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Item 7. Management’s Discussion and Analysis

2026-03-13 compared with 2025-03-14 · 179 added, 196 removed, 908 unchanged (29% of the section changed)

Management’s Discussion and Analysis of Financial Condition and Results of Operations

The purpose of this discussion and analysis is to focus on significant changes in financial condition and results of operations of Red River Bancshares, Inc.

The purpose of this discussion and analysis is to focus on significant changes in the financial condition and results of operations of Red River Bancshares, Inc.

on a consolidated basis during the year ended December 31, 2025 and selected prior periods.

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is the bank holding company for Red River Bank, a Louisiana state-chartered bank established in 1999 that provides a fully integrated suite of banking products and services tailored to the needs of our commercial and retail customers.

As of December 31, 2024, Red River Bank operated from a network of 28 banking centers throughout Louisiana and one combined LDPO in New Orleans, Louisiana.

As of December 31, 2025, Red River Bank operated from a network of 28 banking centers throughout Louisiana and two combined LDPOs, one each in New Orleans, Louisiana and Lafayette, Louisiana.

Banking centers are located in the following Louisiana markets:

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Southwest, which includes the Lake Charles MSA;

the Northshore, which includes Covington;

the Northshore, which includes the Slidell-Mandeville-Covington MSA;

Acadiana, which includes the Lafayette MSA;

and New Orleans.

and New Orleans, which includes the New Orleans-Metairie MSA.

Our priority is to drive shareholder value through the establishment of a market-leading commercial banking franchise based in Louisiana.

We provide our services through relationship-oriented bankers who are committed to their customers and the communities where we offer our products and services.

Our strategy is to expand market share in existing markets and engage in opportunistic new market de novo expansion, supplemented by strategic acquisitions of financial institutions with customer-oriented, compatible philosophies and in desirable geographic areas.

2025 FINANCIAL AND OPERATIONAL HIGHLIGHTS

In 2024, we had steady improvement in the net interest margin and EPS, along with solid loan activity and growth.

We also increased our cash dividend, had significant stock buyback activity, and expanded our banking center network.

• Net income for the year ended December 31, 2024, was $34.2 million, or $4.95 diluted EPS, a decrease of $644,000, or 1.8%, compared to $34.9 million, or $4.86 diluted EPS, for the year ended December 31, 2023.

The decrease in net income was mainly due to higher operating expenses, lower noninterest income, and higher provision for credit losses, partially offset by higher net interest income.

In 2025, we had record-high net income and EPS, and an improved net interest margin, along with solid balance sheet growth.

We also increased our cash dividend, had significant stock buyback activity, continued our organic expansion initiative, and improved our digital banking systems.

• Net income for the year ended December 31, 2025, was $42.8 million, or $6.38 diluted EPS, an increase of $8.5 million, or 24.9%, compared to $34.2 million, or $4.95 diluted EPS, for the year ended December 31, 2024.

The increase in net income was mainly due to higher net interest income.

• The return on assets was 1.33% for 2025 and 1.11% for 2024.

• The return on equity was 12.58% for 2025 and 11.02% for 2024.

• Assets increased $20.8 million, or 0.7%, to $3.15 billion as of December 31, 2024, compared to $3.13 billion as of December 31, 2023.

• Loans HFI increased $82.2 million, or 4.1%, to $2.08 billion as of December 31, 2024, compared to $1.99 billion as of December 31, 2023.

The increase in loans was due to new loan activity in various markets across Louisiana.

• Deposits totaled $2.81 billion as of December 31, 2024, consistent with December 31, 2023.

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

• As of December 31, 2024, total securities were $684.9 million, or 21.7% of assets, compared to $714.3 million, or 22.8% of assets, as of December 31, 2023.

Securities decreased $29.4 million mainly due to maturities and principal repayments exceeding purchases.

• For 2024, liquid assets, which are cash and cash equivalents, decreased $36.5 million to $269.0 million, compared to $305.4 million for 2023.

The liquid assets to assets ratio was 8.54% as of December 31, 2024 and 9.76% as of December 31, 2023.

• Net interest income increased between 2024 and 2023 with higher interest income being partially offset by higher interest expense.

The net interest margin FTE increased 5 bps to 2.96% for 2024 compared to 2.91% for the prior year.

The 2024 net interest income and net interest margin FTE were impacted by the changing interest rate environment, combined with repricing activity in loans, securities, and deposits.

• Provision expense was $1.2 million for 2024 compared to $735,000 for 2023.

• NPAs were $3.3 million, or 0.10% of assets, as of December 31, 2024.

As of December 31, 2024, the ACL was $21.7 million, or 1.05% of loans HFI.

• In 2024, we paid a quarterly cash dividend of $0.09 per share, resulting in annual cash dividends of $0.36 per share.

In 2023, we paid a quarterly cash dividend of $0.08 per share, resulting in annual cash dividends of $0.32 per share.

In the first quarter of 2025, we declared a quarterly cash dividend of $0.12 per share.

• The 2024 stock repurchase program authorized us to purchase up to $5.0 million of our outstanding common stock from January 1, 2024 through December 31, 2024.

In 2024, under this plan, on the open market, we repurchased 17,085 shares of our common stock at an aggregate cost of $809,000.

We also completed a privately negotiated stock repurchase of 60,000 shares of our common stock for $3.0 million, which reduced the availability under the 2024 stock repurchase program.

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

• Also in 2024, we completed two other privately negotiated stock repurchases of an aggregate of 250,000 shares of our common stock for a total purchase price of approximately $12.5 million.

These repurchases were supplemental to our 2024 stock repurchase program and did not impact the amount of permitted repurchases under the program.

• In 2024, we repurchased a total of 327,085 shares of our common stock, or 4.6% of the December 31, 2023 outstanding shares.

For 2024, these repurchases benefited earnings per share by $0.14.

• On December 19, 2024, our Board of Directors approved the renewal of our stock repurchase program for 2025.

• Net interest income and net interest margin FTE increased for 2025 compared to 2024.

Net interest income for 2025 was $105.6 million, which was $16.3 million, or 18.2%, higher than $89.3 million for the prior year.

Net interest margin FTE increased 42 bps to 3.38% for 2025, compared to 2.96% for the prior year.

These improvements were due to higher loans and securities yields, lower cost of deposits, and an improved earning asset mix.

• As of December 31, 2025, loans HFI were $2.25 billion, which was $173.7 million, or 8.4%, higher than $2.08 billion as of December 31, 2024.

In 2025, we had robust new loan and commitment activity, combined with funding of loan construction commitments.

• As of December 31, 2025, assets were $3.35 billion, which was $201.3 million, or 6.4%, higher than $3.15 billion as of December 31, 2024, driven by a $158.3 million increase in deposits.

• Deposits totaled $2.96 billion as of December 31, 2025, an increase of $158.3 million, or 5.6%, compared to $2.81 billion as of December 31, 2024.

In 2025, there were increases in most deposit categories.

• As of December 31, 2025, total securities were $773.0 million, which was $88.1 million, or 12.9%, higher than $684.9 million as of December 31, 2024.

This increase was mainly due to utilizing securities cash flows, along with other liquid funds, to purchase $182.1 million of securities at favorable yields.

• The provision for credit losses was $2.3 million for 2025, compared to $1.2 million for 2024, mainly due to loan growth.

As of December 31, 2025, NPAs were $3.5 million, or 0.11% of assets, and the ACL was $23.4 million, or 1.04% of loans HFI.

• We paid quarterly cash dividends per common share of $0.12 in the first and second quarters of 2025, and $0.15 in the third and fourth quarters of 2025, resulting in total 2025 cash dividends per common share of $0.54.

This was a 50.0% increase from $0.36 per common share paid in 2024.

In the first quarter of 2026, we declared a quarterly cash dividend of $0.25 per common share.

• The 2025 stock repurchase program authorized us to purchase up to $5.0 million of our outstanding shares of common stock from January 1, 2025 through December 31, 2025.

In 2025, we repurchased 11,748 shares of our common stock on the open market at an aggregate cost of $656,000, excluding excise tax.

The 2025 stock repurchase program expired on December 31, 2025, with $4.3 million of available capacity.

• During 2025, we completed two privately negotiated stock repurchases for an aggregate of 200,000 shares of our common stock at a total purchase price of $10.4 million, excluding excise tax.

These repurchases were supplemental to our 2025 stock repurchase program.

• In 2025, we repurchased a total of 211,748 shares of our common stock, or 3.12% of our December 31, 2024 outstanding shares.

For the year ended December 31, 2025, these repurchases benefited earnings per share by $0.10.

• On December 18, 2025, our Board of Directors approved the renewal and increase of our stock repurchase program for 2026.

The 2026 stock repurchase program authorizes us to purchase up to $10.0 million of our outstanding shares of common stock from January 1, 2026 through December 31, 2026.

• We expanded organically throughout Louisiana with the following events:

◦ In the second quarter of 2024, we opened a second Red River Bank full-service banking center in the New Orleans, Louisiana market.

◦ In the fourth quarter of 2024, Red River Bank purchased property in Lafayette, Louisiana and plans to build a new banking center at that location, which would be our second banking center in the Acadiana market.

• In 2024, the Company and Red River Bank, were included in various financial industry ranking reports:

◦ S&P Global Market Intelligence ranked Red River Bank 15th of the top 50 best-performing community banks in 2023 with assets between $3.0 and $10.0 billion.

◦ Bank Director Magazine ranked the Company 9th in the top 30 best-performing publicly traded financial institutions with assets less than $5.0 billion.

◦ The American Banker publication included Red River Bank in its “2024 Best Banks to Work For” ranking.

• In 2025 and early 2026, we also completed various projects and other events:

◦ In the first quarter of 2025, Red River Bank’s online, mobile banking, and bill payment systems were upgraded in order to improve our digital services for all customers.

◦ In the first quarter of 2025, S&P Global Market Intelligence ranked Red River Bank 14th of the top 50 best deposit franchises in 2024 for banks with assets between $3.0 and $10.0 billion.

◦ On March 14, 2025, our board of directors and executive management had the privilege of ringing the closing bell at the Nasdaq Market Site in New York to commemorate being a public company for six years.

◦ In the second quarter of 2025, we changed our credit card program provider to align with our debit card program provider.

◦ In the third quarter of 2025, we opened an LDPO in the Pinhook Tower building in Lafayette, Louisiana.

◦ In early January 2026, we held a ground-breaking ceremony for our second full-service banking center in the Acadiana market.

The following tables set forth selected historical consolidated financial information for each of the periods indicated.

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Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on March 14, 2025.

Net income for the year ended December 31, 2024, was $34.2 million, or $4.95 diluted EPS, a decrease of $644,000, or 1.8%, compared to $34.9 million, or $4.86 diluted EPS, for the year ended December 31, 2023.

The decrease in net income was mainly due to a $2.3 million increase in operating expenses, a $673,000 decrease in noninterest income, and a $465,000 increase in the provision for credit losses, partially offset by a $2.9 million increase in net interest income.

Net income for the year ended December 31, 2025, was $42.8 million, or $6.38 diluted EPS, an increase of $8.5 million, or 24.9%, compared to $34.2 million, or $4.95 diluted EPS, for the year ended December 31, 2024.

The increase in net income was mainly due to a $16.3 million increase in net interest income, partially offset by a $3.9 million increase in operating expenses, a $2.2 million increase in income tax expense, a $1.1 million increase in the provision for credit losses, and a $477,000 decrease in noninterest income.

The return on assets for the year ended December 31, 2025, was 1.33%, compared to 1.11% for the prior year.

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These market rates impact pricing of certain assets and liabilities used by financial institutions.

In 2023, the interest rate environment trended upward.

The FOMC increased the federal funds rate by 50 bps in the first quarter of 2023, by 25 bps in the second and third quarters of 2023, then kept the rate consistent through the second quarter of 2024.

Late in the third quarter of 2024, the FOMC decreased the federal funds rate by 50 bps, and by an additional 50 bps during the fourth quarter of 2024, reducing the target federal funds range to 4.25%-4.50%.

In 2024, the FOMC decreased the federal funds rate by 50 bps in each of the third and fourth quarters, resulting in a target federal funds range of 4.25%-4.50%.

In 2025, the FOMC reduced the federal funds rate by 25 bps in the third quarter and an additional 50 bps in the fourth quarter, reducing the target federal funds range to 3.50%-3.75%.

The average effective federal funds rate was 4.21% for 2025 compared to 5.14% for 2024.

The net interest income and net interest margin FTE increased for the year ended December 31, 2025, compared to the year ended December 31, 2024.

Net interest income for the year ended December 31, 2024, was $89.3 million, which was $2.9 million, or 3.3%, higher than the year ended December 31, 2023.

Net interest income increased due to an $18.7 million increase in interest and dividend income, partially offset by a $15.8 million increase in interest expense.

The increase in interest and dividend income for the year ended December 31, 2024, when compared to the year ended December 31, 2023, was primarily due to higher interest income on loans and securities.

Loan income increased $15.5 million primarily due to higher rates on new and renewed loans, combined with higher balances in loans HFI.

Securities income increased $2.8 million due to reinvesting lower yielding securities cash flows into higher yielding securities.

The increase in interest expense for the year ended December 31, 2024, when compared to the year ended December 31, 2023, was due to high deposit rates through the third quarter of 2024, as we responded to deposit rate pressure, combined with larger balances in higher cost deposit accounts.

However, in the fourth quarter of 2024, deposit rates were reduced in conjunction with the federal funds rate decreases by the FOMC.

Net interest margin FTE increased 5 bps to 2.96% for the year ended December 31, 2024, from 2.91% for the year ended December 31, 2023, as a result of interest rate environment fluctuations along with our balance sheet repricing structure.

The net interest margin FTE improved each quarter in 2024.

This improvement was due to having increased yields on loans and securities throughout the year, combined with the lower cost of deposits in the fourth quarter of 2024.

The yield on securities increased 52 bps due to reinvesting lower yielding securities cash flows into higher yielding securities.

The yield on loans increased 50 bps due to higher rates on new and renewed loans as a result of the higher interest rate environment through the third quarter of 2024.

Net interest income for the year ended December 31, 2025, was $105.6 million, which was $16.3 million, or 18.2%, higher than the year ended December 31, 2024, and was driven by a $12.7 million increase in interest and dividend income and a $3.6 million decrease in interest expense.

For 2025, loan income increased $11.1 million, primarily due to higher rates on new and renewed loans compared to the existing portfolio yield, combined with higher average loan balances.

Securities income increased $4.2 million due to purchasing higher yielding securities, combined with higher average securities balances.

Interest income on short-term liquid assets decreased $2.6 million, primarily due to the FOMC lowering the target federal funds range in 2025.

For 2025, interest expense decreased $3.6 million due to lower rates on total interest-bearing deposits, slightly offset by higher interest-bearing deposit balances.

Net interest margin FTE increased 42 bps to 3.38% for the year ended December 31, 2025, from 2.96% for the year ended December 31, 2024, with improvements in each quarter in 2025.

These improvements were due to having higher yields on securities and loans, combined with a lower cost of deposits.

These positive variances were partially offset by a 96 bp decrease to the yield on short-term liquid assets, due to the lower average federal funds rate for the year ended December 31, 2025.

The yield on securities increased 47 bps due to purchasing $182.1 million of securities with an average rate of 4.91%.

The yield on loans increased 28 bps due to higher rates on new and renewed loans compared to the existing portfolio yield.

The average rate on new and renewed loans was 6.95% for the year ended December 31, 2025, compared to 7.62% for the prior year.

The net interest margin FTE for the year ended December 31, 2024, when compared to the year ended December 31, 2023, was impacted by an increase in the cost of deposits.

The cost of deposits increased 56 bps to 1.74% for the year ended December 31, 2024, from 1.18% for the year ended December 31, 2023.

For the same time periods, the rates on time deposits and interest-bearing transaction deposits increased 111 and 44 bps, respectively.

The cost of deposits increased through the third quarter of 2024, due to deposit rate pressure and customers moving deposits from lower yielding categories to higher yielding categories.

However, in conjunction with the federal funds rate decreases by the

FOMC that began late in the third quarter of 2024, we lowered selected deposit rates in the third and fourth quarters, which reduced deposit costs at the end of 2024.

The cost of deposits decreased 18 bps to 1.56% for the year ended December 31, 2025, from 1.74% for the year ended December 31, 2024.

For the same time periods, the rates on time deposits and interest-bearing transaction deposits decreased 54 and 15 bps, respectively.

These decreases occurred as we adjusted rates on selected transaction and time deposits in response to the federal funds rate decreases by the FOMC in 2024 and 2025.

As of December 31, 2025, the target federal funds range was 3.50%-3.75%.

The market’s expectation is that the FOMC may lower the target range of the federal funds rate by at least 25 bps in 2025.

In 2025, we anticipate receiving approximately $101.0 million in securities cash flows with an average yield of 3.01%, and we project approximately $194.0 million of fixed rate loans will mature with an average yield of 6.04%.

We expect to redeploy these balances into higher yielding assets.

Additionally, in 2025, we expect $541.9 million of time deposits to mature with an average rate of 4.10%, which we anticipate repricing into lower cost deposits.

The market’s expectation is that the FOMC may lower the target federal funds range by 25-50 bps in 2026.

Income on short-term liquid assets follows the target federal funds range, which we expect to decrease in 2026.

In 2026, we project $261.4 million of fixed rate loans at 5.85% to mature and $434.0 million of floating rate loans at 6.24% to reprice.

We expect to redeploy these balances into loans with slightly higher rates.

We also expect to receive $125.3 million in securities cash flows at 3.69%, which we plan to redeploy into securities at higher yields.

Rates on interest-bearing transaction deposits could be lowered with target

federal funds range reductions.

We expect $573.9 million in time deposits at 3.57% to mature in 2026, with the opportunity to reprice slightly lower.

As of December 31, 2025, floating rate loans were 19.3% of loans HFI, and floating rate transaction deposits were 8.1% of interest-bearing transaction deposits.

Depending on balance sheet activity and the movement in interest rates, we expect the net interest income and net interest margin to improve slightly during the first half of 2025.

Depending on balance sheet activity and the interest rate environment, we expect net interest income and net interest margin FTE to increase slightly during the first half of 2026.

The following table presents average balance sheet information, interest income, interest expense, and the corresponding average yields earned and rates paid for the years presented:

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Securities - tax-exempt 186,379 3,909 2.10 % 193,368 3,991 2.06 %

Federal funds sold — — — % 18,594 886 4.70 %

Interest-bearing deposits in other banks 195,507 8,445 4.26 % 210,959 11,077 5.22 %

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Cost of funds 1.42 % 1.59 %

(1) Includes average outstanding balances of loans HFS of $2.9 million and $2.4 million for the years ended December 31, 2024 and 2023, respectively.

(1) Includes average outstanding balances of loans HFS of $2.9 million for each of the years ended December 31, 2025 and 2024.

(2) Nonaccrual loans are included as loans carrying a zero yield.

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(144) 62 (82)

Federal funds sold

(886) — (886)

Interest-bearing deposits in other banks

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Nonmarketable equity securities

(50) (10) (60)

Total interest-earning assets

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Provision for credit losses $ 2,300 $ 1,200 $ 1,100 91.7 %

The provision for credit losses for the year ended December 31, 2024, totaled $1.2 million, an increase of $465,000 from $735,000 for the year ended December 31, 2023.

The provision for credit losses for the year ended December 31, 2025, was $2.3 million for loans, an increase of $1.1 million from $1.2 million for the year ended December 31, 2024.

The provision for credit losses for 2024 included $1.0 million for loans and $200,000 for unfunded commitments.

The primary drivers of the increase were the potential economic challenges resulting from the recent inflationary environment, changing monetary policy, current economic forecasts, and loan growth.

In the second half of 2024, we had an increase in unfunded loan commitments, which also contributed to the increase in provision for credit losses.

In 2025, the higher provision was primarily driven by loan growth, lingering impacts related to inflation and tariffs, and greater uncertainty with future unemployment.

We will continue to evaluate future provision needs in relation to current economic situations, loan growth, trends in asset quality, forecasted information, and other conditions influencing loss expectations.

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Noninterest income decreased $477,000 to $20.0 million for the year ended December 31, 2025, compared to $20.4 million for the prior year.

The decrease in noninterest income was due to lower income from SBIC limited partnerships of which the Bank is a member and lower loan and deposit fee income, partially offset by higher mortgage loan income and net debit card income.

The decrease in noninterest income was primarily due to lower income from SBIC limited partnerships of which the Bank is a member, lower loan and deposit fee income, and lower net debit card income, partially offset by higher brokerage income, higher other income, and a gain on equity securities.

The table below presents, for the periods indicated, the major categories of noninterest income:

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Gain (Loss) on equity securities 94 (28) 122 435.7 %

SBIC income 1,453 2,873 (1,420) (49.4 %)

SBIC income (loss) 55 1,453 (1,398) (96.2 %)

659 340 319 93.8 %

Total noninterest income $ 19,964 $ 20,441 $ (477) (2.3 %)

SBIC income decreased $1.4 million to $1.5 million for 2024, compared to $2.9 million for 2023.

In 2024, we received $114,000 of distribution payments, in addition to normal income.

In 2023, we received income from the sale of an investment, in addition to normal income.

Loan and deposit income decreased $106,000 to $2.0 million for 2024, compared to $2.1 million for 2023.

The decrease was primarily related to lower deposit fees due to changing customer deposit activity, partially offset by higher nonrecurring loan related fees.

Mortgage loan income increased $525,000 to $2.5 million for 2024, compared to $2.0 million for 2023, mainly due to an increase in the average loan amount, which generated higher mortgage loan fee income.

Debit card income, net, increased $273,000 to $3.8 million for 2024, compared to $3.6 million for 2023.

In the first quarter of 2024, we terminated our previous debit card provider contract, which resulted in $145,000 of nonrecurring income.

In January 2024, a newly negotiated debit card provider contract became effective, which resulted in an increase in debit card income.

These increases were partially offset by higher debit card processing expenses.

SBIC income decreased $1.4 million to $55,000 for 2025, compared to 2024.

This decrease was mainly due to fund value adjustments as an SBIC fund entered its wind-down phase in 2025.

Loan and deposit income decreased $310,000 to $1.7 million for 2025, compared to 2024.

Credit card income, net of expenses, is reported in loan and deposit income.

In the second quarter of 2025, we changed our credit card program provider to align with our debit card program provider, which resulted in increased credit card expenses.

Also, 2025 and 2024 benefited from $89,000 and $201,000 of nonrecurring loan-related fees, respectively.

Debit card income, net, was $3.8 million for 2025 and 2024.

2025 included higher debit card activity and net revenue.

2024 benefited from $145,000 of nonrecurring income due to the termination of our prior debit card provider contract.

Brokerage income increased $942,000 to $4.7 million for 2025, compared to 2024, due to increased investing activity by clients.

Assets under management were $1.33 billion and $1.14 billion as of December 31, 2025 and 2024, respectively.

Other income increased $319,000 to $659,000 for 2025, compared to 2024.

We participate as a member in JAM FINTOP.

During the third quarter of 2025, JAM FINTOP completed the sale of an investment, which led to distributions of capital and income.

As a result, other income for 2025 included $379,000 of nonrecurring JAM FINTOP partnership income.

Equity securities are an investment in a CRA mutual fund consisting primarily of bonds.

The gain or loss on equity securities is a fair value adjustment primarily driven by changes in the interest rate environment.

Due to the fluctuations in market rates, equity securities had a gain of $94,000 in 2025, compared to a loss of $28,000 in 2024.

Operating Expenses

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Operating expenses increased $3.9 million to $70.1 million for the year ended December 31, 2025 , compared to $66.2 million for the year ended December 31, 2024 .

The increase in operating expenses was mainly due to higher personnel expenses, technology expenses, legal and professional expenses, and occupancy and equipment expenses, partially offset by lower other taxes and loan and deposit expenses.

The increase in operating expenses was mainly due to higher personnel expenses, occupancy and equipment expenses, loan and deposit expenses, other operating expenses, technology expenses, and data processing expense, partially offset by lower legal and professional expenses.

The following table presents, for the periods indicated, the major categories of operating expenses:

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Personnel expenses are the largest component of operating expenses and include payroll expenses, incentive compensation, benefit plans, health insurance, and payroll taxes.

Personnel expenses increased $1.4 million to $38.6 million for 2024 compared to $37.2 million in 2023 .

This increase was primarily due to higher compensation expense as a result of net staff changes, partially offset by a decrease in medical insurance expense.

Personnel expenses increased $3.1 million to $41.7 million for 2025, compared to 2024 .

This increase was primarily due to an increase in headcount, increased revenue-based commission compensation, annual raises, and higher personnel-related accruals.

As of December 31, 2025 and 2024 , we had 375 and 369 total employees, respectively.

Technology expenses increased $423,000 to $3.2 million for 2024 compared to $2.8 million for 2023.

This increase was primarily due to implementing new software and $51,000 of nonrecurring expenses related to our new banking center location and new administrative office, both in the New Orleans market.

Legal and professional expenses increased $279,000 to $2.7 million for 2024 compared to $2.4 million for 2023.

This increase was due to higher contracted services, higher public company expenses, and higher professional and advisory services mainly related to a newly negotiated debit card provider contract effective January 2024.

Occupancy and equipment expenses increased $110,000 to $6.7 million for 2024 compared to $6.6 million for 2023.

This increase was primarily due to $111,000 of nonrecurring expenses related to our new banking center location and new administrative office, both in the New Orleans market, and other 2024 property renovations.

The same period prior year had $255,000 of nonrecurring expenses related to opening our new operations center building, the expansion of a banking center in the Southwest market, and renovations of the main office building in Alexandria, Louisiana.

Other taxes decreased $314,000 to $2.4 million for 2024 compared to $2.7 million for 2023.

This decrease was primarily due to a decrease in State of Louisiana bank stock tax resulting from lower deposit account balances and lower net income for the applicable tax years.

Loan and deposit expenses decreased $89,000 to $895,000 for 2024 compared to $984,000 for 2023.

2024 benefited from the receipt of a $262,000 negotiated, variable rebate from a vendor.

This decrease was partially offset by an increase in collection and loan expenses.

Occupancy and equipment expenses increased $452,000 to $7.1 million for 2025, compared to 2024.

This increase was primarily due to an increase in maintenance expense, a full period of expenses related to our New Orleans market expansion in 2024, expenses related to our Acadiana market expansion in 2025, and nonrecurring expenses related to renovations of a banking center and to the main office building.

2024 had $111,000 of nonrecurring expenses related to our new banking center location and new administrative office, both in the New Orleans market, and other 2024 property renovations.

Loan and deposit expenses increased $236,000 to $1.1 million for 2025, compared to 2024.

In 2025, we received a $173,000 negotiated, variable rebate from a vendor, compared to a $262,000 similar rebate in 2024.

Also, in 2025, there was an overall increase in both loan and deposit-related expenses.

Other operating expenses increased $210,000 to $4.5 million for 2025, compared to 2024.

This increase was mainly due to an increase in employee-related expenses.

Technology expenses increased $196,000 to $3.4 million for 2025, compared to 2024.

This increase was primarily due to continued software technology enhancements and upgrades, partially offset by lower technology communication expenses from a new vendor relationship.

Data processing expense increased $116,000 to $2.4 million for 2025, compared to 2024.

This increase was due to new expenses and $31,000 of nonrecurring implementation fees related to our first quarter 2025 online, mobile banking, and bill payment system upgrades.

This increase was partially offset by the receipt of a $447,000 periodic refund from our data processing center in 2025, compared to a $284,000 similar refund in 2024.

Legal and professional expenses decreased $258,000 to $2.4 million for 2025, compared to 2024.

This decrease was mainly due to lower audit-related expenses.

Income Tax Expense

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Income tax expense $ 10,362 $ 8,146 $ 2,216 27.2 %

For the years ended December 31, 2024 and 2023, income tax expense remained consistent at $8.1 million.

The comparability in income tax expense was primarily due to the decrease in pre-tax income offset by an increase in the effective income tax rate due to permanent book versus tax differences.

The effective income tax rate for 2024 was 19.2%, compared to 18.8% for 2023.

For the years ended December 31, 2025 and 2024, income tax expense totaled $10.4 million and $8.1 million, respectively.

The increase in income tax expense was primarily due to the increase in pre-tax income.

Our effective income tax rates for the years ended December 31, 2025 and 2024, were 19.5% and 19.2%, respectively.

FINANCIAL CONDITION

1 unchanged sentence

During 2025, loans HFI increased $173.7 million, or 8.4%, to $2.25 billion as of December 31, 2025.

The increase in loans was due to improved loan activity in various markets across Louisiana.

The increase in loans was the result of robust new loan and commitment activity, combined with the funding of loan construction commitments.

Total securities increased $88.1 million, or 12.9%, to $773.0 million and were 23.1% of assets as of December 31, 2025.

The increase in securities was mainly due to utilizing securities cash flows, along with other liquid funds, to purchase $182.1 million of securities at favorable yields.

Deposits increased $158.3 million, or 5.6%, to $2.96 billion as of December 31, 2025, due to increases in most deposit categories.

Cash and cash equivalents decreased $55.6 million, or 20.7%, to $213.4 million and were 6.4% of assets as of December 31, 2025.

Cash and cash equivalents decreased due to loan growth exceeding deposit growth.

Total securities decreased $29.4 million, or 4.1%, to $684.9 million and were 21.7% of assets as of December 31, 2024.

The decrease in securities was due to maturities and principal repayments exceeding purchases.

Deposits were fairly consistent at $2.81 billion as of December 31, 2024 and $2.80 billion as of December 31, 2023.

Cash and cash equivalents decreased due to loan and securities growth exceeding deposit growth.

We had no outstanding borrowings as of December 31, 2025 and 2024.

3 unchanged sentences

Interest-bearing deposits in other banks were the third-largest component of earning assets as of December 31, 2025.

Liquidity that is not being deployed in loans or securities is placed in these accounts.

As of December 31, 2025, interest-bearing deposits in other banks were $187.7 million and were 5.6% of assets, a decrease of $50.7 million, or 21.3%, compared to $238.4 million and 7.6% of assets as of December 31, 2024.

Excess liquidity that is not being deployed into loans or securities is placed in these accounts.

This decrease was primarily due to funding loan and securities growth, which exceeded deposit growth during 2025.

Our securities portfolio is the second-largest component of earning assets and provides a significant source of revenue.

7 unchanged sentences

Securities AFS and securities HTM are debt securities.

Total debt securities on the consolidated balance sheets were $681.9 million as of December 31, 2024, a decrease of $29.4 million, or 4.1%, from $711.3 million as of December 31, 2023.

Total debt securities on the consolidated balance sheets were $769.9 million as of December 31, 2025, an increase of $88.0 million, or 12.9%, from $681.9 million as of December 31, 2024.

Securities AFS are held for indefinite periods of time and are carried at estimated fair value.

1 unchanged sentence

The carrying values of our securities AFS are adjusted for unrealized gain or loss, and any unrealized gain or loss is reported on an after-tax basis as a component of AOCI in stockholders’ equity.

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, compared to a net unrealized loss of $62.2 million as of December 31, 2023.

The net unrealized loss on securities AFS decreased $20.1 million for the year ended December 31, 2025, resulting in a net unrealized loss of $43.2 million as of December 31, 2025, compared to a net unrealized loss of $63.2 million as of December 31, 2024.

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

1 unchanged sentence

Securities HTM had an unrealized loss of $18.2 million as of December 31, 2025, compared to an unrealized loss of $22.8 million as of December 31, 2024.

Investment activity for the year ended December 31, 2024, included $157.3 million in maturities, principal repayments, and calls, partially offset by $128.9 million of securities purchased.

Investment activity for the year ended December 31, 2025, included $182.1 million of securities purchased, partially offset by $114.4 million in maturities, principal repayments, and calls.

There were no sales of securities AFS, and there were no purchases or sales of securities HTM for the same period.

1 unchanged sentence

agency securities.

The mortgage-backed securities purchased had a yield of 5.26% and an average life of 3.99 years.

The mortgage-backed securities purchased had a yield of 4.92%

and an average life of 4.50 years.

agency securities purchased had a yield of 4.88% and an average life of 4.64 years.

The securities portfolio tax-equivalent yield was 2.89% for the year ended December 31, 2025, compared to 2.43% for the year ended December 31, 2024.

The increase in yield for the year ended December 31, 2024, was primarily due to reinvesting lower yielding securities cash flows received during 2024 into higher yielding securities.

The increase in yield for the year ended December 31, 2025, was primarily due to reinvesting lower yielding securities cash flows received during 2025, along with other liquid funds, into higher yielding securities.

The contractual maturity of mortgage-backed securities and collateralized mortgage obligations is not a reliable indicator of their expected lives because borrowers have the right to prepay their obligations at any time.

16 unchanged sentences

196,607 4 (25,311) 171,300

Treasury securities

10,995 — (63) 10,932

agency securities

45 unchanged sentences

Municipal bonds 3,204 1.83 % 11,466 2.27 % 45,115 2.20 % 111,515 2.11 % 171,300 2.14 %

Treasury securities 10,932 1.27 % — — % — — % — — % 10,932 1.27 %

agency securities 963 4.53 % 4,479 2.76 % 40,414 4.43 % 20,125 3.91 % 65,981 4.15 %

23 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, 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, 2025, equity securities had a fair value of $3.0 million with a recognized gain of $94,000 for the year ended December 31, 2025.

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.

3 unchanged sentences

As of December 31, 2025, loans HFI were $2.25 billion, an increase of $173.7 million, or 8.4%, compared to $2.08 billion as of December 31, 2024.

Loans HFI increased primarily due to new loan activity in various markets across Louisiana.

In 2025, we had robust new loan and commitment activity, combined with funding of loan construction commitments.

Loans by Category

16 unchanged sentences

CRE loans increased $35.7 million, or 4.0%, to $920.3 million as of December 31, 2025, from $884.6 million as of December 31, 2024.

The average CRE loan size was $953,000 as of December 31, 2024 and $938,000 as of December 31, 2023.

The average CRE loan size was $1.0 million as of December 31, 2025 and $953,000 as of December 31, 2024.

Non-owner occupied CRE loans were $458.6 million, or 20.4% of loans HFI, and represented 108.7% of the Bank’s total risk-based capital as of December 31, 2025.

11 unchanged sentences

Health care 33,590 1.5 % 34,411 1.6 %

Investor one-to-four family and multifamily 26,133 1.2 % 13,805 0.7 %

Religious and other nonprofit 22,846 1.0 % 25,351 1.2 %

2 unchanged sentences

Hospitality services 12,696 0.6 % 13,812 0.7 %

Investor one-to-four family and multifamily 13,805 0.7 % 14,532 0.7 %

Energy 12,608 0.6 % 13,118 0.7 %

Professions, scientific, and technical services 11,843 0.5 % 11,535 0.5 %

Transportation and warehousing 11,453 0.5 % 11,371 0.5 %

Energy 9,952 0.4 % 12,608 0.6 %

Arts, entertainment, and recreation 8,652 0.4 % 9,685 0.5 %

6 unchanged sentences

Finance and insurance 9,285 0.4 % 7,888 0.4 %

Wholesale trade 7,863 0.4 % 7,880 0.4 %

Construction 9,262 0.4 % 7,276 0.4 %

Wholesale trade 7,094 0.3 % 7,863 0.4 %

Energy 5,440 0.2 % 5,792 0.3 %

1 unchanged sentence

Educational services 2,623 0.1 % 3,384 0.1 %

Retail trade 2,841 0.1 % 3,582 0.2 %

Information 2,500 0.1 % 2,448 0.1 %

Retail trade 1,141 0.1 % 2,841 0.1 %

All other 267,634 12.0 % 269,087 13.0 %

28 unchanged sentences

Hospitality services 2.6 %

Public administration 2.0 %

Finance and insurance 1.9 %

Public administration 1.6 %

Religious and other nonprofit 1.3 %

3 unchanged sentences

Health care loans are our largest industry concentration and are made up of a diversified portfolio of health care providers.

As of December 31, 2024, total health care loans were $167.3 million, or 8.1% of loans HFI, compared to $153.8 million, or 7.7% of loans HFI, as of December 31, 2023.

As of December 31, 2025, health care loans were $194.3 million, or 8.6% of loans HFI, compared to $167.3 million, or 8.1% of loans HFI, as of December 31, 2024.

The average health care loan size was $414,000 as of December 31, 2025, and $372,000 as of December 31, 2024.

9 unchanged sentences

Northwest 339,867 15.1 %

New Orleans 239,042 10.6 %

Southwest 176,190 7.9 %

Northshore 139,186 6.2 %

New Orleans 167,082 8.1 %

Acadiana 137,253 6.1 %

32 unchanged sentences

NPAs totaled $3.5 million as of December 31, 2025, an increase of $264,000, or 8.1%, from $3.3 million as of December 31, 2024.

The increase was primarily due to an increase in nonaccrual loans, partially offset by a decrease in past due loans.

The ratio of NPAs to assets was 0.10% as of December 31, 2024 and 0.08% as of December 31, 2023.

The increase was primarily due to an increase in nonaccrual loans.

The ratio of NPAs to assets was 0.11% and 0.10% as of December 31, 2025 and December 31, 2024, respectively.

Nonperforming loan and asset information is summarized below:

10 unchanged sentences

Nonperforming loans to loans HFI 0.16 % 0.16 %

0.16 % 0.13 %

NPAs to assets 0.11 % 0.10 %

34 unchanged sentences

Loans that do not share similar risk characteristics are evaluated individually and excluded from the collective evaluation.

The ACL is determined using the CECL model, which considers relevant available information, from internal and external sources, relating to past events, current conditions, and reasonable and supportable forecasts.

The ACL is determined using relevant available information, from internal and external sources, relating to past events, current conditions, and reasonable and supportable forecasts.

As of December 31, 2025, the ACL was $23.4 million, or 1.04% of loans HFI.

As of December 31, 2024, the ACL was $21.7 million, or 1.05%, of loans HFI.

The $395,000 increase in the ACL for the year ended December 31, 2024, was due $1.0 million from the provision for credit losses on loans, partially offset by $605,000 of net charge-offs.

The provision for credit losses for the year ended December 31, 2024, was $1.2 million, an increase of $465,000 from $735,000 for the year ended December 31, 2023.

The $1.7 million increase in the ACL for the year ended December 31, 2025, was due to $2.3 million from the provision for credit losses on loans, partially offset by $632,000 of net charge-offs.

The provision for credit losses for the year ended December 31, 2025, was $2.3 million for loans, an increase of $1.1 million from $1.2 million for the year ended December 31, 2024.

The provision for credit losses for 2024 included $1.0 million for loans and $200,000 for unfunded commitments.

The primary drivers of the increase were the potential economic challenges resulting from the recent inflationary environment, changing monetary policy, current economic forecasts, and loan growth.

In the second half of 2024, we had an increase in unfunded loan commitments, which contributed to the increase in provision for credit losses.

In 2025, the higher provision was primarily driven by loan growth, lingering impacts related to inflation and tariffs, and greater uncertainty with future unemployment.

Net charge-offs for the year ended December 31, 2025, were $632,000, an increase of $27,000 from $605,000 for the year ended December 31, 2024.

The ratio of net charge-offs to average loans HFI was 0.03% and 0.02% for the years ended December 31, 2024 and 2023, respectively.

The ratio of net charge-offs to average loans HFI was 0.03% for the years ended December 31, 2025 and 2024.

The following table displays activity in the ACL for December 31, 2025 and 2024:

5 unchanged sentences

Allowance at beginning of period $ 21,731 $ 21,336

Impact of adopting ASC 326

Provision expense (1)

Provision for credit losses (1)

Commercial real estate (20) —

One-to-four family residential (30) (1)

14 unchanged sentences

We believe that we have established our ACL in accordance with GAAP and that the ACL was adequate to provide for known and inherent losses in the portfolio at all times shown above.

Future provisions for credit losses on loans are subject to ongoing evaluations of the factors and loan portfolio risks, including economic pressures related to inflation, labor market and supply chain constraints, and natural disasters affecting the state of Louisiana.

Future provisions for credit losses on loans are subject to ongoing evaluations of the factors and loan portfolio risks, including economic pressures related to inflation, unemployment, tariffs and trade, and natural disasters affecting the state of Louisiana.

A decline in market area economic conditions, deterioration of asset quality, or growth in portfolio size could cause the allowance to become inadequate, and material additional provisions for credit losses could be required.

24 unchanged sentences

We do not have any internet-sourced or brokered deposits.

Total 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.

Noninterest-bearing deposits decreased $50.0 million, or 5.5%, during 2024 to $866.5 million as of December 31, 2024.

Total deposits increased $158.3 million, or 5.6%, to $2.96 billion as of December 31, 2025, from $2.81 billion as of December 31, 2024.

The increase was primarily a result of higher customer deposit balances combined with the timing of funds from public entity customers.

Noninterest-bearing deposits increased by $47.4 million, or 5.5%, to $913.9 million as of December 31, 2025.

Noninterest-bearing deposits as a percentage of total deposits were 30.84% as of December 31, 2025, compared to 30.89% as of December 31, 2024.

Interest-bearing deposits increased $53.2 million, or 2.8%, during 2024 to $1.94 billion as of December 31, 2024, with the largest increase in time deposits.

Interest-bearing deposits increased $110.9 million, or 5.7%, during 2025 to $2.05 billion as of December 31, 2025, with the largest increase in interest-bearing demand deposits.

The Bank has a granular, diverse deposit portfolio with customers in a variety of industries throughout Louisiana.

The average deposit account size was approximately $28,000 as of December 31, 2024 and December 31, 2023.

The average deposit account size was approximately $29,000 as of December 31, 2025, compared to $28,000 as of December 31, 2024.

The following table presents our deposits by account type as of the dates indicated:

26 unchanged sentences

The average cost of interest-bearing deposits and total deposits for 2025 was 2.31% and 1.56%, respectively, compared to 2.60% and 1.74% for 2024, respectively.

The increase in the average cost of interest-bearing deposits and total deposits in 2024 as compared to 2023 was due to a higher rate environment that began in the second half of 2022 and continued until the FOMC decreased rates in the third and fourth quarters of 2024.

The decrease in the average cost of interest-bearing deposits and total deposits in 2025 as compared to 2024 was due to reducing rates on selected interest-bearing deposit accounts in conjunction with target federal funds range reductions.

Also, as of December 31, 2025, 8.1% of interest-bearing transaction deposits had floating rates, which adjust with market rates.

26 unchanged sentences

We utilize the FHLB of Dallas as needed as a funding source.

As of December 31, 2024 and 2023, availability under our FHLB of Dallas line was $1.04 billion and $934.1 million, respectively.

As of December 31, 2025 and 2024, availability under our FHLB of Dallas line was $1.03 billion and $1.04 billion, respectively.

This line is secured by a blanket lien on selected Red River Bank loans that meet FHLB of Dallas collateral requirements.

5 unchanged sentences

In 2023, we pledged securities to have borrowing access to the Federal Reserve Bank’s Discount Window facility.

In addition, effective March 2024, the Bank was approved for the Discount Window’s Borrower-In-Custody “BIC” program, which provides borrowing capacity through the pledging of eligible Red River Bank loans that are not pledged to the FHLB.

As of December 31, 2024, we had a total borrowing capacity of $157.8 million, including $118.7 million through the BIC program, compared to a total borrowing capacity of $45.5 million as of December 31, 2023.

In addition, effective March 2024, the Bank was approved for the BIC program, which provides borrowing capacity through the pledging of eligible Red River Bank loans that are not pledged to the FHLB.

As of December 31, 2025, we had a total borrowing capacity of $125.5 million through the Federal Reserve Bank’s Discount Window, including $85.1 million through the BIC program, compared to a total borrowing capacity of $157.8 million, including $118.7 million through the BIC program as of December 31, 2024.

Other Borrowings.

We may also utilize federal funds from various correspondent financial institutions as a source of short-term funding.

As of December 31, 2024 and 2023, we had $95.0 million in federal funds lines available from these funding sources.

We had no outstanding balances on these lines as of December 31, 2024 or 2023.

Hancock Whitney Bank Line of Credit.

We maintained a revolving line of credit of $6.0 million at Hancock Whitney Bank collateralized by 100.0% of the stock of the Bank until July 1, 2024.

We had no outstanding balances on this line during 2024 or 2023.

We may also utilize federal funds lines from various correspondent financial institutions as a source of short-term funding.

As of December 31, 2025 and 2024, we had $100.0 million and $95.0 million, respectively, in federal funds lines available from these funding sources.

We had no outstanding balances from these sources as of December 31, 2025 or 2024.

Stockholders’ Equity

Total stockholders’ equity as of December 31, 2024, was $319.7 million, compared to $303.9 million as of December 31, 2023, an increase of $15.9 million, or 5.2%.

This increase was attributable to $34.2 million of net income for the year ended December 31, 2024, $411,000 of stock compensation, and a $247,000, net of tax, market adjustment to AOCI related to securities, partially offset by the repurchase of 327,085 shares of common stock for $16.5 million and $2.5 million in cash dividends.

The $16.5 million of common stock repurchases includes $213,000 of stock repurchase excise tax related to our 2023 and 2024 stock repurchases, which regulations require to be recorded as a reduction to stockholders’ equity.

During the second quarter of 2022, we reclassified $166.3 million, net of $17.9 million of unrealized loss, from securities AFS to securities HTM.

Total stockholders’ equity as of December 31, 2025, was $365.2 million, compared to $319.7 million as of December 31, 2024.

The $45.4 million, or 14.2%, increase in stockholders’ equity was attributable to $42.8 million of net income for the year ended December 31, 2025, a $16.9 million, net of tax, market adjustment to AOCI related to securities, and $495,000 of stock compensation, partially offset by the repurchase of 211,748 shares of common stock for $11.2 million, including excise tax, and $3.6 million in cash dividends.

In 2022, we reclassified $166.3 million, net of $17.9 million of unrealized loss, from securities AFS to securities HTM.

The securities were transferred at fair value, which became the cost basis for the securities HTM.

At the date of transfer, the net unrealized loss of $17.9 million, of which $14.2 million, net of tax, was included in AOCI and is being amortized over the remaining life of the securities as a yield adjustment, in a manner consistent with the amortization or accretion of the original purchase premium or discount on the associated security.

There were no gains or

losses recognized as a result of the transfer.

There were no gains or losses recognized as a result of the transfer.

As of December 31, 2025, the net unamortized, unrealized loss remaining on the transferred securities included in the consolidated balance sheets totaled $11.7 million, of which $9.2 million, net of tax, was included in AOCI.

On December 14, 2023, our 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 authorized us to purchase up to $5.0 million of our outstanding shares of common stock from January 1, 2024 through December 31, 2024.

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

The 2025 stock repurchase program authorized us to purchase up to $5.0 million of our

outstanding shares of common stock from January 1, 2025 through December 31, 2025.

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, we entered into a privately negotiated stock repurchase agreement for the purchase of 200,000 shares of our common stock for a total purchase price of approximately $10.0 million.

For the year ended December 31, 2025, we repurchased 11,748 shares of our common stock on the open market at an aggregate cost of $656,000, excluding excise tax, under the stock repurchase program.

The 2025 stock repurchase program expired on December 31, 2025, with $4.3 million of remaining availability.

On May 22, 2025, we entered into a privately negotiated stock repurchase agreement for the purchase of 100,000 shares of our common stock for a total purchase price of approximately $5.1 million, excluding excise tax.

This repurchase was supplemental to our 2025 stock repurchase program and did not impact the amount of permitted repurchases thereunder.

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

This repurchase was supplemental to our 2024 stock repurchase program.

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

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

On August 7, 2025, we entered into a privately negotiated stock repurchase agreement for the purchase of 100,000 shares of our common stock for a total purchase price of approximately $5.3 million, excluding excise tax.

This repurchase was supplemental to our 2025 stock repurchase program and did not impact the amount of permitted repurchases thereunder.

For the year ended December 31, 2024, we repurchased 17,085 shares of our 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 our 2023 and 2024 stock repurchases, which regulations require to be recorded as a reduction to stockholders’ equity.

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

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

For the year ended December 31, 2025, we recorded $111,000 of stock repurchase excise tax.

On December 18, 2025, our board of directors approved the renewal and increase of the 2025 stock repurchase program that expired on December 31, 2025.

The renewed and increased 2026 stock repurchase program authorizes us to purchase up to $10.0 million of our outstanding shares of common stock from January 1, 2026 through December 31, 2026.

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.

15 unchanged sentences

Liquidity levels are dependent on our operating, financing, lending, and investing activities during any given period.

Access to purchased funds from correspondent banks and overnight advances from the FHLB of Dallas and the Federal

Reserve Bank of Atlanta are also available.

Access to purchased funds from correspondent banks and overnight advances from the FHLB of Dallas and the Federal Reserve Bank of Atlanta are also available.

Purchased funds from correspondent banks and overnight advances can be utilized to meet funding obligations.

2 unchanged sentences

Our average deposits increased $88.8 million, or 3.2%, for the year ended December 31, 2025, compared to the average deposits for the year ended December 31, 2024.

The increase in average total deposits was primarily due to new time deposit activity.

The increase in average total deposits was primarily a result of higher balances in customer deposit accounts and the timing of funds from public entity customers.

Our average total loans increased $98.8 million, or 4.8%, for the year ended December 31, 2025, compared to average total loans for the year ended December 31, 2024.

1 unchanged sentence

As of December 31, 2025, liquid assets were $213.4 million, compared to $269.0 million as of December 31, 2024.

The decrease of $36.5 million, or 11.9%, was due to the funding of loans, partially offset by the inflow of deposits and net securities cash flows received during the year.

The decrease of $55.6 million, or 20.7%, was due to the funding of loan and securities growth, which exceeded deposit growth for the year.

The liquid assets to assets ratio was 6.37% as of December 31, 2025, compared to 8.54% as of December 31, 2024.

10 unchanged sentences

Another borrowing source is the Federal Reserve Bank’s Discount Window.

Effective the third quarter of 2023, the Bank pledged securities to have borrowing access to the Federal Reserve Bank’s Discount Window.

The Bank has pledged securities to have borrowing access to the Federal Reserve Bank’s Discount Window facility.

In addition, the Bank was approved for the BIC program, which provides borrowing capacity through the pledging of eligible Red River Bank loans that are not pledged to the FHLB.

There were no outstanding borrowings from the Federal Reserve Bank’s Discount Window as of December 31, 2025 and 2024.

Other sources available for meeting liquidity needs include federal funds lines, repurchase agreements, and other lines of credit.

We maintain four federal funds lines of credit with commercial banks that provided for the availability to borrow up to an aggregate of $95.0 million in federal funds as of December 31, 2024 and 2023.

We maintain four federal funds lines of credit with commercial banks that provided for the availability to borrow up to an aggregate of $100.0 million and $95.0 million in federal funds as of December 31, 2025 and 2024, respectively.

The rates for the federal funds lines are determined by the applicable commercial bank at the time of borrowing.

We also maintained an additional $6.0 million revolving line of credit at one of our correspondent banks until July 1, 2024.

As of December 31, 2024 and 2023, we had total borrowing capacity of $95.0 million and $101.0 million, respectively, through these combined funding sources.

We had no outstanding balances from either of these sources as of December 31, 2024 and 2023.

The Federal Reserve’s Bank Term Funding Program was available from March 12, 2023 through March 11, 2024.

The Bank did not utilize this program while it was being offered.

We had no outstanding balances from these sources as of December 31, 2025 and 2024.

Off-Balance Sheet Items

5 unchanged sentences

Financial Statements and Supplementary Data - Note 3.

Loans and Asset Quality - Commitments to Extend Credit.” For more information about our financial commitments with time deposits, operating lease obligations, and limited partnership investments and construction commitments, see “Item 8.

Loans and Asset Quality - Commitments to Extend Credit.” For more information about our financial commitments with time deposits and other off-balance sheet commitments, see “Item 8.

Financial Statements and Supplementary Data - Note 5.

Deposits,” “- Note 7.

Leases,” and “- Note 12.

Deposits” and “- Note 12.

Off-Balance Sheet Contractual Obligations and Contingencies,” respectively.

61 unchanged sentences

It is important to understand how such other banking organizations calculate and name their financial measures similar to the non-GAAP financial measures discussed in this Report when comparing such non-GAAP financial measures.

Tangible Assets, Tangible Equity, Tangible Book Value, and Realized Book Value

Tangible Book Value Per Share .

102 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 7. Management’s Discussion and Analysis