Red River Bancshares(RRBI) - 2025 Q1 - Quarterly Report

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