RED RIVER BANCSHARES INC

Previous wording

The purpose of this discussion and analysis is to focus on significant changes in the financial condition of Red River Bancshares, Inc. on a consolidated basis from December 31, 2024 through June 30, 2025, and on our results of operations for the quarters ended June 30, 2025 and March 31, 2025, and for the six months ended June 30, 2025 and June 30, 2024.

Current wording

The purpose of this discussion and analysis is to focus on significant changes in the financial condition of Red River Bancshares, Inc. on a consolidated basis from December 31, 2024 through September 30, 2025, and on our results of operations for the quarters ended September 30, 2025 and June 30, 2025, and for the nine months ended September 30, 2025 and September 30, 2024.

Previous wording

The following discussion contains forward-looking statements that reflect our current views with respect to, among other things, future events and our financial performance. We caution that assumptions, expectations, projections, intentions, or beliefs about future events may, and often do, vary from actual results and the differences can be material. See “Cautionary Note Regarding Forward-Looking Statements” and “Part II - Item 1A. Risk Factors” in this Report. Also, see risk factors and other cautionary statements described in “Part I - Item 1A. Risk Factors” included in our Annual Report on Form 10-K for the year ended December 31, 2024. We do not undertake any obligation to publicly update any forward-looking statements except as otherwise required by applicable law.

Current wording

The following discussion contains forward-looking statements that reflect our current views with respect to, among other things, future events and our financial performance. We caution that assumptions, expectations, projections, intentions, or beliefs about future events may, and often do, vary from actual results and the differences can be material. See “Cautionary Note Regarding Forward-Looking Statements” and “Part II - Item 1A. Risk Factors” in this Report. Also, see risk factors and other cautionary statements described in “Part I - Item 1A. Risk Factors” included in our Annual Report on Form 10-K for the year ended December 31, 2024.

Previous wording

Red River Bancshares, Inc. 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. Red River Bank operates from a network of 28 banking centers throughout Louisiana and one combined LDPO in New Orleans, Louisiana. Banking centers are located in the following Louisiana markets: Central, which includes the Alexandria MSA; Northwest, which includes the Shreveport-Bossier City MSA; Capital, which includes the Baton Rouge MSA; Southwest, which includes the Lake Charles MSA; the Northshore, which includes Covington; Acadiana, which includes the Lafayette MSA; and New Orleans.

Current wording

Red River Bancshares, Inc. 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. Red River Bank operates 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: Central, which includes the Alexandria MSA; Northwest, which includes the Shreveport-Bossier City MSA; Capital, which includes the Baton Rouge MSA; Southwest, which includes the Lake Charles MSA; the Northshore, which includes Covington; Acadiana, which includes the Lafayette MSA; and New Orleans.

Previous wording

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 marketde novo expansion, supplemented by strategic acquisitions of financial institutions with customer-oriented, compatible philosophies and in desirable geographic areas.

Current wording

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 marketde novo expansion, supplemented by strategic acquisitions of financial institutions with customer-oriented, compatible philosophies located in desirable geographic areas.

Previous wording

SECOND QUARTER 2025 FINANCIAL AND OPERATIONAL HIGHLIGHTS

Current wording

THIRD QUARTER 2025 FINANCIAL AND OPERATIONAL HIGHLIGHTS

Previous wording

•Net income for the second quarter of 2025 was $10.2 million, or $1.51 diluted EPS, a decrease of $156,000, or 1.5%, compared to $10.4 million, or $1.52 diluted EPS, for the first quarter of 2025. Net income for the second quarter was impacted by a $1.2 million increase in net interest income, which was offset by a $554,000 decrease in noninterest income, along with an expected $779,000 increase in operating expenses. Net income for the first quarter benefited from approximately $620,000 of periodic items that reduced operating expenses.

Current wording

•Net income for the third quarter of 2025 was $10.8 million, or $1.63 diluted EPS, an increase of $605,000, or 5.9%, compared to $10.2 million, or $1.51 diluted EPS, for the second quarter of 2025. Net income for the third quarter was impacted by a $1.1 million increase in net interest income, combined with $253,000 of nonrecurring partnership income.

Previous wording

•For the second quarter of 2025, the return on assets was 1.30%, and the return on equity was 12.27%.

Current wording

•For the third quarter of 2025, the return on assets was 1.34%, and the return on equity was 12.62%.

Previous wording

•Net interest income and net interest margin FTE increased for the second quarter of 2025 compared to the prior quarter. Net interest income for the second quarter of 2025 was $25.8 million, which was $1.2 million, or 4.9%, higher than $24.6 million for the prior quarter. Net interest margin FTE increased 14 bps to 3.36% for the second quarter of 2025, compared to 3.22% for the prior quarter. These improvements were the result of higher securities and loan yields and a lower cost of deposits, along with an improved asset mix.

Current wording

•Net interest income and net interest margin FTE increased for the third quarter of 2025 compared to the prior quarter. Net interest income for the third quarter of 2025 was $26.9 million, which was $1.1 million, or 4.1%, higher than $25.8 million for the prior quarter. Net interest margin FTE increased 7 bps to 3.43% for the third quarter of 2025, compared to 3.36% for the prior quarter. These improvements were the result of higher securities and loan yields, along with an improved earning asset mix.

Previous wording

•As of June 30, 2025, loans HFI were $2.14 billion, which was $23.8 million, or 1.1%, higher than $2.11 billion as of March 31, 2025. In the second quarter of 2025, we had steady new loan closing activity, combined with funding of loan construction commitments.

Current wording

•As of September 30, 2025, loans HFI were $2.17 billion, which was $34.5 million, or 1.6%, higher than $2.14 billion as of June 30, 2025. In the third quarter of 2025, we experienced solid new loan and commitment activity, combined with funding of loan construction commitments.

Previous wording

•On July 24, 2025, our board of directors announced that the cash dividend for the third quarter of 2025 will be $0.15 per common share, which is a 25.0% increase from $0.12 per common share paid for each of the first and second quarters of 2025.

Current wording

•On July 24, 2025, our board of directors announced that the cash dividend for the third quarter of 2025 would be $0.15 per common share, which was a 25.0% increase from $0.12 per common share paid for each of the first and second quarters of 2025. In the third quarter of 2025, we paid the quarterly cash dividend of $0.15 per common share.

Previous wording

•The 2025 stock repurchase 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. No shares were repurchased in the first quarter of 2025. In the second quarter of 2025, we repurchased 11,748 shares on the open market at an aggregate cost of $656,000, excluding excise tax. As of June 30, 2025, the 2025 stock repurchase program had $4.3 million of available capacity.

Current wording

•The 2025 stock repurchase 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. No shares were repurchased on the open market in the first and third quarters of 2025. In the second quarter of 2025, we repurchased 11,748 shares on the open market at an aggregate cost of $656,000, excluding excise tax. As of September 30, 2025, the 2025 stock repurchase program had $4.3 million of available capacity.

Previous wording

•On May 22, 2025, we entered into a privately negotiated stock repurchase agreement for the repurchase of 100,000 shares of our common stock at a purchase price of $5.1 million, excluding excise tax. This repurchase was supplemental to our 2025 stock repurchase program.

Current wording

•On August 7, 2025, we entered into a privately negotiated stock repurchase agreement for the repurchase of 100,000 shares of our common stock at a purchase price of $5.3 million, excluding excise tax. This repurchase was supplemental to our 2025 stock repurchase program.

Previous wording

Net income for the second quarter of 2025 was $10.2 million, or $1.51 diluted EPS, a decrease of $156,000, or 1.5%, compared to $10.4 million, or $1.52 diluted EPS, for the first quarter of 2025. The decrease in net income was due to a $779,000 increase in operating expenses, a $554,000 decrease in noninterest income, and a $32,000 increase in income tax expense, partially offset by a $1.2 million increase in net interest income. The return on assets for the second quarter of 2025 was 1.30%, compared to 1.32% for the first quarter of 2025. The return on equity was 12.27% for the second quarter of 2025, compared to 12.85% for the first quarter of 2025. Our efficiency ratio for the second quarter of 2025 was 56.87%, compared to 55.51% for the first quarter of 2025.

Current wording

Net income for the third quarter of 2025 was $10.8 million, or $1.63 diluted EPS, an increase of $605,000, or 5.9%, compared to $10.2 million, or $1.51 diluted EPS, for the second quarter of 2025. The increase in net income was due to a $1.1 million increase in net interest income and a $307,000 increase in noninterest income, partially offset by a $522,000 increase in operating expenses, a $200,000 increase in the provision for credit losses, and a $47,000 increase in income tax expense. The return on assets for the third quarter of 2025 was 1.34%, compared to 1.30% for the second quarter of 2025. The return on equity was 12.62% for the third quarter of 2025, compared to 12.27% for the second quarter of 2025. Our efficiency ratio for the third quarter of 2025 was 56.06%, compared to 56.87% for the second quarter of 2025.

Previous wording

Net income for the six months ended June 30, 2025, was $20.5 million, or $3.03 diluted EPS, an increase of $4.4 million, or 27.0%, compared to $16.2 million, or $2.31 diluted EPS, for the six months ended June 30, 2024. The increase in net income was due to a $7.3 million increase in net interest income, partially offset by a $1.4 million increase in operating expenses, a $1.2 million increase in income tax expense, a $300,000 increase in the provision for credit losses, and a $36,000 decrease in noninterest income. The return on assets for the six months ended June 30, 2025, was 1.31%, compared to 1.06% for the six months ended June 30, 2024. The return on equity was 12.55% for the six months ended June 30, 2025, compared to 10.73% for the six months ended June 30, 2024. Our efficiency ratio for the six months ended June 30, 2025, was 56.20%, compared to 61.23% for the six months ended June 30, 2024.

Current wording

Net income for the nine months ended September 30, 2025, was $31.3 million, or $4.65 diluted EPS, an increase of $6.4 million, or 25.8%, compared to $24.9 million, or $3.59 diluted EPS, for the nine months ended September 30, 2024. The increase in net income was due to a $11.7 million increase in net interest income, partially offset by a $2.5 million increase in operating expenses, a $1.7 million increase in income tax expense, a $650,000 increase in the provision for credit losses, and a $431,000 decrease in noninterest income. The return on assets for the nine months ended September 30, 2025, was 1.32%, compared to 1.08% for the nine months ended September 30, 2024. The return on equity was 12.58% for the nine months ended September 30, 2025, compared to 10.86% for the nine months ended September 30, 2024. Our efficiency ratio for the nine months ended September 30, 2025, was 56.15%, compared to 60.84% for the nine months ended September 30, 2024.

Previous wording

In the first half of 2024, the target range for the federal funds rate was consistent at 5.25%-5.50%. In September of 2024, the FOMC decreased the federal funds rate by 50 bps and then by an additional 50 bps during the fourth quarter of 2024, reducing the target federal funds range to 4.25%-4.50%. The target range for the federal funds rate was unchanged in the first half of 2025. The average effective federal funds rate was 4.33% for the first and second quarters of 2025, compared to 5.33% for the first six months of 2024. Net interest income and net interest margin FTE increased in the second quarter of 2025, compared to the prior quarter. Also, net interest income and net interest margin FTE increased for the six months ended June 30, 2025, compared to the six months ended June 30, 2024.

Current wording

In the first half of 2024, the target range for the federal funds rate was consistent at 5.25%-5.50%. In September of 2024, the FOMC decreased the federal funds rate by 50 bps and then by an additional 50 bps during the fourth quarter of 2024, reducing the target federal funds range to 4.25%-4.50% until September 2025. Late in the third quarter of 2025, the FOMC decreased the federal funds rate by an additional 25 bps, reducing the target range to 4.00%-4.25%. The average effective federal funds rate was 4.30% for the third quarter of 2025, compared to 4.33% for the second quarter of 2025. For the nine months ended September 30, 2025, the average effective federal funds rate was 4.32%, compared to 5.31% for the nine months ended September 30, 2024. Net interest income and net interest margin FTE increased in the third quarter of 2025, compared to the prior quarter. Also, net interest income and net interest margin FTE increased for the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024.

Previous wording

Net interest income for the second quarter of 2025 was $25.8 million, which was $1.2 million, or 4.9%, higher than the first quarter of 2025, due to a $922,000 increase in interest and dividend income, combined with a $287,000 decrease in interest expense. The increase in interest and dividend income was mainly due to higher interest income on loans, partially offset by lower interest income on short-term liquid assets. Loan income increased $1.2 million due to higher yields on loans, combined with higher average loan balances. The income on short-term liquid assets decreased $598,000 due to a $57.5 million decrease in the average balance of these funds. The decrease in interest expense was due to lower rates on time deposits, along with a lower average balance on interest-bearing transaction deposits.

Current wording

Net interest income for the third quarter of 2025 was $26.9 million, which was $1.1 million, or 4.1%, higher than the second quarter of 2025, due to a $1.4 million increase in interest and dividend income, slightly offset by a $352,000 increase in interest expense. The increase in interest and dividend income was mainly due to higher interest income on loans and securities. Loan income increased $1.1 million due to higher yields on loans, combined with higher average loan balances. Securities income increased $277,000 due to purchasing higher yielding securities, combined with higher average securities balances. The increase in interest expense was due to higher rates on interest-bearing transaction accounts due to public entity deposit pricing competition.

Previous wording

The net interest margin FTE increased 14 bps to 3.36% for the second quarter of 2025, compared to 3.22% for the prior quarter. This increase was due to improved yields on securities and loans, combined with lower deposit costs. The yield on securities increased 12 bps, primarily due to reinvesting lower yielding securities cash flows into higher yielding securities. The yield on loans increased 9 bps due to higher rates on new and renewed loans compared to the prior quarter. The average rate on new and renewed loans was 7.14% for the second quarter of 2025 and 7.02% for the prior quarter. The cost of deposits decreased 5 bps to 1.56% for the second quarter of 2025, compared to 1.61% for the previous quarter, primarily due to maturing time deposits repricing at lower rates.

Current wording

The net interest margin FTE increased 7 bps to 3.43% for the third quarter of 2025, compared to 3.36% for the prior quarter. This increase was due to improved yields on securities and loans, partially offset by higher deposit costs. The yield on securities increased 10 bps, primarily due to purchasing $78.2 million of securities with an average rate of 4.84%, which was higher than the current portfolio yield. The yield on loans increased 7 bps due to higher rates on new and renewed loans compared to the existing portfolio, as well as higher average loan balances. The average rate on new and renewed loans was 7.02% for the third quarter of 2025 and 7.14% for the prior quarter. The cost of deposits increased 2 bps to 1.58% for the third quarter of 2025, compared to 1.56% for the previous quarter, which was driven by higher rates on interest-bearing transaction accounts due to public entity deposit pricing competition.

Previous wording

The FOMC kept the federal funds rate consistent in the first half of 2025, with the target federal funds range remaining at 4.25%-4.50%. The market’s expectation is that the FOMC may lower the target range of the federal funds rate in the second half of 2025. During the remainder of 2025, we anticipate receiving approximately $50.0 million in securities cash flows with an average yield of 3.47%, and we project approximately $112.7 million of fixed rate loans will mature with an average yield of 6.14%. We expect to redeploy these balances into slightly higher yielding assets. Additionally, during the second half of 2025, we expect $439.0 million of time deposits to mature with an average rate of 3.71%. Weanticipate maintaining a fairly consistent cost of deposits in the second half of 2025. As of June 30, 2025, floating rate loans were 18.0% of loans HFI, and floating rate transaction deposits were 8.9% of interest-bearing transaction deposits. Depending on balance sheet activity, the movement in interest rates, and the economic outlook, we expect the net interest income and net interest margin FTE to increase slightly in the third and fourth quarters of 2025.

Current wording

In 2025, the FOMC kept the federal funds rate consistent through mid-September, with the target federal funds range remaining at 4.25%-4.50%. On each of September 17, 2025 and October 29, 2025, the FOMC lowered the target range of the federal funds rate by 25 bps, resulting in a range of 3.75%-4.00%. The market’s expectation is that the FOMC may lower the target federal funds range by 25 bps in December 2025. In the fourth quarter of 2025, we expect to receive $33.4 million in securities cash flows at 3.72%, which we plan to redeploy at higher yields. We project $84.9 million of fixed rate loans with an average yield of 6.41% to mature and $387.1 million of floating rate loans at 6.62% to reprice. Based on the current rate forecast, we expect the total loan yield to be slightly lower in the fourth quarter of 2025. Additionally, we expect $261.2 million in time deposits at 3.71% to mature, which should reprice at slightly lower yields considering maturity volumes and renewal pricing. Rates on interest-bearing transaction deposits could be adjusted with target federal funds range reductions. We anticipate a slightly lower cost of deposits in the fourth quarter of 2025. As of September 30, 2025, floating rate loans were 17.8% of loans HFI, and floating rate transaction deposits were 8.9% of interest-bearing transaction deposits. Depending on balance sheet activity and the interest rate environment, we expect net interest income and net interest margin FTE to decrease slightly in the fourth quarter of 2025.

Previous wording

(1)Includes average outstanding balances of loans HFS of$2.5 million and$2.6 million for the three months ended June 30, 2025 and March 31, 2025, respectively.

Current wording

(1)Includes average outstanding balances of loans HFS of$3.2 million and$2.5 million for the three months ended September 30, 2025 and June 30, 2025, respectively.

Previous wording

Net interest income for the six months ended June 30, 2025 was $50.4 million, which was $7.3 million, or 16.9%, higher than $43.2 million for the six months ended June 30, 2024. Net interest income increased due to a $5.8 million increase in interest and dividend income, combined with a $1.4 million decrease in interest expense.

Current wording

Net interest income for the nine months ended September 30, 2025 was $77.3 million, which was $11.7 million, or 17.8%, higher than $65.6 million for the nine months ended September 30, 2024. Net interest income increased due to a $9.1 million increase in interest and dividend income, combined with a $2.6 million decrease in interest expense.

Previous wording

The increase in interest and dividend income for the six months ended June 30, 2025, when compared to the six months ended June 30, 2024, was due to higher interest income on loans and securities, partially offset by a decrease in interest income on short-term liquid assets. Loan income increased $5.0 million due to higher rates on new and renewed loans compared to the existing portfolio yield, combined with higher average loan balances. Securities income increased $1.9 million primarily due to reinvesting lower yielding securities cash flows into higher yielding securities. Interest income on short-term liquid assets decreased $1.0 million due to the FOMC lowering the federal funds rate during the second half of 2024. The decrease in interest expense for the six months ended June 30, 2025, when compared to the six months ended June 30, 2024, was due to lower rates on total interest-bearing deposits, partially offset by a higher average balance in these deposits.

Current wording

The increase in interest and dividend income for the nine months ended September 30, 2025, when compared to the nine months ended September 30, 2024, was due to higher interest income on loans and securities, partially offset by a decrease in interest income on short-term liquid assets. Loan income increased $7.7 million due to higher rates on new and renewed loans compared to the existing portfolio yield, combined with higher average loan balances. Securities income increased $3.0 million primarily due to purchasing higher yielding securities. Interest income on short-term liquid assets decreased $1.6 million due to the FOMC lowering the federal funds rate during the second half of 2024 and in

Previous wording

These positive variances were partially offset by a 104 bp decrease to the yield on short-term liquid assets, due to the lower average federal funds rate for the six months ended June 30, 2025.

Current wording

Net interest margin FTE increased 42 bps to 3.34% for the nine months ended September 30, 2025, from 2.92% for the nine months ended September 30, 2024, primarily due to higher yields on securities and loans, combined with lower deposit costs. These positive variances were partially offset by a 103 bp decrease to the yield on short-term liquid assets, due to the lower average federal funds rate for the nine months ended September 30, 2025.

Previous wording

The yield on securities increased 49 bps mainly due to reinvesting lower yielding securities cash flows into higher yielding securities. The yield on loans increased 31 bps due to higher rates on new and renewed loans compared to the existing portfolio yield. The cost of deposits decreased 13 bps to 1.59% for the six months ended June 30, 2025, from 1.72% for the six months ended June 30, 2024, due to a 24 bp decrease in the rate on interest-bearing deposits. Within total interest-bearing deposits, the rate on time deposits and interest-bearing transaction deposits decreased 42 and 13 bps, respectively. These decreases occurred as we adjusted rates on selected transaction and time deposits during the second half of 2024 in response to the federal funds rate decreases by the FOMC. We also lowered selected time deposit rates in the first quarter of 2025.

Current wording

The yield on securities increased 48 bps mainly due to purchasing $41.1 million of securities in the fourth quarter of 2024 and an additional $146.7 million of securities during the nine months ended September 30, 2025, at favorable rates. The yield on loans increased 29 bps due to higher rates on new and renewed loans compared to the existing portfolio yield. The cost of deposits decreased 17 bps to 1.58% for the nine months ended September 30, 2025, from 1.75% for the nine months ended September 30, 2024, due to a 28 bp decrease in the rate on interest-bearing deposits. Within total interest-bearing deposits, the rate on time deposits and interest-bearing transaction deposits decreased 51 and 16 bps, respectively. These decreases occurred as we adjusted rates on selected transaction and time deposits during the second half of 2024 in response to the federal funds rate decreases by the FOMC. We also lowered selected time deposit rates in 2025.

Previous wording

The following table presents average balance sheet information, interest income, interest expense, and the corresponding average yields earned and rates paid for the six months ended June 30, 2025 and 2024:

Current wording

The following table presents average balance sheet information, interest income, interest expense, and the corresponding average yields earned and rates paid for the nine months ended September 30, 2025 and 2024:

Previous wording

(1)Includes average outstanding balances of loans HFS of $2.6 million and $2.6 million for the six months ended June 30, 2025 and 2024, respectively.

Current wording

(1)Includes average outstanding balances of loans HFS of $2.8 million and $2.7 million for the nine months ended September 30, 2025 and 2024, respectively.

Previous wording

The provision for credit losses for the second quarter of 2025 was $450,000 for loans, which was consistent with the prior quarter. The provision in the first and second quarters of 2025 was due to loan growth, combined with uncertainty regarding tariffs and trade. 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.

Current wording

The provision for credit losses for the third quarter of 2025 was $650,000 for loans, which was $200,000 higher than the provision for credit losses from the prior quarter. This higher provision was primarily driven by loan growth, lingering impacts related to inflation and tariffs, and greater uncertainty with future unemployment. The provision in the second quarter of 2025 was due to loan growth, combined with uncertainty regarding tariffs and trade. 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.

Previous wording

The provision for credit losses for the six months ended June 30, 2025 was $900,000 for loans, an increase of $300,000, or 50.0%, from $600,000 for the six months ended June 30, 2024. The increase for the first six months of 2025 was related to loan growth, combined with uncertainty regarding tariffs and trade. The provision for the first six months of 2024 was due to the inflationary environment, changing monetary policy, economic forecasts, and loan growth.

Current wording

The provision for credit losses for the nine months ended September 30, 2025, was $1.6 million for loans, an increase of $650,000, or 72.2%, from $900,000 for the nine months ended September 30, 2024. The provision for 2024 included $800,000 for loans and $100,000 for unfunded commitments. The increase for the first nine months of 2025 was primarily driven by loan growth, lingering impacts related to inflation and tariffs, and greater uncertainty with future unemployment. The provision for the first nine months of 2024 was due to the inflationary environment, changing monetary policy, economic forecasts, and loan growth.

Previous wording

Noninterest income decreased $554,000 to $4.7 million for the second quarter of 2025 compared to $5.3 million for the first quarter of 2025. The decrease in noninterest income was mainly due to lower brokerage income and SBIC income.

Current wording

Noninterest income increased $307,000 to $5.0 million for the third quarter of 2025 compared, to $4.7 million for the second quarter of 2025. The increase in noninterest income was mainly due to higher other income, brokerage income, and service charges on deposit accounts, partially offset by lower net debit card income and SBIC income.

Previous wording

Brokerage income decreased $336,000 to $989,000 for the second quarter of 2025, compared to the prior quarter. The lower income in the second quarter of 2025 was due to decreased investing activity by clients. Assets under management were $1.19 billion as of June 30, 2025, and $1.14 billion as of March 31, 2025.

Current wording

Brokerage income increased $142,000 to $1.1 million for the third quarter of 2025, compared to the prior quarter. The higher income in the third quarter of 2025 was due to increased investing activity by clients. Assets under management were $1.29 billion as of September 30, 2025, and $1.19 billion as of June 30, 2025.

Previous wording

SBIC income decreased $233,000 to $47,000 for the second quarter of 2025, compared to the prior quarter. This decrease was mainly due to fund value adjustments as an SBIC fund enters its wind-down phase. We expect SBIC income to fluctuate in future quarters.

Current wording

The SBIC partnerships reported a loss of $75,000 in the third quarter of 2025, compared to $47,000 of income in the previous quarter. This $122,000 decrease was mainly due to fund value adjustments as an SBIC fund continues its wind-down phase. We expect SBIC income to be lower in future quarters.

Previous wording

Noninterest income was $10.0 million for the six months ended June 30, 2025, consistent with the six months ended June 30, 2024. A decrease in SBIC income and loan and deposit income was offset by an increase in brokerage income and net debit card income.

Current wording

Noninterest income decreased $431,000 to $15.0 million for the nine months ended September 30, 2025, compared to $15.4 million for the nine months ended September 30, 2024. The decrease in noninterest income was mainly due to lower SBIC income and loan and deposit income, partially offset by higher brokerage income, other income, and net debit card income.

Previous wording

SBIC income decreased $479,000 to $327,000 for the six months ended June 30, 2025, compared to the same period prior year. This decrease was mainly due to fund value adjustments in the first half of 2025 as an SBIC fund enters its wind-down phase. In the first half of 2024, we received $114,000 of distribution payments, in addition to normal income.

Current wording

SBIC income decreased $855,000 to $252,000 for the nine months ended September 30, 2025, compared to the same period prior year. This decrease was mainly due to fund value adjustments as an SBIC fund continues its wind-down phase. For the nine months ended September 30, 2024, we received $114,000 of distribution payments, in addition to normal income.

Previous wording

Loan and deposit income decreased $107,000 to $877,000 for the six months ended June 30, 2025, compared to the same period prior year. 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.

Current wording

Loan and deposit income decreased $302,000 to $1.3 million for the nine months ended September 30, 2025, compared to the same period prior year. 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. The nine months ended September 30, 2024 benefited from $201,000 of nonrecurring loan-related fees.

Previous wording

Brokerage income increased $434,000 to $2.3 million for the six months ended June 30, 2025, compared to the same period prior year, due to increased investing activity by clients in the first half of 2025. Assets under management were $1.19 billion and $1.09 billion as of June 30, 2025 and 2024, respectively.

Current wording

Brokerage income increased $579,000 to $3.4 million for the nine months ended September 30, 2025, compared to the same period prior year, due to increased investing activity by clients. Assets under management were $1.29 billion and $1.13 billion as of September 30, 2025 and 2024, respectively.

Previous wording

Debit card income, net, increased $103,000 to $2.1 million for the six months ended June 30, 2025, compared to the same period prior year. For the six months ended June 30, 2025, debit card expenses were lower due to the new debit card provider contract. The first half of 2024 benefited from $145,000 of nonrecurring income due to the termination of our prior debit card provider contract.

Current wording

Debit card income, net, increased $50,000 to $2.9 million for the nine months ended September 30, 2025, compared to the same period prior year. For the nine months ended September 30, 2025, debit card expenses were lower due to the new debit card provider contract. The first half of 2024 benefited from $145,000 of nonrecurring income due to the termination of our prior debit card provider contract.

Previous wording

Operating expenses increased $779,000 to $17.4 million for the second quarter of 2025, compared to $16.6 million for the first quarter of 2025. Theincrease in operating expenses was mainly due to higher data processing expense, loan and deposit expenses, and personnel expenses.

Current wording

Operating expenses increased $522,000 to $17.9 million for the third quarter of 2025, compared to $17.4 million for the second quarter of 2025. Theincrease in operating expenses was mainly due to higher personnel expenses and occupancy and equipment expenses.

Previous wording

Operating expenses increased $1.4 million to $34.0 million for the six months ended June 30, 2025, compared to $32.6 million for the six months ended June 30, 2024. Theincrease in operating expenses was mainly due to higher personnel expenses, occupancy and equipment expenses, technology expenses, loan and deposit expenses, and data processing expense.

Current wording

Operating expenses increased $2.5 million to $51.8 million for the nine months ended September 30, 2025, compared to $49.3 million for the nine months ended September 30, 2024. Theincrease in operating expenses was mainly due to higher personnel expenses, occupancy and equipment expenses, loan and deposit expenses, technology expenses, and data processing expense.

Previous wording

Personnel expenses increased $1.1 million to$20.2 million for thesix months ended June 30, 2025, compared to the same period prior year. This increase was primarily due to an increase in headcount and increased revenue-based commission compensation. As of June 30, 2025 and 2024, we had 374 and 361 total employees, respectively.

Current wording

Personnel expenses increased $1.9 million to$30.8 million for thenine months ended September 30, 2025, compared to the same period prior year. This increase was primarily due to an increase in headcount, increased revenue-based commission compensation, annual raises, and higher personnel-related accruals. As of September 30, 2025 and 2024, we had 377 and 366 total employees, respectively.

Previous wording

Occupancy and equipment expenses increased $234,000 to$3.5 million for thesix months ended June 30, 2025, compared to the same period prior year. This increase was primarily due to an increase in maintenance expense, a full period of expenses related to our New Orleans market 2024 expansion, and nonrecurring expenses related to a banking center renovation. The same period prior year had $67,000 of non-recurring expenses related to our new location in the New Orleans market and other 2024 property renovations.

Current wording

Occupancy and equipment expenses increased $419,000 to$5.4 million for thenine months ended September 30, 2025, compared to the same period prior year. 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. The same period prior year had $76,000 of nonrecurring expenses related to our new location in the New Orleans market and other 2024 property renovations.

Previous wording

Loan and deposit expenses increased $193,000 to $460,000 for the six months ended June 30, 2025, compared to the same period prior year. In the first quarter of 2025, we received a $173,000 negotiated, variable rebate from a vendor compared to a $262,000 similar rebate in the same period prior year. Also, in the second quarter of 2025, there was an increase in loan-related expenses due to the timing of mortgage expenses and higher collections expense.

Current wording

Loan and deposit expenses increased $255,000 to $816,000 for the nine months ended September 30, 2025, compared to the same period prior year. In the first quarter of 2025, we received a $173,000 negotiated, variable rebate from a vendor, compared to a $262,000 similar rebate in the same period prior year. Also, for the nine months ended September 30, 2025, there was an increase in loan-related expenses due to the timing of mortgage expenses and higher collections expense.