Core Viewpoint - Red River Bancshares (RRBI) has been upgraded to a Zacks Rank 1 (Strong Buy) due to an upward trend in earnings estimates, which is a significant factor influencing stock prices [1][3]. Earnings Estimates and Stock Price Movement - The Zacks rating system is based on changes in earnings estimates, which are closely correlated with near-term stock price movements [4][6]. - Institutional investors utilize earnings estimates to determine the fair value of stocks, leading to buying or selling actions that affect stock prices [4]. Company Performance and Outlook - The upgrade for Red River Bancshares indicates an improvement in the company's underlying business, which is expected to drive the stock price higher as investors respond positively to this trend [5][10]. - The Zacks Consensus Estimate for Red River Bancshares has increased by 9.6% over the past three months, with expected earnings of $5.86 per share for the fiscal year ending December 2025, showing no year-over-year change [8]. Zacks Rank System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with Zacks Rank 1 stocks historically generating an average annual return of +25% since 1988 [7]. - Only the top 5% of Zacks-covered stocks receive a "Strong Buy" rating, indicating superior earnings estimate revisions and potential for market-beating returns [9][10].

Core Viewpoint - Red River Bancshares (RRBI) has shown strong stock performance, with a 12.2% increase over the past month and a 16.7% gain since the beginning of the year, outperforming both the Zacks Finance sector and the Zacks Banks - Southwest industry [1][2]. Performance Metrics - The stock reached a new 52-week high of $63 recently [1]. - Red River Bancshares has consistently beaten earnings estimates, reporting an EPS of $1.52 against a consensus estimate of $1.29 in its last earnings report [2]. Earnings Projections - For the current fiscal year, earnings are expected to be $5.86 per share on revenues of $120.78 million, reflecting an 18.38% increase in EPS and a 10.06% increase in revenues [3]. - For the next fiscal year, projected earnings are $6.02 per share on revenues of $125.45 million, indicating a year-over-year change of 2.79% in EPS and 3.87% in revenues [3]. Valuation Metrics - The stock trades at 10.8 times current fiscal year EPS estimates, below the peer industry average of 12.8 times [7]. - On a trailing cash flow basis, it trades at 11.4 times, compared to the peer group's average of 11.6 times [7]. Style Scores - Red River Bancshares has a Value Score of B, with Growth and Momentum Scores both at C, resulting in a combined VGM Score of B [6]. - The Zacks Rank for the stock is 2 (Buy), supported by rising earnings estimates, indicating potential for further growth [8].

Group 1 - The company announced a stock repurchase agreement for 100,000 shares at a purchase price of $5.1 million, reflecting a discount to the 10-, 20-, and 30-day volume weighted average price as of May 20, 2025 [1] - The repurchase is part of a previously announced $5.0 million repurchase program, which remains unaffected by this transaction, with approximately $4.7 million of remaining capacity under the program as of May 22, 2025 [1] - The company's President and CEO stated that the repurchase demonstrates a commitment to increasing shareholder value [1] Group 2 - Red River Bancshares, Inc. is the bank holding company for Red River Bank, which was established in 1999 and offers a comprehensive suite of banking products and services [2] - The bank operates 28 banking centers across Louisiana and has a combined loan and deposit production office in New Orleans [2] - The banking centers serve various markets in Louisiana, including Alexandria, Shreveport-Bossier City, Baton Rouge, Lake Charles, Covington, Lafayette, and New Orleans [2]

[PART I - Financial Information](index=5&type=section&id=PART%20I%20Financial%20Information) [Item 1. Financial Statements (Unaudited)](index=5&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) This section presents Red River Bancshares' unaudited consolidated financial statements for Q1 2025, detailing balance sheets, income, comprehensive income, equity, and cash flow with notes [Consolidated Balance Sheets](index=5&type=section&id=Consolidated%20Balance%20Sheets) Total assets increased to $3.186 billion as of March 31, 2025, from $3.150 billion at year-end 2024, driven by growth in loans held for investment Consolidated Balance Sheet Highlights (Unaudited) | (in thousands) | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Total Assets** | **$3,186,432** | **$3,149,594** | | Total Cash and Cash Equivalents | $252,155 | $268,975 | | Loans held for investment, net | $2,092,907 | $2,053,282 | | Total Deposits | $2,825,676 | $2,805,106 | | **Total Liabilities** | **$2,853,116** | **$2,829,855** | | **Total Stockholders' Equity** | **$333,316** | **$319,739** | [Consolidated Statements of Income](index=6&type=section&id=Consolidated%20Statements%20of%20Income) For Q1 2025, net income rose to $10.35 million from $8.19 million in Q1 2024, driven by a 15.2% increase in net interest income, with diluted EPS growing to $1.52 Q1 2025 vs Q1 2024 Income Statement Highlights (Unaudited) | (in thousands, except per share data) | For the Three Months Ended March 31, 2025 | For the Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net Interest Income | $24,610 | $21,363 | | Provision for credit losses | $450 | $300 | | Total Noninterest Income | $5,272 | $4,928 | | Total Operating Expenses | $16,588 | $15,873 | | **Net Income** | **$10,352** | **$8,188** | | **Diluted EPS** | **$1.52** | **$1.16** | [Consolidated Statements of Comprehensive Income](index=7&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income) Comprehensive income for Q1 2025 was $14.24 million, up from $5.98 million in Q1 2024, primarily due to net income growth and positive unrealized gains on securities Comprehensive Income (Unaudited) | (in thousands) | For the Three Months Ended March 31, 2025 | For the Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net income | $10,352 | $8,188 | | Total other comprehensive income (loss) | $3,889 | $(2,206) | | **Comprehensive Income (Loss)** | **$14,241** | **$5,982** | [Consolidated Statements of Changes in Stockholders' Equity](index=8&type=section&id=Consolidated%20Statements%20of%20Changes%20in%20Stockholders%27%20Equity) Stockholders' equity increased to $333.3 million by March 31, 2025, driven by net income and other comprehensive income, partially offset by cash dividends - Key drivers for the change in stockholders' equity in Q1 2025 include net income of **$10.35 million** and other comprehensive income of **$3.89 million**, offset by cash dividends of **$813,000**[23](index=23&type=chunk) - The cash dividend per share increased to **$0.12** in Q1 2025 from **$0.09** in Q1 2024[23](index=23&type=chunk) [Consolidated Statements of Cash Flows](index=9&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Net cash provided by operating activities was $13.9 million in Q1 2025, while investing activities used $50.5 million, resulting in a $16.8 million net decrease in cash Cash Flow Summary (Unaudited) | (in thousands) | For the Three Months Ended March 31, 2025 | | :--- | :--- | | Net cash provided by (used in) operating activities | $13,914 | | Net cash provided by (used in) investing activities | $(50,491) | | Net cash provided by (used in) financing activities | $19,757 | | **Net change in cash and cash equivalents** | **$(16,820)** | | Cash and cash equivalents - end of period | $252,155 | [Notes to Unaudited Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Unaudited%20Consolidated%20Financial%20Statements) These notes detail significant accounting policies, including new standard adoption, and provide breakdowns of securities, loans, deposits, fair value, capital, and EPS, confirming banking as a single segment - The company adopted ASU No. 2024-01 regarding stock compensation on January 1, 2025, which did not have a material impact on the financial statements[31](index=31&type=chunk) - Total securities were **$699.5 million** as of March 31, 2025, with no allowance for credit losses (ACL) recorded for either AFS or HTM securities due to a zero credit loss assumption[36](index=36&type=chunk)[42](index=42&type=chunk)[43](index=43&type=chunk) - The company's banking operations are considered a single reportable operating segment, as the Chief Operating Decision Maker (CODM) assesses performance on a company-wide basis[92](index=92&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=27&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q1 2025 financial condition and results, highlighting net income, net interest margin, loan and deposit growth, asset quality, and liquidity, with net income up 11.2% from Q4 2024 [First Quarter 2025 Financial and Operational Highlights](index=27&type=section&id=FIRST%20QUARTER%202025%20FINANCIAL%20AND%20OPERATIONAL%20HIGHLIGHTS) Q1 2025 saw strong financial performance with net income of $10.4 million and diluted EPS of $1.52, improved net interest margin, loan and deposit growth, and a 33.3% dividend increase Q1 2025 Key Performance Metrics | Metric | Q1 2025 | Q4 2024 | | :--- | :--- | :--- | | Net Income | $10.4 million | $9.3 million | | Diluted EPS | $1.52 | $1.37 | | Return on Assets | 1.32% | 1.18% | | Return on Equity | 12.85% | 11.46% | | Net Interest Margin FTE | 3.22% | 3.09% | - The quarterly cash dividend was increased by **33.3%** to **$0.12** per common share[101](index=101&type=chunk) - Completed significant upgrades to online, mobile banking, and bill payment systems to improve digital services[101](index=101&type=chunk) [Results of Operations](index=30&type=section&id=RESULTS%20OF%20OPERATIONS) Net income for Q1 2025 was $10.4 million, a 26.4% increase year-over-year and 11.2% quarter-over-quarter, driven by higher net interest income and improved efficiency Net Income and EPS Comparison | (dollars in thousands, except per share data) | Q1 2025 | Q4 2024 | Q1 2024 | | :--- | :--- | :--- | :--- | | Net Income | $10,352 | $9,306 | $8,188 | | Diluted EPS | $1.52 | $1.37 | $1.16 | [Financial Condition](index=37&type=section&id=FINANCIAL%20CONDITION) As of March 31, 2025, total assets grew to $3.19 billion, supported by increases in deposits and loans held for investment, maintaining a strong capital position Balance Sheet Changes (Q1 2025 vs YE 2024) | (in millions) | March 31, 2025 | Dec 31, 2024 | % Change | | :--- | :--- | :--- | :--- | | Total Assets | $3,186.4 | $3,149.6 | 1.2% | | Loans HFI | $2,114.7 | $2,075.0 | 1.9% | | Total Deposits | $2,825.7 | $2,805.1 | 0.7% | | Stockholders' Equity | $333.3 | $319.7 | 4.2% | [Liquidity and Asset-Liability Management](index=46&type=section&id=LIQUIDITY%20AND%20ASSET-LIABILITY%20MANAGEMENT) The company maintained strong liquidity with $1.66 billion accessible from various sources, managing interest rate risk with an asset-sensitive balance sheet within policy limits - As of March 31, 2025, the company had access to **$1.66 billion** from various liquidity sources, including the FHLB and Federal Reserve Discount Window[192](index=192&type=chunk) - The company's balance sheet is asset-sensitive, meaning assets reprice faster than liabilities, with a **+100 bps** rate shock simulated to increase net interest income by **1.8%** over 12 months[216](index=216&type=chunk) - Unfunded loan commitments totaled **$503.1 million** and standby letters of credit totaled **$14.6 million** as of March 31, 2025[204](index=204&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=50&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section incorporates by reference the detailed discussion on market risk, particularly interest rate sensitivity, from the MD&A, with interest rate volatility as the primary risk - Disclosures about market risk are presented in the MD&A section under "Interest Rate Sensitivity and Market Risk" and are incorporated here by reference[231](index=231&type=chunk) [Item 4. Controls and Procedures](index=51&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of March 31, 2025, with no material changes to internal control over financial reporting during Q1 2025 - The Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were effective as of the end of the period covered by the report[232](index=232&type=chunk) - No changes in internal control over financial reporting occurred during Q1 2025 that have materially affected, or are reasonably likely to materially affect, internal controls[233](index=233&type=chunk) [PART II - Other Information](index=52&type=section&id=PART%20II%20Other%20Information) [Item 1. Legal Proceedings](index=52&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in various legal matters in the ordinary course of business, with no expected material adverse effect on financial condition or results - The company states that it is not involved in any legal proceedings expected to have a material adverse effect on its financial condition or operations[235](index=235&type=chunk) [Item 1A. Risk Factors](index=52&type=section&id=Item%201A.%20Risk%20Factors) No material changes have occurred to the risk factors previously disclosed in the company's Annual Report on Form 10-K for the year ended December 31, 2024 - No material changes have been made to the risk factors disclosed in the Annual Report on Form 10-K for the year ended December 31, 2024[236](index=236&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=52&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company has a $5.0 million stock repurchase program for 2025, with no shares repurchased during Q1 2025, leaving the full amount available - The company did not repurchase any shares of its common stock during the first quarter of 2025[237](index=237&type=chunk) - As of March 31, 2025, **$5.0 million** remained available for repurchase under the 2025 stock repurchase program[237](index=237&type=chunk) [Item 3. Defaults Upon Senior Securities](index=52&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) None - None[238](index=238&type=chunk) [Item 4. Mine Safety Disclosures](index=52&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) Not applicable - Not applicable[239](index=239&type=chunk) [Item 5. Other Information](index=52&type=section&id=Item%205.%20Other%20Information) None - None[240](index=240&type=chunk) [Item 6. Exhibits](index=53&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including CEO and CFO certifications and financial data in Inline XBRL format - Exhibits filed include CEO and CFO certifications under Sections 302 and 906 of the Sarbanes-Oxley Act[241](index=241&type=chunk) - Financial statements and notes are provided in Inline XBRL format[241](index=241&type=chunk)

Core Insights - Red River Bancshares (RRBI) is experiencing solid improvement in earnings estimates, which may lead to continued short-term price momentum [1][2] - The rising trend in estimate revisions reflects growing analyst optimism regarding the earnings prospects of Red River Bancshares, which is expected to positively impact its stock price [2][3] Current-Quarter Estimate Revisions - For the current quarter, Red River Bancshares is expected to earn $1.42 per share, representing a +22.41% change from the previous year [6] - Over the last 30 days, the Zacks Consensus Estimate has increased by 5.97%, with one estimate moving higher and no negative revisions [6] Current-Year Estimate Revisions - The full-year earnings estimate stands at $5.71 per share, indicating a +15.35% change from the year-ago number [7] - The consensus estimate has increased by 6.37% over the past month, with one estimate moving higher and no negative revisions [7][8] Zacks Rank and Performance - Red River Bancshares has achieved a Zacks Rank 1 (Strong Buy) due to favorable estimate revisions, which historically correlate with strong stock performance [9] - Stocks with Zacks Rank 1 and 2 have significantly outperformed the S&P 500 [9] Bottom Line - The strong estimate revisions have led to a 13.3% increase in the stock price over the past four weeks, suggesting potential for further upside [10]

Group 1: Earnings Performance - Red River Bancshares reported quarterly earnings of $1.52 per share, exceeding the Zacks Consensus Estimate of $1.29 per share, and up from $1.16 per share a year ago, representing an earnings surprise of 17.83% [1] - The company has surpassed consensus EPS estimates for four consecutive quarters [2] - Revenue for the quarter ended March 2025 was $29.88 million, surpassing the Zacks Consensus Estimate by 5%, and up from $26.29 million year-over-year [2] Group 2: Stock Performance and Outlook - Red River Bancshares shares have declined approximately 5% since the beginning of the year, compared to a decline of 5.5% for the S&P 500 [3] - The company's earnings outlook is favorable, with current consensus EPS estimates of $1.32 for the coming quarter and $5.34 for the current fiscal year [7] - The Zacks Rank for Red River Bancshares is 2 (Buy), indicating expectations for the stock to outperform the market in the near future [6] Group 3: Industry Context - The Banks - Southwest industry, to which Red River Bancshares belongs, is currently in the top 5% of over 250 Zacks industries, suggesting strong performance potential [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

Financial Performance - Net income for Q1 2025 was $10.4 million, an increase of $1.0 million, or 11.2%, from Q4 2024, and up $2.2 million, or 26.4%, from Q1 2024[2] - Net income for the three months ended March 31, 2025, was $10,352,000, an increase of 11.25% from $9,306,000 in the previous quarter and 26.56% from $8,188,000 in the same quarter last year[52] - Earnings per share (diluted) increased to $1.52, up from $1.37 in the previous quarter and $1.16 in the same quarter last year, representing a year-over-year growth of 30.34%[52] - The efficiency ratio improved to 55.51%, down from 58.71% in the previous quarter and 60.37% a year ago, indicating better cost management[52] - Return on average assets improved to 1.32%, compared to 1.18% in the previous quarter and 1.07% a year ago, reflecting enhanced asset utilization[52] Income and Revenue - Net interest income for Q1 2025 was $24.6 million, which was $923,000, or 3.9%, higher than the prior quarter[11] - Noninterest income totaled $5.3 million for Q1 2025, an increase of $277,000, or 5.5%, compared to the previous quarter[15] - Net interest income for the quarter was $24,610,000, up from $23,687,000 in the previous quarter and $21,363,000 in the same quarter last year, reflecting a year-over-year increase of 15.66%[52] - Net interest income rose to $24,610 thousand for the three months ended March 31, 2025, up from $23,687 thousand in the previous quarter, representing an increase of 3.89%[54] Assets and Liabilities - As of March 31, 2025, total assets were $3.19 billion, an increase of $36.8 million, or 1.2%, from December 31, 2024[23] - Total assets reached $3,186,432,000, a 1.17% increase from $3,149,594,000 at the end of the previous quarter and a 2.74% increase from $3,101,750,000 a year ago[50] - Total deposits totaled $2.83 billion as of March 31, 2025, an increase of $20.6 million, or 0.7%, compared to December 31, 2024[5] - Total deposits rose to $2,825,676,000, a 0.25% increase from $2,805,106,000 in the previous quarter and a 2.85% increase from $2,747,125,000 a year ago[50] Loans and Credit Quality - Loans held for investment increased by $39.7 million, or 1.9%, to $2.11 billion as of March 31, 2025[23] - Nonperforming loans to loans held for investment ratio increased to 0.24%, compared to 0.16% in the previous quarter and 0.12% a year ago, suggesting a slight deterioration in credit quality[52] - The provision for credit losses was $450,000 for Q1 2025, an increase of $150,000 from the prior quarter[14] - The company reported a provision for credit losses of $450,000, an increase from $300,000 in both the previous quarter and the same quarter last year, indicating a cautious approach to potential credit risks[52] Stockholders' Equity - Total stockholders' equity increased by $13.6 million, or 4.2%, to $333.3 million as of March 31, 2025, driven by $10.4 million of net income[40] - Stockholders' equity increased to $326,707 thousand as of March 31, 2025, compared to $323,029 thousand at the end of the previous quarter, showing a growth of 0.83%[54] - The tangible common equity (non-GAAP) was reported at $331,770 thousand as of March 31, 2025, up from $318,193 thousand in the previous quarter, indicating a solid capital position[59] - The total stockholders' equity to assets ratio improved to 10.46% as of March 31, 2025, compared to 10.15% in the previous quarter, indicating a stronger capital structure[59] Dividends - The quarterly cash dividend increased by 33.3% to $0.12 per share for Q1 2025, up from $0.09 per share for each quarter in 2024[3] - Cash dividends per share increased to $0.12, up from $0.09 in the previous quarter and the same as the previous year, indicating a stable dividend policy[52] Other Metrics - The net interest margin FTE increased by 13 basis points to 3.22% for Q1 2025, compared to 3.09% for the prior quarter[12] - The net interest margin improved to 3.17% for the three months ended March 31, 2025, compared to 3.04% in the previous quarter, indicating a positive trend in profitability[54] - The cost of deposits decreased to 1.61% for the three months ended March 31, 2025, down from 1.71% in the previous quarter, reflecting improved funding efficiency[54] - Nonperforming assets (NPAs) totaled $5.2 million as of March 31, 2025, an increase of $1.9 million, or 58.6%, from December 31, 2024[32]

Core Viewpoint - Red River Bancshares, Inc. reported strong financial results for the first quarter of 2025, with significant increases in net income, net interest income, and net interest margin, alongside a notable rise in cash dividends to shareholders [2][3][4]. Financial Performance - Net income for Q1 2025 was $10.4 million, or $1.52 per diluted share, marking an 11.2% increase from Q4 2024 and a 26.4% increase from Q1 2024 [2][3]. - The quarterly return on assets was 1.32%, and the return on equity was 12.85% [2]. - Net interest income rose to $24.6 million, a 3.9% increase from the previous quarter, driven by higher securities yields and lower deposit rates [3][9]. - The net interest margin increased by 13 basis points to 3.22% compared to the prior quarter [10]. Balance Sheet Overview - Total assets as of March 31, 2025, were $3.19 billion, reflecting a 1.2% increase from December 31, 2024, primarily due to a $20.6 million rise in deposits [3][23]. - Loans held for investment increased by $39.7 million, or 1.9%, to $2.11 billion [27]. - Total deposits reached $2.83 billion, up by $20.6 million, or 0.7%, compared to the previous quarter [33]. Dividend and Stock Repurchase - The quarterly cash dividend was increased by 33.3% to $0.12 per share for Q1 2025, up from $0.09 per share in 2024 [3][4]. - The company has authorized a stock repurchase program of up to $5.0 million for 2025 [3]. Credit Quality and Provisions - The provision for credit losses was $450,000 for Q1 2025, an increase from $300,000 in the prior quarter, attributed to loan growth and economic uncertainties [13][32]. - Nonperforming assets totaled $5.2 million, or 0.16% of total assets, reflecting an increase from the previous quarter [31][45]. Noninterest Income and Operating Expenses - Noninterest income for Q1 2025 was $5.3 million, a 5.5% increase from the previous quarter, driven by higher brokerage income [14][15]. - Operating expenses decreased by 1.5% to $16.6 million, primarily due to lower data processing and loan expenses [18][19]. Market Position and Future Outlook - Red River Bank was ranked 14th among the top 50 best deposit franchises for banks with assets between $3.0 billion and $10.0 billion [3]. - The company remains focused on improving net interest margins and managing deposit costs while redeploying assets into higher-yielding investments [5][11].

Core Viewpoint - Red River Bancshares (RRBI) has received an upgrade to a Zacks Rank 1 (Strong Buy), indicating a positive outlook on its earnings estimates, which is a significant factor influencing stock prices [1][4]. Earnings Estimates and Revisions - The Zacks rating system is based on the Zacks Consensus Estimate, which aggregates EPS estimates from sell-side analysts for the current and following years [2]. - The recent upgrade reflects an 8.5% expected increase in earnings per share to $5.37 for the fiscal year ending December 2025, along with a 5.8% increase in the Zacks Consensus Estimate over the past three months [9]. Impact of Institutional Investors - Changes in earnings estimates are closely correlated with stock price movements, largely due to institutional investors who adjust their valuations based on these estimates [5]. - An increase in earnings estimates typically leads to higher fair value calculations, prompting institutional investors to buy, which drives stock prices up [5][6]. Zacks Rank System - The Zacks Rank system categorizes stocks into five groups based on earnings estimates, with Zacks Rank 1 stocks historically generating an average annual return of +25% since 1988 [8]. - The upgrade of Red River Bancshares to Zacks Rank 1 places it in the top 5% of Zacks-covered stocks, indicating strong potential for market-beating returns in the near term [11].

Loan Portfolio - As of December 31, 2024, the company's owner-occupied commercial real estate (CRE) loans totaled $425.7 million, representing 20.5% of loans held for investment (HFI) [125] - The company's construction and development loans, non-owner occupied CRE loans, and non-real estate secured loans financing CRE activities amounted to $615.4 million, or 29.7% of loans HFI as of December 31, 2024 [125] - A significant portion of the loan portfolio, $1.65 billion or 79.7% of loans HFI, is secured by real estate as the primary collateral as of December 31, 2024 [126] - Approximately $614.6 million, or 29.6% of the total loan portfolio, was secured by primary and secondary liens on one-to-four family residential loans as of December 31, 2024 [128] - Commercial and industrial loans accounted for approximately $327.1 million, or 15.8% of loans HFI as of December 31, 2024 [130] - Health care loans amounted to $167.3 million, representing 8.1% of loans HFI, highlighting significant exposure to the health care sector [150] - Energy loans totaled $29.8 million, or 1.4% of loans HFI, reflecting vulnerability to fluctuations in oil and natural gas prices [151] - The Company's loans held for investment portfolio totaled $2.08 billion as of December 31, 2024, with an allowance for credit losses of $21.73 million [396] - Unfunded loan commitments amounted to $521.50 million, with a reserve for unfunded commitments of $642,000 [396] Credit Losses and Nonperforming Assets - The allowance for credit losses (ACL) totaled $21.7 million, approximately 1.05% of loans HFI as of December 31, 2024 [131] - Nonperforming assets (NPAs) were reported at $3.3 million, or 0.10% of total assets as of December 31, 2024 [135] - The company may need to increase its provision for credit losses due to potential future credit losses exceeding current estimates [132] - Increased credit losses may arise from negative conditions in the health care sector and volatility in the energy industry, affecting overall loan portfolio quality [150][151] - The provision for credit losses was $1.20 million in 2024, up from $735,000 in 2023 [410] - The company reported a provision for credit losses of $1,200,000 in 2024, an increase from $735,000 in 2023 [417] - Nonaccrual loans totaled $2,968,000 as of December 31, 2024, with $1,267,000 having no ACL and $1,701,000 with ACL [493] Financial Performance - Total interest and dividend income for 2024 was $137.23 million, an increase from $118.57 million in 2023 [410] - Net interest income after provision for credit losses was $88.09 million for 2024, compared to $85.70 million in 2023 [410] - Net income for 2024 was $34.24 million, a decrease from $34.88 million in 2023 [410] - Basic earnings per share for 2024 were $4.96, compared to $4.87 in 2023 [410] - Comprehensive income for 2024 was $34,482,000, down from $45,551,000 in 2023, reflecting a significant decline in other comprehensive income [412] - Total stockholders' equity as of December 31, 2024, was $319,739,000, a decrease from $303,851,000 in 2023 [415] - Cash and cash equivalents at the end of 2024 were $268,975,000, down from $305,426,000 in 2023, indicating a net change of $(36,451,000) [417] - Operating activities provided net cash of $38,284,000 in 2024, compared to $40,111,000 in 2023 [417] Regulatory and Compliance Risks - The company operates in a highly regulated environment, which imposes extensive compliance costs and could adversely affect operations and profitability [191] - The company may need to raise additional capital in the future to meet regulatory requirements and support growth, which is influenced by various external factors [160] - Regulatory changes may require the company to invest significant resources to comply, potentially impacting profitability [193] - The company is subject to capital requirements that could limit growth opportunities and require additional capital raising [197] - The FDIC may change deposit insurance assessment rates, which could reduce profitability and adversely affect financial condition [202] - The company faces risks related to regulatory examinations, which could result in penalties or restrictions on operations [196] Technology and Operational Challenges - The company faces operational challenges in implementing new technology, which may prevent it from fully realizing anticipated benefits [172] - The company has a continuing need for technological improvements but may not have sufficient resources to effectively implement new technology [173] - The company relies heavily on its executive management team and key employees, and unexpected loss of their services could adversely affect business and profitability [166] - The company is subject to significant risks related to data security, including unauthorized access and cyber-attacks, which may increase costs and harm reputation [167] Market and Competitive Environment - The company faces significant competition from larger banks and non-bank competitors, which may impact its ability to attract and retain customers [152] - The company is exposed to risks from changing interest rates, which could adversely affect net interest income and the valuation of assets and liabilities [138] - The company’s stock price may be subject to substantial fluctuations, making it difficult for investors to sell shares at desired volumes or prices [179] - Future sales of substantial amounts of equity securities could adversely affect the market price of the company’s common stock [180] - The company’s ability to pay dividends may be limited by potential future outstanding indebtedness and regulatory restrictions [185] - The company’s stock repurchase program may not enhance long-term shareholder value and could increase stock price volatility [186] Investment Securities - The Company’s securities AFS portfolio includes U.S. Treasury securities, mortgage-backed securities, U.S. agency securities, and municipal bonds [430] - The Company’s securities HTM portfolio consists of mortgage-backed securities and U.S. agency securities, both having a zero credit loss assumption [431] - The total amortized cost of available-for-sale (AFS) securities was $613,393 thousand as of December 31, 2024, with a fair value of $550,148 thousand, indicating an unrealized loss of approximately 10.40% [482] - The company held 485 AFS securities in unrealized loss positions as of December 31, 2024, with an aggregate unrealized loss of $62,942 thousand [482] - The total amortized cost of held-to-maturity (HTM) securities was $131,796 thousand, with a fair value of $108,990 thousand as of December 31, 2024 [478] Accounting and Financial Reporting - The company’s financial results depend on management's selection of accounting methods and estimates, which could lead to materially different results than originally estimated [174] - The company utilizes statistical and quantitative models for decision-making, and faulty data or modeling could negatively impact its operations [175] - The Company adopted ASC 326 on January 1, 2023, which requires loans acquired with evidence of credit deterioration to be recorded at amortized cost with an allowance for expected credit loss [449] - The provision for income tax is based on a corporate tax rate of 21.0% as of December 31, 2024, and 2023 [460] - The Company performed its annual impairment test of goodwill for 2024 and 2023, indicating no impairment [454] - The Company has adopted stock incentive plans for key employees, with stock-based compensation costs recognized over the vesting period [457] - The Company does not expect the adoption of recent accounting standards to have a material impact on its consolidated financial statements [466][467][468][469]