Red River Bancshares(US:RRBI)2021-11-12 21:21Financial Performance - Net income for Q3 2021 was $8.1 million, or $1.12 diluted EPS, a decrease of 1.2% from Q2 2021, but an increase of 11.7% from Q3 2020[98]. - For the nine months ended September 30, 2021, net income was $24.4 million, or $3.34 diluted EPS, a 17.0% increase from $20.9 million, or $2.84 diluted EPS in the same period of 2020[105]. - Net interest income for Q3 2021 totaled $18.1 million, a 4.7% increase from $17.3 million in Q3 2020, driven by a $621,000 decrease in interest expense[109]. - Net interest income for the nine months ended September 30, 2021, was $52,947 thousand, an increase of $2,608 thousand or 5.2% from $50,339 thousand in the same period of 2020[135]. - Noninterest income increased by $1.8 million to $18.8 million for the nine months ended September 30, 2021, compared to $17.0 million for the same period in 2020[138]. Assets and Liabilities - Total assets reached $3.02 billion as of September 30, 2021, a 14.3% increase from $2.64 billion on December 31, 2020[101]. - Total deposits increased to $2.70 billion, a 15.6% rise from $2.34 billion as of December 31, 2020[101]. - Total stockholders' equity reached $298.7 million as of September 30, 2021, an increase of $13.2 million, or 4.6%, from $285.5 million as of December 31, 2020[204]. - Cash and cash equivalents rose by $283.4 million, or 63.4%, to $730.6 million as of September 30, 2021, due to deposit growth exceeding loan growth[212]. - Total interest-bearing liabilities were $1,519,067 thousand for the nine months ended September 30, 2021, compared to $1,181,578 thousand for the same period in 2020, representing a 28.5% increase[126]. Loan Performance - Non-PPP loans held for investment were $1.58 billion, a 7.3% increase from December 31, 2020[98]. - The average balance of non-PPP loans (non-GAAP) was $1.56 billion in Q3 2021, with a yield of 3.93%[118]. - Total non-PPP loans HFI amounted to $1,576.6 million as of September 30, 2021, compared to $1,455.7 million as of September 30, 2020[199]. - Nonaccrual loans totaled $1.375 million as of September 30, 2021, down from $3.307 million as of December 31, 2020[188]. - The allowance for loan losses increased to $19.2 million, or 1.18% of loans HFI, compared to $18.0 million or 1.13% as of December 31, 2020[196]. Interest Rates and Margins - The net interest margin for Q3 2021 was 2.60%, compared to 2.54% in Q2 2021 and 3.02% in Q3 2020[98]. - The yield on loans increased by 7 bps to 4.11% for Q3 2021, attributed to a higher yield on PPP loans[113]. - The cost of deposits was 0.20% for Q3 2021, a decrease of 17 bps from 0.37% in Q3 2020, due to a 17.3% increase in average noninterest-bearing deposits[113]. - The net interest margin FTE decreased to 2.60% in Q3 2021, down 42 bps from 3.02% in Q3 2020, primarily due to higher levels of low-yielding short-term liquid assets[112]. - The net interest spread decreased to 2.27% for the nine months ended September 30, 2021, compared to 2.82% for the same period in 2020[130]. Operational Highlights - A new banking center was opened in Lake Charles, Louisiana, and plans for expansion into New Orleans were announced[102]. - The company completed a $3.0 million stock repurchase program and renewed it for an additional $5.0 million[98]. - Operating expenses increased by $433,000 (3.3%) to $13.7 million for the third quarter of 2021 and by $2.2 million (5.7%) to $40.2 million for the nine months compared to the same periods in 2020[149][150]. - Technology expenses rose by $73,000 (11.0%) for the three months and $281,000 (15.1%) for the nine months ended September 30, 2021, driven by new systems to support market expansion[154]. - The efficiency ratio for Q3 2021 was 57.61%, compared to 55.88% for Q3 2020[104]. Legal Matters - The Company is involved in a class action lawsuit alleging wrongful imposition of non-sufficient funds fees, with the plaintiff seeking unspecified damages[245]. - The lawsuit was filed on August 28, 2020, in Louisiana's 19th Judicial District Court, representing all account holders who incurred similar charges[245]. - The Bank has denied the allegations and is vigorously defending the case, having filed an exception of no cause of action[245]. - Management believes that ongoing legal matters are not expected to materially affect consolidated results, financial condition, or cash flows[245]. - The Company cannot determine the probability of a materially adverse result or estimate potential exposure at this stage[245].