RED RIVER BANCSHARES INC

Previous wording

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. on a consolidated basis during the year ended December 31, 2024 and selected prior periods. This discussion and analysis should be read in conjunction with information presented elsewhere in this Report, including our audited consolidated financial statements and notes thereto included in “Item 8. Financial Statements and Supplementary Data.”

Current wording

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. This discussion and analysis should be read in conjunction with information presented elsewhere in this Report, including our audited consolidated financial statements and notes thereto included in “Item 8. Financial Statements and Supplementary Data.”

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. 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. 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. 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: 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 the Slidell-Mandeville-Covington MSA; Acadiana, which includes the Lafayette MSA; and New Orleans, which includes the New Orleans-Metairie MSA.

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

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.

Current wording

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.

Previous wording

•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.

Current wording

•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.

Previous wording

•The return on assets was 1.11% for 2024 and 1.15% for 2023.

Current wording

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

Previous wording

•The return on equity was 11.02% for 2024 and 12.44% for 2023.

Current wording

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

Previous wording

•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.

Current wording

•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.

Previous wording

•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.

Current wording

•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.

Previous wording

•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.

Current wording

•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.

Previous wording

•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.

Current wording

•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.

Previous wording

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

Current wording

•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.

Previous wording

◦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.

Current wording

◦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.

Previous wording

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. The return on assets for the year ended December 31, 2024, was 1.11%, compared to 1.15% for the prior year. The return on equity was 11.02% for the year ended December 31, 2024, compared to 12.44% for the prior year. Our efficiency ratio for the year ended December 31, 2024, was 60.29%, compared to 59.39% for the year ended December 31, 2023.

Current wording

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. The return on equity was 12.58% for the year ended December 31, 2025, compared to 11.02% for the prior year. Our efficiency ratio for the year ended December 31, 2025, was 55.84%, compared to 60.29% for the year ended December 31, 2024.

Previous wording

The Federal Reserve sets the target federal funds rate, which is the cost of immediately available overnight funds, and influences other market rates, such as the prime rate. 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%. The average effective federal funds rate was 5.14% for 2024 compared to 5.03% for 2023. The net interest income and net interest margin FTE increased for the year ended December 31, 2024, compared to the year ended December 31, 2023.

Current wording

The Federal Reserve sets the target federal funds rate, which is the cost of immediately available overnight funds, and influences other market rates, such as the prime rate. These market rates impact pricing of certain assets and liabilities used by financial institutions. 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.

Previous wording

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

Current wording

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 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.

Previous wording

As of December 31, 2024, the target federal funds range was 4.25%-4.50%. 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. As of December 31, 2024, floating rate loans were 16.0% 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.

Current wording

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

Previous wording

(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.

Current wording

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

Previous wording

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 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. 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 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. 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.

Previous wording

Noninterest income decreased $673,000 to $20.4 million for the year ended December 31, 2024, compared to $21.1 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.

Current wording

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 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.

Previous wording

Operating expenses increased $2.3 million to $66.2 million for the year ended December 31, 2024, compared to $63.9 million for the year ended December 31, 2023. Theincrease 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.

Current wording

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. Theincrease 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.

Previous wording

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. As of December 31, 2024 and 2023, we had 369 and 362 total employees, respectively.

Current wording

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 $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.

Previous wording

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.

Current wording

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.

Previous wording

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.

Current wording

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.

Previous wording

As of December 31, 2024, assets were $3.15 billion, which was $20.8 million, or 0.7%, higher than $3.13 billion as of December 31, 2023. During 2024, loans HFI increased $82.2 million, or 4.1%, to $2.08 billion as of December 31, 2024. The increase in loans was due to improved loan activity in various markets across Louisiana. Cash and cash equivalents decreased $36.5 million, or 11.9%, to $269.0 million and were 8.5% of assets as of December 31, 2024. 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. We had no outstanding borrowings as of December 31, 2024 and 2023. During 2024, stockholders’ equity increased $15.9 million to $319.7 million as of December 31, 2024. As of December 31, 2024, the loans HFI to deposits ratio was 73.97%, compared to 71.13% as of December 31, 2023, and the noninterest-bearing deposits to total deposits ratio was 30.89%, compared to 32.71% as of December 31, 2023.

Current wording

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. 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 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 and securities growth exceeding deposit growth. We had no outstanding borrowings as of December 31, 2025 and 2024. During 2025, stockholders’ equity increased $45.4 million to $365.2 million as of December 31, 2025. As of December 31, 2025, the loans HFI to deposits ratio was 75.88%, compared to 73.97% as of December 31, 2024, and the noninterest-bearing deposits to total deposits ratio was 30.84%, compared to 30.89% as of December 31, 2024.

Previous wording

Interest-bearing deposits in other banks were the third-largest component of earning assets as of December 31, 2024. As of December 31, 2024, interest-bearing deposits in other banks were $238.4 million and were 7.6% of assets, a decrease of $13.9 million, or 5.5%, compared to $252.4 million and 8.1% of assets as of December 31, 2023. Excess liquidity that is not being deployed into loans or securities is placed in these accounts.

Current wording

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

Previous wording

Our securities portfolio is the second-largest component of earning assets and provides a significant source of revenue. Securities are classified as AFS, HTM, and equity securities. As of December 31, 2024, our total securities portfolio was 21.7% of assets. It is designed primarily to provide and maintain liquidity, generate a favorable return on investments without incurring unnecessary interest rate and credit risk, and complement our lending activities. We may invest in various types of liquid assets that are permissible under governing regulations and approved by our investment policy, which include U.S. Treasury obligations, U.S. government agency obligations, certificates of deposit of insured domestic banks, mortgage-backed and mortgage-related securities, corporate notes having an investment rating of “A” or better, municipal bonds, and certain equity securities.

Current wording

Our securities portfolio is the second-largest component of earning assets and provides a significant source of revenue. Securities are classified as AFS, HTM, and equity securities. As of December 31, 2025, our total securities portfolio was 23.1% of assets. It is designed primarily to provide and maintain liquidity, generate a favorable return on investments without incurring unnecessary interest rate and credit risk, and complement our lending activities. We may invest in various types of liquid assets that are permissible under governing regulations and approved by our investment policy, which include U.S. Treasury obligations, U.S. government agency obligations, certificates of deposit of insured domestic banks, mortgage-backed and mortgage-related securities, corporate notes having an investment rating of “A” or better, municipal bonds, and certain equity securities.

Previous wording

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.

Current wording

Securities AFS and securities HTM are debt securities. 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.

Previous wording

Securities AFS are held for indefinite periods of time and are carried at estimated fair value. As of December 31, 2024, the estimated fair value of securities AFS was $550.1 million. 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.

Current wording

Securities AFS are held for indefinite periods of time and are carried at estimated fair value. As of December 31, 2025, the estimated fair value of securities AFS was $647.3 million. 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 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.

Previous wording

Securities HTM, which we have the intent and ability to hold until maturity, are carried at amortized cost. As of December 31, 2024, the amortized cost of securities HTM was $131.8 million. Securities HTM had an unrealized loss of $22.8 million as of December 31, 2024, compared to an unrealized loss of $22.2 million as of December 31, 2023.

Current wording

Securities HTM, which we have the intent and ability to hold until maturity, are carried at amortized cost. As of December 31, 2025, the amortized cost of securities HTM was $122.6 million. 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.

Previous wording

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

Current wording

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.

Previous wording

Securities AFS purchased for the year ended December 31, 2024, consisted of $94.6 million in mortgage-backed securities and $34.2 million in U.S. agency securities. The mortgage-backed securities purchased had a yield of 5.26% and an average life of 3.99 years. The U.S. agency securities purchased had a yield of 5.71% and an average life of 4.08 years.

Current wording

Securities AFS purchased for the year ended December 31, 2025, consisted of $166.1 million in mortgage-backed securities and $16.0 million in U.S. agency securities. The mortgage-backed securities purchased had a yield of 4.92% and an average life of 4.50 years. The U.S. agency securities purchased had a yield of 4.88% and an average life of 4.64 years.

Previous wording

The securities portfolio tax-equivalent yield was 2.43% for the year ended December 31, 2024, compared to 1.90% for the year ended December 31, 2023. 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.

Current wording

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, 2025, was primarily due to reinvesting lower yielding securities cash flows received during 2025, along with other liquid funds, into higher yielding securities.

Previous wording

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. Mortgage-backed securities and collateralized mortgage obligations are typically issued with stated principal amounts and are backed by pools of mortgage loans and other loans with varying maturities. The term of the underlying mortgages and loans may vary significantly due to the ability of a borrower to prepay. Monthly pay downs on mortgage-backed securities may cause the average lives of the securities to be much different than the stated contractual maturity. During a period of rising interest rates, fixed rate mortgage-backed securities are not likely to experience heavy prepayments of principal, and consequently, the average lives of these securities are typically lengthened. If interest rates begin to fall, prepayments may increase, thereby shortening the estimated average lives of these securities. As of December 31, 2024, the average life of our securities portfolio was 7.0 years with an estimated effective duration of 4.9 years. As of December 31, 2023, the average life of our securities portfolio was 7.1 years with an estimated effective duration of 5.0 years.

Current wording

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. Mortgage-backed securities and collateralized mortgage obligations are typically issued with stated principal amounts and are backed by pools of mortgage loans and other loans with varying maturities. The term of the underlying mortgages and loans may vary significantly due to the ability of a borrower to prepay. Monthly pay downs on mortgage-backed securities may cause the average lives of the securities to be much different than the stated contractual maturity. During a period of rising interest rates, fixed rate mortgage-backed securities are not likely to experience heavy prepayments of principal, and consequently, the average lives of these securities are typically lengthened. If interest rates begin to fall, prepayments may increase, thereby shortening the estimated average lives of these securities. As of December 31, 2025, the average life of our securities portfolio was 6.1 years with an estimated effective duration of 4.2 years. As of December 31, 2024, the average life of our securities portfolio was 7.0 years with an estimated effective duration of 4.9 years.

Previous wording

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

Current wording

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, 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.

Previous wording

Our loan portfolio is our largest category of earning assets, and interest income earned on our loan portfolio is our primary source of income. We maintain a diversified loan portfolio with a focus on CRE, one-to-four family residential, and commercial and industrial loans. As of December 31, 2024, loans HFI were $2.08 billion, an increase of $82.2 million, or 4.1%, compared to $1.99 billion as of December 31, 2023. Loans HFI increased primarily due to new loan activity in various markets across Louisiana.

Current wording

Our loan portfolio is our largest category of earning assets, and interest income earned on our loan portfolio is our primary source of income. We maintain a diversified loan portfolio with a focus on CRE, one-to-four family residential, and commercial and industrial loans. 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. In 2025, we had robust new loan and commitment activity, combined with funding of loan construction commitments.

Previous wording

Commercial Real Estate Loans. CRE loans are primarily made for commercial property that is owner occupied as well as commercial property owned by real estate investors. Real estate securing these loans includes many property types, such as retail centers, nursing homes, offices and office buildings, medical facilities, warehouses, churches and related facilities, production facilities, and multifamily properties. CRE loans increased $33.1 million, or 3.9%, to $884.6 million as of December 31, 2024, from $851.6 million as of December 31, 2023. The average CRE loan size was $953,000 as of December 31, 2024 and $938,000 as of December 31, 2023.

Current wording

Commercial Real Estate Loans. CRE loans are primarily made for commercial property that is owner occupied as well as commercial property owned by real estate investors. Real estate securing these loans includes many property types, such as retail centers, nursing homes, offices and office buildings, medical facilities, warehouses, churches and related facilities, production facilities, and multifamily properties. 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 $1.0 million as of December 31, 2025 and $953,000 as of December 31, 2024.

Previous wording

Non-owner occupied CRE loans were $458.9 million, or 22.1% of loans HFI, and represented 116.6% of the Bank’s total risk-based capital as of December 31, 2024. Non-owner occupied office loans were $56.4 million, or 2.7% of loans HFI, as of December 31, 2024, and are primarily centered in low-rise suburban areas. The owner occupied and non-owner occupied components of the CRE portfolio are summarized below:

Current wording

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. Non-owner occupied office loans were $54.3 million, or 2.4% of loans HFI, as of December 31, 2025, and are primarily centered in low-rise suburban areas. The owner occupied and non-owner occupied components of the CRE portfolio are summarized below:

Previous wording

One-to-Four Family Residential Loans. One-to-four family residential loans are predominantly first lien mortgage loans secured by owner occupied one-to-four family residential properties. One-to-four family residential loans increased $15.1 million, or 2.5%, to $614.6 million as of December 31, 2024, compared to $599.5 million as of December 31, 2023.

Current wording

One-to-Four Family Residential Loans. One-to-four family residential loans are predominantly first lien mortgage loans secured by owner occupied one-to-four family residential properties. One-to-four family residential loans increased $14.2 million, or 2.3%, to $628.8 million as of December 31, 2025, compared to $614.6 million as of December 31, 2024.

Previous wording

Construction and Development Loans. The construction and development portfolio includes loans to small and medium-sized businesses to construct owner occupied facilities, loans to developers of CRE investment properties and residential developments, and, to a lesser extent, loans to individual clients for construction of single-family homes. Construction and development loans increased $30.0 million, or 23.9%, to $155.2 million as of December 31, 2024, compared to $125.2 million as of December 31, 2023.

Current wording

Construction and Development Loans. The construction and development portfolio includes loans to small and medium-sized businesses to construct owner occupied facilities, loans to developers of CRE investment properties and residential developments, and, to a lesser extent, loans to individual clients for construction of single-family homes. Construction and development loans increased $66.0 million, or 42.5%, to $221.2 million as of December 31, 2025, compared to $155.2 million as of December 31, 2024.