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, 2025 through March 31, 2026, and on our results of operations for the quarters ended March 31, 2026 and December 31, 2025, and for the three months ended March 31, 2026 and March 31, 2025.

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, 2025 through June 30, 2026, and on our results of operations for the quarters ended June 30, 2026 and March 31, 2026, and for the six months ended June 30, 2026 and June 30, 2025.

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 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.

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 Lafayette, Louisiana, and Shreveport, 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

FIRST QUARTER 2026 FINANCIAL AND OPERATIONAL HIGHLIGHTS

Current wording

SECOND QUARTER 2026 FINANCIAL AND OPERATIONAL HIGHLIGHTS

Previous wording

•Net income for the first quarter of 2026 was $12.0 million, or $1.81 diluted EPS, an increase of $556,000, or 4.9%, compared to $11.4 million, or $1.73 diluted EPS, for the fourth quarter of 2025. Net income for the first quarter was impacted by approximately $590,000 of periodic items that reduced operating expenses. These operating expense reductions benefited EPS by $0.07.

Current wording

•Net income for the second quarter of 2026 was $11.8 million, or $1.78 diluted EPS, a decrease of $208,000, or 1.7%, compared to $12.0 million, or $1.81 diluted EPS, for the first quarter of 2026. Net income for the second quarter was impacted by an expected $1.0 million increase in operating expenses, partially offset by a $563,000 increase in net interest income. Net income for the first quarter of 2026 benefited from approximately $590,000 of periodic items that reduced operating expenses.

Previous wording

•For the first quarter of 2026, the return on assets was 1.44%, and the return on equity was 12.95%.

Current wording

•For the second quarter of 2026, the return on assets was 1.43%, and the return on equity was 12.41%.

Previous wording

•Loans HFI were $2.25 billion as of March 31, 2026 and December 31, 2025. In the first quarter of 2026, new loan originations and construction commitment fundings were offset by payments and payoffs.

Current wording

•As of June 30, 2026, loans HFI were $2.26 billion, a slight increase from $2.25 billion as of March 31, 2026. In the second quarter of 2026, new loan originations and construction commitment fundings exceeded payments and payoffs.

Previous wording

•On February 26, 2026, our board of directors announced that the cash dividend for the first quarter of 2026 would be $0.25 per common share, which was a 66.7% increase from $0.15 per common share paid for each of the third and fourth quarters of 2025. In the first quarter of 2026, we paid the quarterly cash dividend of $0.25 per common share.

Current wording

•We paid a quarterly cash dividend of $0.25 per common share in the second quarter of 2026.

Previous wording

•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. There was no stock repurchase activity in the first quarter of 2026. As of March 31, 2026, the 2026 stock repurchase program had $10.0 million of available capacity.

Current wording

•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. There was no stock repurchase activity in the first half of 2026. As of June 30, 2026, the 2026 stock repurchase program had $10.0 million of available capacity.

Previous wording

•We continue to implement our organic expansion plan. The following construction projects are in process:

Current wording

•We continued to implement our organic expansion plan with the following projects:

Previous wording

◦In the Northwest market, there are two projects in process with the goal of relocating personnel and vacating the Market Street location in Shreveport, Louisiana. In May 2026, we plan to relocate our Northwest market leadership and lenders to our newly constructed Shreveport Commercial and Private Banking Loan and Deposit Production Office Building, which is adjacent to our East Kings banking center. We then plan to relocate the Market Street retail banking center to the nearby American Towers building, which will have a more efficient cost structure.

Current wording

◦In the Northwest market, we completed our relocation projects. In May 2026, we relocated our Northwest market leadership and lenders to our newly constructed Shreveport Commercial and Private Banking LDPO, which is adjacent to our East Kings banking center. We also relocated the Market Street banking center, serving our retail customers, to the nearby American Tower building, which has a more efficient cost structure.

Previous wording

◦In the New Orleans market, we have leased and are remodeling a portion of the bottom floor of the Energy Centre Building on Poydras Street. Completion is expected in the third quarter of 2026. Once complete, we plan to relocate the Baronne Street retail banking center and the New Orleans market leadership and lenders to this updated, convenient, and visible location.

Current wording

◦In the New Orleans market, we recently completed remodeling a portion of the ground floor of the Energy Centre Building on Poydras Street. On July 20, 2026, we relocated the Baronne Street retail banking center and the New Orleans market leadership and lenders to this updated, convenient, and visible location.

Previous wording

◦In the Acadiana market, we held a ground-breaking ceremony in January 2026 for our second full-service banking center in this market, located on Camellia Boulevard in Lafayette, Louisiana. We expect this location to open early in 2027.

Current wording

◦In the Acadiana market, construction is in process on our second full-service banking center in this market, located on Camellia Boulevard in Lafayette, Louisiana. We expect this location to open early in 2027.

Previous wording

Net income for the first quarter of 2026 was $12.0 million, or $1.81 diluted EPS, an increase of $556,000, or 4.9%, compared to $11.4 million, or $1.73 diluted EPS, for the fourth quarter of 2025. The increase in net income was due to a $1.0 million decrease in operating expenses and a $163,000 increase in net interest income, partially offset by a $416,000 decrease in noninterest income and a $192,000 increase in income tax expense. The return on assets for the first quarter of 2026 was 1.44%, compared to 1.38% for the fourth quarter of 2025. The return on equity was 12.95% for the first quarter of 2026, compared to 12.60% for the fourth quarter of 2025. Our efficiency ratio for the first quarter of 2026 was 52.37%, compared to 54.99% for the fourth quarter of 2025.

Current wording

Net income for the second quarter of 2026 was $11.8 million, or $1.78 diluted EPS, a decrease of $208,000, or 1.7%, compared to $12.0 million, or $1.81 diluted EPS, for the first quarter of 2026. The decrease in net income was due to a $1.0 million increase in operating expenses, partially offset by a $563,000 increase in net interest income, a $205,000 increase in noninterest income, and a $60,000 decrease in income tax expense. The return on assets for the second quarter of 2026 was 1.43%, compared to 1.44% for the first quarter of 2026. The return on equity was 12.41% for the second quarter of 2026, compared to 12.95% for the first quarter of 2026. Our efficiency ratio for the second quarter of 2026 was 54.25%, compared to 52.37% for the first quarter of 2026.

Previous wording

Net income for the three months ended March 31, 2026, was $12.0 million, or $1.81 diluted EPS, an increase of $1.6 million, or 15.6%, compared to $10.4 million, or $1.52 diluted EPS, for the three months ended March 31, 2025. The increase in net income was due to a $3.8 million increase in net interest income, partially offset by a $739,000 decrease in noninterest income, a $662,000 increase in operating expenses, a $474,000 increase in income tax expense, and a $300,000 increase in the provision for credit losses. The return on assets for the three months ended March 31, 2026, was 1.44%, compared to 1.32% for the three months ended March 31, 2025. The return on equity was 12.95% for the three months ended March 31, 2026, compared to 12.85% for the three months ended March 31, 2025. Our efficiency ratio for the three months ended March 31, 2026, was 52.37%, compared to 55.51% for the three months ended March 31, 2025.

Current wording

Net income for the six months ended June 30, 2026, was $23.7 million, or $3.59 diluted EPS, an increase of $3.2 million, or 15.5%, compared to $20.5 million, or $3.03 diluted EPS, for the six months ended June 30, 2025. The increase in net income was due to a $6.9 million increase in net interest income, partially offset by a $1.6 million increase in operating expenses, a $856,000 increase in income tax expense, a $719,000 decrease in noninterest income, and a $600,000 increase in the provision for credit losses. The return on assets for the six months ended June 30, 2026, was 1.44%, compared to 1.31% for the six months ended June 30, 2025. The return on equity was 12.68% for the six months ended June 30, 2026, compared to 12.55% for the six months ended June 30, 2025. Our efficiency ratio for the six months ended June 30, 2026, was 53.32%, compared to 56.20% for the six months ended June 30, 2025.

Previous wording

In the first half of 2025, the target range for the federal funds rate was consistent at 4.25%-4.50%. In the second half of 2025, the FOMC decreased 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 target range for the federal funds rate was unchanged in the first quarter of 2026. The average effective federal funds rate was 3.64% for the first quarter of 2026, compared to 3.90% for the fourth quarter of 2025, and 4.33% for the first quarter of 2025. Net interest income was slightly higher in the first quarter of 2026, compared to the prior quarter. Net interest margin FTE for the first quarter of 2026 was consistent with the previous quarter. Net interest income and net interest margin FTE increased in the first quarter of 2026 compared to the first quarter of 2025.

Current wording

In the first half of 2025, the target range for the federal funds rate was consistent at 4.25%-4.50%. In the second half of 2025, the FOMC decreased 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 target range for the federal funds rate was unchanged in the first half of 2026. The average effective federal funds rate was 3.63% for the second quarter of 2026, compared to 3.64% for the first quarter of 2026. The average effective federal funds rate was 3.64% for the first six months of 2026, compared to 4.33% for the first six months of 2025. Net interest income and net interest margin FTE increased in the second quarter of 2026, compared to the prior quarter. Also, net interest income and net interest margin FTE increased for the six months ended June 30, 2026, compared to the six months ended June 30, 2025.

Previous wording

Net interest income for the first quarter of 2026 was $28.4 million, which was $163,000, or 0.6%, higher than the fourth quarter of 2025, due to a $217,000 decrease in interest expense, slightly offset by a $54,000 decrease in interest and dividend income. The decrease in interest expense was primarily due to our lowering of selected deposit rates. The decrease in interest and dividend income was driven by a $119,000 decrease in loan income, which was impacted by two less accrual days in the first quarter of 2026 compared to the prior quarter. Also contributing to this decrease was a $29,000 decrease in securities income, which was impacted by the repricing of variable rate securities as a result of the rate decreases in the fourth quarter of 2025. Income on short-term liquid assets increased $95,000 as a result of higher average balances in these assets, partially offset by the lower rate environment.

Current wording

Net interest income for the second quarter of 2026 was $29.0 million, which was $563,000, or 2.0%, higher than the first quarter of 2026, due to a $385,000 decrease in interest expense and a $178,000 increase in interest and dividend income. The decrease in interest expense was primarily due to lower average interest-bearing deposit balances. The increase in interest and dividend income was driven by a $689,000 increase in loan income due to higher yields, and included $98,000 of additional interest income resulting from the successful resolution of nonaccrual loans in the second quarter. The increase in interest and dividend income was partially offset by a $443,000 decrease in income on short-term liquid assets and a $66,000 decrease in securities income, resulting from lower average balances in these assets.

Previous wording

The net interest margin FTE was 3.51% for the first quarter of 2026, which was consistent with the prior quarter. The net interest margin FTE was impacted by a consistent yield on loans, a lower yield on short-term liquid assets and securities, and lower deposit costs. The average rate on new and renewed loans was 6.71% for the first quarter of 2026 and 6.72% for the prior quarter. The yield on short-term liquid assets decreased 23 bps due to the reduction of the target federal funds rate in December. The yield on securities decreased by 2 bps due to repricing of variable rate securities. The cost of deposits decreased 3 bps to 1.47%, compared to 1.50% for the previous quarter, which was driven by our lowering of selected deposit rates.

Current wording

The net interest margin FTE was 3.61% for the second quarter of 2026, which was 10 bps higher than the prior quarter. The net interest margin FTE was impacted by a higher yield on loans and lower deposit costs. The average rate on new and renewed loans was 6.38% for the second quarter of 2026 and 6.71% for the prior quarter. The cost of deposits decreased 4 bps to 1.43%, compared to 1.47% for the previous quarter, driven by lower time deposit rates.

Previous wording

As of March 31, 2026, the target federal funds range was 3.50%-3.75%. The market’s expectation is that the federal funds range may remain consistent in 2026. During the remainder of 2026, we project $201.4 million of fixed rate loans at 5.87% to mature, which we expect to redeploy into loans with slightly higher rates. We have $463.8 million of floating rate loans at 6.16%, which we expect to remain at a consistent rate. Based on the current rate forecast, we expect the total loan yield to be slightly higher in the second quarter of 2026. We also expect to receive $90.9 million in securities cash flows at 3.66%, which we plan to redeploy into securities at higher yields. We project $515.0 million in time deposits at 3.50% to mature, which may reprice at slightly lower rates considering maturity volumes and renewal pricing. As of March 31, 2026, floating rate loans were 20.6% of loans HFI, and floating rate transaction deposits were 9.2% of interest-bearing transaction deposits. Depending on balance sheet activity and interest rate competition, we expect net interest income and net interest margin FTE to increase slightly in the second quarter of 2026.

Current wording

As of June 30, 2026, the target federal funds range was 3.50%-3.75%. Due to uncertainty regarding the forecasted interest rate environment, we are modeling a consistent federal funds range for the second half of 2026. During the remainder of 2026, we project $157.4 million of fixed rate loans at 5.91% to mature, which we expect to redeploy into loans with slightly higher rates. We have $489.1 million of floating rate loans at 6.14%, which we expect to remain at a consistent rate. Based on the current rate forecast, we expect the total loan yield to be slightly higher in the third quarter of 2026. During the remainder of 2026, we also expect to receive $56.8 million in securities cash flows at 3.69%, for which we are currently evaluating reinvestment options as we consider balance sheet management strategies. We project $449.6 million in time deposits at 3.44% to mature, which may reprice at slightly lower rates considering maturity volumes and renewal pricing. As of June 30, 2026, floating rate loans were 21.6% of loans HFI, and floating rate transaction deposits were 9.7% of interest-bearing transaction deposits. Depending on balance sheet activity and interest rate competition, we expect net interest income and net interest margin FTE to increase slightly in the second half of 2026.

Previous wording

(1)Includes average outstanding balances of loans HFS of$2.7 million and$3.3 million for the three months ended March 31, 2026 and December 31, 2025, respectively.

Current wording

(1)Includes average outstanding balances of loans HFS of$4.7 million and$2.7 million for the three months ended June 30, 2026 and March 31, 2026, respectively.

Previous wording

Net interest income for the three months ended March 31, 2026 was $28.4 million, which was $3.8 million, or 15.4%, higher than $24.6 million for the three months ended March 31, 2025. Net interest income increased due to a $3.3 million increase in interest and dividend income, combined with a $457,000 decrease in interest expense.

Current wording

Net interest income for the six months ended June 30, 2026 was $57.4 million, which was $6.9 million, or 13.8%, higher than $50.4 million for the six months ended June 30, 2025. Net interest income increased due to a $5.9 million increase in interest and dividend income, combined with a $1.0 million decrease in interest expense.

Previous wording

The increase in interest and dividend income for the three months ended March 31, 2026, when compared to the three months ended March 31, 2025, 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 $3.3 million due to higher average loan balances, combined with higher rates on new and renewed loans compared to the existing portfolio yield. Securities income increased $988,000 primarily due to purchasing higher yielding securities, combined with higher average securities balances. Interest income on short-term liquid assets decreased $924,000 due to lower average balances on these assets, combined with the FOMC lowering the federal funds rate in 2025.

Current wording

The increase in interest and dividend income for the six months ended June 30, 2026, when compared to the six months ended June 30, 2025, 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 $6.0 million due to higher average loan balances, combined with higher rates on new and renewed loans compared to the existing portfolio yield. Securities income increased $1.6 million primarily due to purchasing higher yielding securities, combined with higher average securities balances. Interest income on short-term liquid assets decreased $1.7 million due to lower average balances on these assets, combined with the FOMC lowering the federal funds rate in the second half of 2025.

Previous wording

Net interest margin FTE increased 29 bps to 3.51% for the three months ended March 31, 2026, from 3.22% for the three months ended March 31, 2025, primarily due to higher yields on securities and loans, combined with lower deposit costs. These positive variances were partially offset by a 75 bp decrease to the yield on short-term liquid assets, due to the FOMC lowering the federal funds rate in 2025.

Current wording

Net interest margin FTE increased 27 bps to 3.56% for the six months ended June 30, 2026, from 3.29% for the six months ended June 30, 2025, primarily due to higher yields on securities and loans, combined with lower deposit costs. These positive variances were partially offset by a 76 bp decrease to the yield on short-term liquid assets, due to the FOMC lowering the federal funds rate in the second half of 2025.

Previous wording

The yield on securities increased 29 bps mainly due to purchasing $145.3 million of securities in the last nine months of 2025 and an additional $24.7 million of securities in the first quarter of 2026, at favorable rates. The yield on loans increased 19 bps due to higher rates on new and renewed loans compared to the existing portfolio yield. The cost of deposits decreased 14 bps to 1.47% for the three months ended March 31, 2026, from 1.61% for the three months ended March 31, 2025, due to a 22 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 34 and 13 bps, respectively. These decreases occurred as we adjusted rates on selected transaction and time deposits during the second half of 2025 in response to the federal funds rate decreases by the FOMC.

Current wording

The yield on securities increased 23 bps mainly due to purchasing $113.6 million of securities in the second half of 2025 and an additional $36.6 million of securities in the first half of 2026, at favorable rates. The yield on loans increased 16 bps due to higher rates on new and renewed loans compared to the existing portfolio yield. The cost of deposits decreased 14 bps to 1.45% for the six months ended June 30, 2026, from 1.59% for the six months ended June 30, 2025, due to a 22 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 30 and 16 bps, respectively. These decreases occurred as we adjusted rates on selected transaction and time deposits during the second half of 2025 in response to the federal funds rate decreases by the FOMC.

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 three months ended March 31, 2026 and 2025:

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 six months ended June 30, 2026 and 2025:

Previous wording

(1)Includes average outstanding balances of loans HFS of $2.7 million and $2.6 million for the three months ended March 31, 2026 and 2025, respectively.

Current wording

(1)Includes average outstanding balances of loans HFS of $3.7 million and $2.6 million for the six months ended June 30, 2026 and 2025, respectively.

Previous wording

The provision for credit losses for the first quarter of 2026 was $750,000 for loans, which was consistent with the prior quarter. The provision for credit losses in the first quarter of 2026 was due to continued loan growth, lingering impacts related to inflation and tariffs, geopolitical uncertainty, and greater uncertainty with future labor market trends. The provision in the fourth quarter of 2025 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.

Current wording

The provision for credit losses for the second quarter of 2026 was $750,000 for loans, which was consistent with the prior quarter. The provision in the first and second quarters of 2026 was due to lingering impacts related to inflation and tariffs, geopolitical uncertainty, greater uncertainty with future labor market trends, and slight loan growth. 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 first quarter of 2026 was $750,000 for loans, which was $300,000 higher than the provision for credit losses of $450,000 for the first quarter of 2025. The increase in the first quarter of 2026 was due to continued loan growth, lingering impacts related to inflation and tariffs, geopolitical uncertainty, and greater uncertainty with future labor market trends. The provision in the first quarter of 2025 was related to loan growth, combined with uncertainty regarding tariffs and trade.

Current wording

The provision for credit losses for the six months ended June 30, 2026 was $1.5 million for loans, an increase of $600,000, or 66.7%, from $900,000 for the six months ended June 30, 2025. The increase for the first six months of 2026 was due to lingering impacts related to inflation and tariffs, geopolitical uncertainty, greater uncertainty with future labor market trends, and slight loan growth. The provision for the first six months of 2025 was related to loan growth, combined with uncertainty regarding tariffs and trade.

Previous wording

Noninterest income decreased $416,000 to $4.5 million for the first quarter of 2026, compared to $4.9 million for the fourth quarter of 2025. The decrease in noninterest income was mainly due to lower brokerage income and other income, partially offset by higher SBIC income.

Current wording

Noninterest income increased $205,000 to $4.7 million for the second quarter of 2026, compared to $4.5 million for the first quarter of 2026. The increase in noninterest income was mainly due to higher mortgage loan income and net debit card income, partially offset by lower SBIC income.

Previous wording

The SBIC partnerships reported a loss of $105,000 in the first quarter of 2026, compared to a loss of $197,000 in the previous quarter. These losses were mainly due to fund value adjustments as an SBIC fund continues its wind-down phase. We expect SBIC income to fluctuate in future quarters.

Current wording

The SBIC partnerships reported a loss of $291,000 in the second quarter of 2026, compared to a loss of $105,000 in the previous quarter. These losses were mainly due to fund value adjustments as an SBIC fund continues its wind-down phase. We expect SBIC income or loss to fluctuate in future quarters.

Previous wording

Noninterest income decreased $739,000 to $4.5 million for the three months ended March 31, 2026, compared to $5.3 million for the three months ended March 31, 2025. The decrease in noninterest income was mainly due to lower brokerage income and SBIC income.

Current wording

Noninterest income decreased $719,000 to $9.3 million for the six months ended June 30, 2026, compared to $10.0 million for the six months ended June 30, 2025. The decrease in noninterest income was mainly due to lower SBIC income and brokerage income, partially offset by higher mortgage loan income.

Previous wording

SBIC partnerships reported a loss of $105,000 for the three months ended March 31, 2026, compared to $280,000 of income for the same period prior year. This variance was mainly due to fund value adjustments as an SBIC fund entered its wind-down phase in mid-2025.

Current wording

SBIC partnerships reported a loss of $395,000 for the six months ended June 30, 2026, compared to $327,000 of income for the same period prior year. This variance was mainly due to fund value adjustments as an SBIC fund entered its wind-down phase in mid-2025.

Previous wording

Brokerage income decreased $386,000 to $939,000 for the three months ended March 31, 2026, compared to the same period prior year, mainly due to decreased investing activity by clients. Also, the first quarter of 2025 included $107,000 in incentive income related to a prior year investment group broker-dealer partner conversion. Assets under management were $1.35 billion and $1.14 billion as of March 31, 2026 and 2025, respectively.

Current wording

Brokerage income decreased $502,000 to $1.8 million for the six months ended June 30, 2026, compared to the same period prior year, mainly due to decreased investing activity by clients. Also, the first six months of 2025 included $215,000 in incentive income related to a prior year investment group broker-dealer partner conversion. Assets under management were $1.41 billion and $1.19 billion as of June 30, 2026 and 2025, respectively.

Previous wording

Operating expenses decreased $1.0 million to $17.3 million for the first quarter of 2026, compared to $18.3 million for the fourth quarter of 2025. Thedecrease in operating expenses was mainly due to lower personnel expenses, data processing expense, loan and deposit expenses, and other taxes.

Current wording

Operating expenses increased $1.0 million to $18.3 million for the second quarter of 2026, compared to $17.3 million for the first quarter of 2026. Theincrease in operating expenses was mainly due to higher data processing expense, personnel expenses, loan and deposit expenses, and occupancy and equipment expenses.

Previous wording

Data processing expense decreased $336,000 to $377,000 for first quarter of 2026, compared to the prior quarter. This decrease was mainly attributable to receipt of a $389,000 periodic refund from our data processing center in the first quarter of 2026.

Current wording

Data processing expense increased $381,000 to $758,000 for the second quarter of 2026, compared to the prior quarter. The first quarter of 2026 benefited from the receipt of a $389,000 periodic refund from our data processing center.

Previous wording

Personnel expenses increased $494,000 to $10.5 million for the three months ended March 31, 2026, compared to the same period prior year. This increase was primarily due to annual raises effective April 2025 and higher personnel-related accruals in the first quarter of 2026. As of March 31, 2026 and 2025, we had 375 total employees.

Current wording

Personnel expenses increased $194,000 to $10.7 million for the second quarter of 2026, compared to the prior quarter. This increase was primarily due to annual raises effective April 2026 and an increase in headcount. As of June 30, 2026 and March 31, 2026, we had 381 and 375 total employees, respectively.

Previous wording

Loan and deposit expenses decreased $212,000 to $103,000 for the first quarter of 2026, compared to the prior quarter. This decrease was primarily attributable to receipt of a $201,000 negotiated, variable rebate from a vendor in the first quarter of 2026.

Current wording

Loan and deposit expenses increased $139,000 to $242,000 for the second quarter of 2026, compared to the prior quarter. The second quarter of 2026 benefited from reimbursement of $82,000 of collection expenses due to the successful resolution of nonaccrual loans. The first quarter of 2026 benefited from receipt of a $201,000 negotiated, variable rebate from a vendor.

Previous wording

Operating expenses increased $662,000 to $17.3 million for the three months ended March 31, 2026, compared to $16.6 million for the three months ended March 31, 2025. Theincrease in operating expenses was mainly due to higher personnel expenses and data processing expense, partially offset by lower other taxes.

Current wording

Operating expenses increased $1.6 million to $35.5 million for the six months ended June 30, 2026, compared to $34.0 million for the six months ended June 30, 2025. Theincrease in operating expenses was mainly due to higher personnel expenses, occupancy and equipment expenses, other business development expenses, technology expenses, and data processing expense, partially offset by lower loan and deposit expenses and other taxes.

Previous wording

Data processing expense increased $89,000 to $377,000 for the three months ended March 31, 2026, compared to the same period prior year. The first quarter of 2026 included receipt of a $389,000 periodic refund from our data processing center compared to a $447,000 similar refund in the same period prior year. The first quarter of 2026 also included a full period of expenses related to online banking, mobile banking, and bill payment system upgrades completed in 2025.

Current wording

Data processing expense increased $126,000 to $1.1 million for the six months ended June 30, 2026, compared to the same period prior year. The first six months of 2026 included a full period of expenses related to online banking, mobile banking, and bill payment system upgrades completed in 2025. The first quarter of 2026 included the receipt of a $389,000 periodic refund from our data processing center, compared to a $447,000 similar refund in the same period prior year.

Previous wording

Other taxes decreased $52,000 to $560,000 for the three months ended March 31, 2026, compared to the same period prior year. In 2025, Louisiana corporate income tax rates were lowered. In order for financial institutions to be included in this benefit, the State of Louisiana bank stock tax calculation was adjusted effective 2026, which resulted in other taxes being lower in the first quarter of 2026.

Current wording

Other taxes decreased $108,000 to $1.1 million for the six months ended June 30, 2026, compared to the same period prior year. In 2025, Louisiana corporate income tax rates were lowered. In order for financial institutions to be included in this benefit, the State of Louisiana bank stock tax calculation was adjusted effective 2026, which resulted in other taxes being lower in the first six months of 2026.

Previous wording

Our accrued tax rate is based on an annualized projection and changes considering our most recent financial results and balances. Our effective income tax rates have differed from the U.S. statutory rate due to the effect of tax-exempt income from loans, securities, life insurance policies, income tax effects associated with stock-based compensation, and permanent and temporary tax differences.

Current wording

Our accrued tax rate is based on an annualized projection and changes considering our most recent financial results and balances. Our effective income tax rates have differed from the U.S. statutory rate due to the effect of tax-exempt income from loans, securities, and life insurance policies, as well as income tax effects associated with stock-based compensation and permanent and temporary tax differences.