Red River Bancshares (RRBI) Q2 2024 earnings summary

Executive summary

• Net income for Q2 2024 was $8.0 million ($1.16 diluted EPS), down 2.5% sequentially and 10.9% year-over-year; return on assets was 1.05% and return on equity was 10.69% for the quarter.

• Net interest margin FTE improved to 2.92% from 2.83% in Q1 2024, driven by higher yields on loans and securities.

• Loans held for investment reached $2.05 billion, up 2.8% from December 31, 2023; deposits decreased 3.0% to $2.72 billion over the same period.

• Opened a new banking center in the New Orleans market and continued organic expansion; recognized as a top-10 best-performing publicly traded financial institution (assets <$5B) for 2023.

• Stockholders' equity increased 1.0% to $307.0 million; capital ratios remain strong with total risk-based capital at 18.01%.

Financial highlights

• Net income for the six months ended June 30, 2024, was $16.2 million ($2.31 diluted EPS), down 12.9% year-over-year.

• Net interest income for Q2 2024 was $21.8 million, up 2.0% sequentially; for the six months, it was $43.2 million, down 2.9% year-over-year.

• Noninterest income for Q2 2024 was $5.1 million, up 3.4% sequentially, mainly from higher mortgage and SBIC income; for the six months, it was $10.0 million, down 3.1% year-over-year.

• Operating expenses for Q2 2024 were $16.7 million, up 5.1% sequentially, mainly due to higher loan/deposit, data processing, and occupancy costs.

• Efficiency ratio for Q2 2024 was 62.07%, up from 60.37% in Q1 2024; for the six months, 61.23% versus 57.74% prior year.

Outlook and guidance

• Management expects net interest margin FTE to improve slightly in the second half of 2024, driven by redeployment of maturing securities and loans into higher-yielding assets.

• Anticipates continued normal deposit and loan activity, with no material changes in risk profile or capital adequacy expected.

• Expects continued solid profitability and returns, with optimism about the Louisiana and U.S. economies.