What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2025-03-14 compared with 2024-03-15 · 329 added, 345 removed, 1199 unchanged (36% of the section changed)

3 unchanged sentences

Red River Bancshares, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheet of Red River Bancshares, Inc.

and its subsidiaries (the Company) as of December 31, 2023, and the related consolidated statements of income, comprehensive income, changes in stockholders’ equity, and cash flows for the year then ended, and the related notes (collectively referred to as the financial statements).

In our opinion, the financial statements present fairly, in all material respects, the consolidated financial position of the Company as of December 31, 2023, and the consolidated results of their operations and their cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States of America.

Change in Accounting Principle

As discussed in note 1 to the financial statements, the Company has changed its method of accounting for credit losses in 2023 due to the adoption of ASU No.

2016-13, Financial Instruments - Credit Losses (Topic 326):

Measurement of Credit Losses on Financial Instruments .

Opinion on the Financial Statements and Internal Control over Financial Reporting

We have audited the accompanying consolidated balance sheets of Red River Bancshares, Inc.

and its subsidiaries (the “Company”) as of December 31, 2024, and December 31, 2023, and the related consolidated statements of income, comprehensive income, changes in stockholders’ equity, and cash flows for each of the years then ended, and the related notes (collectively referred to as the “financial statements”).

We also have audited the Company’s internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”).

In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of the Company as of December 31, 2024 and 2023, and the consolidated results of their operations and their cash flows for each of the years then ended, in conformity with accounting principles generally accepted in the United States of America.

Also, in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2024, based on criteria established in the Internal Control - Integrated Framework (2013) issued by COSO.

Basis for Opinion

These financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s financial statements based on our audit.

The Company’s management is responsible for these financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Annual Report on Internal Control over Financial Reporting.

Our responsibility is to express an opinion on the Company’s financial statements and an opinion on the Company’s internal control over financial reporting based on our audits.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

As part of our audit, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.

Accordingly, we express no such opinion.

Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

We conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud and whether effective internal control over financial reporting was maintained in all material respects.

Our audits of the financial statements included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audit provides a reasonable basis for our opinion.

We have served as the Company’s auditors since 2023 (Note:

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk.

Our audits also included performing such other procedures as we considered necessary in the circumstances.

We believe that our audits provide a reasonable basis for our opinions.

Definition and Limitations of Internal Control over Financial Reporting

An entity’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

An entity’s internal control over financial reporting includes those policies and procedures that:

(i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the entity;

(ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the entity are being made only in accordance with authorizations of management and directors of the entity;

and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the entity’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the Audit Committee and that:

(i) related to accounts or disclosures that are material to the financial statements and (ii) involved our especially challenging, subjective, or complex judgments.

The communication of the critical audit matter does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Allowance for Credit Losses

The Company’s loans held for investment portfolio totaled $2.08 billion as of December 31, 2024, and the allowance for credit losses (“ACL”) on loans held for investment was $21.73 million.

The Company’s unfunded loan commitments totaled $521.50 million as of December 31, 2024, and the reserve for unfunded commitments was $642,000.

These amounts are included in the ACL and reserve for unfunded commitments.

As more fully described in Notes 1 and 3 to the Company’s financial statements, the Company estimates its exposure to expected credit losses as of the balance sheet date, for existing financial instruments held at amortized cost, and off-balance sheet exposures, such as unfunded loan commitments, letters of credit, and other financial guarantees that are not unconditionally cancellable by the Company.

The Company measures expected credit losses of financial assets on a collective (pool) basis when the financial assets share similar risk characteristics.

We identified the valuation of the ACL as a critical audit matter, as the determination of the ACL requires management to exercise significant judgment and could have a material impact on the Company’s financial statements.

Management must consider numerous subjective factors, including determining qualitative factors used to adjust the calculated allowance for credit losses, loan credit risk grading, and identifying loans requiring individual evaluation among others.

As disclosed by management, different assumptions and conditions could result in a materially different amount for the estimate of the ACL.

As such, there is a high degree of auditor judgment and subjectivity, and significant audit effort was required in performing procedures in auditing the ACL.

Addressing the critical audit matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the financial statements.

The primary procedures we performed to address this critical audit matter included:

• Obtained an understanding of the Company’s process for establishing the ACL, including determination of the qualitative factors and reserve assumptions for loans evaluated on an individual basis, and evaluated the process utilized by management to challenge the model results and determine the best estimate of the ACL as of the balance sheet date;

• Evaluated the design and tested the operating effectiveness of controls associated with the ACL process, including:

◦ reliability and accuracy of data used in the model,

◦ management’s review and approval of the selected qualitative factors,

◦ classifications of loans by loan segment,

◦ identification of problems loans,

◦ risk rating grades assigned to loans,

◦ management’s review and approval of the ACL;

• Evaluated the appropriateness of the models and methodologies used in quantitative calculations;

• Tested the completeness and accuracy of data used in the estimate;

• Performed analysis of prepayment speeds used to calculate the weighted average remaining maturity;

• Evaluated if qualitative factors were applied based on a comprehensive framework and compared to the adjustments utilized by management to both internal portfolio metrics and external macroeconomic data (as applicable) to support adjustments and evaluate trends in such adjustments;

• Verified historical net loss;

• Performed loan reviews in order to evaluate the accuracy of loan credit ratings and reasonableness of specific reserves on individually evaluated loans;

• Evaluated the disclosures in the financial statements.

/s/ EISNERAMPER LLP

We have served as the Company’s auditor since 2023 (Note:

Partners of Postlethwaite & Netterville, APAC joined EisnerAmper LLP in 2023.

Postlethwaite & Netterville, APAC had served as the Company’s auditor since 1998).

/s/ EISNERAMPER LLP

Baton Rouge, Louisiana

Metairie, Louisiana

March 14, 2025

3 unchanged sentences

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheet of Red River Bancshares, Inc.

and its subsidiaries (the Company) as of December 31, 2022, the related consolidated statements of income, comprehensive income, changes in stockholders’ equity, and cash flows for each of the years in the two-year period ended December 31, 2022, and the related notes (collectively referred to as the consolidated financial statements).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2022, and the results of its operations and its cash flows for each of the years in the two-year period ended December 31, 2022, in conformity with accounting principles generally accepted in the United States of America.

We have audited the accompanying consolidated statements of income, comprehensive income, changes in stockholders’ equity, and cash flows of Red River Bancshares, Inc.

and its subsidiaries (the Company) for the year ended December 31, 2022, and the related notes (collectively referred to as the financial statements).

In our opinion, the financial statements present fairly, in all material respects, the Company’s consolidated results and cash flows for the year ended December 31, 2022, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits.

These financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s financial statements based on our audit.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud.

We conducted our audit in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.

Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that our audits provide a reasonable basis for our opinion.

/s/ Postlethwaite & Netterville

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audit provides a reasonable basis for our opinion.

/s/ Postlethwaite & Netterville, APAC

We have served as the Company’s auditor since 1998.

16 unchanged sentences

Allowance for credit losses ( 21,731 ) ( 21,336 )

Loans held for investment, net 2,053,282 1,971,522

Premises and equipment, net 59,441 57,088

4 unchanged sentences

Other assets 33,433 32,287

$ 3,128,810 $ 3,082,686

Total Assets $ 3,149,594 $ 3,128,810

Noninterest-bearing deposits $ 866,496 $ 916,456

19 unchanged sentences

Total Liabilities and Stockholders’ Equity $ 3,149,594 $ 3,128,810

$ 3,128,810 $ 3,082,686

The accompanying notes are an integral part of these consolidated financial statements.

46 unchanged sentences

EARNINGS PER SHARE

$ 4.87 $ 5.14 $ 4.53

$ 4.86 $ 5.13 $ 4.51

Basic $ 4.96 $ 4.87 $ 5.14

Diluted $ 4.95 $ 4.86 $ 5.13

The accompanying notes are an integral part of these consolidated financial statements.

28 unchanged sentences

Issuance of restricted shares of common stock through stock incentive plan 7,550 — — — — —

Forfeiture of restricted shares of common stock ( 100 ) — — — — —

Issuance of shares of common stock as board compensation 675 35 — — — 35

Repurchase of common stock under stock repurchase program ( 153,553 ) ( 7,878 ) — — — ( 7,878 )

Repurchase of common stock ( 4,465 ) ( 218 ) — — — ( 218 )

Cash dividend - $ 0.28 per share

5 unchanged sentences

Issuance of restricted shares of common stock through stock incentive plan 9,300 — — — — —

Forfeiture of restricted shares of common stock ( 1,940 ) — — — — —

Issuance of shares of common stock as board compensation 1,660 85 — — — 85

Repurchase of common stock under stock repurchase program ( 4,465 ) ( 218 ) — — — ( 218 )

Repurchase of common stock ( 101,298 ) ( 4,999 ) — — — ( 4,999 )

Cash dividend - $ 0.32 per share

— — — ( 2,289 ) — ( 2,289 )

Cumulative effect of change in accounting principle — — — ( 569 ) — ( 569 )

Other comprehensive income (loss) — — — — 10,672 10,672

5 unchanged sentences

Issuance of shares of common stock as board compensation 811 41 — — — 41

Repurchase of common stock under stock repurchase program ( 101,298 ) ( 4,999 ) — — — ( 4,999 )

Repurchase of common stock, including excise tax ( 327,085 ) ( 16,522 ) — — — ( 16,522 )

Cash dividend - $ 0.36 per share

— — — ( 2,483 ) — ( 2,483 )

Cumulative effect of change in accounting principle — — — ( 569 ) — ( 569 )

Other comprehensive income (loss) — — — — 247 247

38 unchanged sentences

Capital contribution in partnerships ( 861 ) ( 1,819 ) ( 892 )

Return of capital contribution in partnerships 856 — —

Net (increase) decrease in loans HFI ( 82,799 ) ( 77,042 ) ( 232,733 )

Purchase of bank owned life insurance — — ( 5,000 )

Proceeds from sales of foreclosed assets 69 15 641

18 unchanged sentences

SUPPLEMENTAL DISCLOSURES

Cash paid during the year for:

Cash paid during the period for:

Interest $ 48,353 $ 25,693 $ 7,483

24 unchanged sentences

Operating Segments

While the chief operating decision-maker monitors the revenue streams of the various products and services, operations are managed and financial performance is evaluated on a company-wide basis.

Accordingly, all of the financial service operations are considered by management to be aggregated in one reportable operating segment.

While the CODM monitors the revenue streams of the various banking products, services, and markets, banking operations are managed and financial performance is evaluated on a company-wide basis.

Accordingly, all of the banking operations are considered by management to be aggregated in one reportable operating segment.

For additional segment information see “Note 18.

Segment Reporting.”

Use of Estimates

2 unchanged sentences

Actual results could differ from those estimates.

On January 1, 2023, the Company adopted ASU No.

2016-13, Financial Instruments - Credit Losses (Topic 326):

Measurement of Credit Losses on Financial Instruments , which significantly changed the impairment model for most financial assets that are measured at amortized cost, including loans HFI, securities, and unfunded commitments, from an incurred loss model to an expected loss model.

Accounting policies related to the ACL are considered critical as these policies involve considerable subjective judgment and estimation by management.

Changes in factors and forecasts used in evaluating the overall loan portfolio may result in significant changes in the ACL and related provision expense in future periods.

The allowance level is influenced by loan portfolio growth, changes in the quality and composition of the loan portfolio, the level of nonperforming loans, delinquency and charge-off trends, current economic conditions, forecasted information, and other conditions influencing loss expectations.

Changes to the assumptions in the model in future periods could have a material impact on the Company’s Consolidated Financial Statements.

Refer to “- Securities” and “- Loans Held for Investment” for a detailed discussion on the Company’s methodologies for estimating expected credit losses.

Acquisition Accounting

11 unchanged sentences

Equity securities include a CRA mutual fund owned by the Company, which is carried at fair value with any periodic changes in value recorded through the statements of income.

Prior to the adoption of ASC 326 on January 1, 2023, declines in the fair value of HTM and AFS debt securities below their cost that were deemed to be other-than-temporary were reflected in earnings as realized losses to the extent the losses were credit related.

FASB issued accounting guidance related to the recognition and presentation of OTTI.

The accounting guidance specified that if (1) a company did not have the intent to sell a debt security prior to recovery;

and (2) it was more likely than not that it would not have to sell the debt security prior to recovery, the security would not be considered other-than-temporarily impaired unless there was a credit loss.

When an entity did not intend to sell the security, and it was more likely than not that the entity would not have to sell the security before recovery of its cost basis, the entity would recognize the credit component of an OTTI of a debt security in earnings and the remaining portion in other comprehensive income (loss).

For HTM debt securities, the amount of OTTI recorded in other comprehensive income (loss) for the noncredit portion of an OTTI should be amortized over the remaining life of the security based on the timing of its future estimated cash flows.

Securities AFS

The Company adopted the provisions of ASC 326 on January 1, 2023.

The Company is required to measure expected credit losses on securities AFS.

1 unchanged sentence

Management evaluates each security by considering the nature of the collateral, potential future changes in collateral values, default rates, delinquency rates, third-party guarantees, credit ratings, volatility of the security’s fair value, and historical loss information for financial assets secured with similar collateral, along with other factors.

In analyzing an issuer’s financial condition, management considers whether the securities are issued by the federal government or its agencies, whether downgrades by bond rating agencies have occurred, the results of reviews of the issuer’s financial condition, and the issuer’s anticipated ability to pay the contractual cash flows of the investments.

In analyzing an issuer’s financial condition, management considers whether the securities are issued by

the federal government or its agencies, whether downgrades by bond rating agencies have occurred, the results of reviews of the issuer’s financial condition, and the issuer’s anticipated ability to pay the contractual cash flows of the investments.

If a decline in the fair value related to creditworthiness or other factors is determined, an ACL is calculated using a discounted cash flow method, whereby management compares the present value of expected cash flows with the amortized cost basis of the security.

45 unchanged sentences

Allowance for Credit Losses - Loans

The ACL is a valuation account calculated in accordance with ASC 326 and is deducted from the amortized cost basis of loans HFI to present management’s best estimate of the expected credit losses to be recognized over the lifetime of the loans.

Effective January 1, 2023, the ACL is a valuation account that is deducted from the amortized cost basis of loans HFI to present management’s best estimate of the expected credit losses to be recognized over the lifetime of the loans.

The amount of the ACL should not be interpreted as an indication that charge-offs in future periods will necessarily occur in those amounts, or at all.

Loans are charged-off against the allowance when management is relatively certain that principal and interest will be uncollectible.

Loans are charged-off against the allowance when management is relatively certain that principal

and interest will be uncollectible.

Expected recoveries do not exceed the aggregate of amounts previously charged-off and expected to be charged-off.

6 unchanged sentences

These qualitative factors serve to compensate for additional areas of uncertainty inherent in the portfolio that are not reflected in the Company’s historic loss factors.

The determination of the amount of allowance involves a high degree of judgement and subjectivity.

The determination of the amount of allowance involves a high degree of judgment and subjectivity.

The ACL is measured on a collective pool basis when similar risk characteristics and risk profiles exist.

7 unchanged sentences

Risks inherent in this portfolio pool include fluctuations in the value of real estate, project completion risk, and change in market trends.

Commercial construction This category consists of loans to small and medium-sized businesses to construct owner occupied facilities and developers of commercial real estate investment properties.

Commercial construction This category consists of loans to small and medium-sized businesses to construct owner occupied facilities and developers of CRE investment properties.

Risks inherent in this portfolio pool include fluctuations in the value of real estate, project completion risk, change in market trends, and the ability to sell the property upon completion.

8 unchanged sentences

Risks inherent in this portfolio pool include local unemployment rates, changes in the local economy, and factors that would impact property values.

Owner occupied commercial real estate This category consists of loans to established operating companies and secured by owner occupied offices and industrial real estate properties.

Owner occupied CRE This category consists of loans to established operating companies and secured by owner occupied offices and industrial real estate properties.

Risks inherent in this portfolio pool include fluctuations in the value of real estate, the overall strength of the economy, new job creation trends, environmental contamination, and the quality of the borrower’s management.

Non-owner occupied commercial real estate This category consists of loans to developers and other persons or entities and secured by non-owner occupied commercial real estate properties.

Non-owner occupied CRE This category consists of loans to developers and other persons or entities and secured by non-owner occupied CRE properties.

Risks inherent in this portfolio pool include fluctuations in the value of real estate, the overall strength of the economy, new job creation trends, tenant vacancy rates, environmental contamination, and the quality of the borrower’s management.

15 unchanged sentences

The Company estimates expected credit losses over the contractual period in which the Company is exposed to credit risk via a contractual obligation to extend credit, unless that obligation is unconditionally cancellable by the Company.

The reserve for unfunded commitments is recorded within accrued interest payable on the consolidated balance sheets, and the related provision is recorded in other operating expenses on the consolidated statements of income.

The reserve for unfunded commitments is recorded within other liabilities on the consolidated balance sheets, and the related provision is recorded in provision for credit losses on the consolidated statements of income.

The estimate includes consideration of the likelihood that funding will occur and an estimate of expected credit losses on commitments expected to be funded over its estimated life.

17 unchanged sentences

Foreclosed assets are included in other assets on the consolidated balance sheets.

As of December 31, 2023, the Company had $ 69,000 of foreclosed assets.

As of December 31, 2022, the Company had no foreclosed assets.

As of December 31, 2024 and 2023, the Company had $ 38,000 and $ 69,000 of foreclosed assets, respectively.

Credit Related Financial Information

16 unchanged sentences

Under provisions of the LBCA, there is no concept of “Treasury Shares.” Rather, shares purchased by the Company constitute authorized but unissued shares.

Accordingly, the Company’s consolidated balance sheets reflect the cost of shares purchased by the Company within common stock.

Accordingly, the Company’s consolidated balance sheets reflect the cost of shares purchased by the Company, and any applicable excise taxes, within common stock.

Comprehensive Income

31 unchanged sentences

• Revenue earned at a point in time - Fee income (including wire transfer, check ordering, and other transactional fees), NSF/OD charges, ATM/Card fee income (including ATM transaction fees and credit and debit card interchange income), and brokerage transaction income.

Revenue is recorded as transactions occur or services are provided to customers.

The Company is the principal in each of these contracts with

the exception of credit and debit card interchange fees, online transaction interchange fees, sweep income, and brokerage services income, in which case the Company is acting as the agent and records revenue net of expenses paid.

Revenue is recorded as transactions

occur or services are provided to customers.

The Company is the principal in each of these contracts with the exception of credit and debit card interchange fees, online transaction interchange fees, sweep income, and brokerage services income, in which case the Company is acting as the agent and records revenue net of expenses paid.

• Revenue earned over time (generally under a monthly contract) - Debit card agreement, safe deposit box fees, and brokerage agreement income.

5 unchanged sentences

Accounting Standards Adopted in 2024

2016-13, Financial Instruments - Credit Losses (Topic 326):

Measurement of Credit Losses on Financial Instruments.

On January 1, 2023 , the Company adopted ASC 326 , as amended, which replaces the incurred loss methodology with an expected loss methodology that is referred to as the CECL methodology.

The measurement of expected credit losses under the CECL methodology is applicable to financial assets measured at amortized cost, including loans HFI, securities HTM, and unfunded commitments.

In addition, ASC 326 made changes to the accounting for securities AFS, which requires credit losses to be presented as an allowance rather than as a write-down on securities AFS that management does not intend to sell or believes that it is more likely than not that the Company will have the ability to hold until each security has recovered its cost basis.

The Company adopted ASC 326 using the modified retrospective method for all financial assets measured at amortized cost and unfunded commitments.

Results for reporting periods beginning after January 1, 2023, are presented under ASC 326 while prior period amounts continue to be reported in accordance with previously applicable GAAP.

The Company recorded a $ 569,000 , net of tax, decrease to stockholders’ equity as of January 1, 2023, for the cumulative effect of adopting ASC 326 .

The transition adjustment included a $ 278,000 increase to the December 31, 2022 ALL and established a $ 442,000 reserve for unfunded commitments as presented in the following table.

(in thousands) December 31, 2022

ALL Impact of ASC 326 Adoption

January 1, 2023

Commercial real estate $ 7,720 $ 876 $ 8,596

One-to-four family residential 5,682 1,231 6,913

Construction and development 1,654 ( 444 ) 1,210

Commercial and industrial 4,350 ( 822 ) 3,528

Tax-exempt 751 ( 427 ) 324

Consumer 471 ( 136 ) 335

Total $ 20,628 $ 278 $ 20,906

Reserve for unfunded commitments $ — $ 442 $ 442

Due to the zero credit loss assumption on securities AFS and HTM and the considerations applied to the securities AFS, no ACL was recorded on January 1, 2023 for securities AFS or HTM.

2021-08, Business Combinations (Topic 805):

Accounting for Contract Assets and Contract Liabilities from Contracts with Customers.

The amendments in this update address how to determine whether a contract liability is recognized by the acquirer in a business combination.

The amendment also resolves the inconsistency of post-acquisition revenue recognition by providing specific guidance on how to recognize and measure acquired contract assets and contract liabilities from revenue contracts in a business combination.

On January 1, 2023, the Company adopted ASU No.

Adoption of this ASU did not have an impact on the Company’s consolidated financial statements.

2022-02 Financial Instruments – Credit Losses (Topic 326):

Troubled Debt Restructurings and Vintage Disclosures.

The guidance issued in this update eliminates the accounting guidance for TDRs by creditors in Subtopic 3 10-40, Receivables – Troubled Debt Restructurings by Creditors , but also enhances the disclosure requirements for certain loan refinancings and restructurings by creditors when a borrower is experiencing financial difficulty.

The guidance requires that an entity disclose current-period gross write-offs by year of origination for financing receivables and net investments in leases within the scope of Subtopic 326-20, Financial Instruments – Credit Losses – Measured at

Amortized Cost .

On January 1, 2023, the Company adopted ASU No.

2022-02 on a prospective basis .

Adoption of this ASU did not have a material impact on the Company’s consolidated financial statements.

2023-01, Leases (Topic 842):

Common Control Arrangements.

The guidance issued in this update addresses two issues.

First, the standard requires entities to determine whether a related party arrangement between entities under common control is a lease.

If the arrangement is a lease, the accounting for the lease is treated the same as an arrangement with an unrelated party.

This is a change in the requirement under Topic 840, Leases, which used the basis of economic substance.

Secondly, the standard requires leasehold improvements associated with common control leases be amortized by the lessee over the useful life of the leasehold improvements to the common control group as long as the lessee controls the use of the underlying asset.

If the lessor obtained control of the use of the underlying asset through a lease with another entity not within the common control group, the amortization period may not exceed the amortization period of the common control group.

If the lessee no longer controls the use of the underlying asset, the improvement is accounted for as a transfer between entities under common control through an adjustment to equity.

These leasehold improvements are subject to the impairment guidance in Topic 360 Property, Plant and Equipment .

Both items of this amendment are effective for fiscal years beginning after December 15, 2023.

Early adoption is permitted for both interim periods and annual financial statements that have not been issued.

On January 1, 2023, the Company early adopted ASU No.

2023-01, and it did not have an impact on the Company’s consolidated financial statements.

2023-03, Presentation of Financial Statements (Topic 205), Income Statement - Reporting Comprehensive Income (Topic 220), Distinguishing Liabilities from Equity (Topic 480), Equity (Topic 505), and Compensation - Stock Compensation (Topic 718).

The guidance in this update amends various SEC paragraphs relating to financial disclosures.

This update is an alignment of SEC and GAAP reporting.

This update was issued in the third quarter of 2023 and was effective upon issuance.

The adoption of this guidance did not have a material impact on the Company’s consolidated financial statements.

2023-06, Disclosure Improvements.

The guidance in this update amends various SEC paragraphs relating to financial disclosures.

This update is an alignment of SEC and GAAP reporting.

This update was issued in the fourth quarter of 2023 and was effective upon issuance.

The adoption of this guidance did not have a material impact on the Company’s consolidated financial statements.

Recent Accounting Pronouncements

2023-07, Segment Reporting (Topic 280):

The guidance issued in this update requires improvement to the disclosures about a public entity’s reportable segments and more detailed information about a reportable segment’s expenses.

Even though the Company has a single reportable segment, all the disclosures required by this update are required.

Improvements to Reportable Segment Disclosures.

The guidance issued in this update requires improvement to the disclosures about a public entity’s reportable segments and more detailed information about a reportable segment’s expenses and other segment items.

Although the Company has a single reportable segment, all the disclosures required by this update are required.

Under this guidance, public entities are required to disclose segment expenses and other segment items on an annual and interim basis and to provide in interim periods all disclosures about a reportable segment that are currently required annually.

The goal of these disclosures is to enable investors to develop more decision-useful financial analyses.

This update is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024.

Early adoption is permitted.

The Company does not expect the adoption of this standard to have a material impact on the Company’s consolidated financial statements.

The amendments in this update should be applied retrospectively to all previous periods presented.

The adoption of this standard did not have an impact on the Company’s consolidated financial statements.

Recent Accounting Pronouncements

ASU 2023-09 Income Taxes (Topic 740):

Improvements to Income Tax Disclosures.

The guidance in this update provides enhanced transparency and decision usefulness of income tax disclosures.

The amendment addresses investor requests for income tax information through improvements to income tax disclosures related to the rate reconciliation and income taxes paid information.

The guidance requires public business entities to disclose in their rate reconciliation table additional categories of information about federal, state, and foreign income taxes and to provide more details about the reconciling items in some categories if the items meet a quantitative threshold.

The guidance also requires all entities to disclose annually income taxes paid (net of refunds received) disaggregated by federal, state, and foreign taxes and to disaggregate the information by jurisdiction based on a quantitative threshold.

Investors anticipate theses disclosures will provide an understanding of an entity’s exposures to changes in tax legislation and allow investors to better assess income tax information that affects cash flow forecasts and capital allocation decisions, as well as identify opportunities to increase future cash flows.

This update is effective for annual periods beginning after December 15, 2024.

The standard is effective for annual periods beginning after December 15, 2024.

Early adoption is permitted.

The amendments should be applied on a prospective basis.

Retrospective application is permitted.

The amendments should be applied on a prospective basis, but retrospective application is permitted.

The Company does not expect the adoption of this standard to have a material impact on the Company’s consolidated financial statements.

2024-01, Compensation - Stock Compensation (Topic 718):

Scope Application of Profits Interest and Similar Awards.

The guidance issued in this update was designed to improve GAAP by adding an illustrative example that clarifies when the scope guidance of Topic 718 should be applied, since diversity in practice exists.

This ASU does not change existing guidance.

The standard is effective for annual periods beginning after December 15, 2024, and interim periods within those annual periods.

Early adoption is permitted.

The amendments in this update should be applied retrospectively to all prior periods presented or prospectively.

The Company does not expect the adoption of this guidance to have a material impact on the Company’s consolidated financial statements.

2024-02, Codification Improvements - Amendments to Remove References to the Concept Statements.

The guidance issued in this update amends the codification to remove references to various FASB Concept Statements.

The codification will be updated to clarify or correct unintended application of guidance that is not expected to have any significant effect on current accounting practice or cost to most entities.

The standard is effective for fiscal years beginning after December 15, 2024.

Early adoption is permitted.

The Company does not expect the adoption of this guidance to have a material impact on the Company’s consolidated financial statements.

2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40).

The guidance issued in this update was designed to improve financial reporting by requiring entities to disclose additional information about specific expense categories in the notes to financial statements.

This standard is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027.

Early adoption is permitted.

The amendments in this update should be applied either prospectively to

financial statements issued for reporting periods after the effective date of this update or retrospectively to any or all prior periods presented in the financial statements.

The Company does not expect the adoption of this guidance to have a material impact on the Company’s consolidated financial statements.

Reclassification

7 unchanged sentences

As of December 31, 2024, the estimated fair value of securities AFS was $ 550.1 million.

The net unrealized loss on securities AFS decreased $ 12.0 million for the year ended December 31, 2023, resulting in a net unrealized loss of $ 62.2 million as of December 31, 2023.

The net unrealized loss on securities AFS increased $ 1.0 million for the year ended December 31, 2024, resulting in a net unrealized loss of $ 63.2 million as of December 31, 2024.

Securities HTM, which the Company has the intent and ability to hold until maturity, are carried at amortized cost.

45 unchanged sentences

The Company evaluates securities AFS for impairment when there has been a decline in fair value below the amortized cost basis of a security to determine whether there is a credit loss associated with the decline in fair value on at least a quarterly basis, and more frequently when economic or market concerns warrant such evaluation.

Due to the zero credit loss assumption and the considerations applied to the securities AFS, no ACL was recorded on January 1, 2023, and there was no ACL for securities AFS as of December 31, 2023.

Due to the zero credit loss assumption and evaluation of the considerations applied to the securities AFS, there was no ACL for securities AFS as of December 31, 2024 and 2023.

Also, as part of the Company’s evaluation of its intent and ability to hold investments for a period of time sufficient to allow for any anticipated recovery in the market, the Company considers its investment strategy, cash flow needs, liquidity position, capital adequacy, and interest rate risk position.

Management does not intend to sell these securities prior to recovery, and it is more likely than not that the Company will have the ability to hold them, primarily due to adequate liquidity, until each security has recovered its cost basis.

Due to the zero credit loss assumption on the securities HTM portfolio, no ACL was recorded on January 1, 2023, and there was no ACL for securities HTM as of December 31, 2023.

Accrued interest receivable totaled $ 3.0 million as of December 31, 2023 and December 31, 2022, for securities AFS and securities HTM and was reported in accrued interest receivable on the consolidated balance sheets.

Information pertaining to securities AFS and securities HTM with gross unrealized losses as of December 31, 2023 and 2022, aggregated by investment category and length of time that individual securities have been in a continuous loss position, is described as follows:

Due to the zero credit loss assumption on the securities HTM portfolio, there was no ACL recorded for securities HTM as of December 31, 2024 and 2023.

Accrued interest receivable totaled $ 3.0 million as of December 31, 2024 and 2023, for securities AFS and securities HTM and was reported in accrued interest receivable on the consolidated balance sheets.

Information pertaining to securities AFS with gross unrealized losses as of December 31, 2024 and 2023, aggregated by investment category and length of time that individual securities have been in a continuous loss position, is described as follows:

December 31, 2024

7 unchanged sentences

Total Securities AFS $ ( 860 ) $ 97,178 $ ( 62,942 ) $ 376,357

Securities HTM:

Mortgage-backed securities $ — $ — $ ( 22,098 ) $ 118,216

agency securities — — ( 109 ) 813

Total Securities HTM $ — $ — $ ( 22,207 ) $ 119,029

December 31, 2023

6 unchanged sentences

Total Securities AFS $ ( 200 ) $ 43,499 $ ( 62,379 ) $ 487,233

Securities HTM:

Mortgage-backed securities $ ( 19,142 ) $ 131,629 $ — $ —

agency securities ( 134 ) 778 — —

Total Securities HTM $ ( 19,276 ) $ 132,407 $ — $ —

As of December 31, 2023, the Company held 545 securities AFS and securities HTM that were in unrealized loss positions.

The aggregate unrealized loss of these securities as of December 31, 2023, was 10.96 % of the amortized cost basis of total debt securities.

The proceeds from sales and calls of debt securities and their gross gain (loss) for the years ended December 31, 2023, 2022, and 2021, are shown below:

As of December 31, 2024, the Company held 485 securities AFS that were in unrealized loss positions.

The aggregate unrealized loss of these securities AFS as of December 31, 2024, was 10.40 % of the amortized cost basis of securities AFS.

The proceeds from sales of debt securities and their gross gain (loss) for the years ended December 31, 2024, 2023, and 2022, are shown below:

Years Ended December 31,

7 unchanged sentences

Equity securities are carried at fair value on the consolidated balance sheets with periodic changes in value recorded through the consolidated statements of income.

As of December 31, 2022, equity securities had a fair value of $ 10.0 million with a recognized loss

of $ 468,000 for the year ended December 31, 2022.

The loss on equity securities during 2022 was due to a significant increase in interest rates.

During 2023, the Company sold $ 7.0 million of the mutual fund.

As of December 31, 2024, equity securities had a fair value of $ 2.9 million with a recognized loss of $ 28,000 for the year ended December 31, 2024.

As of December 31, 2023, equity securities had a fair value of $ 3.0 million with a recognized loss of $ 14,000 for the year ended December 31, 2023.

Pledged Securities

11 unchanged sentences

Total loans HFS $ 2,547 $ 1,306

Deferred loan origination fees, net of certain direct costs, were $ 1.4 million as of December 31, 2023 and 2022.

Deferred loan origination fees, net of certain direct costs, were $ 1.7 million and $ 1.4 million as of December 31, 2024 and 2023, respectively.

Accrued interest receivable on loans HFI totaled $ 6.9 million and $ 6.8 million as of December 31, 2024 and 2023, respectively, and was reported in accrued interest receivable on the accompanying consolidated balance sheets.

1 unchanged sentence

The majority of the lending activity occurs within the Bank’s Louisiana markets.

The Bank maintains a diversified loan portfolio with a focus on commercial real estate, one-to-four family residential real estate, and commercial and industrial loans.

The Bank maintains a diversified loan portfolio with a focus on CRE, one-to-four family residential real estate, and commercial and industrial loans.

Substantially all of the Bank’s real estate loans are secured by properties located within Louisiana.

Allowance for Credit Losses

Effective January 1, 2023, the Company adopted the provisions of ASC 326 using the modified retrospective method.

For reporting periods beginning on and after January 1, 2023, the Company maintains an ACL on all loans that reflects management’s estimate of expected credit losses for the full life of the loan portfolio.

The Company maintains an ACL on all loans that reflects management’s estimate of expected credit losses for the full life of the loan portfolio.

The following table summarizes the activity in the ACL by category for the year ended December 31, 2024:

(in thousands) Beginning

Balance Impact of ASC 326 Adoption

Losses Charge-offs Recoveries Ending

Balance Provision

Charge-offs Recoveries Ending

Commercial real estate $ 9,118 $ ( 71 ) $ — $ — $ 9,047

5 unchanged sentences

Total allowance for credit losses $ 21,336 $ 1,000 $ ( 803 ) $ 198 $ 21,731

Allowance for Loan Losses

For reporting periods prior to January 1, 2023, the Company maintained an ALL on loans that represented management’s estimate of probable losses incurred in the portfolio category.

The following table summarizes the activity in the ALL by category for the year ended December 31, 2022:

(1) The $ 1.2 million provision for credit losses on the consolidated statements of income for the year ended December 31, 2024, includes $ 1.0 million for loans and $ 200,000 for unfunded loan commitments.

Effective January 1, 2023, the Company adopted the provisions of ASC 326 using the modified retrospective method.

The following table summarizes the activity in the ACL by category for the year ended December 31, 2023:

(in thousands) Beginning

Balance Provision

Balance Impact of ASC 326 Adoption

Losses Charge-offs Recoveries Ending

5 unchanged sentences

Consumer 471 ( 136 ) 217 ( 383 ) 128 297

Total allowance for loan losses $ 19,176 $ 1,750 $ ( 547 ) $ 249 $ 20,628

Total allowance for credit losses $ 20,628 $ 278 $ 735 $ ( 473 ) $ 168 $ 21,336

Allowance for Loan Losses

For reporting periods prior to January 1, 2023, the Company maintained an ALL on loans that represented management’s estimate of probable losses incurred in the portfolio category.

The following table summarizes the activity in the ALL by category for the year ended December 31, 2022:

11 unchanged sentences

(in thousands) Individually

Impairment Collectively

Impairment Total

Evaluated Collectively

Evaluated Total

Allowance for credit losses:

13 unchanged sentences

Total loans HFI $ 8,905 $ 2,066,108 $ 2,075,013

The balance in the ALL and the related recorded investment in loans by category as of December 31, 2022, are as follows:

The balance in the ACL and the related recorded investment in loans by category as of December 31, 2023, are as follows:

(in thousands) Individually

Impairment Collectively

Impairment Total

Allowance for loan losses:

Evaluated Collectively

Evaluated Total

Allowance for credit losses:

Commercial real estate $ 342 $ 8,776 $ 9,118

4 unchanged sentences

Consumer 104 193 297

Total allowance for loan losses $ 314 $ 20,314 $ 20,628

Total allowance for credit losses $ 729 $ 20,607 $ 21,336

Commercial real estate $ 1,379 $ 850,203 $ 851,582

15 unchanged sentences

Total loans HFI $ 1,267 $ 1,701 $ 2,968

The following table presents nonaccrual loans as of December 31, 2023:

(in thousands) Nonaccrual with No ACL Nonaccrual with ACL Total Nonaccrual

Commercial real estate $ — $ 714 $ 714

One-to-four family residential — 269 269

Construction and development — — —

Commercial and industrial 709 135 844

Tax-exempt — — —

Consumer — 132 132

Total loans HFI $ 709 $ 1,250 $ 1,959

No material interest income was recognized in the consolidated statements of income on nonaccrual loans for the years ended December 31, 2024, 2023, or 2022.

11 unchanged sentences

Total loans HFI $ 1,842 $ 2,722 $ 2,976 $ 2,067,473 $ 2,075,013 $ 266

The following table presents the current, past due, and nonaccrual loans by category as of December 31, 2022:

(in thousands) Current 30-89 Days

The following table presents the aging analysis of the past due loans and loans 90 days or more past due and still accruing interest by loan category as of December 31, 2023:

(in thousands) 30-59 Days 60-89 Days

Past Due 90 Days

Past Due Nonaccrual Total

or More Current Total

Loans HFI 90 Days or More Past Due and Accruing

Commercial real estate $ 36 $ — $ 678 $ 850,868 $ 851,582 $ —

31 unchanged sentences

Total impaired loans $ 7,658 $ 7,568 $ 314 $ 6,219 $ 252

Information pertaining to impaired loans as of and for the year ended December 31, 2021, is as follows:

(in thousands) Unpaid

Balance Recorded

Investment Related

Allowance Average

Investment Interest

With no related allowance recorded:

Commercial real estate $ 1,599 $ 1,595 $ — $ 1,969 $ 78

One-to-four family residential 483 434 — 539 19

Construction and development 501 501 — 400 32

Commercial and industrial — — — 355 —

Tax-exempt — — — — —

Consumer 8 8 — 4 1

Total with no related allowance 2,591 2,538 — 3,267 130

With allowance recorded:

Commercial real estate 3,416 3,416 68 2,111 64

One-to-four family residential — — — 145 —

Construction and development — — — — —

Commercial and industrial 85 77 40 1,570 5

Tax-exempt — — — — —

Consumer 118 118 118 112 5

Total with related allowance 3,619 3,611 226 3,938 74

Total impaired loans $ 6,210 $ 6,149 $ 226 $ 7,205 $ 204

Loan Modifications

The Company adopted ASU No.

2022-02 Financial Instruments – Credit Losses (Topic 326):

Troubled Debt Restructurings and Vintage Disclosures effective January 1, 2023, using the prospective method.

This ASU eliminates the TDR recognition and measurement guidance and requires all loan modifications to be evaluated based on whether the modification represents a new loan or a continuation of an existing loan.

Modifications are made to a borrower experiencing financial difficulty, and the modified terms are in the form of principal forgiveness, interest rate reduction, other-than-insignificant payment delay, or a term extension in the current reporting period.

As of December 31, 2023, the amortized cost basis of loans that were modified to borrowers experiencing financial difficulty during the year ended December 31, 2023 is as follows:

December 31, 2023

(dollars in thousands) Term Extension Total Class of Loans Receivable Financial Effect

Commercial real estate $ — — %

One-to-four family residential 300 0.1 % Amortization period was extended by a weighted-average of 2.34 years.

Construction and development — — %

Commercial and industrial — — %

Tax-exempt — — %

Consumer — — %

Total $ 300 0.1 %

For the years ended December 31, 2024 and 2023, modifications were made to certain borrowers by granting term extensions.

These term extensions were not significant to the consolidated financial statements.

Troubled Debt Restructurings

For reporting periods prior to January 1, 2023, when ASC 326 was adopted, the restructuring of a loan was considered a TDR if the borrower was experiencing financial difficulties and the Bank had granted a concession.

A summary of current, past due, and nonaccrual TDR loans as of December 31, 2022, is as follows:

(dollars in thousands) Current 30-89

Past Due 90 Days

Past Due Nonaccrual Total

Commercial real estate $ 3,197 $ — $ — $ 42 $ 3,239

One-to-four family residential 797 151 — 22 970

Construction and development — — — — —

Commercial and industrial — — — — —

SBA PPP, net of deferred income — — — — —

Tax-exempt — — — — —

Consumer 10 — — 101 111

Total $ 4,004 $ 151 $ — $ 165 $ 4,320

Number of TDR loans 11 2 — 3 16

A summary of loans modified as TDRs that occurred during the years ended December 31, 2022 and 2021, is as follows:

December 31, 2022 December 31, 2021

Recorded Investment Recorded Investment

A summary of loans modified as TDRs that occurred during the year ended December 31, 2022, is as follows:

December 31, 2022

Recorded Investment

(dollars in thousands) Loan

Modification Post

Modification Loan

Modification Post

Commercial real estate 1 $ 50 $ 50

5 unchanged sentences

Total 7 $ 850 $ 853

The TDRs described above increased the ALL by $ 101,000 and $ 14,000 during the years ended December 31, 2022 and 2021, respectively.

Additionally, there were no charge-offs of TDRs in 2022 or 2021, and there were no TDRs that subsequently defaulted in 2022 or 2021.

The TDRs described above increased the ALL by $ 101,000 during the year ended December 31, 2022.

Additionally, there were no charge-offs of TDRs in 2022, and there were no TDRs that subsequently defaulted in 2022.

Credit Quality Indicators

11 unchanged sentences

As of December 31, 2024, the Company had no loans classified as doubtful or loss.

The following table summarizes loans by risk rating and year of origination as of December 31, 2023:

The following table summarizes loans by risk rating and year of origination as of December 31, 2024, and gross charge-offs for the year ended December 31, 2024:

Year of Origination

29 unchanged sentences

Total loans HFI $ 421,855 $ 318,025 $ 428,770 $ 371,975 $ 166,712 $ 205,633 $ 162,043 $ 2,075,013

Current period gross charge-offs $ 12 $ 20 $ 1 $ — $ 10 $ 25 $ 405 $ 473

The following table summarizes loans by risk rating as of December 31, 2022:

(in thousands) Pass Special

Mention Substandard Doubtful Loss Total

Gross charge-offs $ 13 $ 27 $ 37 $ 1 $ — $ 312 $ 413 $ 803

As of December 31, 2023, the Company had no loans classified as doubtful or loss.

The following table summarizes loans by risk rating and year of origination as of December 31, 2023, and gross charge-offs for the year ended December 31, 2023:

Year of Origination

(in thousands) 2023 2022 2021 2020 2019 Prior Years Revolving Lines Total

Commercial real estate

Pass $ 124,134 $ 256,707 $ 239,364 $ 76,754 $ 63,475 $ 61,957 $ 18,467 $ 840,858

Special Mention 73 — 3,186 — 1,031 4,082 — 8,372

Substandard 184 779 675 — — 714 — 2,352

Total $ 124,391 $ 257,486 $ 243,225 $ 76,754 $ 64,506 $ 66,753 $ 18,467 $ 851,582

One-to-four family residential

Pass $ 122,004 $ 134,583 $ 129,388 $ 90,190 $ 31,110 $ 74,077 $ 16,472 $ 597,824

Special Mention — — — — — 261 — 261

Substandard — 79 — 37 385 827 74 1,402

Total $ 122,004 $ 134,662 $ 129,388 $ 90,227 $ 31,495 $ 75,165 $ 16,546 $ 599,487

Construction and development

Pass $ 54,189 $ 55,515 $ 10,333 $ 1,742 $ 2,158 $ 1,015 $ 286 $ 125,238

Special Mention — — — — — — — —

Substandard — — — — — — — —

Total $ 54,189 $ 55,515 $ 10,333 $ 1,742 $ 2,158 $ 1,015 $ 286 $ 125,238

Commercial and industrial

Tax-exempt 83,166 — — — — 83,166

Consumer 27,298 — 138 — — 27,436

Pass $ 73,653 $ 49,637 $ 51,012 $ 13,863 $ 7,409 $ 813 $ 107,171 $ 303,558

Special Mention 1,208 937 4,659 — 310 509 3,173 10,796

Substandard 4 — 59 5 54 51 800 973

Total $ 74,865 $ 50,574 $ 55,730 $ 13,868 $ 7,773 $ 1,373 $ 111,144 $ 315,327

Pass $ 959 $ 15,679 $ 8,174 $ 13,919 $ 4,250 $ 29,932 $ — $ 72,913

Special Mention — — — — — — — —

Substandard — — — — — — — —

Total $ 959 $ 15,679 $ 8,174 $ 13,919 $ 4,250 $ 29,932 $ — $ 72,913

Pass $ 16,947 $ 6,385 $ 2,325 $ 858 $ 363 $ 133 $ 1,173 $ 28,184

Special Mention — — — — — — — —

Substandard — 29 — — — 90 8 127

Total $ 16,947 $ 6,414 $ 2,325 $ 858 $ 363 $ 223 $ 1,181 $ 28,311

Total loans HFI $ 393,355 $ 520,330 $ 449,175 $ 197,368 $ 110,545 $ 174,461 $ 147,624 $ 1,992,858

Gross charge-offs $ 12 $ 20 $ 1 $ — $ 10 $ 25 $ 405 $ 473

Commitments to Extend Credit

6 unchanged sentences

Standby letters of credit are conditional commitments issued by the Company to guarantee the performance of a customer to a third party.

Those guarantees are primarily issued to support public and private borrowing arrangements, including commercial paper, bond financing, and similar transactions.

Those guarantees are primarily issued to support public and private borrowing arrangements, including

commercial paper, bond financing, and similar transactions.

Commitments under standby letters of credit totaled approximately $ 11.9 million and $ 15.4 million as of December 31, 2024 and 2023, respectively.

The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loan facilities to customers.

Effective January 1, 2023, the Company adopted the provision of ASC 326 using the modified retrospective method and established a reserve for unfunded commitments based on estimates of expected credit losses over the contractual period in which the Company is exposed to credit risk via a contractual obligation to extend credit, unless that obligation is unconditionally cancellable by the Company.

As of December 31, 2023, the reserve on unfunded commitments was $ 442,000 .

Effective January 1, 2023, the Company adopted the provision of ASC 326 using the modified retrospective method and established a reserve for unfunded commitments.

The Company estimates expected credit losses over the contractual period in which the Company is exposed to credit risk through a contractual obligation to extend credit, unless that obligation is unconditionally cancellable by the Company.

The reserve for unfunded commitments is recorded within accrued expenses and other liabilities on the consolidated balance sheets, and the related provision is recorded in provision for credit losses on the consolidated statements of income.

The estimate includes consideration of the likelihood that funding will occur and an estimate of expected credit losses on commitments expected to be funded over its estimated life.

The loss rates computed for each pool and expected pool-level funding rates are applied to the related unfunded commitment balance to obtain the reserve amount.

As of December 31, 2024 and December 31, 2023, the reserve on unfunded commitments was $ 642,000 and $ 442,000 , respectively.

The following table summarizes the reserve for unfunded commitments for the periods indicated:

As of and for the Years Ended December 31,

(in thousands) 2024 2023

Reserve for unfunded commitments at beginning of period $ 442 $ —

Provision for credit losses (1,2)

Impact of ASC 326 adoption

Reserve for unfunded commitments at end of period $ 642 $ 442

(2) The $ 735,000 provision for credit losses on the consolidated statements of income for the year ended December 31, 2023, is all for loans.

Premises and Equipment, Net

9 unchanged sentences

Total premises and equipment 89,229 84,627

84,627 80,151

Accumulated depreciation ( 29,788 ) ( 27,539 )

Premises and equipment, net $ 59,441 $ 57,088

$ 57,088 $ 54,383

Depreciation expense amounted to approximately $ 2.5 million, $ 2.2 million, and $ 2.1 million for the years ended December 31, 2024, 2023, and 2022, respectively.

Deposits were consistent at $ 2.80 billion as of December 31, 2023 and 2022.

In 2023, there was a deposit mix shift between deposit categories as customers moved funds from noninterest-bearing and lower yielding categories to higher yielding categories.

Deposits were $ 2.81 billion as of December 31, 2024, which remained consistent with $ 2.80 billion as of December 31, 2023.

In 2024, customer deposit balances were consistent with normal activity.

D eposits are summarized below:

19 unchanged sentences

The Company has established borrowing capacity with the FHLB of Dallas, the Federal Reserve Bank’s Discount Window facility, and other correspondent banks to provide additional sources of operating funds.

As of June 30, 2023, the Company had $ 60.0 million in short-term advances at an interest rate of 5.49 % from the FHLB of Dallas under the existing line of credit.

The $ 60.0 million advance matured and was repaid in July 2023.

As of December 31, 2023, total borrowing capacity from these sources was $ 975.7 million.

As of December 31, 2023 and 2022, the Company had no outstanding borrowings under these agreements.

As of December 31, 2024, total borrowing capacity from these sources was $ 1.18 billion.

As of December 31, 2024 and 2023, the Company had no outstanding borrowings under these agreements, and there were no borrowings during these periods.

The Company determines if an arrangement is a lease at inception of the contract and assesses the appropriate classification as operating or financing.

2 unchanged sentences

Operating right-of-use assets and lease liabilities are recognized at the commencement date based on the present value of lease payments over the term using the interest rate implicit in the contract, when available, or the Company’s incremental collateralized borrowing rate with similar terms.

As of December 31, 2023, the Company maintained seven operating leases on land and buildings for banking center facilities under long-term leases.

As of December 31, 2024, the Company maintained six operating leases on land and buildings for banking center facilities under long-term leases.

These operating leases contain renewal options for periods ranging from one to five years that expire at various dates through October 31, 2033, with no residual value guarantees.

Future obligations relating to the exercise of renewal options are included in the measurement if, based on the judgment of management, the renewal option is reasonably certain to be exercised.

Factors in determining whether an option is reasonably certain of exercise include, but are not limited to, the value of leasehold improvements, the value of the renewal rate compared to

market rates, and the presence of factors that would cause a significant economic penalty to the Company if the option is not exercised.

Factors in determining whether an option is reasonably certain of exercise include, but are not limited to, the value of leasehold improvements, the value of the renewal rate compared to market rates, and the presence of factors that would cause a significant economic penalty to the Company if the option is not exercised.

Management reasonably plans to exercise all options, and as such, all renewal options are included in the measurement of the right-of-use assets and operating lease liabilities.

3 unchanged sentences

Cash paid for amounts included in the measurement of lease liabilities for operating leases totaled $ 571,000 , $ 625,000 , and $ 606,000 for the years ended December 31, 2024, 2023, and 2022, respectively.

The table below summarizes other information related to the Company’s operating leases as of and for the year ended December 31, 2023:

As of and for the Year Ended December 31, 2023

Weighted average remaining operating lease term 6.70 years

The table below summarizes other information related to the Company’s operating leases as of December 31, 2024 and 2023:

Weighted average remaining operating lease term 5.51 years 6.70 years

Weighted average operating lease discount rate 3.3 % 3.3 %

6 unchanged sentences

Present value of lease liabilities $ 2,864

The Company’s obligations under financing leases are not material and have not been included in assets and liabilities in the financial statements.

Income Tax Expense

20 unchanged sentences

FHLB of Dallas stock dividends ( 39 ) ( 20 )

Equity security valuation ( 6 ) —

Other ( 338 ) —

Gross deferred tax liability ( 3,760 ) ( 2,562 )

3 unchanged sentences

Deferred compensation 831 708

Net unrealized loss on securities 16,081 18,917

Unrealized loss on securities 16,015 16,081

Equity security valuation — 35

Advance payment 197 325

Advance payments from vendors 302 197

Accrued bonus 512 502

2 unchanged sentences

Employee Benefits

The Company adopted a contributory retirement plan for employees of Red River Bank effective March 1, 1999, and amended effective January 1, 2022.

Beginning April 1, 2022, employees have the opportunity to invest a portion of their plan funds in the Company’s common stock through a unitized fund.

The Company adopted a contributory retirement plan for employees of the Bank effective March 1, 1999, and amended effective January 1, 2022.

Beginning April 1, 2022, employees had the opportunity to invest a portion of their plan funds in the Company’s common stock through a unitized fund.

Effective January 1, 2025, the Company’s common stock unitized fund was no longer an investment alternative in the plan.

The contributory retirement plan covers all employees who meet the length of service and the number of hours worked requirements and elect to participate.

8 unchanged sentences

On April 17, 2008, the Company adopted its 2008 Plan, which provided for the grant of stock-based awards for key employees and non-employee members of the Company’s board of directors.

The 2008 Plan expired on December 31,

2018, and no new awards were granted under this plan after that date.

The 2008 Plan expired on December 31, 2018, and no new awards were granted under this plan after that date.

As of December 31, 2020, all granted stock options under the 2008 Plan had been exercised.

3 unchanged sentences

The Compensation Committee administers the 2018 Plan, makes determinations with respect to participation, and authorizes stock-based awards under the plan.

The maximum number of shares of the Company’s common stock available for issuance under the 2018 Plan was 200,000 shares .

The maximum number of shares of the Company’s common stock available for

issuance under the 2018 Plan was 200,000 shares.

The status of the Company’s 2018 Plan is presented below:

2 unchanged sentences

Awards granted ( 9,300 )

Awards forfeited 1,850

Awards available for issuance - December 31, 2023 166,100

9 unchanged sentences

For the year ended December 31, 2024, the compensation expense for the vested restricted stock was $ 370,000 .

As of December 31, 2023, there was approximately $ 880,000 of total unrecognized compensation cost related to restricted stock awards.

As of December 31, 2024, there was approximately $ 1.1 million of total unrecognized compensation cost related to restricted stock awards.

That cost is expected to be recognized over a weighted average period of 4.3 years.

During 2022, the Compensation Committee granted 7,550 restricted stock awards with a weighted average fair value of $ 53.40 .

During 2023, the Compensation Committee granted 9,300 restricted stock awards with a weighted average fair value of $ 48.11 , and 1,940 restricted stock awards with a weighted average fair value of $ 49.51 were forfeited.

For the year ended December 31, 2023, the compensation expense for the vested restricted stock was $ 319,000 .

9 unchanged sentences

Vested ( 5,830 ) $ 43.03

Forfeited ( 100 ) $ 42.35

Nonvested - December 31, 2022 19,855 $ 49.33

1 unchanged sentence

Vested ( 5,870 ) $ 47.18

Forfeited ( 1,940 ) $ 49.51

Nonvested - December 31, 2023 21,345 $ 49.40

30 unchanged sentences

Construction Commitment

The Company has one committed construction agreement to construct a banking center, and there was approximately $ 1.6 million remaining on this commitment as of December 31, 2023.

The Company has one committed construction agreement to renovate a banking center, and there was approximately $ 12,000 remaining on this commitment as of December 31, 2024.

Contingencies

16 unchanged sentences

Securities AFS, loans HFS, and equity securities are recorded at fair value on a recurring basis.

Additionally, the Company may be required to record at fair value other assets on a nonrecurring basis, such as impaired loans, foreclosed assets, and other certain assets.

Additionally, the Company may be required to record at fair value other assets on a nonrecurring basis, such as collateral dependent loans, foreclosed assets, and other certain assets.

The nonrecurring fair value adjustments typically involve application of lower of cost or market accounting or write-downs of individual assets.

15 unchanged sentences

Residential mortgage loans originated and held for sale are carried at the lower of cost or estimated fair value on an individual basis.

The fair values of mortgage loans HFS are based on commitments on hand from investors within

the secondary market for loans with similar characteristics.

The fair values of mortgage loans HFS are based on commitments on hand from investors within the secondary market for loans with similar characteristics.

As such, the fair value adjustments for mortgage loans HFS are recurring Level 2.

The Company does not record loans HFI at fair value on a recurring basis.

However, from time to time, a loan may be considered impaired and an allowance may be established.

Loans for which it was probable that payment of interest and principal will not be made in accordance with the contractual terms of the loan agreement are considered impaired.

Once a loan is identified as individually impaired, management measures impairment using estimated fair value methodologies.

The fair value of impaired loans is estimated using one of several methods, including collateral value, market value of similar debt, enterprise value, liquidation value, and discounted cash flows.

When the fair value of the collateral is based on an observable market price or a current appraised value, the Company considers the impaired loan as nonrecurring Level 2.

When an appraised value is not available or management determines the fair value of the collateral is further impaired below the appraised value and there is no observable market price, the Company considers the impaired loan as nonrecurring Level 3.

Loans for which it was probable that payment of interest and principal will not be made in accordance with the contractual terms of the loan agreement are evaluated individually to determine if any credit loss exists.

For loans evaluated on an individual basis that are collateral dependent, the fair value is estimated by applying a discount factor to the collateral value then deducting the estimated cost to sell.

For loans evaluated on an individual basis that are not collateral dependent, the discounted cash flow method is utilized to determine the fair value.

When a loan experiences a credit loss with specific allocated losses determined by the fair value method, the Company considers the collateral dependent loan as nonrecurring Level 3.

Foreclosed Assets:

25 unchanged sentences

Certain financial assets and financial liabilities are measured at fair value on a nonrecurring basis and are subject to fair value adjustments in certain circumstances.

Financial assets measured at fair value on a nonrecurring basis include certain impaired collateral dependent loans reported at fair value of the underlying collateral if repayment is expected solely from the collateral.

Financial assets measured at fair value on a nonrecurring basis include certain individually evaluated collateral dependent loans reported at fair value of the underlying collateral if repayment is expected solely from the collateral.

Prior to foreclosure of these loans, fair value of the collateral is estimated using Level 3 inputs based on customized discounting criteria.

The table below presents certain impaired loans that were remeasured and reported at fair value through the ALL or ACL based upon the fair value of the underlying collateral during the reported periods:

Years Ended December 31,

The table below presents certain collateral dependent loans that were remeasured and reported at fair value through the ACL based upon the fair value of the underlying collateral as of the dates indicated:

(in thousands) 2024 2023

Carrying value of impaired loans before allowance $ 633 $ 3,149 $ 4,114

Carrying value of collateral dependent loans before allowance $ 1,672 $ 633

Specific allowance ( 658 ) ( 100 )

Fair value of impaired loans $ 533 $ 2,843 $ 4,035

The Company had no financial liabilities measured at fair value on a nonrecurring basis during the years ended December 31, 2023, 2022, and 2021.

Fair value of collateral dependent loans $ 1,014 $ 533

The Company had no financial liabilities measured at fair value on a nonrecurring basis as of December 31, 2024 and 2023.

Nonfinancial Assets and Liabilities :

3 unchanged sentences

The fair value of foreclosed assets is estimated using Level 3 inputs based on customized discounting criteria less estimated selling costs.

The following table presents foreclosed assets that were remeasured and reported at fair value during the reported periods:

Years Ended December 31,

The following table presents foreclosed assets that were remeasured and reported at fair value as of the dates indicated:

(in thousands) 2024 2023

3 unchanged sentences

Fair value of foreclosed assets $ 38 $ 69

The following table presents foreclosed assets that were remeasured subsequent to initial recognition and reported at fair value during the reported periods:

Years Ended December 31,

(in thousands) 2023 2022 2021

Foreclosed assets remeasured subsequent to initial recognition:

Carrying value of foreclosed assets prior to remeasurement $ — $ — $ 133

Write-downs — — ( 34 )

Fair value of foreclosed assets $ — $ — $ 99

The Company had no nonfinancial liabilities measured at fair value on a nonrecurring basis during the years ended December 31, 2023, 2022, and 2021.

There were no foreclosed assets that were remeasured subsequent to initial recognition and reported at fair value as of December 31, 2024 and 2023.

The Company had no nonfinancial liabilities measured at fair value on a nonrecurring basis as of December 31, 2024 and 2023.

The unobservable inputs used for the Level 3 fair value measurements on a nonrecurring basis were as follows:

1 unchanged sentence

December 31, 2024

Impaired loans $ 1,754 Discounted appraisals Collateral discounts and costs to sell 0 % - 100 %

Collateral dependent loans $ 7,841 Discounted appraisals Collateral discounts and costs to sell 0 % - 100 %

Foreclosed assets $ 38 Discounted appraisals Collateral discounts and costs to sell N/A N/A

December 31, 2023

Impaired loans $ 7,254 Discounted appraisals Collateral discounts and costs to sell 0 % - 100 %

Collateral dependent loans $ 1,754 Discounted appraisals Collateral discounts and costs to sell 0 % - 100 %

Foreclosed assets $ 69 Discounted appraisals Collateral discounts and costs to sell N/A N/A

45 unchanged sentences

In May 2018, the Economic Growth Act was enacted.

One of the Economic Growth Act’s highlights, with implications for us, was the asset threshold under the Policy Statement being increased from $1.0 billion to $3.0 billion, which benefits bank holding companies by, among various other items, allowing for an 18-month safety and soundness examination cycle as opposed to a 12-month examination cycle, changing to scaled biannual regulatory reporting requirements as opposed to quarterly regulatory reporting requirements, and not subjecting bank holding companies to capital adequacy guidelines on a consolidated basis.

Because the Company had less than $3.0 billion in assets as of each of the June 30 th measurement dates starting with the Economic Growth Act’s enactment and going through June 30, 2021, the Company has received benefits under the Policy Statement through 2022, except with regard to the timing of the Red River Bank safety and soundness exam by the FDIC and the OFI.

Due to the timing of the asset balance determination for the Red River Bank safety and soundness examination, a 12-month examination cycle began in the second half of 2022.

As of June 30, 2022 and 2023, the last applicable measurement dates, the Company had more than $3.0 billion in assets.

Therefore, effective January 1, 2023, the Company no longer receives any benefits under the Policy Statement and became subject to consolidated capital requirements.

Capital amounts and ratios for the Company as of December 31, 2023 and 2022, are presented in the following table:

Regulatory Requirement

Actual Minimum (1)

One of the Economic Growth Act’s highlights, with implications for the Company, was the asset threshold under the Policy Statement being increased from $1.0 billion to $3.0 billion, which benefits bank holding companies by, among various other items, allowing for an 18-month safety and soundness examination cycle as opposed to a 12-month examination cycle, changing to scaled biannual regulatory reporting requirements as opposed to quarterly regulatory reporting requirements, and not subjecting bank holding companies to capital adequacy guidelines on a consolidated basis.

Effective January 1, 2023, the Company no longer receives any benefits under the Policy Statement and became subject to consolidated capital requirements.

As of the June 30, 2024 measurement date, the Company had more than $3.0 billion in assets and remains subject to consolidated capital requirements.

Capital amounts and ratios for the Company as of December 31, 2024 and 2023, are presented in the following table (Basel III Minimum includes the capital conservation buffer):

Actual Basel III Minimum

(dollars in thousands) Amount Ratio Amount Ratio

5 unchanged sentences

December 31, 2023

Total Risk-Based Capital $ 356,001 17.39 % N/A N/A

Tier I Risk-Based Capital $ 335,373 16.38 % N/A N/A

Common Equity Tier I Capital $ 335,373 16.38 % N/A N/A

Tier I Leverage Capital $ 335,373 10.71 % N/A N/A

(1) Due to the full phase-in of the CCB, these are the Basel III regulatory minimum amounts and ratios.

These amounts and ratios were labeled as “Minimum Plus CCB” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022, and prior filings.

Capital amounts and ratios for the Bank as of December 31, 2023 and 2022, are presented in the following table:

Total Risk-Based Capital $ 384,577 18.28 % $ 220,905 10.50 %

Tier I Risk-Based Capital $ 362,799 17.24 % $ 178,828 8.50 %

Common Equity Tier I Capital $ 362,799 17.24 % $ 147,270 7.00 %

Tier I Leverage Capital $ 362,799 11.56 % $ 125,575 4.00 %

Capital amounts and ratios for the Bank as of December 31, 2024 and 2023, are presented in the following table (Basel III Minimum includes the capital conservation buffer):

Regulatory Requirements

Actual Minimum (1)

Actual Basel III Minimum

Well-Capitalized (1)

10 unchanged sentences

Tier I Leverage Capital $ 356,804 11.37 % $ 125,538 4.00 % $ 156,923 5.00 %

(1) Due to the full phase-in of the CCB, these are the Basel III regulatory minimum amounts and ratios.

These amounts and ratios were labeled as “Minimum Plus CCB” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022, and prior filings.

(1) This column refers to the prompt corrective action requirements applicable to banks.

13 unchanged sentences

The Company’s status as a bank holding company also affects its ability to pay dividends in two additional ways.

First, since the Company is a holding company with no material business activities of its own, its ability to pay dividends could become dependent upon the ability of Red River Bank to transfer funds to it in the form of dividends, loans, and advances.

The Bank’s ability to pay dividends and make other distributions and payments to the Company is itself subject to various legal, regulatory, and other restrictions, and the present and future dividend policy of Red River Bank is subject to the discretion of its board of directors.

First, since the Company is a holding company with no material business activities of its own, its ability to pay dividends could become dependent upon the ability of the Bank to transfer funds to it in the form of dividends, loans, and advances.

The Bank’s ability to pay dividends and make other distributions and payments to the Company is itself subject to various legal, regulatory, and other restrictions, and the present and future dividend policy of the Bank is subject to the discretion of its board of directors.

Second, as a bank holding company, the Company’s payment of dividends must comply with the laws, regulations, and policies of the Federal Reserve.

3 unchanged sentences

and (3) the bank holding company will continue to meet, and is not in danger of failing to meet, minimum regulatory capital adequacy ratios.

The ability of Red River Bank to pay dividends on its common stock is restricted by Louisiana Banking Law, the FDIA, and FDIC regulations.

The ability of the Bank to pay dividends on its common stock is restricted by Louisiana Banking Law, the FDIA, and FDIC regulations.

In general, the board of directors of a Louisiana state bank may, quarterly, semiannually, or annually, declare or pay dividends on its outstanding capital stock, provided that the bank has surplus at least equal to 50.0% of its capital stock and such surplus will not be reduced below 50.0% following payment of the dividend.

6 unchanged sentences

Taking into consideration the Company’s performance and capital levels, cash dividends were paid in 2024, 2023, and 2022.

Stock Repurchase Programs

On November 4, 2022, the Company’s board of directors approved the renewal of the 2022 stock repurchase program that expired on December 31, 2022.

The 2023 stock repurchase program authorized the Company to purchase up to $ 5.0 million of its outstanding shares of common stock from January 1, 2023 through December 31, 2023.

For the year ended December 31, 2023, the Company repurchased 101,298 shares of its common stock at an aggregate cost of $ 5.0 million, and reached the 2023 stock repurchase program purchase limit.

Repurchases were made from time to time in the open market at prevailing prices and based on market conditions.

As of December 31, 2023, there were no available funds remaining under the 2023 stock repurchase program.

Stock Repurchases

On December 14, 2023, the Company’s board of directors approved the renewal of the 2023 stock repurchase program that was completed in the fourth quarter of 2023 after reaching its purchase limit.

The 2024 stock repurchase program has

similar terms to the 2023 stock repurchase program and authorizes the Company to purchase up to $ 5.0 million of its outstanding shares of common stock from January 1, 2024 through December 31, 2024.

The 2024 stock repurchase program authorized the Company to purchase up to $ 5.0 million of its outstanding shares of common stock from January 1, 2024 through December 31, 2024.

Repurchases were made from time to time in the open market at prevailing prices and based on market conditions, and in privately negotiated transactions.

On March 13, 2024, the company entered into a privately negotiated stock repurchase agreement for the purchase of 200,000 shares of the Company’s common stock for a total purchase price of approximately $ 10.0 million.

This repurchase was supplemental to the Company’s 2024 stock repurchase program and did not impact the amount of permitted repurchases thereunder.

On August 8, 2024, the Company entered into a privately negotiated stock repurchase agreement for the purchase of 60,000 shares of the Company’s common stock for a total purchase price of approximately $ 3.0 million.

This repurchase was supplemental to the Company’s 2024 stock repurchase program.

However, in connection with the repurchase, the Company reduced the availability under its 2024 stock repurchase program by $ 3.0 million.

On November 5, 2024, the Company entered into a privately negotiated stock repurchase agreement for the purchase of 50,000 shares of the Company’s common stock for a total purchase price of approximately $ 2.5 million.

This repurchase was supplemental to the Company’s 2024 stock repurchase program and did not impact the amount of permitted repurchases thereunder.

For the year ended December 31, 2024, the Company repurchased 17,085 shares of its common stock on the open market at an aggregate cost of $ 809,000 under the stock repurchase program.

The 2024 stock repurchase program expired on December 31, 2024, with $ 1.1 million of remaining availability.

Effective January 1, 2023, stock repurchases are subject to a nondeductible excise tax under the Inflation Reduction Act of 2022 equal to 1.0 % of the fair market value of the shares repurchased, subject to certain limitations.

In the fourth quarter of 2024, $ 213,000 of stock repurchase excise tax was recorded.

This tax relates to the Company’s 2023 and 2024 stock repurchases, which regulations require to be recorded as a reduction to stockholders’ equity.

On December 19, 2024, the Company’s board of directors approved the renewal of the 2024 stock repurchase program that expired on December 31, 2024.

The renewed program authorizes the Company to purchase up to $ 5.0 million of its outstanding shares of common stock from January 1, 2025 through December 31, 2025.

Repurchases may be made from time to time in the open market at prevailing prices and based on market conditions, or in privately negotiated transactions.

5 unchanged sentences

As of December 31, 2024, the net unamortized, unrealized loss remaining on the transferred securities included in the consolidated balance sheets totaled $ 13.0 million, of which $ 10.3 million, net of tax, was included in AOCI.

CECL Adjustment - Implementation of Current Expected Credit Losses Methodology related to ASU No.

On January 1, 2023, the Company adopted the CECL methodology for estimating credit losses.

In the first quarter of 2023, the implementation of CECL resulted in a $ 720,000 adjustment to the ACL and reserve for unfunded commitments, and a $ 569,000 , net of tax, adjustment to retained earnings.

Earnings Per Common Share

14 unchanged sentences

Diluted $ 4.95 $ 4.86 $ 5.13

Segment Reporting

The Company is engaged primarily in providing a fully integrated suite of banking products and services consistently across all of its markets.

The Company has identified the Executive Management Committee of the Bank as the Company’s CODM.

The Executive Management Committee of the Bank is comprised of the Chief Executive Officer, Chief Financial Officer, Chief Banking Officer, Chief Operating Officer, Chief Credit Policy Officer, General Counsel, and several division heads that report directly to the Chief Executive Officer.

The CODM assesses performance and decides how to allocate resources based on net income as reported in the accompanying consolidated statements of income.

While the CODM monitors the revenue streams of the various banking products, services, and markets, banking operations are managed and financial performance is evaluated on a company-wide basis.

Accordingly, all of the Company’s banking operations are considered by management to be aggregated in one reportable operating segment.

The Company’s banking operations accounting policies are the same as those described in “Note 1.

Significant Accounting Policies.” Segment assets are reported in the accompanying consolidated balance sheets in total assets.

The CODM uses net income and assets in deciding whether to reinvest profits into banking products, services, and markets or into other Company priorities like dividends, share repurchases, or acquisitions.

Actual net income and assets are compared to budgeted metrics to assist in operating and financial decisions and future activities.

Financial results for the banking operations segment are presented in the table below:

As of and for the Years Ended December 31,

(in thousands) 2024 2023 2022

Interest and dividend income $ 137,230 $ 118,568 $ 94,375

Interest expense 47,936 32,130 7,736

Provision for credit losses 1,200 735 1,750

Noninterest income 20,441 21,114 18,747

Depreciation and amortization 3,219 2,746 2,609

Other operating expenses 62,935 61,127 56,046

Income before income tax expense 42,381 42,944 44,981

Income tax expense 8,146 8,065 8,065

Segment net income $ 34,235 $ 34,879 $ 36,916

Adjustments and reconciling items — — —

Consolidated net income $ 34,235 $ 34,879 $ 36,916

Total Assets $ 3,149,594 $ 3,128,810 $ 3,082,686

Quarterly Results of Operations (Unaudited)

18 unchanged sentences

Net interest income 21,294 20,725 21,510 22,909

Provision for loan losses 750 600 250 150

Net interest income after provision for loan losses 22,924 22,488 20,899 18,578

Provision for credit losses 250 185 300 —

Net interest income after provision for credit losses 21,044 20,540 21,210 22,909

Noninterest income 5,187 5,581 6,007 4,340

5 unchanged sentences

Diluted $ 1.16 $ 1.12 $ 1.25 $ 1.33

Subsequent Events

Management has evaluated subsequent events and transactions through March 15, 2024, the date that the financial statements were available to be issued.

On March 13, 2024, the Company entered into a privately negotiated stock repurchase agreement for the purchase of 200,000 shares of the Company’s common stock, no par value per share for a total purchase price of approximately $ 10.0 million.

The repurchase was supplemental to the Company’s $ 5.0 million stock repurchase program and did not impact the amount of permitted repurchases thereunder.

Parent Company Financial Statements

3 unchanged sentences

Cash and cash equivalents $ 6,653 $ 5,516

$ 5,516 $ 10,795

Investment in subsidiary bank 312,669 297,856

297,856 254,619

$ 303,896 $ 265,784

Other assets 621 524

Total Assets $ 319,943 $ 303,896

Accrued expenses and other liabilities $ 204 $ 45

60 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data