Red River Bancshares (RRBI) Q3 2024 earnings summary

Executive summary

• Net income for Q3 2024 was $8.8 million ($1.27 diluted EPS), up 9.6% sequentially, driven by higher net interest income and improved net interest margin FTE, with return on assets at 1.13% and return on equity at 11.11%.

• For the nine months ended September 30, 2024, net income was $24.9 million ($3.59 diluted EPS), down 6.2% year-over-year, primarily due to higher operating expenses and lower noninterest income.

• Assets totaled $3.10 billion as of September 30, 2024, up $53.2 million from June 30, 2024, mainly due to a $30.5 million increase in deposits.

• Book value per share rose to $47.51 as of September 30, 2024, from $44.58 at June 30, 2024, driven by reduced accumulated other comprehensive loss and net income.

• The company completed a $3.0 million stock repurchase and paid a $0.09 per share dividend in Q3 2024.

Financial highlights

• Net interest income for Q3 2024 was $22.5 million, up 3.1% sequentially, with net interest margin FTE improving to 2.98% from 2.92%.

• Noninterest income was $5.4 million, up 6.3% from Q2 2024, aided by a $151,000 nonrecurring loan fee and gains on equity securities.

• Operating expenses for Q3 2024 were $16.8 million, up slightly from Q2, mainly due to higher technology and tax expenses.

• Loans held for investment reached $2.06 billion, up 0.4% sequentially, with strong loan commitment closings.

• Total securities increased 4.7% to $697.7 million as of September 30, 2024.

Outlook and guidance

• Management expects net interest income and margin FTE to improve slightly in Q4 2024 as deposit rates are lowered in line with anticipated federal funds rate decreases.

• Anticipates redeploying $134 million in securities cash flows and $194.2 million in maturing fixed-rate loans into higher-yielding assets over the next year.

• Expects $558.5 million of time deposits to mature and reprice into lower cost deposits by September 2025.

• SBIC income is projected to be slightly higher in Q4 2024 compared to Q3.