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Regulatory Capital Requirements
 12 Months Ended
Dec. 31, 2021
Regulatory Capital Requirements Under Banking Regulations [Abstract]  
Regulatory Capital Requirements Regulatory Capital Requirements
Red River Bank
The Bank is subject to various regulatory capital requirements administered by the FDIC. Failure to meet minimum capital requirements can initiate certain mandatory, and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the Bank’s and the Company’s financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Bank must meet specific capital guidelines that involve quantitative measures of their assets, liabilities, and certain off-balance sheet items as calculated under regulatory accounting practices. The capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors.
The Bank is subject to Basel III capital guidelines. Basel III requires the Bank to maintain certain minimum ratios to meet capital adequacy requirements. In addition, a CCB was established above the minimum regulatory capital requirements. Effective January 1, 2019, the final CCB was fully phased in at 2.50%. It is management’s belief that, as of December 31, 2021, the Bank met all capital adequacy requirements under Basel III. Management expects that the capital ratios for the Bank under Basel III will continue to exceed capital adequacy requirements. The most recent notification from the FDIC (as of June 30, 2021) categorized the Bank as “well capitalized” under the regulatory framework for prompt corrective action.
Capital amounts and ratios for Red River Bank as of December 31, 2021 and 2020, are presented in the following table:
Regulatory Requirements
Actual
Minimum
Minimum Plus CCB
(dollars in thousands)AmountRatioAmountRatioAmountRatio
December 31, 2021
Total Risk-Based Capital$305,771 17.06 %$143,372 8.00 %$188,176 10.50 %
Tier I Risk-Based Capital$286,595 15.99 %$107,529 6.00 %$152,333 8.50 %
Common Equity Tier I Capital$286,595 15.99 %$80,647 4.50 %$125,451 7.00 %
Tier I Leverage Capital$286,595 9.23 %$124,241 4.00 %$124,241 4.00 %
December 31, 2020
Total Risk-Based Capital$271,061 17.17 %$126,307 8.00 %$165,778 10.50 %
Tier I Risk-Based Capital$253,110 16.03 %$94,731 6.00 %$134,202 8.50 %
Common Equity Tier I Capital$253,110 16.03 %$71,048 4.50 %$110,519 7.00 %
Tier I Leverage Capital$253,110 9.98 %$101,495 4.00 %$101,495 4.00 %
Red River Bancshares, Inc.
As a general matter, bank holding companies are subject to Basel III capital adequacy requirements under applicable Federal Reserve regulations on a consolidated basis. However, bank holding companies that qualify as “small bank holding companies” under the Federal Reserve’s Small Bank Holding Company Policy Statement are exempt from the Federal Reserve’s consolidated capital adequacy guidelines at the holding company level and instead are evaluated at the bank level. In May 2018, the Economic Growth Act was enacted, and it increased the asset threshold for “small bank holding companies” from $1.0 billion to $3.0 billion. Because the Company had less than $3.0 billion in assets as of June 30, 2020, the last applicable measurement date, it was not subject to capital adequacy guidelines on a consolidated basis as of December 31, 2021. Although the minimum regulatory capital requirements are not currently applicable to the Company, the Company calculates these ratios for its own planning and monitoring purposes.
Capital amounts and ratios for Red River Bancshares, Inc. as of December 31, 2021 and 2020, are presented in the following table:
Actual
(dollars in thousands)AmountRatio
December 31, 2021
Total Risk-Based Capital$319,553 17.83 %
Tier I Risk-Based Capital$300,377 16.76 %
Common Equity Tier I Capital$300,377 16.76 %
Tier I Leverage Capital$300,377 9.67 %
December 31, 2020
Total Risk-Based Capital$294,962 18.68 %
Tier I Risk-Based Capital$277,011 17.55 %
Common Equity Tier I Capital$277,011 17.55 %
Tier I Leverage Capital$277,011 10.92 %
Community Bank Leverage Ratio Framework
As part of the directive under the Economic Growth Act, on September 17, 2019, the FDIC and other federal bank regulatory agencies approved the CBLR framework. This optional framework became effective January 1, 2020, and is available as an alternative to the Basel III risk-based capital framework. The CBLR framework provides for a simple measure of capital adequacy for certain community banking organizations. Specifically, depository institutions and depository institution holding companies that have less than $10.0 billion in total consolidated assets and meet other qualifying criteria, including a Tier I leverage ratio of greater than 9.00% (subsequently temporarily reduced to 8.00% for 2020 and 8.50% for 2021 as a COVID-19 relief measure), are considered qualifying community banking organizations and are eligible to opt into the CBLR framework and replace the applicable Basel III risk-based capital requirements.
As of December 31, 2021, the Company and the Bank qualify for the CBLR framework. Management does not intend to utilize the CBLR framework.