[FORM 10-Q Filing Information](index=1&type=section&id=FORM%2010-Q) This section provides key filing details for Red River Bancshares, Inc.'s Quarterly Report on Form 10-Q - Red River Bancshares, Inc. filed its Quarterly Report on Form 10-Q for the period ended September 30, 2022[2](index=2&type=chunk) - The company's common stock trades on The Nasdaq Stock Market, LLC under the symbol **RRBI**[3](index=3&type=chunk) - As of October 31, 2022, the registrant had **7,183,915 shares** of common stock issued and outstanding[3](index=3&type=chunk) [Table of Contents](index=2&type=section&id=TABLE%20OF%20CONTENTS) This section lists the organizational structure and page references for the report's content [Glossary of Terms](index=3&type=section&id=Glossary%20of%20Terms) This section defines key financial and industry-specific terms used throughout the report [Cautionary Note Regarding Forward-Looking Statements](index=5&type=section&id=CAUTIONARY%20NOTE%20REGARDING%20FORWARD-LOOKING%20STATEMENTS) This section advises readers on the inherent risks and uncertainties associated with forward-looking statements in the report - The report contains forward-looking statements regarding future events and financial performance, which are subject to risks and uncertainties[14](index=14&type=chunk) - Key risk factors include general business and economic conditions, the impact of **COVID-19**, government and regulatory actions, increased competition, interest rate volatility, and asset quality deterioration[15](index=15&type=chunk) - The company does not undertake to publicly update or review any forward-looking statement, except as required by applicable law[15](index=15&type=chunk) [PART I. Financial Information](index=7&type=section&id=PART%20I.%20Financial%20Information) This part presents the company's unaudited consolidated financial statements and management's discussion and analysis [Item 1. Financial Statements (Unaudited)](index=7&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) This section presents the unaudited consolidated financial statements, including balance sheets, income statements, cash flows, and detailed notes [Consolidated Balance Sheets](index=7&type=section&id=Consolidated%20Balance%20Sheets) This table provides a snapshot of the company's assets, liabilities, and equity at specific points in time | Metric (in thousands) | Sep 30, 2022 | Dec 31, 2021 | Change ($ thousands) | Change (%) | | :-------------------- | :----------- | :----------- | :------------------- | :--------- | | Total Assets | $3,059,678 | $3,224,710 | $(165,032) | (5.1)% | | Total Liabilities | $2,816,265 | $2,926,560 | $(110,295) | (3.8)% | | Total Stockholders' Equity | $243,413 | $298,150 | $(54,737) | (18.4)% | | Loans Held for Investment | $1,879,669 | $1,683,832 | $195,837 | 11.6% | | Total Deposits | $2,796,494 | $2,910,348 | $(113,854) | (3.9)% | | Securities Available-for-Sale | $609,748 | $659,178 | $(49,430) | (7.5)% | | Securities Held-to-Maturity | $154,736 | $— | $154,736 | — | [Consolidated Statements of Income](index=8&type=section&id=Consolidated%20Statements%20of%20Income) This table details the company's revenues, expenses, and net income over specific reporting periods | Metric (in thousands) | Q3 2022 | Q3 2021 | Change ($ thousands) | Change (%) | | :-------------------- | :----------- | :----------- | :------------------- | :--------- | | Net Interest Income | $23,088 | $18,109 | $4,979 | 27.5% | | Provision for loan losses | $600 | $150 | $450 | 300.0% | | Total Noninterest Income | $4,867 | $5,643 | $(776) | (13.8)% | | Total Operating Expenses | $15,041 | $13,684 | $1,357 | 9.9% | | Net Income | $10,186 | $8,138 | $2,048 | 25.2% | | Basic EPS | $1.42 | $1.12 | $0.30 | 26.8% | | Diluted EPS | $1.42 | $1.12 | $0.30 | 26.8% | | Metric (in thousands) | 9M 2022 | 9M 2021 | Change ($ thousands) | Change (%) | | :-------------------- | :----------- | :----------- | :------------------- | :--------- | | Net Interest Income | $62,965 | $52,947 | $10,018 | 18.9% | | Provision for loan losses | $1,000 | $1,750 | $(750) | (42.9)% | | Total Noninterest Income | $14,128 | $18,821 | $(4,693) | (24.9)% | | Total Operating Expenses | $43,573 | $40,239 | $3,334 | 8.3% | | Net Income | $26,725 | $24,442 | $2,283 | 9.3% | | Basic EPS | $3.72 | $3.35 | $0.37 | 11.0% | | Diluted EPS | $3.71 | $3.34 | $0.37 | 11.1% | [Consolidated Statements of Comprehensive Income](index=9&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income) This table presents net income and other comprehensive income components, reflecting changes in equity not from net income | Metric (in thousands) | Q3 2022 | Q3 2021 | Change ($ thousands) | | :-------------------- | :----------- | :----------- | :------------------- | | Net income | $10,186 | $8,138 | $2,048 | | Total other comprehensive income (loss) | $(19,940) | $(1,119) | $(18,821) | | Comprehensive Income (Loss) | $(9,754) | $7,019 | $(16,773) | | Metric (in thousands) | 9M 2022 | 9M 2021 | Change ($ thousands) | | :-------------------- | :----------- | :----------- | :------------------- | | Net income | $26,725 | $24,442 | $2,283 | | Total other comprehensive income (loss) | $(79,971) | $(6,982) | $(72,989) | | Comprehensive Income (Loss) | $(53,246) | $17,460 | $(70,706) | - Unrealized net loss on securities arising during the nine months ended September 30, 2022, significantly increased to **$(102.8 million)** from $(8.6 million) in the prior year, primarily due to rising interest rates[22](index=22&type=chunk) [Consolidated Statements of Changes in Stockholders' Equity](index=10&type=section&id=Consolidated%20Statements%20of%20Changes%20in%20Stockholders'%20Equity) This table outlines the changes in the company's equity accounts over the reporting period | Metric (in thousands) | Sep 30, 2022 | Dec 31, 2021 | Change ($ thousands) | | :-------------------- | :----------- | :----------- | :------------------- | | Common Stock | $60,050 | $60,233 | $(183) | | Additional Paid-In Capital | $2,014 | $1,814 | $200 | | Retained Earnings | $265,093 | $239,876 | $25,217 | | Accumulated Other Comprehensive Income (Loss) | $(83,744) | $(3,773) | $(79,971) | | Total Stockholders' Equity | $243,413 | $298,150 | $(54,737) | - The decrease in total stockholders' equity was primarily driven by a significant increase in accumulated other comprehensive loss, mainly due to unrealized losses on securities[18](index=18&type=chunk)[26](index=26&type=chunk) - The company repurchased **4,465 shares** of common stock for **$218 thousand** during the nine months ended September 30, 2022[26](index=26&type=chunk) [Consolidated Statements of Cash Flows](index=12&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) This table summarizes the cash inflows and outflows from operating, investing, and financing activities | Cash Flow Activity (in thousands) | 9M 2022 | 9M 2021 | Change ($ thousands) | | :-------------------------------- | :----------- | :----------- | :------------------- | | Net cash provided by (used in) operating activities | $35,343 | $50,070 | $(14,727) | | Net cash provided by (used in) investing activities | $(403,554) | $(126,418) | $(277,136) | | Net cash provided by (used in) financing activities | $(115,580) | $359,711 | $(475,291) | | Net change in cash and cash equivalents | $(483,791) | $283,363 | $(767,154) | | Cash and cash equivalents - end of period | $301,073 | $730,564 | $(429,491) | - The significant increase in cash used in investing activities was primarily due to **$313.5 million** in securities purchases and a **$196.1 million** net increase in loans held for investment during the nine months ended September 30, 2022[29](index=29&type=chunk) - Financing activities shifted from a net cash inflow of **$359.7 million** in 9M 2021 to a net cash outflow of **$115.6 million** in 9M 2022, mainly due to a decrease in deposits[29](index=29&type=chunk) [Notes to Unaudited Consolidated Financial Statements](index=14&type=section&id=Notes%20to%20Unaudited%20Consolidated%20Financial%20Statements) This section provides detailed explanations and disclosures supporting the unaudited consolidated financial statements [1. Summary of Significant Accounting Policies](index=14&type=section&id=1.%20Summary%20of%20Significant%20Accounting%20Policies) This note outlines the key accounting principles and methods used in preparing the financial statements - The company adopted ASU No. 2021-05, Leases (Topic 842), as of January 1, 2022, with no material impact on financial statements[37](index=37&type=chunk) - ASU No. 2016-13 (CECL model) is effective for the company on January 1, 2023, and is expected to result in a combined **1.0% to 5.0% increase** in its allowance for credit losses and unfunded commitments[38](index=38&type=chunk) - ASU No. 2022-02, eliminating accounting guidance for Troubled Debt Restructurings (TDRs), is effective January 1, 2023, and is not expected to have a material impact[40](index=40&type=chunk) [2. Securities](index=15&type=section&id=2.%20Securities) This note details the composition, fair value, and reclassification of the company's securities portfolio - Total securities were **$764.5 million** as of September 30, 2022[41](index=41&type=chunk) - The company reclassified **$166.3 million** (**20.5%** of the securities portfolio) from available-for-sale (AFS) to held-to-maturity (HTM) during the second quarter of 2022[43](index=43&type=chunk) | Metric (in thousands) | Sep 30, 2022 | Dec 31, 2021 | Change ($ thousands) | | :-------------------- | :----------- | :----------- | :------------------- | | Securities AFS (Fair Value) | $609,748 | $659,178 | $(49,430) | | Securities HTM (Amortized Cost) | $154,736 | $— | $154,736 | | Net Unrealized Loss on Securities AFS | $(89,593) | $(9,614) | $(79,979) | - Equity securities, primarily an investment in a CRA mutual fund, were liquidated in April 2022 due to a significant increase in interest rates, resulting in a recognized loss of **$447 thousand** for the nine months ended September 30, 2022[51](index=51&type=chunk) [3. Loans and Asset Quality](index=18&type=section&id=3.%20Loans%20and%20Asset%20Quality) This note provides a breakdown of the loan portfolio, including categories, growth, and asset quality metrics | Loan Category (in thousands) | Sep 30, 2022 | Dec 31, 2021 | Change ($ thousands) | Change (%) | | :--------------------------- | :----------- | :----------- | :------------------- | :--------- | | Total Loans Held for Investment | $1,879,669 | $1,683,832 | $195,837 | 11.6% | | Commercial real estate | $787,464 | $670,293 | $117,171 | 17.5% | | One-to-four family residential | $532,034 | $474,420 | $57,614 | 12.1% | | Construction and development | $140,398 | $106,339 | $34,059 | 32.0% | | Commercial and industrial | $307,159 | $311,373 | $(4,214) | (1.4)% | | SBA PPP, net | $1,350 | $17,550 | $(16,200) | (92.3)% | | Allowance for Loan Losses | $(19,953) | $(19,176) | $(777) | 4.1% | | Asset Quality (in thousands) | Sep 30, 2022 | Dec 31, 2021 | Change ($ thousands) | Change (%) | | :--------------------------- | :----------- | :----------- | :------------------- | :--------- | | Nonaccrual loans | $2,703 | $280 | $2,423 | 865.4% | | Accruing loans 90+ days past due | $12 | $39 | $(27) | (69.2)% | | Total Nonperforming Loans | $2,715 | $319 | $2,396 | 751.1% | | Total Troubled Debt Restructurings | $4,351 | $3,944 | $407 | 10.3% | - Loans classified as 'Pass' decreased from **99.5%** of loans HFI at December 31, 2021, to **98.6%** at September 30, 2022, while 'Special Mention' and 'Substandard' loans increased[66](index=66&type=chunk) [4. Deposits](index=26&type=section&id=4.%20Deposits) This note details the composition of the company's deposits, including interest-bearing and noninterest-bearing categories | Deposit Type (in thousands) | Sep 30, 2022 | Dec 31, 2021 | Change ($ thousands) | Change (%) | | :-------------------------- | :----------- | :----------- | :------------------- | :--------- | | Total Deposits | $2,796,494 | $2,910,348 | $(113,854) | (3.9)% | | Noninterest-bearing deposits | $1,172,157 | $1,149,672 | $22,485 | 2.0% | | Interest-bearing deposits | $1,624,337 | $1,760,676 | $(136,339) | (7.7)% | - The decrease in total deposits was primarily due to expected customer deposit account activity and response to the changing interest rate environment[70](index=70&type=chunk) [5. Contingencies](index=26&type=section&id=5.%20Contingencies) This note discusses potential future obligations arising from legal proceedings and other business activities - Management believes that current legal proceedings are not expected to have a material adverse effect on the company's consolidated results of operations, financial condition, or cash flows[71](index=71&type=chunk) [6. Fair Value](index=26&type=section&id=6.%20Fair%20Value) This note explains the methodologies and hierarchy used for measuring assets and liabilities at fair value - The company uses a fair value hierarchy (**Level 1, 2, and 3**) to categorize assets and liabilities measured at fair value[74](index=74&type=chunk) - Securities AFS, loans HFS, and equity securities are recorded at fair value on a recurring basis, primarily using **Level 2 inputs**[79](index=79&type=chunk) - Impaired loans and foreclosed assets are measured at fair value on a nonrecurring basis, often utilizing **Level 3 inputs** based on discounted appraisals and collateral discounts[77](index=77&type=chunk)[78](index=78&type=chunk)[84](index=84&type=chunk) [7. Regulatory Capital Requirements](index=29&type=section&id=7.%20Regulatory%20Capital%20Requirements) This note outlines the company's compliance with regulatory capital ratios and its 'well capitalized' status | Red River Bank Capital Ratios | Sep 30, 2022 | Dec 31, 2021 | Minimum Basel III Requirement | | :---------------------------- | :----------- | :----------- | :---------------------------- | | Total Risk-Based Capital | 16.57% | 17.06% | 10.50% | | Tier I Risk-Based Capital | 15.58% | 15.99% | 8.50% | | Common Equity Tier I Capital | 15.58% | 15.99% | 7.00% | | Tier I Leverage Capital | 9.94% | 9.23% | 4.00% | - Red River Bank met all capital adequacy requirements under Basel III as of September 30, 2022, and was categorized as '**well capitalized**' by the FDIC[87](index=87&type=chunk) - The company expects to no longer receive benefits under the Small Bank Holding Company Policy Statement starting in 2023, as its assets exceeded **$3.0 billion** as of June 30, 2022[89](index=89&type=chunk) - The company and the Bank qualify for the Community Bank Leverage Ratio (CBLR) framework but do not intend to utilize it[91](index=91&type=chunk) [8. Earnings Per Common Share](index=31&type=section&id=8.%20Earnings%20Per%20Common%20Share) This note provides a breakdown of basic and diluted earnings per common share for the reporting periods | EPS Metric | Q3 2022 | Q3 2021 | 9M 2022 | 9M 2021 | | :--------- | :------ | :------ | :------ | :------ | | Basic EPS | $1.42 | $1.12 | $3.72 | $3.35 | | Diluted EPS | $1.42 | $1.12 | $3.71 | $3.34 | - Diluted EPS increased by **$0.30** (**26.8%**) for Q3 2022 compared to Q3 2021, and by **$0.37** (**11.1%**) for 9M 2022 compared to 9M 2021[93](index=93&type=chunk) [9. Equity](index=31&type=section&id=9.%20Equity) This note details changes in stockholders' equity, including share repurchases and accumulated other comprehensive income - The company did not repurchase any shares of common stock during the third quarter of 2022, with **$4.8 million** remaining available under the current stock repurchase program as of September 30, 2022[94](index=94&type=chunk) - A new stock repurchase program authorizing up to **$5.0 million** of common stock purchases was approved for January 1, 2023, through December 31, 2023[212](index=212&type=chunk) - The net unamortized, unrealized loss on securities transferred from AFS to HTM, included in AOCI, totaled **$13.0 million** (net of tax) as of September 30, 2022[96](index=96&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=33&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's analysis of the company's financial performance, condition, and key operational drivers [Corporate Summary](index=33&type=section&id=CORPORATE%20SUMMARY) This section provides an overview of Red River Bancshares, Inc.'s business, operations, and strategic focus - Red River Bancshares, Inc. is a bank holding company for Red River Bank, operating **28 banking centers** and one loan and deposit production office across Louisiana[100](index=100&type=chunk) - The company's strategy focuses on expanding market share in existing markets, opportunistic de novo expansion, and strategic acquisitions[101](index=101&type=chunk) [Third Quarter 2022 Financial and Operational Highlights](index=33&type=section&id=THIRD%20QUARTER%202022%20FINANCIAL%20AND%20OPERATIONAL%20HIGHLIGHTS) This section summarizes the key financial and operational achievements for the third quarter of 2022 | Metric | Q3 2022 | Q2 2022 | Change ($ millions) | Change (%) | | :----- | :----------- | :----------- | :------------------ | :--------- | | Net Income | $10.2 million | $9.1 million | $1.1 million | 12.1% | | Diluted EPS | $1.42 | $1.27 | $0.15 | 11.8% | | Return on Assets | 1.30% | 1.15% | 0.15% | 13.0% | | Return on Equity | 15.48% | 14.30% | 1.18% | 8.2% | | Net Interest Income | $23.1 million | $21.1 million | $2.0 million | 9.5% | | Net Interest Margin FTE | 3.06% | 2.75% | 0.31% | 11.3% | - Assets decreased by **$61.4 million** from June 30, 2022, mainly due to a **$53.7 million** decrease in deposits[103](index=103&type=chunk) - Loans Held for Investment increased by **$38.1 million** (**2.1%**) to **$1.88 billion** as of September 30, 2022[103](index=103&type=chunk) - Nonperforming assets were **$2.7 million**, or **0.09%** of assets, as of September 30, 2022[103](index=103&type=chunk) [Results of Operations](index=36&type=section&id=RESULTS%20OF%20OPERATIONS) This section analyzes the company's financial performance, including net income, interest income, noninterest income, and expenses [Net Income](index=36&type=section&id=Net%20Income%20(Results%20of%20Operations)) This section details the drivers of net income and related profitability metrics for the reporting periods | Metric | Q3 2022 | Q2 2022 | Change ($ millions) | Change (%) | | :----- | :----------- | :----------- | :------------------ | :--------- | | Net Income | $10.2 million | $9.1 million | $1.1 million | 12.1% | | Diluted EPS | $1.42 | $1.27 | $0.15 | 11.8% | | Return on Assets | 1.30% | 1.15% | 0.15% | 13.0% | | Return on Equity | 15.48% | 14.30% | 1.18% | 8.2% | | Metric | 9M 2022 | 9M 2021 | Change ($ millions) | Change (%) | | :----- | :----------- | :----------- | :------------------ | :--------- | | Net Income | $26.7 million | $24.4 million | $2.3 million | 9.4% | | Diluted EPS | $3.71 | $3.34 | $0.37 | 11.1% | | Return on Assets | 1.13% | 1.15% | (0.02)% | (1.7)% | | Return on Equity | 13.25% | 11.17% | 2.08% | 18.6% | - The increase in Q3 2022 net income was mainly due to a **$1.9 million** increase in net interest income[108](index=108&type=chunk) - The increase in 9M 2022 net income was primarily due to a **$10.0 million** increase in net interest income and a **$750 thousand** decrease in provision for loan losses, partially offset by lower noninterest income and higher operating expenses[109](index=109&type=chunk) [Net Interest Income and Net Interest Margin](index=36&type=section&id=Net%20Interest%20Income%20and%20Net%20Interest%20Margin) This section analyzes the components of net interest income and the net interest margin, reflecting interest rate dynamics | Metric | Q3 2022 | Q2 2022 | Change ($ millions) | Change (%) | | :----- | :----------- | :----------- | :------------------ | :--------- | | Net Interest Income | $23.1 million | $21.1 million | $2.0 million | 9.5% | | Net Interest Margin FTE | 3.06% | 2.75% | 0.31% | 11.3% | | Metric | 9M 2022 | 9M 2021 | Change ($ millions) | Change (%) | | :----- | :----------- | :----------- | :------------------ | :--------- | | Net Interest Income | $63.0 million | $52.9 million | $10.1 million | 19.1% | | Net Interest Margin FTE | 2.76% | 2.63% | 0.13% | 4.9% | - The increase in net interest income and margin was driven by a higher interest rate environment and an improved asset mix, with the FOMC raising the target federal funds rate multiple times in 2022[111](index=111&type=chunk)[113](index=113&type=chunk) - The company's balance sheet is asset sensitive, and an increasing interest rate environment is expected to positively impact net interest income and net interest margin FTE in Q4 2022[114](index=114&type=chunk)[234](index=234&type=chunk) [Provision for Loan Losses](index=41&type=section&id=Provision%20for%20Loan%20Losses%20(Results%20of%20Operations)) This section discusses the provision for loan losses, reflecting management's assessment of credit risk | Metric (in thousands) | Q3 2022 | Q2 2022 | Change ($ thousands) | Change (%) | | :-------------------- | :------ | :------ | :------------------- | :--------- | | Provision for loan losses | $600 | $250 | $350 | 140.0% | | Metric (in thousands) | 9M 2022 | 9M 2021 | Change ($ thousands) | Change (%) | | :-------------------- | :------ | :------ | :------------------- | :--------- | | Provision for loan losses | $1,000 | $1,750 | $(750) | (42.9)% | - The increase in Q3 2022 provision was due to potential economic challenges from inflation, changing monetary policy, and loan growth[129](index=129&type=chunk) - The decrease in 9M 2022 provision compared to 9M 2021 was because the prior year's provision was influenced by anticipated adverse effects of the COVID-19 pandemic[131](index=131&type=chunk) [Noninterest Income](index=42&type=section&id=Noninterest%20Income%20(Results%20of%20Operations)) This section analyzes the various sources of noninterest income, including service charges and mortgage loan income | Noninterest Income (in thousands) | Q3 2022 | Q2 2022 | Change ($ thousands) | Change (%) | | :-------------------------------- | :------ | :------ | :------------------- | :--------- | | Total Noninterest Income | $4,867 | $4,860 | $7 | 0.1% | | Mortgage loan income | $624 | $892 | $(268) | (30.0)% | | Debit card income, net | $934 | $1,056 | $(122) | (11.6)% | | SBIC income | $231 | $151 | $80 | 53.0% | | Noninterest Income (in thousands) | 9M 2022 | 9M 2021 | Change ($ thousands) | Change (%) | | :-------------------------------- | :------ | :------ | :------------------- | :--------- | | Total Noninterest Income | $14,128 | $18,821 | $(4,693) | (24.9)% | | Mortgage loan income | $2,643 | $7,009 | $(4,366) | (62.3)% | | Debit card income, net | $2,926 | $3,344 | $(418) | (12.5)% | | Service charges on deposit accounts | $4,205 | $3,457 | $748 | 21.6% | - The significant decrease in mortgage loan income for both periods was driven by rising mortgage interest rates and reduced purchase activity[137](index=137&type=chunk)[139](index=139&type=chunk) - Service charges on deposit accounts increased due to a larger number of non-sufficient fund transactions[143](index=143&type=chunk) [Operating Expenses](index=43&type=section&id=Operating%20Expenses%20(Results%20of%20Operations)) This section examines the trends and drivers of the company's operating expenses, including personnel and occupancy costs | Operating Expenses (in thousands) | Q3 2022 | Q2 2022 | Change ($ thousands) | Change (%) | | :-------------------------------- | :------ | :------ | :------------------- | :--------- | | Total Operating Expenses | $15,041 | $14,471 | $570 | 3.9% | | Personnel expenses | $8,853 | $8,574 | $279 | 3.3% | | Other business development expenses | $436 | $340 | $96 | 28.2% | | Operating Expenses (in thousands) | 9M 2022 | 9M 2021 | Change ($ thousands) | Change (%) | | :-------------------------------- | :------ | :------ | :------------------- | :--------- | | Total Operating Expenses | $43,573 | $40,239 | $3,334 | 8.3% | | Personnel expenses | $25,879 | $24,087 | $1,792 | 7.4% | | Occupancy and equipment expenses | $4,496 | $4,019 | $477 | 11.9% | | Other taxes | $1,933 | $1,584 | $349 | 22.0% | - Personnel expenses increased due to higher headcount, including new staff in expansion markets[147](index=147&type=chunk)[151](index=151&type=chunk) - Occupancy and equipment expenses rose due to the opening of new locations in expansion markets[149](index=149&type=chunk)[152](index=152&type=chunk) [Income Tax Expense](index=45&type=section&id=Income%20Tax%20Expense%20(Results%20of%20Operations)) This section analyzes the company's income tax expense and effective tax rates for the reporting periods | Metric (in thousands) | Q3 2022 | Q2 2022 | Change ($ thousands) | Change (%) | | :-------------------- | :------ | :------ | :------------------- | :--------- | | Income tax expense | $2,128 | $2,141 | $(13) | (0.6)% | | Effective income tax rate | 17.3% | 19.0% | (1.7)% | (8.9)% | | Metric (in thousands) | 9M 2022 | 9M 2021 | Change ($ thousands) | Change (%) | | :-------------------- | :------ | :------ | :------------------- | :--------- | | Income tax expense | $5,795 | $5,337 | $458 | 8.6% | | Effective income tax rate | 17.8% | 17.9% | (0.1)% | (0.6)% | - The increase in income tax expense for the nine months ended September 30, 2022, was primarily due to the increase in pre-tax income[160](index=160&type=chunk) [Financial Condition](index=46&type=section&id=FINANCIAL%20CONDITION) This section provides an in-depth review of the company's balance sheet, including assets, liabilities, and equity [General](index=46&type=section&id=General%20(Financial%20Condition)) This section provides an overview of the company's overall financial position and key balance sheet changes | Metric (in thousands) | Sep 30, 2022 | Dec 31, 2021 | Change ($ thousands) | Change (%) | | :-------------------- | :----------- | :----------- | :------------------- | :--------- | | Total Assets | $3,059,678 | $3,224,710 | $(165,032) | (5.1)% | | Total Deposits | $2,796,494 | $2,910,348 | $(113,854) | (3.9)% | | Loans Held for Investment | $1,879,669 | $1,683,832 | $195,837 | 11.6% | | Total Stockholders' Equity | $243,413 | $298,150 | $(54,737) | (18.4)% | - The decrease in total assets was primarily due to a decrease in deposits, while loans held for investment increased significantly[161](index=161&type=chunk) [Interest-bearing Deposits in Other Banks](index=46&type=section&id=Interest-bearing%20Deposits%20in%20Other%20Banks) This section details the changes in interest-bearing deposits held with other financial institutions | Metric (in thousands) | Sep 30, 2022 | Dec 31, 2021 | Change ($ thousands) | Change (%) | | :-------------------- | :----------- | :----------- | :------------------- | :--------- | | Interest-bearing deposits in other banks | $261,608 | $761,721 | $(500,113) | (65.7)% | - The decrease was a result of deploying excess liquidity into loans and the securities portfolio during the first nine months of 2022[162](index=162&type=chunk) [Securities](index=46&type=section&id=Securities%20(Financial%20Condition)) This section analyzes the company's securities portfolio, including available-for-sale and held-to-maturity categories | Metric (in thousands) | Sep 30, 2022 | Dec 31, 2021 | Change ($ thousands) | Change (%) | | :-------------------- | :----------- | :----------- | :------------------- | :--------- | | Total Debt Securities | $764,485 | $659,178 | $105,307 | 16.0% | | Securities AFS (Fair Value) | $609,748 | $659,178 | $(49,430) | (7.5)% | | Securities HTM (Amortized Cost) | $154,736 | $— | $154,736 | — | | Net Unrealized Loss on Securities AFS | $(89,593) | $(4,838) | $(84,755) | 1751.9% | - The net unrealized loss on securities AFS increased significantly by **$84.8 million**, primarily due to a substantial increase in market interest rates[165](index=165&type=chunk)[172](index=172&type=chunk) - The average life of the securities portfolio increased from **4.9 years** to **6.9 years**, and the effective duration increased from **4.1 years** to **5.0 years**, reflecting the impact of rising market rates[171](index=171&type=chunk) [Loan Portfolio](index=49&type=section&id=Loan%20Portfolio) This section provides a detailed breakdown of the company's loan portfolio by category and industry concentration | Loan Category (in thousands) | Sep 30, 2022 | Dec 31, 2021 | Change ($ thousands) | Change (%) | | :--------------------------- | :----------- | :----------- | :------------------- | :--------- | | Total Loans Held for Investment | $1,879,669 | $1,683,832 | $195,837 | 11.6% | | Non-PPP Loans HFI (non-GAAP) | $1,878,319 | $1,666,282 | $212,037 | 12.7% | | Commercial real estate | $787,464 | $670,293 | $117,171 | 17.5% | | One-to-four family residential | $532,034 | $474,420 | $57,614 | 12.1% | | Construction and development | $140,398 | $106,339 | $34,059 | 32.0% | - Non-PPP loans HFI increased by **$212.0 million**, or **12.7%**, driven by new customer activity in expansion markets and increased loan activity across Louisiana[182](index=182&type=chunk) - Health care loans represent the largest industry concentration at **$145.7 million**, or **7.8%** of non-PPP loans HFI, as of September 30, 2022[184](index=184&type=chunk) - As of September 30, 2022, **2.1%** of non-PPP loans HFI were LIBOR-based, with alternative rate language in each credit agreement for transition[187](index=187&type=chunk) [Nonperforming Assets](index=50&type=section&id=Nonperforming%20Assets) This section details the company's nonperforming assets, including nonaccrual loans and their impact on asset quality | Metric (in thousands) | Sep 30, 2022 | Dec 31, 2021 | Change ($ thousands) | Change (%) | | :-------------------- | :----------- | :----------- | :------------------- | :--------- | | Total Nonperforming Assets | $2,715 | $979 | $1,736 | 177.3% | | Nonperforming Loans to Loans HFI | 0.14% | 0.02% | 0.12% | 600.0% | | NPAs to Total Assets | 0.09% | 0.03% | 0.06% | 200.0% | - The increase in NPAs was primarily due to additional loans placed on nonaccrual status in Q3 2022[190](index=190&type=chunk) - Loans classified as 'Pass' decreased from **99.5%** of loans HFI at December 31, 2021, to **98.6%** at September 30, 2022[196](index=196&type=chunk) [Allowance for Loan Losses](index=52&type=section&id=Allowance%20for%20Loan%20Losses%20(Financial%20Condition)) This section discusses the allowance for loan losses, its adequacy, and the impact of net charge-offs | Metric (in thousands) | Sep 30, 2022 | Dec 31, 2021 | Change ($ thousands) | Change (%) | | :-------------------- | :----------- | :----------- | :------------------- | :--------- | | Allowance for Loan Losses | $19,953 | $19,176 | $777 | 4.1% | | ALL to Loans HFI | 1.06% | 1.14% | (0.08)% | (7.0)% | | Net Charge-offs (9M) | $223 | $533 | $(310) | (58.2)% | - The allowance for loan losses increased by **$777 thousand** for the nine months ended September 30, 2022, mainly due to a **$1.0 million** provision for loan losses, partially offset by **$223 thousand** of net charge-offs[199](index=199&type=chunk) - The adoption of the CECL model on January 1, 2023, is expected to result in a **1.0% to 5.0% increase** in the allowance for credit losses[198](index=198&type=chunk) [Deposits](index=53&type=section&id=Deposits%20(Financial%20Condition)) This section analyzes the company's deposit base, including interest-bearing and noninterest-bearing categories | Deposit Type (in thousands) | Sep 30, 2022 | Dec 31, 2021 | Change ($ thousands) | Change (%) | | :-------------------------- | :----------- | :----------- | :------------------- | :--------- | | Total Deposits | $2,796,494 | $2,910,348 | $(113,854) | (3.9)% | | Noninterest-bearing deposits | $1,172,157 | $1,149,672 | $22,485 | 2.0% | | Interest-bearing deposits | $1,624,337 | $1,760,676 | $(136,339) | (7.7)% | | Noninterest-bearing deposits to total deposits | 41.92% | 39.50% | 2.42% | 6.1% | - The decrease in total deposits was primarily due to customer activity and response to the changing interest rate environment[204](index=204&type=chunk) - Uninsured deposits were approximately **$1.05 billion** as of September 30, 2022, down from **$1.22 billion** at December 31, 2021[205](index=205&type=chunk) [Borrowings](index=54&type=section&id=Borrowings) This section reports on the company's outstanding borrowings and available credit facilities - The company had no outstanding borrowings as of September 30, 2022, or December 31, 2021[207](index=207&type=chunk) [Equity and Regulatory Capital Requirements](index=54&type=section&id=Equity%20and%20Regulatory%20Capital%20Requirements%20(Financial%20Condition)) This section details changes in stockholders' equity and compliance with regulatory capital requirements | Metric (in thousands) | Sep 30, 2022 | Dec 31, 2021 | Change ($ thousands) | Change (%) | | :-------------------- | :----------- | :----------- | :------------------- | :--------- | | Total Stockholders' Equity | $243,413 | $298,150 | $(54,737) | (18.4)% | - The decrease in stockholders' equity was primarily attributed to an **$80.0 million** (net of tax) market adjustment to Accumulated Other Comprehensive Income (AOCI) related to securities[208](index=208&type=chunk) - The company expects to lose certain benefits under the Economic Growth Act's Policy Statement in 2023 due to its assets exceeding **$3.0 billion**[213](index=213&type=chunk) [Liquidity and Asset-Liability Management](index=55&type=section&id=LIQUIDITY%20AND%20ASSET-LIABILITY%20MANAGEMENT) This section discusses the company's liquidity position, funding sources, and management of interest rate risk [Liquidity](index=55&type=section&id=Liquidity) This section outlines the company's sources and uses of liquidity to meet its financial obligations - Liquidity needs are primarily met by core deposits, security and loan maturities, and cash flows from amortizing portfolios[215](index=215&type=chunk) - Total borrowing availability from the FHLB was **$874.0 million** as of September 30, 2022, with a net borrowing capacity of **$859.0 million**[219](index=219&type=chunk) - The company maintains federal funds lines of credit totaling **$95.0 million** and an additional **$6.0 million** revolving line of credit, with no outstanding balances from these sources[220](index=220&type=chunk) [Commitments to Extend Credit](index=56&type=section&id=Commitments%20to%20Extend%20Credit%20(Liquidity)) This section details the company's unfunded loan commitments and standby letters of credit | Commitment Type (in thousands) | Sep 30, 2022 | Dec 31, 2021 | Change ($ thousands) | Change (%) | | :----------------------------- | :----------- | :----------- | :------------------- | :--------- | | Unfunded loan commitments | $384,600 | $357,900 | $26,700 | 7.5% | | Standby letters of credit | $14,500 | $12,500 | $2,000 | 16.0% | - The total outstanding commitments may not reflect actual future cash funding requirements as many are expected to expire unused[223](index=223&type=chunk) [Investment Commitments](index=57&type=section&id=Investment%20Commitments) This section outlines the company's outstanding commitments to various investment partnerships - The company has outstanding commitments of **$226 thousand** and **$4.3 million** to two SBIC limited partnerships[224](index=224&type=chunk)[225](index=225&type=chunk) - An additional outstanding commitment of **$727 thousand** exists for a bank technology limited partnership[225](index=225&type=chunk) [Interest Rate Sensitivity and Market Risk](index=57&type=section&id=Interest%20Rate%20Sensitivity%20and%20Market%20Risk) This section assesses the company's exposure to interest rate fluctuations and its impact on net interest income and equity - The balance sheet is asset sensitive, meaning assets have the opportunity to reprice faster than liabilities in a rising interest rate environment[234](index=234&type=chunk) | Change in Interest Rates (Bps) | % Change in Net Interest Income (Sep 30, 2022) | % Change in Fair Value of Equity (Sep 30, 2022) | | :----------------------------- | :--------------------------------------------- | :---------------------------------------------- | | +300 | 10.7% | (1.6)% | | +200 | 7.1% | (0.7)% | | +100 | 3.7% | 0.2% | | -100 | (4.9)% | (1.9)% | | -200 | (9.9)% | (6.1)% | - Policy thresholds for net interest income decline are **<10.0%** for a 100 bp shift and **<15.0%** for a 200 bp shift, and for fair value of equity decline are **<20.0%** for a 100 bp shift and **<25.0%** for a 200 bp shift[232](index=232&type=chunk) [Non-GAAP Financial Measures](index=58&type=section&id=NON-GAAP%20FINANCIAL%20MEASURES) This section presents non-GAAP financial measures used by management to evaluate performance, providing additional insights [Tangible Assets, Tangible Equity, Tangible Book Value, and Realized Book Value](index=58&type=section&id=Tangible%20Assets,%20Tangible%20Equity,%20Tangible%20Book%20Value,%20and%20Realized%20Book%20Value) This section defines and presents non-GAAP metrics like tangible book value, excluding intangible assets and AOCI - The company uses non-GAAP measures like **tangible book value per share**, **tangible common equity to tangible assets**, and **realized book value per share** to evaluate operating performance, excluding the impact of intangible assets and AOCI[240](index=240&type=chunk)[241](index=241&type=chunk)[243](index=243&type=chunk) | Metric | Sep 30, 2022 | Jun 30, 2022 | Sep 30, 2021 | | :----- | :----------- | :----------- | :----------- | | Book value per share | $33.88 | $35.34 | $41.05 | | Tangible book value per share (non-GAAP) | $33.67 | $35.12 | $40.84 | | Realized book value per share (non-GAAP) | $45.54 | $44.23 | $41.06 | | Tangible common equity to tangible assets (non-GAAP) | 7.91% | 8.08% | 9.84% | [PPP-Adjusted Metrics](index=59&type=section&id=PPP-Adjusted%20Metrics) This section provides financial metrics adjusted for the impact of Paycheck Protection Program (PPP) loans - PPP-adjusted metrics are used to provide a more accurate portrayal of financial condition and performance, given the unique characteristics of PPP loans[247](index=247&type=chunk) | Metric (in thousands) | Sep 30, 2022 | Dec 31, 2021 | Sep 30, 2021 | | :-------------------- | :----------- | :----------- | :----------- | | Loans HFI | $1,879,669 | $1,683,832 | $1,622,593 | | PPP loans, net | $(1,350) | $(17,550) | $(45,962) | | Non-PPP loans HFI (non-GAAP) | $1,878,319 | $1,666,282 | $1,576,631 | | Allowance for loan losses to non-PPP loans HFI (non-GAAP) | 1.06% | 1.15% | 1.22% | - As of September 30, 2022, PPP loans totaled **$1.4 million**, representing **0.1%** of loans HFI, with **$259.5 million** in SBA forgiveness and borrower payments received[246](index=246&type=chunk) [Critical Accounting Estimates](index=60&type=section&id=CRITICAL%20ACCOUNTING%20ESTIMATES) This section confirms no material changes in the methodologies for critical accounting estimates - There were no material changes or developments in the methodologies used for critical accounting estimates during the reporting period[249](index=249&type=chunk) [Recent Accounting Pronouncements](index=60&type=section&id=RECENT%20ACCOUNTING%20PRONOUNCEMENTS) This section refers to Note 1 for details on recently adopted and upcoming accounting standards - Refer to Note 1 of the Unaudited Consolidated Financial Statements for information on recent accounting pronouncements[251](index=251&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=60&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section incorporates market risk disclosures by reference from the Annual Report on Form 10-K and additional details from Item 2 - Information on market risk is incorporated by reference from the Annual Report on Form 10-K and additional details in Item 2 of this report[251](index=251&type=chunk) [Item 4. Controls and Procedures](index=60&type=section&id=Item%204.%20Controls%20and%20Procedures) This section confirms the effectiveness of disclosure controls and procedures and reports no material changes in internal control - The company's disclosure controls and procedures were effective as of September 30, 2022[252](index=252&type=chunk) - There were no material changes in the company's internal control over financial reporting during the third quarter of 2022[253](index=253&type=chunk) [PART II. Other Information](index=61&type=section&id=PART%20II.%20Other%20Information) This part contains additional information not covered in the financial statements, including legal proceedings and risk factors [Item 1. Legal Proceedings](index=61&type=section&id=Item%201.%20Legal%20Proceedings) This section addresses the company's involvement in legal matters and their expected financial impact - No material adverse effect is expected from current legal proceedings[254](index=254&type=chunk) - Legal matters are costly and can divert management's attention, potentially affecting reputation[254](index=254&type=chunk) [Item 1A. Risk Factors](index=61&type=section&id=Item%201A.%20Risk%20Factors) This section refers to the comprehensive list of risk factors detailed in the company's latest Annual Report on Form 10-K - No material changes to the risk factors disclosed in the Annual Report on Form 10-K for December 31, 2021[255](index=255&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=61&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section reports on common stock repurchases and the status of the company's stock repurchase programs - No common stock repurchases were made during the third quarter of 2022[256](index=256&type=chunk) - As of September 30, 2022, **$4.8 million** was available for repurchasing common stock under the current program[256](index=256&type=chunk) - A new stock repurchase program authorizing **$5.0 million** of common stock purchases was approved for January 1, 2023, through December 31, 2023[256](index=256&type=chunk) [Item 3. Defaults Upon Senior Securities](index=61&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This section confirms that the company reported no defaults on its senior securities during the period - No defaults upon senior securities were reported[257](index=257&type=chunk) [Item 4. Mine Safety Disclosures](index=61&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company's operations - Mine Safety Disclosures are not applicable to the registrant[258](index=258&type=chunk) [Item 5. Other Information](index=61&type=section&id=Item%205.%20Other%20Information) This section indicates that no other material information was required to be reported - No other information was reported[259](index=259&type=chunk) [Item 6. Exhibits](index=62&type=section&id=Item%206.%20Exhibits) This section lists all documents filed as exhibits to the Form 10-Q, including corporate governance and certifications - Key exhibits include Restated Articles of Incorporation, Amended and Restated Bylaws, Supplemental Executive Retirement Benefits Agreement, and certifications from Principal Executive and Financial Officers[263](index=263&type=chunk) - The financial information for the quarter ended September 30, 2022, is formatted in Inline Extensible Business Reporting Language (XBRL) as **Exhibit 101**[263](index=263&type=chunk) [Signatures](index=63&type=section&id=Signatures) This section confirms the official signing of the report by the company's President, CEO, and CFO - The report was signed by **R. Blake Chatelain**, President and Chief Executive Officer[267](index=267&type=chunk) - The report was signed by **Isabel V. Carriere**, Executive Vice President and Chief Financial Officer[267](index=267&type=chunk)

[Glossary of Terms](index=3&type=section&id=Glossary%20of%20Terms) This section defines abbreviations and acronyms used throughout the filing, including financial and regulatory terms - The glossary defines abbreviations and acronyms used throughout the filing, including financial terms (AFS, AOCI, CECL, EPS), regulatory bodies (FDIC, Federal Reserve, SEC), and legislative acts (CARES Act, Economic Aid Act, Economic Growth Act)[8](index=8&type=chunk)[9](index=9&type=chunk)[10](index=10&type=chunk)[11](index=11&type=chunk) [Cautionary Note Regarding Forward-Looking Statements](index=5&type=section&id=Cautionary%20Note%20Regarding%20Forward-Looking%20Statements) This section outlines forward-looking statements and associated risks that may cause actual results to differ materially - The report contains forward-looking statements based on current expectations, estimates, and projections, which are subject to inherent uncertainties and risks that could cause actual results to differ materially[13](index=13&type=chunk) - Key risk factors include general business and economic conditions, the impact of COVID-19, government and regulatory actions, increased competition, interest rate volatility, loan portfolio performance, cybersecurity threats, asset quality deterioration, natural disasters, and compliance with regulatory frameworks[14](index=14&type=chunk) [PART I. Financial Information](index=7&type=section&id=PART%20I%20Financial%20Information) [Item 1. Financial Statements (Unaudited)](index=7&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) This section presents the unaudited consolidated financial statements for Red River Bancshares, Inc., including balance sheets, income statements, comprehensive income statements, statements of changes in stockholders' equity, and cash flow statements, along with detailed notes explaining significant accounting policies, securities, loans, deposits, fair value measurements, and regulatory capital requirements [Consolidated Balance Sheets](index=7&type=section&id=Consolidated%20Balance%20Sheets) This section presents the company's financial position, detailing assets, liabilities, and equity at specific points in time Consolidated Balance Sheet Highlights (in thousands) | Item | June 30, 2022 | December 31, 2021 | | :-------------------------------- | :------------ | :---------------- | | Total Assets | $3,121,113 | $3,224,710 | | Total Cash and Cash Equivalents | $356,400 | $784,864 | | Securities available-for-sale | $651,125 | $659,178 | | Securities held-to-maturity | $159,562 | — | | Loans held for investment | $1,841,585 | $1,683,832 | | Allowance for loan losses | $(19,395) | $(19,176) | | Total Deposits | $2,850,195 | $2,910,348 | | Total Liabilities | $2,867,517 | $2,926,560 | | Total Stockholders' Equity | $253,596 | $298,150 | - Total assets decreased by **$103.6 million (3.2%)** from December 31, 2021, to June 30, 2022, primarily due to a decrease in cash and cash equivalents and deposits[17](index=17&type=chunk) - Loans held for investment increased by **$157.8 million (9.4%)** from December 31, 2021, to June 30, 2022[17](index=17&type=chunk) [Consolidated Statements of Income](index=8&type=section&id=Consolidated%20Statements%20of%20Income) This section reports the company's financial performance over periods, detailing revenues, expenses, and net income Consolidated Statements of Income Highlights (in thousands, except per share data) | Item | Three Months Ended June 30, 2022 | Three Months Ended June 30, 2021 | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | | :----------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Total Interest and Dividend Income | $22,498 | $18,644 | $42,507 | $37,822 | | Total Interest Expense | $1,349 | $1,397 | $2,630 | $2,984 | | Net Interest Income | $21,149 | $17,247 | $39,877 | $34,838 | | Provision for loan losses | $250 | $150 | $400 | $1,600 | | Total Noninterest Income | $4,860 | $6,403 | $9,262 | $13,178 | | Total Operating Expenses | $14,471 | $13,392 | $28,533 | $26,555 | | Net Income | $9,147 | $8,239 | $16,539 | $16,304 | | Basic EPS | $1.27 | $1.13 | $2.30 | $2.23 | | Diluted EPS | $1.27 | $1.13 | $2.30 | $2.22 | - Net income for Q2 2022 increased by **$908,000 (11.0%)** YoY to **$9.1 million**, and for the six months ended June 30, 2022, it increased by **$235,000 (1.4%)** to **$16.5 million**[19](index=19&type=chunk) - Net interest income for Q2 2022 increased by **$3.9 million (22.6%)** YoY to **$21.1 million**, and for the six months ended June 30, 2022, it increased by **$5.0 million (14.5%)** to **$39.9 million**[19](index=19&type=chunk) [Consolidated Statements of Comprehensive Income](index=9&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income) This section presents net income and other comprehensive income items, reflecting total changes in equity from non-owner sources Consolidated Statements of Comprehensive Income Highlights (in thousands) | Item | Three Months Ended June 30, 2022 | Three Months Ended June 30, 2021 | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | | :------------------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net income | $9,147 | $8,239 | $16,539 | $16,304 | | Unrealized net gain (loss) on securities (net of tax) | $(20,779) | $1,415 | $(60,878) | $(5,711) | | Comprehensive Income (Loss) | $(10,838) | $9,628 | $(43,492) | $10,441 | - Comprehensive income experienced a significant decline, primarily due to large unrealized losses on securities arising during the period, reflecting market interest rate changes[21](index=21&type=chunk) [Consolidated Statements of Changes in Stockholders' Equity](index=10&type=section&id=Consolidated%20Statements%20of%20Changes%20in%20Stockholders'%20Equity) This section details changes in equity components, including net income, dividends, and other comprehensive income Consolidated Statements of Changes in Stockholders' Equity Highlights (in thousands) | Item | Balance as of December 31, 2021 | Net Income (6M 2022) | Stock Incentive Plan (6M 2022) | Cash Dividend (6M 2022) | Other Comprehensive Income (Loss) (6M 2022) | Balance as of June 30, 2022 | | :-------------------------------- | :------------------------------ | :------------------- | :----------------------------- | :------------------------ | :------------------------------------------ | :---------------------------- | | Common Stock | $60,233 | — | $35 | — | — | $60,050 | | Additional Paid-In Capital | $1,814 | — | $126 | — | — | $1,940 | | Retained Earnings | $239,876 | $16,539 | — | $(1,005) | — | $255,410 | | Accumulated Other Comprehensive Income (Loss) | $(3,773) | — | — | — | $(60,031) | $(63,804) | | Total Stockholders' Equity | $298,150 | $16,539 | $161 | $(1,005) | $(60,031) | $253,596 | - Total stockholders' equity decreased by **$44.6 million** from December 31, 2021, to June 30, 2022, primarily due to a significant increase in accumulated other comprehensive loss, driven by unrealized losses on securities[23](index=23&type=chunk) - The company repurchased **4,465 shares of common stock** for **$218,000** during the six months ended June 30, 2022[23](index=23&type=chunk) [Consolidated Statements of Cash Flows](index=11&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) This section summarizes cash inflows and outflows from operating, investing, and financing activities Consolidated Statements of Cash Flows Highlights (in thousands) | Cash Flow Activity | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | | :--------------------------------------- | :----------------------------- | :----------------------------- | | Net cash provided by (used in) operating activities | $18,195 | $35,338 | | Net cash provided by (used in) investing activities | $(385,283) | $(41,108) | | Net cash provided by (used in) financing activities | $(61,376) | $226,041 | | Net change in cash and cash equivalents | $(428,464) | $220,271 | | Cash and cash equivalents - end of period | $356,400 | $667,472 | - Net cash used in investing activities significantly increased to **$385.3 million** for the six months ended June 30, 2022, compared to **$41.1 million** in the prior year, primarily due to substantial purchases of securities AFS and an increase in loans HFI[26](index=26&type=chunk) - Net cash used in financing activities was **$61.4 million** for the six months ended June 30, 2022, a notable shift from **$226.0 million** provided in the prior year, driven by a net decrease in deposits[26](index=26&type=chunk) [Notes to Unaudited Consolidated Financial Statements](index=13&type=section&id=Notes%20to%20Unaudited%20Consolidated%20Financial%20Statements) This section provides detailed explanations and disclosures supporting the unaudited consolidated financial statements [1. Summary of Significant Accounting Policies](index=13&type=section&id=1.%20Summary%20of%20Significant%20Accounting%20Policies) This section outlines the key accounting principles and methods used in preparing the financial statements - The unaudited consolidated financial statements are prepared in accordance with GAAP for interim financial information, with all necessary adjustments included[31](index=31&type=chunk) - ASU No. 2021-05 (Leases) was adopted on January 1, 2022, with no material impact[34](index=34&type=chunk) - ASU No. 2016-13 (CECL model) is effective January 1, 2023, and is expected to result in a **1.0% to 5.0% increase** in the allowance for credit losses and unfunded commitments[35](index=35&type=chunk) [2. Securities](index=14&type=section&id=2.%20Securities) This section details the company's investment securities portfolio, including available-for-sale and held-to-maturity classifications - Total securities were **$810.7 million** as of June 30, 2022. The net unrealized loss on securities AFS increased by **$59.0 million** for the six months ended June 30, 2022, resulting in a net unrealized loss of **$63.7 million**[38](index=38&type=chunk)[39](index=39&type=chunk) - During Q2 2022, the Company reclassified **$166.3 million (20.5% of the portfolio)** from AFS to HTM at fair value, with the net unrealized loss of **$17.9 million** amortized over the remaining life[40](index=40&type=chunk) Securities AFS and HTM (in thousands) | Category | June 30, 2022 Fair Value | December 31, 2021 Fair Value | | :------------------------ | :----------------------- | :-------------------------- | | Securities AFS | $651,125 | $659,178 | | Securities HTM | $148,062 | — | | Equity securities | — | $7,846 | - Equity securities, primarily a CRA mutual fund, were liquidated in April 2022, recognizing a loss of **$447,000** for the six months ended June 30, 2022[48](index=48&type=chunk) [3. Loans and Asset Quality](index=17&type=section&id=3.%20Loans%20and%20Asset%20Quality) This section provides an overview of the loan portfolio, asset quality, and the allowance for loan losses Loans Held for Investment (in thousands) | Loan Category | June 30, 2022 | December 31, 2021 | | :-------------------------- | :------------ | :---------------- | | Commercial real estate | $765,131 | $670,293 | | One-to-four family residential | $510,741 | $474,420 | | Construction and development | $138,965 | $106,339 | | Commercial and industrial | $320,169 | $311,373 | | SBA PPP, net | $1,349 | $17,550 | | Total loans HFI | $1,841,585 | $1,683,832 | - Total loans HFI increased by **$157.8 million (9.4%)** from December 31, 2021, to June 30, 2022, with significant growth in commercial real estate and one-to-four family residential loans[50](index=50&type=chunk) Allowance for Loan Losses (in thousands) | Item | December 31, 2021 | Provision (6M 2022) | Charge-offs (6M 2022) | Recoveries (6M 2022) | June 30, 2022 | | :-------------------------- | :---------------- | :------------------ | :-------------------- | :------------------- | :------------ | | Total allowance for loan losses | $19,176 | $400 | $(277) | $96 | $19,395 | - Nonaccrual loans decreased from **$280,000** at December 31, 2021, to **$248,000** at June 30, 2022. Total impaired loans decreased from **$6.1 million** to **$4.7 million** over the same period[53](index=53&type=chunk)[55](index=55&type=chunk) - Unfunded loan commitments increased to **$372.3 million** as of June 30, 2022, from **$357.9 million** at December 31, 2021[64](index=64&type=chunk) [4. Deposits](index=25&type=section&id=4.%20Deposits) This section details the composition and changes in the company's deposit base by type and customer Deposits by Type (in thousands) | Deposit Type | June 30, 2022 | December 31, 2021 | | :-------------------------- | :------------ | :---------------- | | Noninterest-bearing deposits | $1,181,781 | $1,149,672 | | Interest-bearing deposits | $1,668,414 | $1,760,676 | | Total Deposits | $2,850,195 | $2,910,348 | - Total deposits decreased by **$60.2 million (2.1%)** from December 31, 2021, to June 30, 2022, primarily due to expected customer deposit account activity[67](index=67&type=chunk) - Noninterest-bearing deposits increased by **$32.1 million (2.8%)**, and their proportion of total deposits rose to **41.46%** from **39.50%**[67](index=67&type=chunk) [5. Contingencies](index=25&type=section&id=5.%20Contingencies) This section discusses potential future obligations arising from legal matters and other business activities - The Company and the Bank are involved in various legal matters in the ordinary course of business, but management does not expect their resolution to have a material adverse effect on financial condition or results of operations[68](index=68&type=chunk) [6. Fair Value](index=25&type=section&id=6.%20Fair%20Value) This section explains the methodologies and hierarchy used for fair value measurements of assets and liabilities - Fair value measurements are categorized into a three-level hierarchy based on the observability of inputs: Level 1 (quoted prices in active markets), Level 2 (observable market data for similar assets/liabilities), and Level 3 (unobservable data)[71](index=71&type=chunk)[73](index=73&type=chunk) Fair Value of Assets Measured on a Recurring Basis (in thousands) | Asset Category | June 30, 2022 Fair Value | Level 2 (June 30, 2022) | December 31, 2021 Fair Value | Level 2 (December 31, 2021) | | :------------------------ | :----------------------- | :---------------------- | :-------------------------- | :-------------------------- | | Loans HFS | $4,524 | $4,524 | $4,290 | $4,290 | | Securities AFS | $651,125 | $651,125 | $659,178 | $659,178 | | Equity securities | — | — | $7,846 | — | - Impaired loans and foreclosed assets are measured at fair value on a nonrecurring basis, primarily using Level 3 inputs based on discounted appraisals and collateral discounts[77](index=77&type=chunk)[80](index=80&type=chunk)[82](index=82&type=chunk) [7. Regulatory Capital Requirements](index=28&type=section&id=7.%20Regulatory%20Capital%20Requirements) This section outlines the company's compliance with regulatory capital standards and its capital adequacy ratios Red River Bank Capital Ratios (June 30, 2022, in thousands) | Capital Ratio | Actual Amount | Actual Ratio | Minimum Ratio | Minimum Plus CCB Ratio | | :-------------------------- | :------------ | :----------- | :------------ | :--------------------- | | Total Risk-Based Capital | $322,847 | 16.27% | 8.00% | 10.50% | | Tier I Risk-Based Capital | $303,452 | 15.29% | 6.00% | 8.50% | | Common Equity Tier I Capital | $303,452 | 15.29% | 4.50% | 7.00% | | Tier I Leverage Capital | $303,452 | 9.35% | 4.00% | 4.00% | - Red River Bank met all Basel III capital adequacy requirements as of June 30, 2022, and was categorized as **'well capitalized'** by the FDIC[86](index=86&type=chunk) - Red River Bancshares, Inc. exceeded **$3.0 billion** in assets as of June 30, 2022, and therefore expects to no longer receive the benefits of the Small Bank Holding Company Policy Statement starting in 2023[88](index=88&type=chunk) - The Company and the Bank qualify for the CBLR framework but do not intend to utilize it[90](index=90&type=chunk) [8. Earnings Per Common Share](index=30&type=section&id=8.%20Earnings%20Per%20Common%20Share) This section presents the basic and diluted earnings per share calculations for the reporting periods Earnings Per Common Share (6M 2022 vs. 6M 2021) | EPS Type | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | | :------------------------ | :----------------------------- | :----------------------------- | | Basic EPS | $2.30 | $2.23 | | Diluted EPS | $2.30 | $2.22 | - Basic and diluted EPS increased slightly for the six months ended June 30, 2022, compared to the prior year[92](index=92&type=chunk) [9. Equity](index=30&type=section&id=9.%20Equity) This section details changes in stockholders' equity, including stock repurchases and accumulated other comprehensive income - The Board approved a renewal of the stock repurchase program, authorizing up to **$5.0 million** in repurchases through December 31, 2022. For the six months ended June 30, 2022, **4,465 shares** were repurchased for **$218,000**, leaving **$4.8 million** available[93](index=93&type=chunk) - AOCI was impacted by the reclassification of securities from AFS to HTM in Q2 2022, with a net unamortized unrealized loss of **$13.5 million** (net of tax) remaining in AOCI as of June 30, 2022[94](index=94&type=chunk)[95](index=95&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=31&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the Company's financial condition as of June 30, 2022, compared to December 31, 2021, and results of operations for the three and six months ended June 30, 2022, compared to prior periods. It highlights record net income, improved net interest margin, solid loan growth, and strategic changes to the securities portfolio, while also discussing operational highlights and future outlook [Corporate Summary](index=31&type=section&id=CORPORATE%20SUMMARY) This section provides an overview of the company's business, operational strategy, and market presence - Red River Bancshares, Inc. is a bank holding company for Red River Bank, a Louisiana state-chartered bank established in 1999, operating **28 banking centers** and one loan and deposit production office across Louisiana[99](index=99&type=chunk) - The Company's strategy focuses on expanding market share in existing markets, opportunistic de novo expansion, and strategic acquisitions, driven by relationship-oriented commercial banking[100](index=100&type=chunk) [Second Quarter 2022 Financial and Operational Highlights](index=31&type=section&id=SECOND%20QUARTER%202022%20FINANCIAL%20AND%20OPERATIONAL%20HIGHLIGHTS) This section summarizes key financial and operational achievements and trends for the second quarter of 2022 - Net income for Q2 2022 reached a record **$9.1 million ($1.27 diluted EPS)**, a **23.7% increase** from Q1 2022, driven by a **$2.4 million** increase in net interest income[102](index=102&type=chunk) Q2 2022 Performance Ratios | Ratio | Q2 2022 | Q1 2022 | | :------------------------ | :------ | :------ | | Return on assets | 1.15% | 0.93% | | Return on equity | 14.30% | 10.27% | | Net interest margin FTE | 2.75% | 2.46% | | Efficiency ratio | 55.64% | 60.80% | - Non-PPP loans HFI increased by **$105.6 million (6.1%)** from March 31, 2022, to **$1.84 billion**, reflecting increased loan activity across all markets[102](index=102&type=chunk) - The Company continued its organic expansion, opening a full-service banking center in Lafayette and remodeling a new banking center in downtown New Orleans[105](index=105&type=chunk) [Results of Operations](index=34&type=section&id=RESULTS%20OF%20OPERATIONS) This section analyzes the company's financial performance, including net interest income, noninterest income, and expenses [Net Interest Income and Net Interest Margin](index=34&type=section&id=Net%20Interest%20Income%20and%20Net%20Interest%20Margin) This section analyzes the components of net interest income and the net interest margin, highlighting interest rate impacts - Net interest income for Q2 2022 was **$21.1 million**, up **12.9%** from Q1 2022, driven by a **$2.5 million** increase in interest and dividend income, partially offset by a **$68,000** increase in interest expense[111](index=111&type=chunk) - Net interest margin FTE increased **29 bps to 2.75%** in Q2 2022 from **2.46%** in Q1 2022, primarily due to an improved asset mix and a higher interest rate environment[112](index=112&type=chunk) - For the six months ended June 30, 2022, net interest income increased by **$5.0 million (14.5%)** YoY to **$39.9 million**, mainly due to higher non-PPP loan income, taxable securities income, and short-term liquid asset income[117](index=117&type=chunk)[118](index=118&type=chunk) - The net interest margin FTE for the six months ended June 30, 2022, decreased **three bps to 2.61%** YoY, primarily due to a **19 bp decrease** in loan yield, partially offset by higher interest rates and an improved asset mix[120](index=120&type=chunk)[121](index=121&type=chunk) [Provision for Loan Losses](index=39&type=section&id=Provision%20for%20Loan%20Losses) This section discusses the provision for loan losses, reflecting changes in asset quality and economic outlook - The provision for loan losses for Q2 2022 was **$250,000**, an increase of **$100,000** from Q1 2022, attributed to potential economic challenges and loan growth[128](index=128&type=chunk) - For the six months ended June 30, 2022, the provision decreased by **$1.2 million (75.0%)** YoY to **$400,000**, due to continued favorable asset quality metrics, contrasting with the higher provision in 2021 for anticipated COVID-19 effects[129](index=129&type=chunk)[130](index=130&type=chunk) [Noninterest Income](index=40&type=section&id=Noninterest%20Income) This section details the various sources of noninterest income and factors influencing their performance - Noninterest income increased by **$458,000 (10.4%)** to **$4.9 million** in Q2 2022 compared to Q1 2022, driven by decreased loss on equity securities, higher SBIC income, and increased debit card and brokerage income[132](index=132&type=chunk) - Mortgage loan income decreased by **$235,000 (20.9%)** in Q2 2022 due to reduced purchase and refinancing activity from higher interest rates and limited housing stock[137](index=137&type=chunk) - For the six months ended June 30, 2022, noninterest income decreased by **$3.9 million (29.7%)** YoY to **$9.3 million**, primarily due to lower mortgage loan income, a loss on equity securities, and reduced SBIC income[139](index=139&type=chunk)[140](index=140&type=chunk)[141](index=141&type=chunk) [Operating Expenses](index=41&type=section&id=Operating%20Expenses) This section analyzes the company's operating expenses, identifying key drivers of changes over the period - Operating expenses increased by **$409,000 (2.9%)** to **$14.5 million** in Q2 2022 compared to Q1 2022, mainly due to higher data processing, personnel, and loan and deposit expenses[147](index=147&type=chunk) - For the six months ended June 30, 2022, operating expenses increased by **$2.0 million (7.4%)** YoY to **$28.5 million**, primarily due to higher personnel, occupancy and equipment, and other taxes, driven by expansion and increased activity[150](index=150&type=chunk)[152](index=152&type=chunk)[153](index=153&type=chunk)[154](index=154&type=chunk) [Income Tax Expense](index=43&type=section&id=Income%20Tax%20Expense) This section reports the income tax expense and effective tax rate, reflecting pre-tax income and tax planning - Income tax expense for Q2 2022 was **$2.1 million**, up **$615,000 (40.3%)** from Q1 2022, due to increased pre-tax income. The effective tax rate for Q2 2022 was **19.0%**[160](index=160&type=chunk) - For the six months ended June 30, 2022, income tax expense increased by **$110,000 (3.1%)** YoY to **$3.7 million**, with an effective tax rate of **18.1%**[161](index=161&type=chunk) [Financial Condition](index=44&type=section&id=FINANCIAL%20CONDITION) This section provides an overview of the company's balance sheet, including assets, liabilities, and equity [General](index=44&type=section&id=General) This section provides a high-level overview of changes in the company's overall financial position and asset deployment - Total assets decreased by **$103.6 million (3.2%)** to **$3.12 billion** as of June 30, 2022, primarily due to a **$60.2 million** decrease in deposits[162](index=162&type=chunk) - The Company strategically deployed short-term liquid assets into loans and the securities portfolio, increasing loans HFI by **$157.8 million (9.4%)** and total securities by **$143.7 million (21.5%)**[162](index=162&type=chunk) [Interest-bearing Deposits in Other Banks](index=44&type=section&id=Interest-bearing%20Deposits%20in%20Other%20Banks) This section details changes in interest-bearing deposits held in other banks, reflecting liquidity management strategies - Interest-bearing deposits in other banks decreased by **$444.7 million (58.4%)** to **$317.1 million** as of June 30, 2022, as excess liquidity was deployed into loans and securities[163](index=163&type=chunk) [Securities](index=44&type=section&id=Securities) This section analyzes the company's securities portfolio, including changes in fair value and reclassifications - Total debt securities increased by **$151.5 million (23.0%)** to **$810.7 million** as of June 30, 2022[165](index=165&type=chunk) - The net unrealized loss on securities AFS increased by **$59.0 million** to **$63.7 million** as of June 30, 2022, due to a significant increase in market interest rates[166](index=166&type=chunk)[173](index=173&type=chunk) - During Q2 2022, **$166.3 million** of securities were reclassified from AFS to HTM to manage the portfolio mix[167](index=167&type=chunk) - The average life of the securities portfolio increased to **7.0 years** with an effective duration of **5.3 years** as of June 30, 2022, up from **4.9 years** and **4.1 years**, respectively, at December 31, 2021, due to rising market rates[172](index=172&type=chunk) [Loan Portfolio](index=47&type=section&id=Loan%20Portfolio) This section provides a detailed breakdown of the loan portfolio by category and market, highlighting growth trends - Loans HFI increased by **$157.8 million (9.4%)** to **$1.84 billion** as of June 30, 2022[181](index=181&type=chunk) - Non-PPP loans HFI (non-GAAP) increased by **$174.0 million (10.4%)** to **$1.84 billion**, driven by new customer activity and increased loan activity across the state[183](index=183&type=chunk) Non-PPP Loans HFI by Market of Origin (June 30, 2022) | Market | Amount (in thousands) | Percent of Non-PPP Loans HFI | | :--------------- | :-------------------- | :--------------------------- | | Central | $626,540 | 34.1% | | Capital | $493,309 | 26.8% | | Northwest | $370,307 | 20.1% | | Southwest | $132,959 | 7.2% | | Northshore | $112,192 | 6.1% | | New Orleans | $54,488 | 3.0% | | Acadiana | $50,441 | 2.7% | | Total | $1,840,236 | 100.0% | - Health care loans represent the largest industry concentration at **8.0%** of non-PPP loans HFI, with an average loan size of **$323,000**[185](index=185&type=chunk) [Nonperforming Assets](index=48&type=section&id=Nonperforming%20Assets) This section reports on the company's nonperforming loans and assets, indicating asset quality trends - NPAs totaled **$971,000** as of June 30, 2022, a slight decrease of **$8,000 (0.8%)** from December 31, 2021, maintaining a ratio of **0.03%** of total assets[191](index=191&type=chunk) Nonperforming Loans and Assets (in thousands) | Item | June 30, 2022 | December 31, 2021 | | :-------------------------- | :------------ | :---------------- | | Nonaccrual loans | $248 | $280 | | Accruing loans 90+ days past due | $63 | $39 | | Total nonperforming loans | $311 | $319 | | Foreclosed assets | $660 | $660 | | Total NPAs | $971 | $979 | [Potential Problem Loans](index=49&type=section&id=Potential%20Problem%20Loans) This section categorizes loans by credit quality, identifying potential problem loans and their classifications - As of June 30, 2022, **98.5%** of loans HFI were classified as 'pass,' with **1.2%** as 'special mention' and **0.3%** as 'substandard.' No loans were classified as 'doubtful' or 'loss'[197](index=197&type=chunk) [Allowance for Loan Losses](index=50&type=section&id=Allowance%20for%20Loan%20Losses) This section details the allowance for loan losses, its adequacy, and factors influencing its changes - The allowance for loan losses was **$19.4 million (1.05% of loans HFI)** as of June 30, 2022, an increase of **$219,000** from December 31, 2021, mainly due to a **$400,000** provision partially offset by **$181,000** of net charge-offs[200](index=200&type=chunk) - The provision for loan losses for the six months ended June 30, 2022, decreased by **$1.2 million (75.0%)** YoY, reflecting continued favorable asset quality metrics[201](index=201&type=chunk) [Deposits](index=51&type=section&id=Deposits) This section analyzes the composition and trends of the company's deposit base, including interest-bearing and noninterest-bearing accounts - Total deposits decreased by **$60.2 million (2.1%)** to **$2.85 billion** as of June 30, 2022, primarily due to expected customer activity[204](index=204&type=chunk) - Noninterest-bearing deposits increased by **$32.1 million (2.8%)** and constituted **41.5%** of total deposits, up from **39.5%** at December 31, 2021[205](index=205&type=chunk) Deposits by Customer Type (in thousands) | Customer Type | June 30, 2022 Balance | % of Total (June 30, 2022) | December 31, 2021 Balance | % of Total (December 31, 2021) | | :-------------- | :-------------------- | :------------------------- | :------------------------ | :----------------------------- | | Consumer | $1,367,169 | 48.0% | $1,400,369 | 48.1% | | Commercial | $1,305,648 | 45.8% | $1,283,992 | 44.1% | | Public | $177,378 | 6.2% | $225,987 | 7.8% | | Total deposits | $2,850,195 | 100.0% | $2,910,348 | 100.0% | [Borrowings](index=52&type=section&id=Borrowings) This section reports on the company's borrowing activities and outstanding debt obligations - The Company had no outstanding borrowings as of June 30, 2022, or December 31, 2021, utilizing deposits as its primary funding source[207](index=207&type=chunk) [Equity and Regulatory Capital Requirements](index=52&type=section&id=Equity%20and%20Regulatory%20Capital%20Requirements) This section discusses changes in stockholders' equity and compliance with regulatory capital standards - Total stockholders' equity decreased by **$44.6 million (14.9%)** to **$253.6 million** as of June 30, 2022, primarily due to a **$60.0 million** (net of tax) market adjustment to AOCI related to securities[208](index=208&type=chunk) - The Company repurchased **4,465 shares of common stock** for **$218,000** during the first six months of 2022 under its renewed stock repurchase program[211](index=211&type=chunk) - As of June 30, 2022, the Company's assets exceeded **$3.0 billion**, meaning it will no longer qualify for the Small Bank Holding Company Policy Statement benefits starting in 2023[212](index=212&type=chunk) [Liquidity and Asset-Liability Management](index=53&type=section&id=LIQUIDITY%20AND%20ASSET-LIABILITY%20MANAGEMENT) This section outlines the company's strategies for managing liquidity and interest rate risk [Liquidity](index=53&type=section&id=Liquidity) This section describes the company's liquidity sources and management strategies to meet financial obligations - Liquidity needs are primarily met by core deposits, security and loan maturities, and cash flows from amortizing portfolios. Excess deposits are invested in interest-earning deposits, federal funds sold, or securities[214](index=214&type=chunk)[216](index=216&type=chunk) - Securities AFS totaled **$651.1 million (20.9% of assets)** as of June 30, 2022, serving as an alternative liquidity source, though **$159.7 million** were pledged to secure public entity deposits[217](index=217&type=chunk) - The Company's net borrowing capacity from the FHLB was **$779.5 million** as of June 30, 2022, and it maintains **$101.0 million** in federal funds lines of credit and other lines of credit[218](index=218&type=chunk)[219](index=219&type=chunk) [Commitments to Extend Credit](index=54&type=section&id=Commitments%20to%20Extend%20Credit) This section details the company's off-balance sheet commitments, including unfunded loan commitments and letters of credit - As of June 30, 2022, unfunded loan commitments totaled **$372.3 million**, and commitments under standby letters of credit totaled **$14.3 million**[222](index=222&type=chunk) [Investment Commitments](index=54&type=section&id=Investment%20Commitments) This section outlines the company's outstanding commitments to various investment partnerships - The Company has outstanding commitments to SBIC limited partnerships totaling **$4.5 million** and a bank technology limited partnership commitment of **$727,000** as of June 30, 2022[223](index=223&type=chunk)[224](index=224&type=chunk)[225](index=225&type=chunk) [Interest Rate Sensitivity and Market Risk](index=55&type=section&id=Interest%20Rate%20Sensitivity%20and%20Market%20Risk) This section assesses the company's exposure to interest rate fluctuations and other market risks - The Company's balance sheet is asset sensitive, meaning assets reprice faster than liabilities, which is expected to positively impact net interest income in a rising interest rate environment[235](index=235&type=chunk) Simulated Change in Net Interest Income and Fair Value of Equity (12-month horizon) | Change in Interest Rates (Bps) | % Change in Net Interest Income (June 30, 2022) | % Change in Fair Value of Equity (June 30, 2022) | | :----------------------------- | :---------------------------------------------- | :--------------------------------------------- | | +300 | 12.6% | 0.0% | | +200 | 8.4% | 0.5% | | +100 | 4.4% | 1.0% | | Base | 0.0% | 0.0% | | -100 | (8.3)% | (4.3)% | | -200 | (15.8)% | (11.9)% | - As of June 30, 2022, floating rate loans were **14.4%** of loans HFI, and floating rate transaction deposits were **4.3%** of interest-bearing transaction deposits[237](index=237&type=chunk) [Non-GAAP Financial Measures](index=56&type=section&id=NON-GAAP%20FINANCIAL%20MEASURES) This section presents and reconciles non-GAAP financial measures used to evaluate the company's performance [Tangible Assets, Tangible Equity, Tangible Book Value, and Realized Book Value](index=56&type=section&id=Tangible%20Assets,%20Tangible%20Equity,%20Tangible%20Book%20Value,%20and%20Realized%20Book%20Value) This section defines and presents non-GAAP metrics like tangible book value and realized book value for financial analysis - Non-GAAP measures like tangible book value per share and tangible common equity to tangible assets are used to evaluate financial institutions by excluding intangible assets[241](index=241&type=chunk)[243](index=243&type=chunk) - Realized book value per share, a non-GAAP measure, excludes AOCI to monitor book value changes without the impact of temporary market fluctuations on securities AFS[245](index=245&type=chunk) Non-GAAP Equity and Asset Metrics (in thousands, except per share data) | Item | June 30, 2022 | March 31, 2022 | June 30, 2021 | | :--------------------------------------- | :------------ | :------------- | :------------ | | Total tangible common equity (non-GAAP) | $252,050 | $263,328 | $291,378 | | Total realized common equity (non-GAAP) | $317,400 | $308,693 | $291,866 | | Tangible book value per share (non-GAAP) | $35.12 | $36.69 | $40.00 | | Realized book value per share (non-GAAP) | $44.23 | $43.02 | $40.06 | | Total tangible assets (non-GAAP) | $3,119,567 | $3,210,914 | $2,876,930 | | Tangible common equity to tangible assets (non-GAAP) | 8.08% | 8.20% | 10.13% | [PPP-Adjusted Metrics](index=57&type=section&id=PPP-Adjusted%20Metrics) This section provides financial metrics adjusted for the impact of Paycheck Protection Program loans for clearer analysis - PPP-adjusted metrics are used to provide a more accurate portrayal of financial condition and performance by excluding PPP loans, which have unique short-term, low-interest characteristics[250](index=250&type=chunk) - As of June 30, 2022, PPP loans totaled **$1.3 million (0.1% of loans HFI)**, with **99.9%** of originated PPP loans having received SBA forgiveness or borrower payments[249](index=249&type=chunk) PPP-Adjusted Loan Metrics | Item | June 30, 2022 | December 31, 2021 | June 30, 2021 | | :--------------------------------------- | :------------ | :---------------- | :------------ | | Non-PPP loans HFI (non-GAAP) | $1,840,236 | $1,666,282 | $1,517,416 | | Allowance for loan losses to non-PPP loans HFI (non-GAAP) | 1.05% | 1.15% | 1.28% | | Nonperforming loans to non-PPP loans HFI | 0.02% | 0.02% | 0.13% | [Critical Accounting Estimates](index=58&type=section&id=CRITICAL%20ACCOUNTING%20ESTIMATES) This section discusses the significant accounting judgments and estimates that materially impact financial reporting - There were no material changes in methodologies for critical accounting estimates during the reporting period, as disclosed in the Annual Report on Form 10-K for December 31, 2021[252](index=252&type=chunk) [Recent Accounting Pronouncements](index=58&type=section&id=RECENT%20ACCOUNTING%20PRONOUNCEMENTS) This section outlines the impact of recently issued accounting standards on the company's financial statements - Refer to Note 1 of the Unaudited Consolidated Financial Statements for details on recent accounting pronouncements, including the expected impact of the CECL model effective January 1, 2023[254](index=254&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=58&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section incorporates by reference the disclosures about market risk from the Annual Report on Form 10-K for December 31, 2021, and provides additional information as of June 30, 2022, related to interest rate sensitivity and market risk - Disclosures about market risk are incorporated by reference from the Annual Report on Form 10-K, with additional updates provided in Item 2 of this report regarding interest rate sensitivity and market risk[254](index=254&type=chunk) [Item 4. Controls and Procedures](index=58&type=section&id=Item%204.%20Controls%20and%20Procedures) This section details the evaluation of the Company's disclosure controls and procedures, concluding their effectiveness as of the end of the reporting period, and confirms no material changes in internal control over financial reporting - Management, including the CEO and CFO, concluded that the Company's disclosure controls and procedures were effective as of June 30, 2022[256](index=256&type=chunk) - There were no material changes in the Company's internal control over financial reporting during the second quarter of 2022[257](index=257&type=chunk) [PART II. Other Information](index=59&type=section&id=PART%20II%20Other%20Information) [Item 1. Legal Proceedings](index=59&type=section&id=Item%201.%20Legal%20Proceedings) This section states that the Company and its subsidiaries are involved in various legal matters in the ordinary course of business, but management does not expect their resolution to have a material adverse effect on the consolidated financial statements - Management believes that current legal proceedings are not expected to have a material adverse effect on the Company's consolidated results of operations, financial condition, or cash flows[258](index=258&type=chunk) [Item 1A. Risk Factors](index=59&type=section&id=Item%201A.%20Risk%20Factors) This section refers to the risk factors disclosed in the Company's Annual Report on Form 10-K for December 31, 2021, and confirms no material changes to those factors - There have been no material changes to the risk factors disclosed in the Annual Report on Form 10-K for the year ended December 31, 2021[259](index=259&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=59&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section summarizes the Company's stock repurchase program, indicating no shares were repurchased during the second quarter of 2022, with $4.8 million remaining available under the program - No shares of common stock were repurchased under the publicly announced stock repurchase program during the second quarter of 2022[260](index=260&type=chunk) - As of June 30, 2022, approximately **$4.8 million** remained available for repurchases under the program, which authorizes purchases up to **$5.0 million** through December 31, 2022[260](index=260&type=chunk) [Item 3. Defaults Upon Senior Securities](index=59&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This section states that there were no defaults upon senior securities during the reporting period - There were no defaults upon senior securities[261](index=261&type=chunk) [Item 4. Mine Safety Disclosures](index=59&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This section indicates that mine safety disclosures are not applicable to the Company - Mine safety disclosures are not applicable to the Company[262](index=262&type=chunk) [Item 5. Other Information](index=59&type=section&id=Item%205.%20Other%20Information) This section states that there is no other information to report - No other information is reported[263](index=263&type=chunk) [Item 6. Exhibits](index=60&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including articles of incorporation, bylaws, executive agreements, certifications, and XBRL financial information - The report includes various exhibits such as Restated Articles of Incorporation, Amended and Restated Bylaws, Supplemental Executive Retirement Benefits Agreement, and certifications from principal executive and financial officers[264](index=264&type=chunk) - Financial information for the quarter ended June 30, 2022, is formatted in Inline Extensible Business Reporting Language (XBRL) as Exhibit 101[264](index=264&type=chunk)

Glossary of Terms This section defines key abbreviations and acronyms used throughout the filing, including financial and regulatory terms - The section defines key abbreviations and acronyms used throughout the filing, including financial terms like **AFS (Available-for-sale)**, **AOCI (Accumulated other comprehensive income or loss)**, **CECL (Current Expected Credit Losses)**, and regulatory terms such as **Basel III** and **PPP (Paycheck Protection Program)**[8](index=8&type=chunk)[9](index=9&type=chunk)[10](index=10&type=chunk) Cautionary Note Regarding Forward-Looking Statements This section advises readers that the report contains forward-looking statements subject to risks and uncertainties that could cause actual results to differ materially - This section advises readers that the report contains forward-looking statements, which are not historical facts and are subject to risks, assumptions, and uncertainties that could cause actual results to differ materially from expectations. Key risk factors include general business and economic conditions, the impact of **COVID-19**, government and regulatory actions, increased competition, interest rate volatility, asset quality, cybersecurity threats, and natural disasters[13](index=13&type=chunk)[14](index=14&type=chunk) PART I. Financial Information This part presents the unaudited consolidated financial statements and management's discussion and analysis of financial condition and results of operations [Item 1. Financial Statements (Unaudited)](index=7&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) This section presents the unaudited consolidated financial statements for Red River Bancshares, Inc., including balance sheets, income statements, and cash flows, with detailed notes [Consolidated Balance Sheets](index=7&type=section&id=Consolidated%20Balance%20Sheets) This statement provides a snapshot of the company's assets, liabilities, and stockholders' equity at specific points in time Consolidated Balance Sheets | Metric | March 31, 2022 (in thousands) | December 31, 2021 (in thousands) | | :-------------------------------- | :----------------------------- | :------------------------------- | | **ASSETS** | | | | Total Cash and Cash Equivalents | $547,119 | $784,864 | | Securities available-for-sale, at fair value | $810,804 | $659,178 | | Loans held for investment | $1,741,026 | $1,683,832 | | Total Assets | $3,212,460 | $3,224,710 | | **LIABILITIES** | | | | Total Deposits | $2,927,728 | $2,910,348 | | Total Liabilities | $2,947,586 | $2,926,560 | | **STOCKHOLDERS' EQUITY** | | | | Total Stockholders' Equity | $264,874 | $298,150 | - Total Assets decreased slightly by **0.4%** from **$3,224,710 thousand** at December 31, 2021, to **$3,212,460 thousand** at March 31, 2022, primarily driven by a significant decrease in Cash and Cash Equivalents, partially offset by increases in Securities available-for-sale and Loans held for investment[17](index=17&type=chunk) - Total Stockholders' Equity saw a notable decrease of **11.2%** from **$298,150 thousand** to **$264,874 thousand**, largely due to a substantial increase in Accumulated other comprehensive loss[17](index=17&type=chunk) [Consolidated Statements of Income](index=8&type=section&id=Consolidated%20Statements%20of%20Income) This statement reports the company's revenues, expenses, and net income over a specific period Consolidated Statements of Income | Metric | For the Three Months Ended March 31, 2022 (in thousands) | For the Three Months Ended March 31, 2021 (in thousands) | | :----------------------------------- | :----------------------------------------------------- | :----------------------------------------------------- | | Total Interest and Dividend Income | $20,009 | $19,178 | | Total Interest Expense | $1,281 | $1,587 | | Net Interest Income | $18,728 | $17,591 | | Provision for loan losses | $150 | $1,450 | | Total Noninterest Income | $4,402 | $6,775 | | Total Operating Expenses | $14,062 | $13,163 | | Income Before Income Tax Expense | $8,918 | $9,753 | | Income tax expense | $1,526 | $1,688 | | Net Income | $7,392 | $8,065 | | Basic Earnings Per Share | $1.03 | $1.10 | | Diluted Earnings Per Share | $1.03 | $1.10 | - Net Income decreased by **$673 thousand (8.3%)** to **$7,392 thousand** for the three months ended March 31, 2022, compared to **$8,065 thousand** for the same period in 2021, primarily due to a significant decrease in Total Noninterest Income and an increase in Total Operating Expenses, partially offset by higher Net Interest Income and a lower Provision for loan losses[20](index=20&type=chunk) [Consolidated Statements of Comprehensive Income](index=9&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income) This statement presents net income and other comprehensive income, reflecting changes in equity from non-owner sources Consolidated Statements of Comprehensive Income | Metric | For the Three Months Ended March 31, 2022 (in thousands) | For the Three Months Ended March 31, 2021 (in thousands) | | :----------------------------------- | :----------------------------------------------------- | :----------------------------------------------------- | | Net income | $7,392 | $8,065 | | Unrealized net gain (loss) on securities arising during period | $(50,652) | $(9,021) | | Total other comprehensive income (loss) | $(40,046) | $(7,252) | | Comprehensive Income (Loss) | $(32,654) | $813 | - Comprehensive Income (Loss) significantly declined from **$813 thousand** in Q1 2021 to **$(32,654) thousand** in Q1 2022, primarily driven by a substantial increase in unrealized net loss on securities arising during the period[22](index=22&type=chunk) [Consolidated Statements of Changes in Stockholders' Equity](index=10&type=section&id=Consolidated%20Statements%20of%20Changes%20in%20Stockholders'%20Equity) This statement details changes in each component of stockholders' equity over a period, including net income, dividends, and other comprehensive income Consolidated Statements of Changes in Stockholders' Equity | Metric | Balance as of December 31, 2021 (in thousands) | Net Income (in thousands) | Stock Incentive Plan (in thousands) | Board Compensation (in thousands) | Stock Repurchase (in thousands) | Cash Dividend (in thousands) | Other Comprehensive Income (Loss) (in thousands) | Balance as of March 31, 2022 (in thousands) | | :----------------------------------- | :------------------------------------- | :------------------------ | :-------------------------- | :------------------------------ | :-------------------------- | :----------------------- | :---------------------------------------------- | :------------------------------------ | | Total Stockholders' Equity | $298,150 | $7,392 | $63 | $35 | $(218) | $(502) | $(40,046) | $264,874 | - Total Stockholders' Equity decreased from **$298,150 thousand** at December 31, 2021, to **$264,874 thousand** at March 31, 2022, primarily due to a significant other comprehensive loss of **$40,046 thousand** and cash dividends, partially offset by net income[24](index=24&type=chunk) [Consolidated Statements of Cash Flows](index=11&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) This statement reports cash inflows and outflows from operating, investing, and financing activities over a period Consolidated Statements of Cash Flows | Metric | For the Three Months Ended March 31, 2022 (in thousands) | For the Three Months Ended March 31, 2021 (in thousands) | | :----------------------------------- | :----------------------------------------------------- | :----------------------------------------------------- | | Net cash provided by (used in) operating activities | $8,827 | $24,055 | | Net cash provided by (used in) investing activities | $(263,232) | $(41,642) | | Net cash provided by (used in) financing activities | $16,660 | $173,386 | | Net change in cash and cash equivalents | $(237,745) | $155,799 | | Cash and cash equivalents - end of period | $547,119 | $603,000 | - Net change in cash and cash equivalents shifted from a positive **$155,799 thousand** in Q1 2021 to a negative **$(237,745) thousand** in Q1 2022, largely driven by a substantial increase in net cash used in investing activities, primarily due to increased purchases of securities AFS and loans HFI[27](index=27&type=chunk) [Notes to Unaudited Consolidated Financial Statements](index=12&type=section&id=Notes%20to%20Unaudited%20Consolidated%20Financial%20Statements) This section provides detailed explanations and additional information about the figures presented in the financial statements [Note 1. Summary of Significant Accounting Policies](index=12&type=section&id=Note%201.%20Summary%20of%20Significant%20Accounting%20Policies) This note outlines the key accounting principles and methods used in preparing the financial statements - The unaudited consolidated financial statements are prepared in accordance with **GAAP** for interim financial information. Management confirms all necessary adjustments for fair presentation have been included and that there were no material changes to critical accounting policies or estimates during the reporting period[29](index=29&type=chunk)[31](index=31&type=chunk) - **ASU No. 2021-05, Leases (Topic 842)**, was adopted on **January 1, 2022**, with no material impact. The **CECL model (ASU No. 2016-13)** is effective **January 1, 2023**, and the Company is actively evaluating its impact and implementing a third-party vendor solution[32](index=32&type=chunk)[33](index=33&type=chunk) - **ASU No. 2021-08 (Business Combinations)** and **ASU No. 2022-02 (Troubled Debt Restructurings and Vintage Disclosures)** are also effective **January 1, 2023**, and are not expected to have a material impact[34](index=34&type=chunk)[36](index=36&type=chunk) [Note 2. Securities](index=13&type=section&id=Note%202.%20Securities) This note provides details on the company's investment securities, including available-for-sale securities and their fair values - Securities available-for-sale (**AFS**) increased by **$151,600 thousand** to **$810,804 thousand** as of March 31, 2022. Investment activity included **$232,700 thousand** in purchases and **$29,800 thousand** in maturities/repayments[37](index=37&type=chunk)[38](index=38&type=chunk) - The net unrealized loss on the **AFS** portfolio significantly increased by **$50,700 thousand**, resulting in a total unrealized loss of **$55,500 thousand** as of March 31, 2022, primarily due to rising interest rates[37](index=37&type=chunk)[40](index=40&type=chunk) Securities AFS: Amortized Cost and Fair Value | (in thousands) | Amortized Cost (March 31, 2022) | Fair Value (March 31, 2022) | Amortized Cost (December 31, 2021) | Fair Value (December 31, 2021) | | :------------------------ | :------------------------------ | :-------------------------- | :--------------------------------- | :----------------------------- | | Mortgage-backed securities | $496,302 | $461,488 | $386,874 | $379,526 | | Municipal bonds | $231,198 | $213,270 | $227,248 | $229,971 | | U.S. Treasury securities | $131,508 | $129,123 | $41,770 | $41,616 | | U.S. agency securities | $7,263 | $6,923 | $8,062 | $8,065 | | Total Securities AFS | $866,271 | $810,804 | $663,954 | $659,178 | [Note 3. Loans and Asset Quality](index=15&type=section&id=Note%203.%20Loans%20and%20Asset%20Quality) This note details the composition of the loan portfolio, allowance for loan losses, and asset quality metrics Loans Held for Investment by Category | (in thousands) | March 31, 2022 | December 31, 2021 | | :-------------------------- | :------------- | :---------------- | | Commercial real estate | $723,418 | $670,293 | | One-to-four family residential | $484,871 | $474,420 | | Construction and development | $117,526 | $106,339 | | Commercial and industrial | $303,556 | $311,373 | | SBA PPP, net of deferred income | $6,397 | $17,550 | | Tax-exempt | $81,000 | $80,726 | | Consumer | $24,258 | $23,131 | | Total loans HFI | $1,741,026 | $1,683,832 | - Total loans held for investment increased by **$57,200 thousand (3.4%)** to **$1,741,026 thousand** as of March 31, 2022, primarily driven by growth in commercial real estate, one-to-four family residential, and construction and development loans[43](index=43&type=chunk) Allowance for Loan Losses Activity | (in thousands) | Beginning Balance Dec 31, 2021 | Provision for Loan Losses | Charge-offs | Recoveries | Ending Balance Mar 31, 2022 | | :-------------------------- | :----------------------------- | :------------------------ | :---------- | :--------- | :---------------------------- | | Total allowance for loan losses | $19,176 | $150 | $(129) | $47 | $19,244 | - The allowance for loan losses increased slightly to **$19,244 thousand** as of March 31, 2022, with a provision of **$150 thousand**, partially offset by net charge-offs[44](index=44&type=chunk) Past Due and Nonaccrual Loans | (in thousands) | March 31, 2022 | December 31, 2021 | | :-------------------------- | :------------- | :---------------- | | Nonaccrual loans | $269 | $280 | | Accruing loans 90 or more days past due | $44 | $39 | | Total nonperforming loans | $313 | $319 | - Total impaired loans decreased from **$6,149 thousand** at December 31, 2021, to **$4,992 thousand** at March 31, 2022. The interest income recognized on impaired loans decreased from **$65 thousand** in Q1 2021 to **$54 thousand** in Q1 2022[47](index=47&type=chunk)[48](index=48&type=chunk) - Loans classified as **'Pass'** constituted **99.4%** of loans HFI as of March 31, 2022, indicating strong credit quality. There were no loans classified as **'Doubtful'** or **'Loss'**[54](index=54&type=chunk) [Note 4. Deposits](index=21&type=section&id=Note%204.%20Deposits) This note provides a breakdown of the company's deposit liabilities by type and customer segment Deposits by Type | (in thousands) | March 31, 2022 | December 31, 2021 | | :-------------------------- | :------------- | :---------------- | | Noninterest-bearing deposits | $1,181,136 | $1,149,672 | | Interest-bearing deposits | $1,746,592 | $1,760,676 | | Total Deposits | $2,927,728 | $2,910,348 | - Total deposits increased by **$17,400 thousand (0.6%)** to **$2,927,728 thousand** as of March 31, 2022, primarily due to customers maintaining higher deposit balances, partially offset by seasonal drawdowns from public entity customers[58](index=58&type=chunk) [Note 5. Contingencies](index=21&type=section&id=Note%205.%20Contingencies) This note discusses legal matters and other contingent liabilities that may affect the company's financial position - The Company and the Bank are involved in various legal matters in the ordinary course of business, but management believes that the resolution of these proceedings is not expected to have a material adverse effect on the consolidated results of operations, financial condition, or cash flows[59](index=59&type=chunk) [Note 6. Fair Value](index=22&type=section&id=Note%206.%20Fair%20Value) This note explains the company's fair value measurements for assets and liabilities, categorized by input observability - The Company uses fair value measurements for certain assets and liabilities, categorizing them into a three-level hierarchy based on the observability of inputs. Securities **AFS**, loans **HFS**, and equity securities are measured at fair value on a recurring basis, primarily using **Level 2** inputs[60](index=60&type=chunk)[61](index=61&type=chunk)[62](index=62&type=chunk)[63](index=63&type=chunk) Fair Value of Assets Measured on a Recurring Basis | (in thousands) | Fair Value (March 31, 2022) | Level 1 | Level 2 | Level 3 | | :------------------------ | :-------------------------- | :------ | :------ | :------ | | Loans HFS | $6,641 | $— | $6,641 | $— | | Securities AFS | $810,804 | $— | $810,804 | $— | | Equity securities | $7,481 | $7,481 | $— | $— | - Impaired loans and foreclosed assets are measured at fair value on a nonrecurring basis, often using **Level 3** inputs based on discounted appraisals and collateral discounts[68](index=68&type=chunk)[70](index=70&type=chunk)[72](index=72&type=chunk) [Note 7. Regulatory Capital Requirements](index=25&type=section&id=Note%207.%20Regulatory%20Capital%20Requirements) This note outlines the company's compliance with Basel III capital adequacy requirements and its 'well capitalized' status - Red River Bank met all **Basel III** capital adequacy requirements as of March 31, 2022, and was categorized as **'well capitalized'** by the **FDIC** as of June 30, 2021[75](index=75&type=chunk) Red River Bank Capital Ratios | (dollars in thousands) | Actual Amount (Mar 31, 2022) | Actual Ratio (Mar 31, 2022) | Minimum Ratio | Minimum Plus CCB Ratio | | :-------------------------- | :--------------------------- | :-------------------------- | :------------ | :--------------------- | | Total Risk-Based Capital | $313,342 | 16.59 % | 8.00 % | 10.50 % | | Tier I Risk-Based Capital | $294,098 | 15.57 % | 6.00 % | 8.50 % | | Common Equity Tier I Capital | $294,098 | 15.57 % | 4.50 % | 7.00 % | | Tier I Leverage Capital | $294,098 | 9.10 % | 4.00 % | 4.00 % | - Red River Bancshares, Inc. qualifies as a **'small bank holding company'** and is exempt from consolidated capital adequacy guidelines, though it calculates these ratios for internal planning. The Company and Bank qualify for the **CBLR** framework but do not intend to utilize it[77](index=77&type=chunk)[81](index=81&type=chunk) [Note 8. Earnings Per Common Share](index=26&type=section&id=Note%208.%20Earnings%20Per%20Common%20Share) This note provides details on the calculation of basic and diluted earnings per common share Earnings Per Common Share | (in thousands, except share amounts) | For the Three Months Ended March 31, 2022 | For the Three Months Ended March 31, 2021 | | :----------------------------------- | :---------------------------------------- | :---------------------------------------- | | Net income - basic | $7,392 | $8,065 | | Weighted average shares outstanding - basic | 7,179,624 | 7,317,995 | | Basic Earnings Per Share | $1.03 | $1.10 | | Diluted Earnings Per Share | $1.03 | $1.10 | - Basic and diluted **EPS** for Q1 2022 were **$1.03**, a decrease from **$1.10** in Q1 2021, reflecting the lower net income[84](index=84&type=chunk) [Note 9. Stock Repurchase Program](index=27&type=section&id=Note%209.%20Stock%20Repurchase%20Program) This note describes the company's stock repurchase program, including authorization and activity - The Board of Directors approved the renewal of the stock repurchase program on **February 4, 2022**, authorizing the purchase of up to **$5,000 thousand** of common stock through **December 31, 2022**. In Q1 2022, the Company repurchased **4,465 shares** for **$218 thousand**, leaving **$4,800 thousand** available[85](index=85&type=chunk) [Note 10. Subsequent Events](index=27&type=section&id=Note%2010.%20Subsequent%20Events) This note discloses significant events that occurred after the balance sheet date but before the financial statements were issued - In **April 2022**, all shares invested in the **CRA mutual fund (equity securities)** were liquidated following a recognized loss of **$365 thousand** in Q1 2022 due to increased interest rates[86](index=86&type=chunk) - During Q2 2022, the Company decided to reclassify a portion of its securities portfolio from **AFS** to **HTM**, with unrealized gains or losses retained in **AOCI** and amortized over the remaining life of the **HTM** securities[87](index=87&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=28&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the Company's financial condition and results of operations, highlighting key trends and strategic initiatives [Corporate Summary](index=28&type=section&id=CORPORATE%20SUMMARY) This section provides an overview of Red River Bancshares, Inc., its operations, and strategic focus - Red River Bancshares, Inc. is the bank holding company for Red River Bank, a Louisiana state-chartered bank established in **1999**, operating **27 banking centers** and **two loan and deposit production offices** across Louisiana[92](index=92&type=chunk) - The Company's strategy focuses on driving shareholder value through organic market share expansion in existing and new markets, supplemented by strategic acquisitions of compatible financial institutions[93](index=93&type=chunk) [First Quarter 2022 Financial and Operational Highlights](index=28&type=section&id=FIRST%20QUARTER%202022%20FINANCIAL%20AND%20OPERATIONAL%20HIGHLIGHTS) This section summarizes key financial and operational achievements and trends for the first quarter of 2022 - Net income for Q1 2022 was **$7,400 thousand ($1.03 diluted EPS)**, a decrease of **13.1%** from Q4 2021 and **8.3%** from Q1 2021, primarily due to lower **PPP** loan income, reduced mortgage loan income, and a loss on equity securities[95](index=95&type=chunk) Selected Period End Balance Sheet Data Changes (QoQ) | Metric | March 31, 2022 (in thousands) | December 31, 2021 (in thousands) | $ Change | % Change | | :-------------------------------- | :----------------------------- | :------------------------------- | :--------- | :--------- | | Total assets | $3,212,460 | $3,224,710 | $(12,250) | (0.4)% | | Interest-bearing deposits in other banks | $506,982 | $761,721 | $(254,739) | (33.4)% | | Securities available-for-sale | $810,804 | $659,178 | $151,626 | 23.0 % | | Loans held for investment | $1,741,026 | $1,683,832 | $57,194 | 3.4 % | | Total deposits | $2,927,728 | $2,910,348 | $17,380 | 0.6 % | | Total stockholders' equity | $264,874 | $298,150 | $(33,276) | (11.2)% | - Non-**PPP** loans **HFI** increased by **$68,300 thousand (4.1%)** to **$1,730,000 thousand**, driven by new customer activity and expansion markets. Securities **AFS** increased by **$151,600 thousand (23.0%)** to **$810,800 thousand**, improving the asset mix[98](index=98&type=chunk) - The stock repurchase program was renewed for up to **$5,000 thousand**, and the Company continued its organic expansion plan by opening a full-service banking center in Lafayette and leasing a new location in New Orleans[98](index=98&type=chunk) [Results of Operations](index=31&type=section&id=RESULTS%20OF%20OPERATIONS) This section analyzes the company's financial performance, including net interest income, noninterest income, and operating expenses [Net Interest Income and Net Interest Margin](index=31&type=section&id=Net%20Interest%20Income%20and%20Net%20Interest%20Margin) This section examines the primary source of bank revenue and its profitability metric - Net interest income for Q1 2022 was **$18,700 thousand**, a slight decrease of **$47 thousand (0.3%)** from Q4 2021, primarily due to a **$727 thousand** decrease in **PPP** loan income, partially offset by a **$550 thousand** increase in securities income[104](index=104&type=chunk) - The net interest margin **FTE** decreased **six basis points** to **2.46%** in Q1 2022 from **2.52%** in Q4 2021, mainly due to a **16 bp** decrease in loan yield from lower **PPP** loan income, partially offset by an **8 bp** increase in taxable securities yield[105](index=105&type=chunk) - Compared to Q1 2021, net interest income increased by **$1,100 thousand (6.5%)** in Q1 2022, driven by higher non-**PPP** loan income and securities income, despite a **$1,600 thousand** decrease in **PPP** loan income[112](index=112&type=chunk)[113](index=113&type=chunk) - The net interest margin **FTE** decreased **30 bps** to **2.46%** in Q1 2022 from **2.76%** in Q1 2021, mainly due to a **34 bp** decrease in loan yield (including **PPP** and non-**PPP** loans), partially offset by an **18 bp** increase in taxable securities yield and a **9 bp** decrease in the cost of deposits[115](index=115&type=chunk)[116](index=116&type=chunk) [Rate/Volume Analysis](index=36&type=section&id=Rate%2FVolume%20Analysis) This analysis breaks down changes in net interest income into components attributable to changes in interest rates and volumes Change in Net Interest Income (QoQ) | (in thousands) | Increase (Decrease) Due to Change in Volume | Increase (Decrease) Due to Change in Rate | Total Increase (Decrease) | | :----------------------------------- | :---------------------------------------- | :---------------------------------------- | :------------------------ | | Total interest-earning assets | $807 | $(873) | $(66) | | Total interest-bearing liabilities | $4 | $(23) | $(19) | | Increase (decrease) in net interest income | $803 | $(850) | $(47) | Change in Net Interest Income (YoY) | (in thousands) | Increase (Decrease) Due to Change in Volume | Increase (Decrease) Due to Change in Rate | Total Increase (Decrease) | | :----------------------------------- | :---------------------------------------- | :---------------------------------------- | :------------------------ | | Total interest-earning assets | $1,930 | $(1,099) | $831 | | Total interest-bearing liabilities | $102 | $(408) | $(306) | | Increase (decrease) in net interest income | $1,828 | $(691) | $1,137 | [Provision for Loan Losses](index=36&type=section&id=Provision%20for%20Loan%20Losses) This section discusses the amount set aside to cover potential loan defaults, reflecting asset quality - The provision for loan losses for Q1 2022 was **$150 thousand**, consistent with the prior quarter, reflecting stable economic activity and favorable asset quality metrics[123](index=123&type=chunk) - Compared to Q1 2021, the provision decreased significantly by **$1,300 thousand (89.7%)** from **$1,500 thousand**, as the higher provision in 2021 was due to anticipated adverse effects of the **COVID-19** pandemic[125](index=125&type=chunk) [Noninterest Income](index=37&type=section&id=Noninterest%20Income) This section analyzes income generated from sources other than interest, such as service charges and fees - Noninterest income decreased by **$1,300 thousand (22.4%)** to **$4,400 thousand** in Q1 2022 compared to Q4 2021, primarily due to lower mortgage loan income, a **$365 thousand** loss on equity securities (vs. **$75 thousand** loss in Q4 2021), and lower net debit card income[127](index=127&type=chunk)[128](index=128&type=chunk)[129](index=129&type=chunk) - Compared to Q1 2021, noninterest income decreased by **$2,400 thousand (35.0%)** to **$4,400 thousand** in Q1 2022, mainly driven by a **$1,800 thousand** decrease in mortgage loan income and a **$295 thousand** larger loss on equity securities[130](index=130&type=chunk)[131](index=131&type=chunk)[132](index=132&type=chunk) - Service charges on deposit accounts increased by **$249 thousand (23.5%)** in Q1 2022 compared to Q1 2021, mainly due to more non-sufficient fund transactions[135](index=135&type=chunk) [Operating Expenses](index=38&type=section&id=Operating%20Expenses) This section reviews the company's operational costs, including personnel, occupancy, and technology expenses - Operating expenses increased slightly by **$46 thousand (0.3%)** to **$14,100 thousand** in Q1 2022 compared to Q4 2021, driven by higher other taxes and technology expenses, partially offset by lower data processing and loan and deposit expenses[137](index=137&type=chunk) - Other taxes increased by **$138 thousand** due to higher Louisiana bank stock tax from increased deposit balances and net income. Technology expenses rose by **$104 thousand**, including **$59 thousand** for nonrecurring computer hardware/software for new locations[139](index=139&type=chunk)[140](index=140&type=chunk) - Compared to Q1 2021, operating expenses increased by **$899 thousand (6.8%)** to **$14,100 thousand** in Q1 2022, primarily due to higher personnel expenses (**$431 thousand** increase from expansion in newer markets) and occupancy and equipment expenses (**$214 thousand** increase, including **$124 thousand** for new locations)[144](index=144&type=chunk)[146](index=146&type=chunk)[147](index=147&type=chunk) [Income Tax Expense](index=40&type=section&id=Income%20Tax%20Expense) This section analyzes the company's income tax expense and effective tax rate - Income tax expense decreased by **$245 thousand (13.8%)** to **$1,500 thousand** in Q1 2022 compared to Q4 2021, primarily due to a decrease in pre-tax income. The effective income tax rate remained stable at **17.1%** in Q1 2022 (vs. **17.2%** in Q4 2021)[152](index=152&type=chunk)[153](index=153&type=chunk) - Compared to Q1 2021, income tax expense decreased by **$162 thousand (9.6%)** to **$1,500 thousand** in Q1 2022, also driven by lower pre-tax income. The effective tax rate was **17.1%** in Q1 2022 (vs. **17.3%** in Q1 2021)[153](index=153&type=chunk) [Financial Condition](index=41&type=section&id=FINANCIAL%20CONDITION) This section reviews the company's balance sheet, including assets, liabilities, and equity, and their changes [General](index=41&type=section&id=General) This overview summarizes the overall changes in the company's total assets and stockholders' equity - Total assets as of March 31, 2022, were **$3,210,000 thousand**, a slight decrease of **$12,300 thousand (0.4%)** from December 31, 2021, due to deploying short-term liquid assets into the securities AFS portfolio and non-PPP loan growth[154](index=154&type=chunk) - Stockholders' equity decreased by **$33,300 thousand (11.2%)** to **$264,900 thousand**, primarily due to a **$40,000 thousand** net unrealized loss on securities AFS, partially offset by net income[154](index=154&type=chunk) [Interest-bearing Deposits in Other Banks](index=41&type=section&id=Interest-bearing%20Deposits%20in%20Other%20Banks) This section details changes in the company's interest-bearing deposits held at other financial institutions - Interest-bearing deposits in other banks decreased by **$254,700 thousand (33.4%)** to **$507,000 thousand** as of March 31, 2022, as excess liquidity was deployed into loans and securities AFS[155](index=155&type=chunk) [Securities](index=41&type=section&id=Securities) This section discusses the company's investment securities portfolio, including available-for-sale and equity securities - Securities **AFS** increased by **$151,600 thousand (23.0%)** to **$810,800 thousand** as of March 31, 2022. The portfolio's net unrealized loss grew to **$55,500 thousand** from **$4,800 thousand** due to rising market interest rates[157](index=157&type=chunk)[163](index=163&type=chunk) - The Company reallocated **$193,100 thousand** from lower-yielding overnight funds to higher-yielding securities **AFS**, expecting improved future interest income. The average life of the securities portfolio increased to **6.5 years** with an effective duration of **5.6 years**[159](index=159&type=chunk)[162](index=162&type=chunk) - Equity securities, an investment in a **CRA mutual fund**, had a recognized loss of **$365 thousand** in Q1 2022 due to increased interest rates. All shares in this fund were liquidated in **April 2022**[169](index=169&type=chunk) [Loan Portfolio](index=43&type=section&id=Loan%20Portfolio) This section analyzes the composition and growth of the company's loan portfolio, including **PPP** loans - The loan portfolio, the largest earning asset, increased by **$57,200 thousand (3.4%)** to **$1,740,000 thousand** as of March 31, 2022. Non-**PPP** loans **HFI** grew by **$68,300 thousand (4.1%)** to **$1,730,000 thousand**, driven by new customer activity and expansion markets[170](index=170&type=chunk)[172](index=172&type=chunk) - **PPP** loans decreased to **$6,400 thousand (0.4% of loans HFI)** as of March 31, 2022, with **97.5%** of originated **PPP** loans having received **SBA** forgiveness or borrower payments[171](index=171&type=chunk) Loans Held for Investment by Category | (dollars in thousands) | March 31, 2022 | Percent of Total | | :-------------------------- | :------------- | :--------------- | | Commercial real estate | $723,418 | 41.6 % | | One-to-four family residential | $484,871 | 27.8 % | | Construction and development | $117,526 | 6.8 % | | Commercial and industrial | $303,556 | 17.4 % | | SBA PPP, net of deferred income | $6,397 | 0.4 % | | Tax-exempt | $81,000 | 4.6 % | | Consumer | $24,258 | 1.4 % | | Total loans HFI | $1,741,026 | 100.0 % | - Health care loans are the largest industry concentration at **$155,500 thousand (9.0% of non-PPP loans HFI)**, with energy loans at **1.2%**. The Central Louisiana market holds the largest share of non-**PPP** loans **HFI** at **35.4%**[175](index=175&type=chunk)[176](index=176&type=chunk)[177](index=177&type=chunk) [Nonperforming Assets](index=45&type=section&id=Nonperforming%20Assets) This section reports on assets that are not generating income due to borrower default or other issues - Nonperforming assets (**NPAs**) totaled **$973 thousand** as of March 31, 2022, a slight decrease of **$6 thousand (0.6%)** from December 31, 2021, primarily due to payments on nonaccrual loans. The ratio of **NPAs** to total assets remained low at **0.03%**[182](index=182&type=chunk) Nonperforming Loans and Assets | (dollars in thousands) | March 31, 2022 | December 31, 2021 | | :-------------------------- | :------------- | :---------------- | | Nonaccrual loans | $269 | $280 | | Accruing loans 90 or more days past due | $44 | $39 | | Total nonperforming loans | $313 | $319 | | Total foreclosed assets | $660 | $660 | | Total NPAs | $973 | $979 | | Nonperforming loans to loans HFI | 0.02% | 0.02% | | NPAs to total assets | 0.03% | 0.03% | [Potential Problem Loans](index=46&type=section&id=Potential%20Problem%20Loans) This section assesses the credit quality of the loan portfolio by classifying loans based on risk - As of March 31, 2022, **99.4%** of loans **HFI** were classified as **'Pass,'** with **0.2%** as **'Special Mention'** and **0.4%** as **'Substandard.'** No loans were classified as **'Doubtful'** or **'Loss,'** indicating strong credit quality[186](index=186&type=chunk) [Allowance for Loan Losses](index=46&type=section&id=Allowance%20for%20Loan%20Losses) This section details the reserve established to absorb potential losses from the loan portfolio - The allowance for loan losses was **$19,200 thousand**, or **1.11%** of loans **HFI**, as of March 31, 2022, an increase of **$68 thousand** from December 31, 2021, mainly due to a **$150 thousand** provision for loan losses, partially offset by net charge-offs[189](index=189&type=chunk) - The provision for loan losses decreased by **$1,300 thousand (89.7%)** compared to Q1 2021, reflecting continued favorable asset quality metrics, contrasting with the higher provision in 2021 due to anticipated **COVID-19** effects[191](index=191&type=chunk) - The Company believes the allowance for loan losses is adequate, but future provisions are subject to ongoing evaluations of economic conditions, asset quality, and portfolio growth[192](index=192&type=chunk) [Deposits](index=47&type=section&id=Deposits) This section provides an analysis of the company's deposit base, categorized by type and customer - Total deposits increased by **$17,400 thousand (0.6%)** to **$2,930,000 thousand** as of March 31, 2022, driven by higher customer balances, despite seasonal public entity drawdowns[195](index=195&type=chunk) - Noninterest-bearing deposits increased by **$31,500 thousand (2.7%)** to **$1,180,000 thousand**, representing **40.34%** of total deposits. Interest-bearing deposits decreased by **$14,100 thousand (0.8%)** to **$1,750,000 thousand**[195](index=195&type=chunk) Deposits by Customer Type | (dollars in thousands) | March 31, 2022 Balance | March 31, 2022 % of Total | December 31, 2021 Balance | December 31, 2021 % of Total | | :-------------------------- | :--------------------- | :------------------------ | :------------------------ | :--------------------------- | | Consumer | $1,452,427 | 49.6 % | $1,400,369 | 48.1 % | | Commercial | $1,288,921 | 44.0 % | $1,283,992 | 44.1 % | | Public | $186,380 | 6.4 % | $225,987 | 7.8 % | | Total deposits | $2,927,728 | 100.0 % | $2,910,348 | 100.0 % | [Borrowings](index=48&type=section&id=Borrowings) This section reports on the company's outstanding debt and its reliance on other funding sources - The Company had no outstanding borrowings as of March 31, 2022, or December 31, 2021, indicating reliance on deposits as the primary funding source[198](index=198&type=chunk) [Equity and Regulatory Capital Requirements](index=49&type=section&id=Equity%20and%20Regulatory%20Capital%20Requirements) This section discusses changes in stockholders' equity and compliance with regulatory capital standards - Total stockholders' equity decreased by **$33,300 thousand (11.2%)** to **$264,900 thousand** as of March 31, 2022, primarily due to a **$40,000 thousand** net market adjustment to **AOCI** related to securities AFS[199](index=199&type=chunk) - The stock repurchase program was renewed, authorizing up to **$5,000 thousand** in common stock repurchases through **December 31, 2022**. The Company and Bank qualify for the **CBLR** framework but do not intend to use it[200](index=200&type=chunk)[202](index=202&type=chunk) [Liquidity and Asset-Liability Management](index=49&type=section&id=LIQUIDITY%20AND%20ASSET-LIABILITY%20MANAGEMENT) This section addresses the company's ability to meet financial obligations and manage interest rate risk [Liquidity](index=49&type=section&id=Liquidity) This section describes how the company meets its short-term and long-term cash needs - Liquidity needs are primarily met by core deposits, security and loan maturities, and cash flows from amortizing portfolios. Excess deposits are invested in interest-earning deposits, federal funds sold, or securities[203](index=203&type=chunk)[205](index=205&type=chunk) - Securities **AFS** totaled **$810,800 thousand (25.2% of assets)** as of March 31, 2022, serving as a significant liquidity source, though **$133,600 thousand** were pledged to secure public entity deposits[206](index=206&type=chunk) - Interest-bearing deposits in other banks decreased by **$254,700 thousand (33.4%)** to **$507,000 thousand**, as funds were deployed into securities **AFS** and loans[207](index=207&type=chunk) - Total borrowing availability from the **FHLB** was **$789,000 thousand**, with a net borrowing capacity of **$697,200 thousand** as of March 31, 2022. The Company also maintains **$101,000 thousand** in federal funds lines of credit and other lines, with no outstanding balances[208](index=208&type=chunk)[209](index=209&type=chunk) [Commitments to Extend Credit](index=50&type=section&id=Commitments%20to%20Extend%20Credit) This section outlines the company's obligations to provide future funding to customers - As of March 31, 2022, unfunded loan commitments totaled **$356,400 thousand**, and commitments under standby letters of credit were **$13,900 thousand**. These commitments expose the Company to credit, interest rate, and liquidity risks[212](index=212&type=chunk) [Investment Commitments](index=50&type=section&id=Investment%20Commitments) This section details the company's outstanding obligations for future investments - The Company has outstanding investment commitments totaling **$226 thousand** to an **SBIC** limited partnership (from **2014**), **$5,000 thousand** to another **SBIC** limited partnership (from **2020**), and **$827 thousand** to a bank technology limited partnership (from **2021**)[213](index=213&type=chunk)[214](index=214&type=chunk) [Interest Rate Sensitivity and Market Risk](index=50&type=section&id=Interest%20Rate%20Sensitivity%20and%20Market%20Risk) This section describes how the company manages its exposure to fluctuations in interest rates - The Company's primary market risk is interest rate volatility, managed by the **Asset-Liability Management Committee** through guidelines for funds management and monitoring net interest rate sensitivity[215](index=215&type=chunk)[219](index=219&type=chunk) - The balance sheet is asset sensitive, meaning assets reprice faster than liabilities. As of March 31, 2022, floating rate loans were **14.5%** of loans HFI, and floating rate transaction deposits were **4.4%** of interest-bearing transaction deposits[224](index=224&type=chunk)[226](index=226&type=chunk) Simulated Change in Net Interest Income and Fair Value of Equity (12-month horizon) | Change in Interest Rates (Bps) | % Change in Net Interest Income (Mar 31, 2022) | % Change in Fair Value of Equity (Mar 31, 2022) | | :----------------------------- | :--------------------------------------------- | :-------------------------------------------- | | +300 | 29.2 % | 1.8 % | | +200 | 19.6 % | 1.8 % | | +100 | 10.0 % | 1.4 % | | Base | 0.0 % | 0.0 % | | -100 | (3.3)% | (3.8)% | | -200 | (7.6)% | (12.6)% | - The simulated results show that for an instantaneous parallel shift of **+100 bps**, net interest income is estimated to increase by **10.0%**, and for a **-100 bps** shift, it is estimated to decrease by **3.3%**. The fair value of equity in the down **200 bp** scenario was back within the policy threshold as of March 31, 2022[224](index=224&type=chunk)[225](index=225&type=chunk) [Non-GAAP Financial Measures](index=52&type=section&id=NON-GAAP%20FINANCIAL%20MEASURES) This section presents financial metrics not prepared in accordance with GAAP, used by management for performance evaluation [Tangible Assets, Tangible Equity, Tangible Book Value, and Realized Book Value](index=53&type=section&id=Tangible%20Assets%2C%20Tangible%20Equity%2C%20Tangible%20Book%20Value%2C%20and%20Realized%20Book%20Value) This section defines and presents non-GAAP measures that exclude intangible assets and accumulated other comprehensive income (loss) - Management uses non-**GAAP** measures like tangible book value per share, tangible common equity to tangible assets, and realized book value per share to evaluate operating performance, as they exclude intangible assets and accumulated other comprehensive income (loss) which can be volatile[229](index=229&type=chunk)[230](index=230&type=chunk)[231](index=231&type=chunk)[233](index=233&type=chunk) Non-GAAP Equity and Asset Metrics | (dollars in thousands, except per share data) | March 31, 2022 | December 31, 2021 | | :-------------------------------------------- | :------------- | :---------------- | | Total tangible common equity (non-GAAP) | $263,328 | $296,604 | | Total realized common equity (non-GAAP) | $308,693 | $301,923 | | Tangible book value per share (non-GAAP) | $36.69 | $41.31 | | Realized book value per share (non-GAAP) | $43.02 | $42.05 | | Total tangible assets (non-GAAP) | $3,210,914 | $3,223,164 | | Tangible common equity to tangible assets (non-GAAP) | 8.20 % | 9.20 % | [PPP-Adjusted Metrics](index=53&type=section&id=PPP-Adjusted%20Metrics) This section presents financial metrics adjusted for **PPP** loans to provide a clearer view of core performance - **PPP-adjusted metrics** are used to provide a more accurate portrayal of the Company's financial condition and performance, as **PPP** loans have unique, short-term characteristics different from the rest of the loan portfolio[237](index=237&type=chunk) Non-PPP Loans HFI and Related Ratios | (dollars in thousands) | March 31, 2022 | December 31, 2021 | | :----------------------------------- | :------------- | :---------------- | | Loans HFI | $1,741,026 | $1,683,832 | | PPP loans, net | $(6,397) | $(17,550) | | Non-PPP loans HFI (non-GAAP) | $1,734,629 | $1,666,282 | | Non-PPP loans HFI to deposits ratio (non-GAAP) | 59.25 % | 57.25 % | | Allowance for loan losses to non-PPP loans HFI (non-GAAP) | 1.11 % | 1.15 % | | Nonperforming loans to non-PPP loans HFI | 0.02 % | 0.02 % | [Critical Accounting Estimates](index=54&type=section&id=CRITICAL%20ACCOUNTING%20ESTIMATES) This section confirms no material changes in the methodologies for critical accounting estimates during the period - There were no material changes or developments in the methodologies used for critical accounting estimates during the reporting period, as disclosed in the Company's Annual Report on Form 10-K for the year ended December 31, 2021[239](index=239&type=chunk) [Recent Accounting Pronouncements](index=54&type=section&id=RECENT%20ACCOUNTING%20PRONOUNCEMENTS) This section refers to Note 1 for details on recently adopted or upcoming accounting standards - This section refers to **Note 1** of the financial statements for details on recent accounting pronouncements, including the upcoming **CECL** model, which is effective for the Company on **January 1, 2023**[241](index=241&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=54&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section provides disclosures on market risks, particularly interest rate sensitivity, referencing the Annual Report on Form 10-K - The Company's market risk disclosures, particularly concerning interest rate sensitivity, are detailed in the Annual Report on Form 10-K and further updated in **Item 2** of this report[241](index=241&type=chunk) [Item 4. Controls and Procedures](index=54&type=section&id=Item%204.%20Controls%20and%20Procedures) This section details the evaluation of disclosure controls and procedures and reports on internal control changes - The Company's management, including the **CEO** and **CFO**, concluded that disclosure controls and procedures were effective as of March 31, 2022, providing reasonable assurance of achieving control objectives[242](index=242&type=chunk)[243](index=243&type=chunk) - There were no material changes in the Company's internal control over financial reporting during the first quarter of 2022[244](index=244&type=chunk) PART II. Other Information This part includes disclosures on legal proceedings, risk factors, equity sales, and other miscellaneous information [Item 1. Legal Proceedings](index=55&type=section&id=Item%201.%20Legal%20Proceedings) This section addresses the Company's involvement in legal matters arising in the ordinary course of business - Management believes that current legal proceedings are not expected to have a material adverse effect on the Company's consolidated results of operations, financial condition, or cash flows[245](index=245&type=chunk) [Item 1A. Risk Factors](index=55&type=section&id=Item%201A.%20Risk%20Factors) This section refers to the Company's Annual Report on Form 10-K for a comprehensive discussion of risk factors - There have been no material changes to the risk factors disclosed in the Company's Annual Report on Form 10-K for the year ended December 31, 2021[246](index=246&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=55&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section provides information on the Company's **IPO** proceeds and details of common stock repurchases - All net proceeds from the Company's **IPO** in **May 2019** were expended as of March 31, 2022, with no material change in the planned use of proceeds[247](index=247&type=chunk) Common Stock Repurchases (Q1 2022) | Period | Total Number of Shares Purchased | Average Price Paid per Share | Approximate Dollar Value of Shares that May Yet Be Purchased Under the Program (in thousands) | | :-------------------------- | :----------------------------- | :--------------------------- | :--------------------------------------------------------------------------- | | March 1 - March 31, 2022 | 4,465 | $48.84 | $4,782 | | Total | 4,465 | $48.84 | $4,782 | - The Company repurchased **4,465 shares** of common stock for **$218 thousand** in Q1 2022 under its renewed stock repurchase program, which authorizes up to **$5,000 thousand** in repurchases through **December 31, 2022**[248](index=248&type=chunk) [Item 3. Defaults Upon Senior Securities](index=55&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This section confirms that there were no defaults upon senior securities during the reporting period - There were no defaults upon senior securities during the period[249](index=249&type=chunk) [Item 4. Mine Safety Disclosures](index=55&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This section states that mine safety disclosures are not applicable to the Company - Mine safety disclosures are not applicable to Red River Bancshares, Inc.[250](index=250&type=chunk) [Item 5. Other Information](index=55&type=section&id=Item%205.%20Other%20Information) This section indicates that there is no other information to report - No other information is reported in this section[251](index=251&type=chunk) [Item 6. Exhibits](index=56&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed as part of the Form 10-Q, including corporate documents and certifications - Exhibits include Restated Articles of Incorporation, Amended and Restated Bylaws, the **401(k) Profit Sharing Plan**, certifications from the **Principal Executive Officer** and **Principal Financial Officer (Sections 302 and 906 of Sarbanes-Oxley Act)**, and **Inline XBRL** financial information[252](index=252&type=chunk) [Signatures](index=57&type=section&id=Signatures) This section contains the required signatures for the Form 10-Q filing - The report is duly signed by **R. Blake Chatelain, President and Chief Executive Officer**, and **Isabel V. Carriere, Executive Vice President and Chief Financial Officer**, on **May 13, 2022**[254](index=254&type=chunk)[256](index=256&type=chunk)[257](index=257&type=chunk)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2021 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 001-38888 Red River Bancshares, Inc. (Exact name of registrant as specified in its charter) (State or Other Jurisdiction of Incorporation or Organiz ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended: September 30, 2021 or ☐ Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from to Commission File Number: 001-38888 Red River Bancshares, Inc. (Exact name of registrant as specified in its charter) (State or Other Jurisdiction of In ...

| --- | --- | --- | |-----------------------|-------|-------| | | | | | | | | | | | | | | | | | | | | | | | | | INVESTOR PRESENTATION | | | | | | | | | | | 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 Bancshares, Inc.'s (the "Company," "RRBI," "Red River," "we," o ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended: June 30, 2021 or ☐ Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from to Commission File Number: 001-38888 Red River Bancshares, Inc. (Exact name of registrant as specified in its charter) (State or Other Jurisdiction of Incorpo ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended: March 31, 2021 or ☐ Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from to Commission File Number: 001-38888 Red River Bancshares, Inc. (Exact name of registrant as specified in its charter) (State or Other Jurisdiction of Incorp ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2020 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 001-38888 Red River Bancshares, Inc. (Exact name of registrant as specified in its charter) Louisiana 72-1412058 (State or Other Jurisdic ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended: September 30, 2020 or ☐ Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from to Commission File Number: 001-38888 Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) ...