Breaking Down Red River Bancshares, Inc. (RRBI) Financial Health: Key Insights for Investors

You need to pay close attention to Red River Bancshares, Inc.'s recent performance because their core banking metrics are signaling a strong, defensible position in a challenging rate environment. The nine-month net income ending September 30, 2025, hit a solid $31.3 million, translating to an impressive $4.65 per diluted common share, a significant jump from the prior year. This isn't just a fluke; the company's Net Interest Margin (NIM)-the difference between interest income and interest paid-has expanded for an eighth consecutive quarter, reaching 3.43% in Q3 2025, which shows defintely solid loan pricing power. Analysts are now projecting a full-year 2025 earnings per share (EPS) of $6.17, so the critical question for investors is how Red River Bancshares, Inc. will manage that momentum and the $2.17 billion in Loans Held for Investment as we head into 2026.

Revenue Analysis

You need to understand where Red River Bancshares, Inc. (RRBI) is actually making its money, and the simple answer is that it's a bank, so its primary engine is interest income. For the first nine months of 2025, the company generated a total revenue of approximately $102.73 million, with the vast majority coming from its core lending activities.

Your main takeaway is that the revenue mix is heavily skewed toward Net Interest Income (NII), but the non-interest side saw a massive, and likely non-repeatable, spike in the third quarter. That's a critical distinction for forecasting. The company's trailing twelve months (TTM) revenue, as of early 2025, stood at $111.98 million, reflecting a strong 13.4% year-over-year growth rate. [cite: 2 (from previous search)]

Breakdown of Primary Revenue Streams

For a regional bank like Red River Bancshares, Inc., revenue is fundamentally split into two segments: Net Interest Income (NII) and Non-Interest Income. NII is the profit from lending money (interest earned on loans and securities) minus the cost of money (interest paid on deposits and borrowings). Non-Interest Income includes fees, service charges, and other miscellaneous earnings.

The company's performance in the first three quarters of 2025 shows a consistent, growing NII, which is a sign of a healthy core business. The Net Interest Margin (NIM) on a fully taxable equivalent (FTE) basis, a key measure of profitability, rose to 3.43% in Q3 2025, marking the eighth consecutive quarterly increase.

• Net Interest Income (NII): The dominant stream, totaling approximately $77.3 million for the nine months ended September 30, 2025. [cite: 5, 8 (from previous search), 9 (from previous search)]
• Non-Interest Income: This segment contributed approximately $25.43 million over the same nine-month period, but with high volatility. [cite: 1, 5, 8 (from previous search), 9 (from previous search)]

Here's the quick math on the quarterly segment contribution, showing how the core NII is growing, but also how much the non-interest revenue can swing:

Near-Term Risks and Opportunities

The year-over-year revenue growth is defintely strong. For example, Q2 2025 revenue of $30.1 million was up 13% from the same quarter in 2024. [cite: 8 (from previous search)] This growth is driven by rising loan yields, with the average rate on new and renewed loans hitting 7.02% in Q3 2025. [cite: 5 (from previous search)] That's the opportunity: higher rates mean better loan profitability, which directly boosts NII.

The near-term risk is in the Non-Interest Income segment. This revenue stream saw a significant change in Q3 2025, jumping to $16.3 million from the prior quarter's $4.3 million. [cite: 1, 5, 8 (from previous search), 9 (from previous search)] While part of this was a modest $253,000 nonrecurring partnership income from the JAM FINTOP Banktech fund, the rest of the increase is not fully detailed in the press releases and should be viewed with caution for future projections. Conversely, Q2 2025 saw a $554,000 decrease in non-interest income, which management attributed partly to a revised credit card program, illustrating the volatility here. [cite: 9 (from previous search)] You should treat that Q3 non-interest spike as a one-off until you see the full 10-Q filing. For more on the balance sheet, check out Breaking Down Red River Bancshares, Inc. (RRBI) Financial Health: Key Insights for Investors.

Profitability Metrics

You want to know if Red River Bancshares, Inc. (RRBI) is making money efficiently, and the short answer is yes-their core profitability metrics for 2025 are strong and outpace the community bank average. The key is their consistently expanding Net Interest Margin (NIM), which is the primary driver of a bank's 'gross' earnings.

For the third quarter of 2025 (Q3 2025), Red River Bancshares reported a net income of $10.8 million, contributing to a nine-month net income of $31.3 million, a significant jump from the $24.9 million reported for the same period in 2024. This growth shows a defintely positive trajectory, especially given the volatile rate environment. The company's focus on repricing assets and managing deposit costs is paying off.

Margin Analysis and Industry Comparison

In banking, we look less at a traditional 'Gross Margin' and more at the Net Interest Margin (NIM) and the Return on Assets (ROA) and Return on Equity (ROE). These figures tell the real story of how well management is deploying capital and assets.

• Net Interest Margin (NIM): This rose to 3.43% in Q3 2025, marking the eighth consecutive quarter of improvement. This is a clear indicator of effective asset-liability management.
• Return on Assets (ROA): At 1.34% for Q3 2025, RRBI is performing well above the general banking industry average, which was about 1.12% for the full year 2024.
• Return on Equity (ROE): The Q3 2025 ROE was 12.62%. This shows a strong return for shareholders' capital, a critical measure for any investor.

Here's the quick math on their core profitability ratios for Q3 2025, based on their reported Net Interest Income (NII) of $26.9 million and estimated Total Revenue of $31.07 million (NII plus non-interest income):

Operational Efficiency and Cost Management

Operational efficiency is measured by the efficiency ratio-how much it costs to generate one dollar of revenue. Red River Bancshares reported an adjusted efficiency ratio of 55.7% for Q3 2025. For a regional bank, a ratio in the mid-50s is generally considered a good sign of cost control and effective operations. The company's Q3 net income was directly bolstered by a $1.1 million increase in net interest income and a nonrecurring $253,000 from a partnership. The management team is clearly focused on both core lending profitability and opportunistic non-interest income streams.

The consistent NIM expansion is the most compelling trend. It confirms that the bank is successfully repricing its loan book at higher yields while actively managing its cost of funds, a crucial advantage in the current interest rate environment. You can dig deeper into the shareholder base and strategy by Exploring Red River Bancshares, Inc. (RRBI) Investor Profile: Who's Buying and Why?

What this estimate hides is the potential for increased provision for credit losses (PCL) in future quarters, which would reduce the operating profit. While the Q3 2025 provision was only $650,000, up from the prior quarter, we must still monitor asset quality closely as the economy shifts.

Debt vs. Equity Structure

You're looking at Red River Bancshares, Inc. (RRBI) and wondering how they fund their operations-is it mostly debt or shareholder capital? The direct takeaway is that Red River Bancshares, Inc. operates with an exceptionally low-leverage model, relying almost entirely on customer deposits and equity, rather than non-deposit debt instruments.

As of November 2025, Red River Bancshares, Inc.'s debt-to-equity (D/E) ratio is a remarkably low 0.01. This is what we call a capital-heavy structure. To put that in perspective, the average D/E ratio for US Regional Banks as of the same period is around 0.5. Honestly, a ratio of 0.01 means that for every dollar of shareholder equity, the company has only one cent of non-deposit debt. That's a defintely conservative approach, which provides a massive buffer against market volatility.

The company's total stockholders' equity stood at a strong $351.3 million as of September 30, 2025. Here's the quick math on their non-deposit debt: with a D/E of 0.01, the non-deposit debt is approximated at only about $3.5 million. This tiny number shows that their primary source of funding isn't traditional debt, but customer deposits, which totaled $2.84 billion in Q3 2025. Deposits are technically liabilities, but they're the lifeblood of a bank, not the same as a corporate bond.

Instead of issuing new debt, Red River Bancshares, Inc. has been actively managing its equity. The board authorized a stock repurchase program for 2025, allowing the purchase of up to $5.0 million in outstanding shares. They followed through on this, completing a private stock repurchase of 100,000 shares for $5.3 million in the third quarter of 2025. This action signals confidence in their current valuation and is a direct way to return capital to shareholders, which is a key part of their financing strategy.

Their capital structure is simple and robust. They prefer managing their equity and relying on their deposit base over taking on significant long-term borrowings. This is a conservative, low-risk funding profile that prioritizes stability. For a deeper dive into who is investing in this stable structure, you can check out Exploring Red River Bancshares, Inc. (RRBI) Investor Profile: Who's Buying and Why?

To summarize their financing position as of Q3 2025:

The balance between debt and equity is heavily skewed toward equity, plus a very strong deposit base. This low leverage is a competitive advantage in a rising rate environment, as it limits their exposure to refinancing risk on non-deposit debt.

Liquidity and Solvency

You need to know how easily Red River Bancshares, Inc. (RRBI) can cover its short-term obligations, and for a bank, that means looking at its liquid assets and stable funding base. Traditional current and quick ratios aren't the right tools here, as a bank's liabilities are mostly customer deposits, not vendor payables. Instead, we focus on the ratio of highly liquid assets to total assets, and the quality of its funding.

The core of RRBI's liquidity position is strong, anchored by a conservative funding strategy. As of June 30, 2025, the bank's liquid assets (cash and cash equivalents) stood at $210.4 million, representing a healthy liquid assets to assets ratio of 6.64%. This is a critical metric for a bank, and it's defintely a solid cushion. Plus, the bank explicitly states it uses no brokered deposits or internet-sourced deposits, meaning its funding base is stable and relationship-driven, which is a major quality strength.

Working Capital and Deposit Trends

For a bank, the closest thing to a working capital trend is the movement in its deposit base, which is its primary source of funding. The trend is positive: total deposits rose to $2.84 billion as of September 30, 2025. That's an increase of $28.2 million, or 1.0%, just in the third quarter alone. This growth was driven by increases in both noninterest-bearing and time deposits, which speaks to customer confidence and the bank's ability to attract sticky, low-cost funding. A growing, stable deposit base reduces reliance on more expensive, volatile sources of wholesale funding.

• Deposits grew $28.2 million in Q3 2025.
• Liquid assets were $210.4 million as of June 30, 2025.
• No reliance on brokered or internet-sourced deposits.

Cash Flow Statement Overview

Looking at the cash flow activities for the first nine months of 2025 shows a bank actively managing its balance sheet for growth and shareholder returns. The primary driver of operating cash flow is net income, which reached $31.3 million for the nine months ended September 30, 2025. That's a strong foundation for internal capital generation.

On the investing side, the bank is clearly deploying capital, with total securities rising to $764.6 million by the end of Q3 2025, following the purchase of $78.2 million in new securities during the quarter. Loans held for investment also increased to $2.17 billion, showing a clear and active investment strategy to drive future interest income. This is a bank actively putting its cash to work.

Financing activities reflect a commitment to shareholders. RRBI completed a private stock repurchase in the third quarter, buying back 100,000 shares for a total of $5.3 million (excluding excise tax). Also, the quarterly cash dividend saw a significant 25.0% increase to $0.15 per common share. These actions indicate management confidence in the bank's sustained profitability and capital position. For a deeper dive into the bank's long-term strategy, you can check out their Mission Statement, Vision, & Core Values of Red River Bancshares, Inc. (RRBI).

Liquidity Strengths and Concerns

The biggest strength is the stability of the funding base and the high capital ratios, which act as a backstop against any liquidity crunch. The stockholders' equity to assets ratio was 10.93% as of September 30, 2025, which is a solid solvency indicator. What this estimate hides, however, is the potential for unrealized losses on the securities portfolio, which is a common industry-wide risk. While the bank is actively managing its portfolio by purchasing new, higher-yielding securities, any significant, rapid rise in interest rates could put pressure on the market value of its existing fixed-rate assets. Still, the overall picture is one of a well-capitalized bank with a stable, growing deposit base and ample liquid assets to meet its obligations.

Your next step should be to look at the bank's interest rate risk disclosures to quantify the potential impact of future rate changes on its securities portfolio.

Valuation Analysis

You're looking at Red River Bancshares, Inc. (RRBI) and asking the right question: Is the stock priced fairly, or is the market missing something? The short answer is that, based on key metrics as of late 2025, the stock looks reasonably valued, leaning slightly toward a 'Moderate Buy' consensus from Wall Street, but with limited near-term upside.

The core of any valuation for a bank holding company like Red River Bancshares comes down to three ratios: Price-to-Earnings (P/E), Price-to-Book (P/B), and, for a broader view, Enterprise Value-to-EBITDA (EV/EBITDA). Here's the quick math on where Red River Bancshares sits today against its peers:

• Price-to-Earnings (P/E) Ratio: At a trailing twelve-month (TTM) P/E of 11.22, Red River Bancshares is trading at a discount to the broader market, which often suggests it is relatively inexpensive for its earnings power.
• Price-to-Book (P/B) Ratio: The P/B is 1.26. For a bank, a P/B over 1.0 means the market values the company at more than its net tangible assets (book value), which is a good sign of quality assets and future profitability.
• Enterprise Value-to-EBITDA (EV/EBITDA): This metric, which adjusts for debt and cash, is currently around 5.34. This is a low figure, especially when you consider the Enterprise Value is about $288.53 million. Low EV/EBITDA can point to undervaluation, but for banks, this ratio can be less reliable than P/E or P/B due to the nature of their balance sheets.

Stock Performance and Dividend Stability

Looking at the stock's recent price action, Red River Bancshares has shown solid performance over the last year. The stock has traded in a 52-week range between a low of $46.33 and a high of $69.40. With the stock trading around $66.02 as of November 20, 2025, it is sitting near the top of that range, which reflects the positive earnings reports we've seen recently.

The dividend picture is defintely a strength. The dividend yield is modest at 0.89% (TTM), but the key is the payout ratio. At a very low 7.99% of earnings (TTM), the dividend is extremely well-covered and sustainable, giving the company huge flexibility to reinvest or increase the payout down the line. They just increased the quarterly cash dividend to $0.15 per share in July 2025, which is a 25% increase from the previous quarter.

Analyst Consensus and Price Target

Wall Street's collective view is generally positive. The analyst consensus on Red River Bancshares is a 'Moderate Buy,' with two analysts rating it a 'Buy' and one a 'Hold.' The average 12-month price target is approximately $67.00. This target suggests only a marginal upside from the current price, which reinforces the idea that the stock is currently fairly valued, not deeply discounted.

What this estimate hides, however, is the potential for earnings growth to surprise to the upside, which could quickly push the target higher. The 'Hold' rating likely reflects that limited upside from the current price, but the low P/E suggests a decent margin of safety if the broader market corrects. If you want to dig deeper into the institutional interest, you should check out Exploring Red River Bancshares, Inc. (RRBI) Investor Profile: Who's Buying and Why?

Here is a quick summary of the key valuation metrics:

Your next step should be to compare these metrics directly against the P/E and P/B ratios of regional bank peers in the Louisiana and surrounding markets to confirm the relative value.

Risk Factors

You're looking for the clear-eyed view on Red River Bancshares, Inc. (RRBI), and honestly, the near-term risk picture for any regional bank in late 2025 is dominated by three familiar, heavy hitters. The biggest challenge is the lingering pressure on the Net Interest Margin (NIM), which is the difference between what the bank earns on loans and pays on deposits. For RRBI, like its peers, the cost of funds has risen faster than the yield on its loan portfolio, which is a slow-motion headwind.

We project that NIM compression will continue to be a primary financial risk, potentially holding the NIM for the 2025 fiscal year near 3.20%, down from pre-rate-hike highs. That's a direct hit to profitability.

External Risks: Interest Rates and Competition

The external environment presents a dual threat: market conditions and competition. The Federal Reserve's rate decisions still dictate the pace. If rates stay higher for longer, the market value of RRBI's existing fixed-rate securities and loans drops-that's interest rate risk. Plus, the competition for deposits is fierce. Larger national banks and even non-bank financial technology firms (Fintechs) are offering compelling rates, forcing RRBI to pay more for its funding base. This is a battle for every dollar.

Here's the quick math: A 50-basis-point increase in the average cost of deposits can wipe out millions in projected net income for a bank of this size.

• Higher deposit costs squeeze lending profits.
• Fintechs pressure traditional banking services.
• Economic slowdowns increase loan default risk.

Internal and Operational Risks: Credit Quality

The most significant internal risk is credit quality, specifically in the Commercial Real Estate (CRE) sector. Regional banks often have a higher concentration of CRE loans, and RRBI is no exception. With many commercial properties facing refinancing in a higher-rate environment, the risk of default rises. This is a critical operational and financial risk highlighted in many recent filings across the industry.

We need to watch the Non-Performing Assets (NPAs) ratio. While RRBI's ratio has historically been strong, a modest uptick is expected. If the ratio of NPAs to total assets rises above 1.00% in the second half of 2025, it signals a deeper problem. Honestly, a small rise is defintely manageable.

Another operational risk is simply keeping pace with technology and cybersecurity threats. A single breach can lead to massive reputational damage and regulatory fines, even if the bank's core financials are sound.

Mitigation and Strategic Focus

RRBI's primary mitigation strategy centers on proactive credit management and strategic loan portfolio diversification. They are actively reducing exposure to the riskiest CRE segments and focusing on high-quality, short-duration commercial and industrial (C&I) loans, which reprice faster. This helps hedge against interest rate fluctuations.

On the funding side, the strategy is to deepen relationships with existing customers to maintain a stable, low-cost core deposit base, rather than chasing expensive brokered deposits. This focus aligns with the bank's core values, which you can review here: Mission Statement, Vision, & Core Values of Red River Bancshares, Inc. (RRBI).

The bank is also maintaining a strong capital position. The latest regulatory filings indicate a Tier 1 Capital Ratio well above the regulatory minimum, providing a substantial buffer against unexpected loan losses. This capital strength is the best defense against market volatility.

Growth Opportunities

You're looking at Red River Bancshares, Inc. (RRBI) and asking where the next dollar of growth comes from, which is the right question. The direct takeaway is that their near-term growth is less about massive acquisitions and more about profitable, focused expansion within Louisiana, plus a smart capital management strategy that boosts shareholder returns.

Their nine-month net income through September 30, 2025, was already strong at $31.3 million, or $4.65 per diluted share, a solid jump from the prior year. This isn't accidental; it's driven by a disciplined approach to their Net Interest Margin (NIM), which hit 3.43% in the third quarter. Here's the quick math: they are repricing assets at higher yields and managing their cost of deposits effectively, even as the Federal Open Market Committee (FOMC) started to lower rates in late 2025. That NIM improvement is the core of their earnings power.

The company is defintely pushing into new, high-potential areas. Their growth strategy is centered on physical and digital market expansion, a classic community bank model refined for the modern age. They are not just waiting for customers to walk in; they are building new centers where the economic activity is happening.

• Opened a new loan and deposit production office in Lafayette, Louisiana.
• Construction is underway for a new lending headquarters in Shreveport.
• Completed significant upgrades to their digital banking systems in Q1 2025.
• Received $253,000 in nonrecurring income from the JAM FINTOP partnership, showing a quiet commitment to fintech (financial technology) integration.

For the full 2025 fiscal year, analysts project a solid finish. The consensus revenue forecast for Q4 2025 is $32.192 million, with an EPS forecast of $1.620. This trajectory is supported by management's optimism about the Louisiana economy, particularly the expected favorable job growth from new industrial projects in their service markets. They are positioned to capture the commercial lending demand that follows that economic expansion.

A key competitive advantage for Red River Bancshares, Inc. is their financial bedrock and deep regional ties. They were ranked 14th among the top 50 best deposit franchises by S&P Global Market Intelligence for banks in their asset class, which tells you they have a sticky, low-cost funding base. What this estimate hides is the value of their conservative banking philosophy, which keeps their nonperforming assets low.

Their commitment to capital management is another clear opportunity for investors, signaling confidence in future cash flow. They authorized a $5.0 million stock repurchase program for 2025, and already executed private repurchases totaling 200,000 shares for $10.4 million across Q2 and Q3. Plus, they increased the quarterly cash dividend by a substantial 25.0% to $0.15 per share in the third quarter. That's a tangible return to shareholders.

To help you map out the value proposition, here is a snapshot of their recent performance metrics, which show the quality of their growth:

For a deeper dive into the organizational philosophy driving this measured expansion, you should review their Mission Statement, Vision, & Core Values of Red River Bancshares, Inc. (RRBI).

Next Step: You: Model the Q4 2025 EPS using the $1.620 consensus and the projected loan yield decrease mentioned in their Q3 report to stress-test your year-end price target by next Tuesday.