Red River Bancshares Q2 net interest margin rises,expects higher loan growth in H2

Overview

• US regional bank's Q2 net income and EPS fell slightly from prior quarter, rose yr/yr

• Net interest income and margin improved, supported by higher loan yields and lower deposit costs

• Deposits declined 1.4% on seasonal outflows; loans grew modestly; nonperforming assets dropped 38%

Outlook

• Company expects higher loan growth in the second half of 2026

• Red River Bancshares projects net interest income and margin FTE to increase slightly in H2 2026

• Company says SBIC income or loss will fluctuate in future quarters

Result Drivers

• NET INTEREST MARGIN - Co said higher loan yields and lower deposit costs drove a 10 bp increase in net interest margin to 3.61%

• OPERATING EXPENSES - Net income was impacted by a $1.0 mln increase in operating expenses, including higher personnel costs and nonrecurring relocation expenses

• ASSET QUALITY - Nonperforming assets fell 38% due to resolution of problem loans, resulting in additional interest income and expense reimbursements

Company press release: ID:nGNX7Jh38F

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "hold" and the breakdown of recommendations is 1 "strong buy" or "buy", 2 "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the banks peer group is "buy."

• Wall Street's median 12-month price target for Red River Bancshares Inc is $103.00, about 1.3% above its July 29 closing price of $101.68

• The stock recently traded at 14 times the next 12-month earnings vs. a P/E of 13 three months ago

Reuters Recommended Reads

• July 30 - Catalyst Bancorp Q2 net interest margin rises

• July 29 - First US Bancshares Q2 profit rises on loan growth, lower deposit costs

• July 29 - Citizens Holding Q2 net income rises 70% on higher net interest income

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(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)