Red River Bancshares, Inc. · NASDAQ:RRBI
Red River Bancshares — Investor Presentation (July 2024)
42 slides from Red River Bancshares's investor presentation, Jul 26, 2024
Slide 1: Investor Presentation
INVESTOR PRESENTATION As of June 30, 2024 Nasdaq: RRBI
Slide 2: Legal Disclosures
Legal Disclosures 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
Slide 3: Glossary
Glossary ■ 4Q21 - Fourth Quarter of 2021 ■ CGMA – Chartered Global Management ■ M – Dollars in millions Accountant ■ 1Q22 – First Quarter of 2022 ■ M.B.A. – Master of Business Administration ■ CL(s) – Criticized loans ■ 3Q22 – Third Quarter of 2022 ■ MBS – Mortgage-backed securities ■ CPA – Certifie
Slide 4: Strong. Stable. We're your people.
Strong. Stable. We’re your people. ae RED RIVER BANK redriverbank.net DIC
Slide 5: Company overview
■ Established in 1998 in Alexandria, Louisiana ■ Completed IPO in May 2019 ■ Included in Russell 2000 Index ■ As of June 30, 2024: ■ Assets = $3.05 billion ■ Loans HFI = $2.05 billion ■ Securities = $666.6 million ■ Deposits = $2.72 billion ■ Market capitalization = $330.5 million ■ Ownership ■ Insi
Slide 6: We're your people.
Strong • Well capitalized • Solid liquidity position • Stock repurchase program Stable available • Conservative credit culture • Operating in the largest with solid asset quality markets in Louisiana • 28 banking centers and an • Granular, diversified, relationship-based loan and Consistent LDPO dep
Slide 7: History & Strategy
History & Strategy ge RED RIVER BANCSHARES, INC.
Slide 8: Company History
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 2006 Expanded into Northwest Market via banking center and completed stock offering of $5.0M 2009 Comp
Slide 9: Expansion Highlights
Expansion Highlights Southwest Market - Lake Charles, Louisiana ■ 1Q23 - Consolidated Lake Street Banking Center to the expanded Country Club Banking Center New Orleans Market – New Orleans, Louisiana Poydras Street LDPO ■ 4Q21 - Opened LDPO in downtown New Orleans Baronne Street Banking Center ■ 3Q
Slide 10: Book Value
Book Value 55.00 Realized Book Value Per Share1,2 $53.54 50.00 Book Value Per Share2 $44.58 45.00 Tangible Book Value Per Share1,2 40.00 $44.35 35.00 30.00 25.00 20.00 15.00 10.00 CAGR 10.7% 5.00 0.00 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Slide 11: Leadership Team
Leadership Team R. Blake Chatelain ■ President, Chief Executive Officer, and Director G. Bridges Hall, IV ■ Founding management ■ Senior Vice President and Chief Credit Policy Officer1 ■ Previously Executive Vice President of Rapides Bank & Trust ■ Joined Red River Bank in 2006 Company, a subsidiary
Slide 12: Growth Strategies
Growth Strategies De Novo Growth Strategy Historical Asset Growth Method ■ Disciplined, targeted expansions for profitable growth As of June 30, 2024 ■ Target markets with significant disruption by competitors ■ Concentrate on urban markets with growth potential ■ Focus on markets where market share
Slide 13: Guiding Principles
Guiding Principles Relationship-Driven Client Focus Our relationship-driven client focus and consistent lending philosophy results in loyal loan customers who also provide stable core deposits. Experienced Bankers In addition to a cohesive, long-tenured executive management team, we enjoy the benefi
Slide 14: Embracing Technology
Embracing Technology ■ Upgrading online and mobile banking platforms using Q2 Software’s market leading products. These will enhance Red River Bank’s digital offerings for both consumer and business customers ■ Partnering with Allied Payments to offer a new, more robust consumer and business bill pa
Slide 15: Competitive Landscape
Competitive Landscape ■ Red River Bank holds 2.0% of Louisiana deposits1 ■ 57.9% of Louisiana deposits are held by large national or regional banks1 ■ Large banks de-emphasizing markets we serve Deposits in Louisiana1 $136.1 billion As of June 30, 2023 Deposit Market Share as of June 30, 20231 Red R
Slide 16: 2Q24 Overview
2Q24 Overview ge RED RIVER BANCSHARES, INC.
Slide 17: 2Q24 Financial Results
2Q24 Financial Results ■ EPS consistent (dollars in thousands, except per share data) 2Q24 1Q24 2Q23 ■ 1Q24 - benefited from Net Income $ 7,987 $ 8,188 $ 8,968 approximately $800,000 of EPS, Diluted $ 1.16 $ 1.16 $ 1.25 nonrecurring items = $0.09 EPS Book Value Per Share $ 44.58 $ 43.43 $ 39.49 Tang
Slide 18: Balance Sheet
Balance Sheet As of (dollars in thousands) 6/30/24 3/31/24 6/30/23 ■ Assets decreased 0.8% to $3.05 Assets billion Cash and due from banks $ 35,035 $ 19,401 $ 36,662 Interest-bearing deposits in other banks 178,038 210,404 185,409 ■ Loans HFI increased 0.5% to $2.05 Securities AFS, at fair value 526
Slide 19: 2Q24 Selected Income Comparison
2Q24 Selected Income Comparison For the Quarters Ended Variance (dollars in thousands) 6/30/24 3/31/24 $ % Total Interest and Dividend Income $ 33,681 $ 33,018 $ 663 2.0% Total Interest Expense 11,894 11,655 239 2.1% Net Interest Income $ 21,787 $ 21,363 $ 424 2.0% Debit Card Income, net $ 949 $ 1,0
Slide 20: Loan Portfolio Overview
Loan Portfolio Overview ■ Loans HFI = $2.05 billion Largest Industry Concentrations As of June 30, 2024 ■ Average loan size excluding credit cards = $246,000 Health Care 8.2% Investor 1-to-4 and ■ Broad diversification by industry Multifamily 5.8% Construction 4.0% ■ Highest concentration = Health C
Slide 21: Health Care Loans
Health Care Loans ■ Largest industry concentration ■ Health Care loans = $167.4 million, or 8.2%, of loans HFI ■ Average loan size = $361,000 ■ No shared national credits, real estate investment trusts, or assisted living facilities ■ Skilled nursing care facilities operate under a certificate of ne
Slide 22: Commercial Real Estate Loans
Commercial Real Estate Loans ■ CRE = $865.6 million, or 42.3% of loans HFI ■ C&D = $129.2 million, or 6.3% of loans HFI ■ CRE criticized loans = $5.6 million, or 0.6% of total CRE loans and 0.3% of loans HFI ■ CRE NPLs = $737,000, or 0.09% of total CRE loans and < 0.1% of loans HFI Owner Occupied CR
Slide 23: CRE - NOO Office Loans
CRE - NOO Office Loans ■ NOO office loans = $57.4 million, or 2.8% of loans HFI ■ Primarily centered in low-rise suburban areas ■ Average size = $956,000 ■ Average loan-to-value for NOO office loans = 51.5% ■ Criticized NOO office loans = $3.2 million, 5.6% of total NOO office loans or 0.2% of loan
Slide 24: C&D and CRE Historical Concentrations
C&D and CRE Historical Concentrations ■ Low levels of CRE relative to state, regional, and national peers ■ Concentration ratios as a % of risk-based capital are well below bank regulatory guidelines ■ As of 2Q24, RRB CRE Ratio = 162.5% and RRB C&D Ratio = 36.0% C&D Concentration(1) CRE Concentratio
Slide 25: Loans by Market
Loans by Market ■ Expanding operations in Southwest, Acadiana, Northshore, and Capital Markets ■ In the New Orleans Market, opened an LDPO in 2021, and full-service banking centers in 2022 and 2024 Opportunities and Challenges to Future Loans Loans HFI Opportunities Originated by Geographic Market A
Slide 26: Asset Quality
Asset Quality ■ NPAs increased slightly to $3.2 million NPAs / Assets (end of period) ■ NPAs to Assets = 0.11% 0.11% ■ Provision expense totaled $300,000 in 2Q24 0.08% 0.08% 0.07% 0.07% ■ ACL to loans HFI = 1.06% ■ Net charge-offs to average loans since Red River Bank’s opening in 1999 = 0.05% 2Q23
Slide 27: Deposits
Deposits ■ Deposits were $2.72 billion for 2Q24, a decrease of $29.2 million, or 1.1%, compared to 1Q24, due to the seasonal outflow of funds for income tax payments Deposits by Category ■ Noninterest-bearing deposits to deposits ratio = 32.87% (end of period) (in millions) ■ Loans HFI to deposits r
Slide 28: Deposit Characteristics
Deposit Characteristics ■ Granular, diversified deposit portfolio and customer base throughout Louisiana Deposits by Customer Type % of Deposits ■ Average deposit account size = $27,000 As of June 30, 2024 (dollars in millions) ■ Public entity deposits ■ Relationship-based Louisiana public entities
Slide 29: Securities
Securities Key Securities Metrics as of June 30, 2024 ■ Securities AFS portfolio at fair value = $526.9 million, net of $64.4 million Securities of unrealized loss (end of period) (in millions) ■ Securities HTM portfolio at amortized cost = $136.8 million 776.1 ■ Unrealized loss on HTM portfolio = $
Slide 30: Liquidity and Borrowing Availability
Liquidity and Borrowing Availability Liquidity ■ Liquid Assets1 = $213.1 million, or 6.99% of assets, as of June 30, 2024 with $229.4 million average for 2Q24 ■ Estimated cash flows from securities, assuming consistent interest rates ■ $126.0 million principal repayments from July 2024 to June 2025,
Slide 31: Capital
Capital ■ Well capitalized position ■ Includes $61.7 million of net unrealized losses on securities AFS and HTM, 20.1% of capital as of June 30, 2024 ■ Stock repurchases ■ $5.0 million stock repurchase program will expire December 31, 2024 ■ In 1Q24, we entered into a privately negotiated stock repu
Slide 32: Stockholders' Equity Trends
Stockholders’ Equity Trends Total Stockholders’ Equity $320.0 (dollars in millions) $307.0 $303.9 $299.3 $300.0 $280.0 $283.4 $282.0 $276.6 $265.8 $260.0 $264.9 $253.6 $243.4 $240.0 Q1 Q2 Q3 Q4 2022 2023 2024 Realized Stockholders’ Equity1 $380.0 (dollars in millions) $368.7 $362.0 $360.0 $364.3 $35
Slide 33: Profitability Trends
Profitability Trends Net Income Earnings Per Share (Diluted) (in thousands) 36,916 5.13 34,879 4.86 32,952 4.51 28,145 3.83 16,175 2.31 2020 2021 2022 2023 2Q24 2020 2021 2022 2023 2Q24 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Efficiency Ratio YTD Return on Average Assets YTD 61.23% 59.39% 55.77% 56.39% 56.60% 1.22%
Slide 34: Net Interest Margin FTE (2Q24 vs. 1Q24)
Net Interest Margin FTE (2Q24 vs. 1Q24) ■ NIM FTE increased 9 bps to 2.92% for 2Q24 ■ Improved yields on loans and securities outpaced higher deposit costs ■ Loan yield increased 12 bps. Rates on new and renewed loans were 7.98% in 2Q24 compared to 7.56% in 1Q24 ■ Securities yield increased 8 bps du
Slide 35: Net Interest Margin Update
Net Interest Margin Update Average Yield / Rate Basis Points 2Q24 1Q24 Increase (Decrease) Loans 5.21% 5.09% 12 Securities 2.20% 2.12% 8 Total interest-earning assets 4.48% 4.35% 13 Interest-bearing transaction deposits 1.86% 1.81% 5 Time deposits 4.19% 4.12% 7 Cost of deposits 1.75% 1.70% 5 NIM FTE
Slide 36: Noninterest Income (2Q24 vs. 1Q24)
Noninterest Income (2Q24 vs. 1Q24) ■ Noninterest income increased $170,000 to $5.1 million for 2Q24 ■ Mortgage loan income increased $194,000 to $650,000 for 2Q24 due to increased purchase activity ■ SBIC income increased $102,000 to $454,000 for 2Q24 primarily due to higher normal income received f
Slide 37: Operating Expense (2Q24 vs. 1Q24)
Operating Expense (2Q24 vs. 1Q24) ■ Operating expenses increased $816,000 to $16.7 million for 2Q24 ■ Loan and deposit expenses increased $351,000 to $309,000 for 2Q24 ■ 1Q24 benefited from receipt of a $262,000 negotiated, variable rebate from a vendor ■ Data processing expenses increased $304,000
Slide 38: Strategic Outlook
Strategic Outlook ■ Continue building a strong, Louisiana-based, super-community bank by leveraging existing infrastructure and adding select new locations to support growth ■ Operate with high performing financial results ■ Maintain disciplined capital management including consistent dividends and
Slide 39: Summary
Summary Well positioned for the future Well capitalized with 11.74% leverage ratio and stockholders’ equity to assets of 10.07% Diversified loan portfolio with solid asset quality and a good loan pipeline Granular, diversified deposit portfolio Strong liquidity and borrowing capacity 39
Slide 40: Appendix
Appendix ge RED RIVER BANCSHARES, INC.
Slide 41: Non-GAAP Reconciliation
Non-GAAP Reconciliation As of (dollars in thousands, except per share data) 6/30/24 3/31/24 6/30/23 Tangible common equity Total stockholders’ equity $ 306,990 $ 299,314 $ 283,372 Adjustments: Intangible assets (1,546) (1,546) (1,546) Total tangible common equity (non-GAAP) $ 305,444 $ 297,768 $ 281
Slide 42: Non-GAAP Reconciliation (continued)
Non-GAAP Reconciliation (continued) As of (dollars in thousands) 12/31/23 9/30/23 3/31/23 12/31/22 9/30/22 6/30/22 3/31/22 Realized common equity Total stockholders’ equity $ 303,851 $ 281,951 $ 276,640 $ 265,753 $ 243,413 $ 253,596 $ 264,874 Adjustments: Accumulated other comprehensive (income) los
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