposit Income $371 7.2% SBIC Income $20 0.4% Other Income $230 4.5% Loss on Equity Securities $(365) -7.1% Noninterest income decreased $1.3 mill
Slide 38: Operating Expenses
Operating expenses increased $46,000 to $14.1 million for 1Q22 Other taxes increased $138,000 to $636,000 due to higher Louisiana bank stock tax Technology expenses increased $104,000 to $771,000 for 1Q22, due to $59,000 of start-up expenses for new locations Personnel expenses increased $90,000 to
Slide 39: Strategic Priorities
Continue building a strong, Louisiana-based, super-community bank by leveraging existing infrastructure Continue de novo, organic expansion strategy Disciplined focus on personal, relationship banking and building shareholder value Manage net interest income and net interest margin in a changing int
Slide 40: Summary
2 High liquidity levels with opportunity to deploy into loans and securities Diversified loan portfolio with solid asset quality and allowance Improved asset mix Organic expansion into largest Louisiana market for future growth Well capitalized with 9.51% leverage ratio as of March 31, 2022 Summary
Slide 41: Appendix
ae RED RIVER BANCSHARES, INC. ~ APPEN DIX
Slide 42: Non-GAAP Reconciliation
Non-GAAP Reconciliation (do l l ars i n thousands, except per share data) 3/31/22 . 12/31/21 . . 3/31/21 … . 12/31/20 Tangible common equity Total stockholders' equity $ 264,874 $ 298,150 $ 284,911 $ 285,478 Adjustments: Intangible assets (1,546) (1,546) (1,546) (1,546) Total tangible common equity
Slide 43: Non-GAAP Reconciliation (continued)
Non-GAAP Reconciliation (continued) (do l l ars i n thousands) 3/31/22 . 12/31/21 . . 9/30/21 C o 6/30/21 C o 3/31/21 … . 12/31/20 Non-PPP loans HFI Loans HFI $ 1,741,026 $ 1,683,832 $ 1,622,593 $ 1,600,388 $ 1,602,086 $ 1,588,446 Adjustments: PPP loans, net (6,397) (17,550) (45,962) (82,972) (119,3
Slide 44: Non-GAAP Reconciliation (continued)
Non-GAAP Reconciliation (continued) (do l l ars i n thousands) 3/31/22 . 12/31/21 . . 3/31/21 C o 2021 … . 2020 Net interest income Net interest income $ 18,728 $ 18,775 $ 17,591 $ 71,722 $ 69,000 Adjustments: PPP loan income (485) (1,212) (2,132) (5,773) (5,562) Net interest income, excluding PPP l
Red River Bancshares — Gulf South Bank Conference 2022 on 6ix