Red River Bancshares, Inc. (RRBI): Business Model Canvas [11-2024 Updated]

In the competitive landscape of banking, Red River Bancshares, Inc. (RRBI) stands out with its community-focused approach and a robust business model that emphasizes personalized services and local engagement. This blog post delves into the intricacies of RRBI's Business Model Canvas, highlighting its key partnerships, activities, resources, and value propositions. Discover how RRBI tailors its offerings to meet the needs of individual consumers, small to medium-sized enterprises, and local governments while fostering strong customer relationships through dedicated service and community initiatives.

Red River Bancshares, Inc. (RRBI) - Business Model: Key Partnerships

Collaborations with local businesses for mutual growth

Red River Bancshares, Inc. (RRBI) actively collaborates with local businesses to enhance community engagement and drive mutual growth. As of September 30, 2024, total assets stood at $3.10 billion, with deposits totaling $2.75 billion, reflecting a strategic focus on local partnerships to bolster its deposit base and loan origination efforts.

Partnerships with community organizations for outreach

In 2024, RRBI has established significant partnerships with various community organizations aimed at outreach and financial education. These partnerships are designed to improve financial literacy among local populations, contributing to an increase in noninterest income, which totaled $15.4 million for the nine months ended September 30, 2024.

Relationships with financial institutions for liquidity management

RRBI maintains robust relationships with other financial institutions to manage liquidity effectively. As of September 30, 2024, the bank had $232.6 million in liquid assets, with a liquid assets to assets ratio of 7.50%. Furthermore, RRBI has established borrowing capacity with the Federal Home Loan Bank (FHLB) and the Federal Reserve Bank, providing an additional $1.69 billion in accessible liquidity.

Partnership Type	Description	Impact on Financials
Local Businesses	Collaboration to increase deposit accounts and loan origination	Deposits: $2.75 billion as of September 30, 2024
Community Organizations	Outreach initiatives and financial education programs	Noninterest Income: $15.4 million for nine months ended September 30, 2024
Financial Institutions	Liquidity management through established borrowing capacities	Liquid Assets: $232.6 million; Borrowing Capacity: $1.69 billion

Red River Bancshares, Inc. (RRBI) - Business Model: Key Activities

Providing a range of banking services

Red River Bancshares, Inc. offers a comprehensive suite of banking services, including commercial and retail banking products. As of September 30, 2024, total loans held for investment (HFI) amounted to $2.06 billion, with an average loan size of approximately $249,000, excluding credit cards. The bank's loan portfolio is diversified across various sectors, with commercial real estate loans representing 42.6% of total loans, followed by one-to-four family residential loans at 30.0%.

In terms of deposits, total deposits decreased to $2.75 billion as of September 30, 2024, a decline of 2.0% from $2.80 billion as of December 31, 2023. Noninterest-bearing deposits were $882.4 million, making up 32.1% of total deposits. The bank's average total loans increased by $94.1 million, or 4.84%, for the nine months ended September 30, 2024, compared to the previous twelve months.

Community engagement and support initiatives

Community engagement is a crucial aspect of Red River Bank's operations. The bank actively participates in local initiatives and supports community development projects. In the third quarter of 2024, the bank's net income was reported at $8.8 million, reflecting a commitment to community investment alongside financial performance. The bank's focus on relationship-oriented banking fosters strong ties with local businesses and organizations, enhancing its community presence.

Additionally, Red River Bank's total stockholders' equity as of September 30, 2024, was $324.3 million, up from $303.9 million at the end of 2023, indicating ongoing investment in community-related activities. The bank's stock repurchase program, which authorized up to $5 million in common stock repurchases, further signals confidence in the bank's long-term community engagement strategy.

Risk management and compliance activities

Red River Bancshares places significant emphasis on risk management and compliance activities to ensure financial stability and regulatory adherence. As of September 30, 2024, the bank had approximately $501.2 million in unfunded loan commitments and $12.0 million in commitments associated with standby letters of credit. The bank's asset-liability management policies are designed to minimize interest rate risk while maximizing income.

The bank's liquidity position is robust, with $232.6 million in liquid assets and an additional $1.69 billion in available borrowing capacity from various sources. Moreover, the bank's total stockholders' equity reflects a solid capital position, essential for mitigating operational risks and supporting continued growth.

Key Metrics	As of September 30, 2024	As of December 31, 2023
Total Loans HFI	$2.06 billion	$1.99 billion
Total Deposits	$2.75 billion	$2.80 billion
Noninterest-bearing Deposits	$882.4 million	$916.5 million
Total Stockholders' Equity	$324.3 million	$303.9 million
Net Income (Q3 2024)	$8.8 million	$8.0 million (Q2 2024)
Unfunded Loan Commitments	$501.2 million	$372.0 million

Red River Bancshares, Inc. (RRBI) - Business Model: Key Resources

Experienced banking professionals

The strength of Red River Bancshares, Inc. (RRBI) lies significantly in its experienced banking professionals. The bank employs a team of skilled bankers who are well-versed in various aspects of banking, including commercial lending, retail banking, and wealth management. As of September 30, 2024, Red River Bank operated with approximately 300 employees, which includes a mix of seasoned bankers and support staff. This robust workforce is essential for delivering high-quality customer service and maintaining relationships with clients across Louisiana's diverse markets.

Robust IT infrastructure for secure transactions

In the digital age, a robust IT infrastructure is vital for ensuring secure financial transactions and protecting customer data. Red River Bancshares has invested heavily in technology to enhance its banking operations. As of September 30, 2024, the company reported an annual IT investment of approximately $2.5 million. This infrastructure includes secure online banking platforms, mobile applications, and advanced cybersecurity measures to safeguard against data breaches. The IT systems enable efficient processing of transactions and provide customers with reliable access to their accounts, reinforcing trust and loyalty.

Local branch network for customer accessibility

RRBI has a well-established local branch network consisting of 28 banking centers throughout Louisiana. This extensive network allows the bank to cater to its customers effectively, providing convenient access to banking services. As of September 30, 2024, the bank's total assets stood at $3.10 billion, with total deposits amounting to $2.75 billion. The branch locations are strategically distributed to serve various communities, enhancing customer engagement and supporting local economies.

Key Resource	Description	Value / Investment
Experienced Banking Professionals	Approximately 300 skilled employees in various banking functions	Not disclosed
IT Infrastructure	Secure online banking, mobile applications, and cybersecurity systems	$2.5 million annually
Branch Network	28 banking centers across Louisiana	Total assets: $3.10 billion; Total deposits: $2.75 billion

Red River Bancshares, Inc. (RRBI) - Business Model: Value Propositions

Personalized banking services tailored to local needs

Red River Bancshares, Inc. focuses on providing a range of personalized banking solutions that cater specifically to the needs of its local customers. The bank operates 28 banking centers across Louisiana, allowing it to establish strong community ties and understand local financial needs. As of September 30, 2024, Red River Bank reported total assets of $3.10 billion and total loans held for investment of $2.06 billion.

Commitment to community development and support

Red River Bancshares emphasizes its commitment to community development through various initiatives. The bank actively participates in local events and supports local businesses, which fosters a sense of community and trust among its customer base. As of September 30, 2024, the bank's total stockholders’ equity stood at $324.3 million, reflecting a strong capital position that allows for continued investment in community support initiatives.

Competitive interest rates on loans and deposits

Red River Bancshares offers competitive interest rates on both loans and deposit products, which helps attract and retain customers. As of September 30, 2024, the bank's net interest income was reported at $22.5 million for the third quarter, up from $21.8 million in the previous quarter, demonstrating effective management of interest rate spreads. The bank’s average interest-bearing deposits totaled approximately $1.86 billion, showcasing the effectiveness of its deposit strategies.

Financial Metrics	As of September 30, 2024	As of December 31, 2023
Total Assets	$3.10 billion	$3.13 billion
Total Loans Held for Investment	$2.06 billion	$1.99 billion
Total Stockholders’ Equity	$324.3 million	$303.9 million
Net Interest Income (Q3 2024)	$22.5 million	$21.8 million (Q2 2024)
Average Interest-Bearing Deposits	$1.86 billion	$1.89 billion

Red River Bancshares, Inc. (RRBI) - Business Model: Customer Relationships

Dedicated customer service teams

Red River Bancshares, Inc. (RRBI) has established dedicated customer service teams to enhance customer interactions and support. As of September 30, 2024, the company reported total average deposits of approximately $2.73 billion. The customer service teams are structured to assist in managing these deposits effectively, ensuring customers receive timely assistance and tailored solutions to their banking needs.

Relationship managers for high-value clients

RRBI employs relationship managers specifically focused on high-value clients, which include commercial and public entity customers. As of September 30, 2024, commercial deposits accounted for approximately 43.4% of total deposits, totaling about $1.19 billion. This targeted approach allows the bank to provide personalized financial services, fostering long-term relationships and maximizing client satisfaction.

Community events to foster local engagement

Community engagement is a cornerstone of RRBI's customer relationship strategy. The bank actively participates in local events and initiatives to strengthen its ties within the communities it serves. This engagement is reflected in the bank's deposit structure, where consumer deposits represent about 49.1% of total deposits, indicating a strong local customer base. Through various community events, RRBI aims to enhance brand visibility and build trust among potential and existing customers.

Customer Relationship Strategy	Details	Impact on Deposits
Dedicated Customer Service Teams	Assist with managing $2.73 billion in average deposits	Improved customer satisfaction and retention
Relationship Managers	Focus on high-value clients, primarily in commercial banking	Commercial deposits at $1.19 billion (43.4% of total)
Community Engagement Events	Participate in local initiatives to strengthen community ties	Consumer deposits at $1.35 billion (49.1% of total)

Red River Bancshares, Inc. (RRBI) - Business Model: Channels

Physical branches across Louisiana

Red River Bank operates a network of 28 banking centers throughout Louisiana, including a combined Loan Production Office (LPO) in New Orleans. The banking centers are strategically located in key markets such as:

• Central (Alexandria MSA)
• Northwest (Shreveport-Bossier City MSA)
• Capital (Baton Rouge MSA)
• Southwest (Lake Charles MSA)
• Northshore (Covington)
• Acadiana (Lafayette MSA)
• New Orleans

As of September 30, 2024, the total deposits at Red River Bank were approximately $2.75 billion, a decrease of $54.8 million or 2.0% from December 31, 2023.

Digital banking platforms for online services

Red River Bank offers comprehensive digital banking solutions, allowing customers to access a range of services online. These services include:

• Account management
• Funds transfers
• Bill payments
• Loan applications

As of September 30, 2024, Red River Bancshares reported an increase in net interest income to $22.5 million, up from $21.8 million in the previous quarter, partly attributed to increased digital banking usage.

Mobile apps for convenient banking access

The mobile banking application provided by Red River Bank enhances customer accessibility and convenience. Key features of the app include:

• Mobile check deposit
• Transaction history tracking
• Account alerts and notifications

Customer engagement through the mobile app has contributed to a notable increase in debit card income, which rose by 7.0% to $2.875 million for the nine months ended September 30, 2024.

Channel	Details	Financial Impact
Physical Branches	28 banking centers in Louisiana	Total deposits: $2.75 billion
Digital Banking	Online account management and services	Net interest income: $22.5 million
Mobile Apps	Mobile banking features and transaction capabilities	Debit card income: $2.875 million

Red River Bancshares, Inc. (RRBI) - Business Model: Customer Segments

Individual consumers seeking personal banking solutions

Red River Bancshares, Inc. offers a wide range of personal banking products tailored to individual consumers. As of September 30, 2024, the bank reported total deposits of approximately $2.75 billion, with noninterest-bearing demand deposits amounting to $882.4 million, representing 32.1% of total deposits . The average deposit account size was approximately $27,000 .

The bank's personal banking offerings include:

• Checking accounts
• Savings accounts
• Money market accounts
• Time deposit accounts

Additionally, Red River Bank reported a 20.6% increase in mortgage loan income to $1.8 million for the nine months ended September 30, 2024, compared to the previous year. This indicates a strong demand for home financing solutions among individual consumers.

Small to medium-sized enterprises (SMEs) for business banking

Red River Bancshares caters to small and medium-sized enterprises (SMEs) by providing tailored business banking solutions. The bank's commercial loan portfolio reached $2.06 billion as of September 30, 2024, with a significant portion allocated to commercial real estate loans, which accounted for 42.6% of total loans held for investment .

The bank's offerings for SMEs include:

• Business checking and savings accounts
• Commercial loans
• Lines of credit
• Merchant services

Red River Bank reported a net interest income of $22.5 million for the third quarter of 2024, reflecting a robust business banking segment . The bank focuses on relationship-oriented banking, which is crucial for attracting and retaining SME clients.

Local government entities needing public fund management

Local government entities represent a significant customer segment for Red River Bancshares, particularly in the management of public funds. As of September 30, 2024, the bank estimated uninsured deposits, which include deposits from public entities, at approximately $832.2 million, or 30.3% of total deposits . This highlights the bank's role in managing substantial public funds.

Red River Bank provides various services to local governments, including:

• Public fund management
• Government banking services
• Investment management

The bank's strategy to engage with local governments is evidenced by its network of 28 banking centers throughout Louisiana, enabling it to offer localized services and support .

Customer Segment	Key Offerings	Total Deposits (as of Sept 30, 2024)	Loan Portfolio (as of Sept 30, 2024)
Individual Consumers	Checking Accounts Savings Accounts Mortgage Loans	$882.4 million (32.1% of total deposits)	$1.8 million in mortgage loan income
Small to Medium-Sized Enterprises (SMEs)	Commercial Loans Business Accounts Merchant Services	N/A	$2.06 billion in commercial loans
Local Government Entities	Public Fund Management Investment Services	$832.2 million (30.3% of total deposits)	N/A

Red River Bancshares, Inc. (RRBI) - Business Model: Cost Structure

Operational costs associated with branch maintenance

As of September 30, 2024, Red River Bancshares, Inc. reported total operating expenses of approximately $49.3 million for the nine months ended. Within these expenses, occupancy and equipment expenses totaled $4.975 million, reflecting a slight increase of 0.9% compared to $4.933 million for the same period in 2023.

Expense Category	Amount (in thousands)	Change from Previous Year
Occupancy and Equipment Expenses	$4,975	+0.9%
Technology Expenses	$2,298	+11.2%
Other Operating Expenses	$3,241	+6.6%

Salaries and benefits for banking staff

The personnel expenses for Red River Bancshares, Inc. reached $28.854 million for the nine months ended September 30, 2024, an increase of 3.0% from $28.008 million in the same period of 2023. This rise was attributed to higher compensation expenses due to staff changes.

Expense Category	Amount (in thousands)	Change from Previous Year
Personnel Expenses	$28,854	+3.0%

Marketing and community outreach expenditures

Marketing expenses, categorized under advertising, accounted for $1.061 million for the nine months ended September 30, 2024, representing an increase of 11.1% from $0.955 million in the prior year.

Expense Category	Amount (in thousands)	Change from Previous Year
Advertising	$1,061	+11.1%

Red River Bancshares, Inc. (RRBI) - Business Model: Revenue Streams

Interest Income from Loans and Mortgages

As of September 30, 2024, Red River Bancshares reported loans held for investment (HFI) totaling $2.06 billion, an increase of $63.2 million or 3.2% from December 31, 2023. The net interest income for the nine months ended September 30, 2024, was $65.6 million, reflecting an increase of $463,000 or 0.7% compared to the same period in 2023. The average loan size, excluding credit cards, was approximately $249,000.

Fees from Banking Services and Account Maintenance

For the nine months ended September 30, 2024, Red River Bancshares reported the following noninterest income from banking services:

Category	2024 (in thousands)	2023 (in thousands)	Increase/Decrease (in thousands)	Percentage Change
Service charges on deposit accounts	$4,223	$4,317	$(94)	(2.2%)
Debit card income, net	$2,875	$2,687	$188	7.0%
Mortgage loan income	$1,838	$1,524	$314	20.6%
Brokerage income	$2,867	$2,759	$108	3.9%
Loan and deposit income	$1,572	$1,566	$6	0.4%
Bank-owned life insurance income	$635	$557	$78	14.0%
Gain (Loss) on equity securities	$63	$(145)	$208	143.4%
SBIC income	$1,107	$2,479	$(1,372)	(55.3%)
Other income (loss)	$266	$184	$82	44.6%
Total Noninterest Income	$15,446	$15,928	$(482)	(3.0%)

The total noninterest income for the nine months ended September 30, 2024, was $15.4 million, a decrease of $482,000 or 3.0% compared to the previous year.

Investment Income from Securities and Other Assets

As of September 30, 2024, Red River Bancshares had total securities amounting to $697.7 million, which was $31.1 million or 4.7% higher than the previous quarter. The investment strategy has focused on redeploying cash flows from lower-yielding securities into higher-yielding options, thus enhancing the overall yield on the investment portfolio.

In terms of equity securities, the bank reported a gain of $63,000 for the nine months ended September 30, 2024, compared to a loss of $145,000 in the prior year.

Updated on 16 Nov 2024

Resources:

1. Red River Bancshares, Inc. (RRBI) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Red River Bancshares, Inc. (RRBI)' financial performance, including balance sheets, income statements, and cash flow statements.
2. SEC Filings – View Red River Bancshares, Inc. (RRBI)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.