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RBB Bancorp Reports Third Quarter 2023 Earnings

RBB Bancorp (NASDAQ:RBB) and its subsidiaries, Royal Business Bank (the “Bank”) and RBB Asset Management Company (“RAM”), collectively referred to herein as “the Company,” announced financial results for the quarter ended September 30, 2023.

The Company reported net income of $12.0 million, or $0.63 diluted earnings per share, for the quarter ended September 30, 2023, compared to net income of $10.9 million, or $0.58 diluted earnings per share, and $16.7 million, or $0.87 diluted earnings per share, for the quarter ended June 30, 2023 and September 30, 2022, respectively.

“We were pleased to be awarded with a $5 million Community Development Financial Institution (“CDFI”) Equitable Recovery Program (“ERP”) award by the US Treasury,” said David Morris, CEO of RBB Bancorp. “We believe it is a testament to our ongoing efforts to support the communities in which we operate.”

Mr. Morris continued, “We continued to make progress on our goal of reducing our loan to deposit ratio. We were also pleased to see stabilization in credit and a reduction in expenses in the third quarter.”

“We have done a good job managing through the market volatility and improving corporate governance,” said Dr. James Kao, Chairman of the Company. “The Board of Directors is confident that we now have the right strategy and people in place to continue to build shareholder value.”

Third Quarter 2023 Highlights Compared to Second Quarter 2023

  • Net income increased to $12.0 million, or $0.63 diluted earnings per share.
  • Net interest income decreased to $27.6 million.
  • Noninterest income increased to $7.7 million and noninterest expense decreased to $16.9 million.
  • Total loans held for investment decreased by $75.0 million and total deposits decreased by $21.3 million, resulting in a decrease in the net loan to deposit ratio to 97.6% from 99.3% at the end of the prior quarter.
  • Return on average assets increased to 1.17%.
  • Return on average tangible common equity increased to 11.04%. (1)
  • Net interest margin decreased to 2.87%.
  • The ratio of allowance for credit losses to total loans increased to 1.36% from 1.35% at the end of prior quarter.
  • The Company's capital position remained strong with a ratio of 17.8% tier 1 common equity to risk-weighted assets.
  • The Company will redeem $55 million of outstanding Fixed-to-Floating Subordinated Notes due in 2028 (the “2028 Subordinated Notes”) on December 1, 2023.

(1) Reconciliations of the non–U.S. generally accepted accounting principles (“GAAP”) measures are set forth at the end of this press release.

Net Interest Income and Net Interest Margin

Net interest income before provision for credit losses was $27.6 million for the third quarter of 2023, compared to $31.9 million for the second quarter of 2023. The $4.3 million decrease was primarily attributable to an increase in interest expense on time deposits and a decrease in interest and fees on loans, partially offset by increases in interest income on interest-bearing deposits and on investment securities. For the third quarter of 2023, average time deposits increased $70.8 million and the interest rate paid on time deposits increased 35 basis points to 4.33% from 3.98% in the second quarter of 2023.

Compared to the third quarter of 2022, net interest income before provision for credit losses decreased $11.4 million from $39.0 million. The decrease was primarily attributable to an increase in average interest-bearing deposits of $651.7 million and a 301 basis point increase in the interest rate paid on interest-bearing deposits, partially offset by an increase in average loans of $31.5 million and a 46 basis point increase in the yield earned on loans from 5.53% in the third quarter of 2022 to 5.99%.

Net interest margin was 2.87% for the third quarter of 2023, a decrease of 50 basis points from 3.37% in the second quarter of 2023 primarily due to a 36 basis point increase in the average cost of interest-bearing deposits from 3.47% in the second quarter of 2023 to 3.83% in the third quarter of 2023. Cost of interest-bearing deposits increased due to increasing market rates and peer bank deposit competition.

The Company will redeem on December 1, 2023 the 2028 Subordinated Notes at a redemption price equal to 100% of the principal amount of the 2028 Subordinated Notes plus accrued and unpaid interest to but excluding December 1, 2023. The 2028 Subordinated Notes have an aggregate principal amount outstanding of $55 million. From and after December 1, 2023, all interest on the 2028 Subordinated Notes will cease to accrue.

Noninterest Income

Noninterest income was $7.7 million for the third quarter of 2023, an increase of $5.2 million from $2.5 million in the second quarter of 2023. The increase was primarily driven by a $5.0 million CDFI ERP award received, a $194,000 increase in gain on sale of loans, and a $190,000 increase in gain on sale of other real estate owned (“OREO”), partially offset by a $110,000 decrease in wealth management commissions during the quarter.

Noninterest Expense

Noninterest expense for the third quarter of 2023 was $16.9 million, compared to $18.5 million for the second quarter of 2023. The $1.6 million decrease was primarily attributable to a $1.9 million decrease in legal and other professional fees, partially offset by a $417,000 increase in salaries and employee benefits expenses primarily due to new hires in the quarter. The decrease in legal and other professional fees were primarily due to the insurance coverage with respect to legal expenses related to the Company's voluntary cooperation with the Securities and Exchange Commission's (“SEC”) requests for information, as disclosed in the Company's Current Report on Form 8-K filed with the SEC on July 24, 2023, after all prior payments of the Company reached the $1.0 million retention amount.

Income Taxes

The effective tax rate was 29.8% for the third quarter of 2023, 29.5% for the second quarter of 2023, and 27.8% for the third quarter of 2022.

Loan and Securities Portfolio

Loans held for investment, net of deferred fees and discounts, totaled $3.1 billion as of September 30, 2023, a decrease of $75.0 million from June 30, 2023, and a decrease of $100.0 million from September 30, 2022. The decrease from June 30, 2023 was primarily due to a $49.4 million decrease in single-family residential mortgages, a $19.2 million decrease in commercial real estate loans, a $3.8 million decrease in commercial and industrial loans, a $3.0 million decrease in Small Business Administration (“SBA”) loans, and a $2.5 million decrease in other loans, partially offset by a $2.9 million increase in construction and land development loans. The decrease from September 30, 2022 was primarily due to a $93.7 million decrease in construction and land development loans, a $77.2 million decrease in commercial and industrial loans, a $56.6 million decrease in commercial real estate loans, an $11.5 million decrease in SBA loans, and a $10.0 million decrease in other loans, partially offset by a $149.0 million increase in single-family residential mortgages. In the first nine months of 2023, management decreased loan growth to lower the loan to deposit ratio and to strengthen the liquidity position of the Company.

As of September 30, 2023, the Bank’s total available-for-sale securities amounted to $354.4 million, including available-for-sale securities maturing in over 12 months of $259.4 million. As of September 30, 2023, the Bank recorded gross unrealized losses of $37.1 million on its available-for-sale securities compared to gross unrealized losses of $32.3 million as of June 30, 2023 with respect to its available-for-sale securities due to Federal Reserve Bank raised interest rate by 25 basis points in July 2023.

Liquidity and Deposits

Total deposits were $3.2 billion as of September 30, 2023, which reflected a decrease of $21.3 million or 0.7% compared to June 30, 2023, primarily due to a decrease in brokered deposits of $49.1 million, partially offset by an increase in time deposits of $31.7 million. As of September 30, 2023, the Company had $330.8 million in cash on the balance sheet, which is an increase of $84.5 million or 34.3% from June 30, 2023. In addition, the Company had $909.8 million in Federal Home Loan Bank borrowing availability, Fed fund lines of $92.0 million, $41.9 million in available funds from the Federal Reserve Bank's discount window and $261.2 million in available-for-sale securities that were unpledged.

Credit Quality

Nonperforming assets totaled $40.4 million, or 0.99% of total assets at September 30, 2023, compared to $42.2 million, or 1.04% of total assets at June 30, 2023. The $1.8 million decrease in nonperforming assets was due to loans that migrated to accrual status of $2.2 million, loans charged-off of $2.2 million, loan paydowns of $295,000, and one OREO of $293,000 that was sold, partially offset by loans that migrated into non-accrual status of $3.2 million, consisting primarily of commercial real estate loans and single-family residential mortgages.

Special mention loans totaled $31.2 million or 1.00% of total loans at September 30, 2023, compared to $24.2 million, or 0.76% of total loans at June 30, 2023. The increase is due to additional special mention loans of $9.3 million, consisting primarily of commercial real estate loans, partially offset by an upgrade to pass loans of $2.2 million.

Substandard loans totaled $71.4 million or 2.29% of total loans at September 30, 2023, compared to $74.1 million, or 2.32% of total loans at June 30, 2023. The decrease is due to loan paydowns of $3.2 million and upgrades to pass loans of $823,000, partially offset by additional substandard loans of $1.4 million, consisting primarily of single-family residential mortgages.

30-89 day delinquent loans, excluding non-accrual loans, increased $12.4 million to $19.7 million as of September 30, 2023 compared to $7.2 million as of June 30, 2023. The $12.4 million increase in past due loans was primarily due to a new delinquent commercial real estate loan of $16.1 million for one business day payment delay, which reverted back to current in October 2023. Offsetting the increase were loans that migrated back to past due for less than 30 days in the amount of $4.8 million, consisting primarily of single-family residential mortgages, loans that converted to non-accrual status in the aggregate amount of $835,000, and loan payoffs or paydowns of $575,000.

Total net charge-offs were $2.2 million for the third quarter of 2023, as compared to net charge-offs of $580,000 in the prior quarter and net recoveries of $127,000 in the same quarter last year.

Provision for credit losses were $1.4 million for the third quarter of 2023, as compared to $380,000 in the prior quarter and $1.8 million in the same quarter last year.

The allowance for credit losses totaled $42.4 million, or 1.36% of loans held for investment at September 30, 2023, compared with $43.1 million, or 1.35%, of loans held for investment at June 30, 2023.

Dividend Payout and Stock Repurchase

For the third quarter of 2023, the Board of Directors declared a common stock cash dividend of $0.16 per share, payable on November 10, 2023 to stockholders of record on October 30, 2023.

On June 14, 2022, the Board of Directors authorized the repurchase of up to 500,000 shares of common stock, of which 433,124 shares remain available. The repurchase program permits shares to be repurchased in open market or private transactions, through block trades, and pursuant to any trading plan that may be adopted in accordance with SEC Rules 10b5-1 and 10b-8. The Company did not repurchase any shares during the third quarter of 2023, and has not repurchased any shares since October 24, 2022 pursuant to this authorization.

Corporate Overview

RBB Bancorp is a community-based financial holding company headquartered in Los Angeles, California. As of September 30, 2023, the Company had total assets of $4.1 billion. Its wholly-owned subsidiary, the Bank, is a full service commercial bank, which provides business banking services to the Asian communities in Los Angeles County, Orange County, and Ventura County in California, in Las Vegas, Nevada, in Brooklyn, Queens, and Manhattan in New York, in Edison, New Jersey, in the Chicago neighborhoods of Chinatown and Bridgeport, Illinois, and on Oahu, Hawaii. Bank services include remote deposit, E-banking, mobile banking, commercial and investor real estate loans, business loans and lines of credit, commercial and industrial loans, SBA 7A and 504 loans, 1-4 single family residential loans, automobile lending, trade finance, a full range of depository account products and wealth management services. The Bank has nine branches in Los Angeles County, two branches in Ventura County, one branch in Orange County, California, one branch in Las Vegas, Nevada, three branches and one loan operation center in Brooklyn, three branches in Queens, one branch in Manhattan in New York, one branch in Edison, New Jersey, two branches in Chicago, Illinois, and one branch in Honolulu, Hawaii. The Company's administrative and lending center is located at 1055 Wilshire Blvd., Los Angeles, California 90017, and its finance and operations center is located at 7025 Orangethorpe Ave., Buena Park, California 90621. The Company's website address is www.royalbusinessbankusa.com.

Conference Call

Management will hold a conference call at 11:00 a.m. Pacific time/2:00 p.m. Eastern time on Tuesday, October 24, 2023, to discuss the Company’s third quarter 2023 financial results.

To listen to the conference call, please dial 1-888-506-0062 or 1-973-528-0011, the Participant ID code is 626566, conference ID RBBQ323. A replay of the call will be made available at 1-877-481-4010 or 1-919-882-2331, the passcode is 49264, approximately one hour after the conclusion of the call and will remain available through November 7, 2023.

The conference call will also be simultaneously webcast over the Internet; please visit our Royal Business Bank website at www.royalbusinessbankusa.com and click on the “Investors” tab to access the call from the site. This webcast will be recorded and available for replay on our website approximately two hours after the conclusion of the conference call.

Disclosure

This press release contains certain non-GAAP financial disclosures for tangible common equity and tangible assets and adjusted earnings. The Company uses certain non-GAAP financial measures to provide meaningful supplemental information regarding the Company’s operational performance and to enhance investors’ overall understanding of such financial performance. Please refer to the tables at the end of this release for a presentation of performance ratios in accordance with GAAP and a reconciliation of the non-GAAP financial measures to the GAAP financial measures.

Safe Harbor

Certain matters set forth herein (including the exhibits hereto) constitute forward-looking statements relating to the Company’s current business plans and expectations and our future financial position and operating results. These forward-looking statements are subject to risks and uncertainties that could cause actual results, performance and/or achievements to differ materially from those projected. These risks and uncertainties include, but are not limited to, business and economic conditions generally and in the financial services industry, nationally and within our current and future geographic markets, including the tight labor market, ineffective management of the U.S. federal budget or debt or turbulence or uncertainly in domestic of foreign financial markets; the strength of the United States economy in general and the strength of the local economies in which we conduct operations; our ability to attract and retain deposits and access other sources of liquidity; possible additional provisions for loan losses and charge-offs; credit risks of lending activities and deterioration in asset or credit quality; extensive laws and regulations and supervision that we are subject to, including potential supervisory action by bank supervisory authorities; increased costs of compliance and other risks associated with changes in regulation, including any amendments to the Dodd-Frank Wall Street Reform and Consumer Protection Act; compliance with the Bank Secrecy Act and other money laundering statutes and regulations; potential goodwill impairment; liquidity risk; fluctuations in interest rates; the transition away from the London Interbank Offering Rate (LIBOR) and related uncertainty as well as the risks and costs related to our adopted alternative reference rate, including the Secured Overnight Financing Rate (SOFR); risks associated with acquisitions and the expansion of our business into new markets; inflation and deflation; real estate market conditions and the value of real estate collateral; environmental liabilities; our ability to compete with larger competitors; our ability to retain key personnel; successful management of reputational risk; severe weather, natural disasters, earthquakes, fires; or other adverse external events could harm our business; geopolitical conditions, including acts or threats of terrorism, actions taken by the United States or other governments in response to acts or threats of terrorism and/or military conflicts, including the conflicts between Russia and Ukraine and in the Middle East, which could impact business and economic conditions in the United States and abroad; public health crises and pandemics, including the COVID-19 pandemic, and their effects on the economic and business environments in which we operate, including our credit quality and business operations, as well as the impact on general economic and financial market conditions; general economic or business conditions in Asia, and other regions where the Bank has operations; failures, interruptions, or security breaches of our information systems; climate change, including any enhanced regulatory, compliance, credit and reputational risks and costs; cybersecurity threats and the cost of defending against them; our ability to adapt our systems to the expanding use of technology in banking; risk management processes and strategies; adverse results in legal proceedings; the impact of regulatory enforcement actions, if any; certain provisions in our charter and bylaws that may affect acquisition of the Company; changes in tax laws and regulations; the impact of governmental efforts to restructure the U.S. financial regulatory system; the impact of future or recent changes in the Federal Deposit Insurance Corporation ("FDIC") insurance assessment rate of the rules and regulations related to the calculation of the FDIC insurance assessment amount; the effect of changes in accounting policies and practices or accounting standards, as may be adopted from time-to-time by bank regulatory agencies, the SEC, the Public Company Accounting Oversight Board, the Financial Accounting Standards Board or other accounting standards setters, including Accounting Standards Update 2016-13 (Topic 326, “Measurement of Current Losses on Financial Instruments, commonly referenced as the Current Expected Credit Losses Model, which changed how we estimate credit losses and may further increase the required level of our allowance for credit losses in future periods; market disruption and volatility; fluctuations in the Bancorp’s stock price; restrictions on dividends and other distributions by laws and regulations and by our regulators and our capital structure; issuances of preferred stock; our ability to raise additional capital, if needed, and the potential resulting dilution of interests of holders of our common stock; the soundness of other financial institutions; our ongoing relations with our various federal and state regulators, including the SEC, FDIC, FRB and California Department of Financial Protection and Innovation; our success at managing the risks involved in the foregoing items and all other factors set forth in the Company’s public reports, including its Annual Report as filed under Form 10-K and Form 10-K/A for the year ended December 31, 2022, and particularly the discussion of risk factors within that document. The Company does not undertake, and specifically disclaims any obligation, to update any forward-looking statements to reflect occurrences or unanticipated events or circumstances after the date of such statements except as required by law. Any statements about future operating results, such as those concerning accretion and dilution to the Company’s earnings or shareholders, are for illustrative purposes only, are not forecasts, and actual results may differ.

RBB BANCORP AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(Dollars in thousands)

 

 

 

September 30,

 

 

June 30,

 

 

September 30,

 

 

 

2023

 

 

2023

 

 

2022

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

Cash and due from banks

 

$

330,791

 

 

$

246,325

 

 

$

134,179

 

Federal funds sold and other cash equivalents

 

 

 

 

 

 

 

 

40,000

 

Total cash and cash equivalents

 

 

330,791

 

 

 

246,325

 

 

 

174,179

 

Interest-bearing deposits in other financial institutions

 

 

600

 

 

 

600

 

 

 

600

 

Investment securities available for sale

 

 

354,378

 

 

 

391,116

 

 

 

266,270

 

Investment securities held to maturity

 

 

5,214

 

 

 

5,718

 

 

 

5,735

 

Mortgage loans held for sale

 

 

62

 

 

 

555

 

 

 

1,185

 

Loans held for investment

 

 

3,120,952

 

 

 

3,195,995

 

 

 

3,220,913

 

Allowance for credit losses

 

 

(42,430

)

 

 

(43,092

)

 

 

(36,047

)

Net loans held for investment

 

 

3,078,522

 

 

 

3,152,903

 

 

 

3,184,866

 

Premises and equipment, net

 

 

26,134

 

 

 

26,600

 

 

 

26,850

 

Federal Home Loan Bank (FHLB) stock

 

 

15,000

 

 

 

15,000

 

 

 

15,000

 

Cash surrender value of life insurance

 

 

58,346

 

 

 

57,989

 

 

 

56,975

 

Goodwill

 

 

71,498

 

 

 

71,498

 

 

 

71,498

 

Servicing assets

 

 

8,439

 

 

 

8,702

 

 

 

10,054

 

Core deposit intangibles

 

 

3,010

 

 

 

3,246

 

 

 

3,971

 

Right-of-use assets- operating leases

 

 

29,949

 

 

 

28,677

 

 

 

24,768

 

Accrued interest and other assets

 

 

87,411

 

 

 

66,689

 

 

 

63,278

 

Total assets

 

$

4,069,354

 

 

$

4,075,618

 

 

$

3,905,229

 

Liabilities and shareholders' equity

 

 

 

 

 

 

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing demand

 

$

572,393

 

 

$

585,746

 

 

$

916,301

 

Savings, NOW and money market accounts

 

 

608,020

 

 

 

598,546

 

 

 

882,126

 

Time deposits, $250,000 and under

 

 

1,237,831

 

 

 

1,275,476

 

 

 

608,489

 

Time deposits, greater than $250,000

 

 

735,828

 

 

 

715,648

 

 

 

552,754

 

Total deposits

 

 

3,154,072

 

 

 

3,175,416

 

 

 

2,959,670

 

FHLB advances

 

 

150,000

 

 

 

150,000

 

 

 

240,000

 

Long-term debt, net of debt issuance costs

 

 

174,019

 

 

 

173,874

 

 

 

173,441

 

Subordinated debentures

 

 

14,884

 

 

 

14,829

 

 

 

14,665

 

Lease liabilities - operating leases

 

 

31,265

 

 

 

29,915

 

 

 

25,701

 

Accrued interest and other liabilities

 

 

39,111

 

 

 

31,294

 

 

 

19,953

 

Total liabilities

 

 

3,563,351

 

 

 

3,575,328

 

 

 

3,433,430

 

Shareholders' equity:

 

 

 

 

 

 

 

 

 

 

 

 

Shareholders' equity

 

 

531,692

 

 

 

522,623

 

 

 

494,248

 

Non-controlling interest

 

 

72

 

 

 

72

 

 

 

72

 

Accumulated other comprehensive loss, net of tax

 

 

(25,761

)

 

 

(22,405

)

 

 

(22,521

)

Total shareholders' equity

 

 

506,003

 

 

 

500,290

 

 

 

471,799

 

Total liabilities and shareholders’ equity

 

$

4,069,354

 

 

$

4,075,618

 

 

$

3,905,229

 

RBB BANCORP AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

(Dollars in thousands, except share and per share data)

 

 

 

For the Three Months Ended

 

 

 

September 30, 2023

 

 

June 30, 2023

 

 

September 30, 2022

 

Interest and dividend income:

 

 

 

 

 

 

 

 

 

 

 

 

Interest and fees on loans

 

$

47,617

 

 

$

50,810

 

 

$

43,588

 

Interest on interest-bearing deposits

 

 

3,193

 

 

 

2,112

 

 

 

373

 

Interest on investment securities

 

 

4,211

 

 

 

3,574

 

 

 

1,784

 

Dividend income on FHLB stock

 

 

290

 

 

 

259

 

 

 

224

 

Interest on federal funds sold and other

 

 

252

 

 

 

247

 

 

 

445

 

Total interest income

 

 

55,563

 

 

 

57,002

 

 

 

46,414

 

Interest expense:

 

 

 

 

 

 

 

 

 

 

 

 

Interest on savings deposits, NOW and money market accounts

 

 

3,106

 

 

 

2,778

 

 

 

1,529

 

Interest on time deposits

 

 

21,849

 

 

 

19,169

 

 

 

2,460

 

Interest on subordinated debentures and long term debt

 

 

2,579

 

 

 

2,550

 

 

 

2,427

 

Interest on other borrowed funds

 

 

440

 

 

 

579

 

 

 

1,020

 

Total interest expense

 

 

27,974

 

 

 

25,076

 

 

 

7,436

 

Net interest income before provision for credit losses

 

 

27,589

 

 

 

31,926

 

 

 

38,978

 

Provision for credit losses

 

 

1,399

 

 

 

380

 

 

 

1,766

 

Net interest income after provision for credit losses

 

 

26,190

 

 

 

31,546

 

 

 

37,212

 

Noninterest income:

 

 

 

 

 

 

 

 

 

 

 

 

Service charges, fees and other

 

 

6,347

 

 

 

1,525

 

 

 

1,214

 

Gain on sale of loans

 

 

212

 

 

 

18

 

 

 

265

 

Loan servicing fees, net of amortization

 

 

623

 

 

 

606

 

 

 

724

 

Increase in cash surrender value of life insurance

 

 

356

 

 

 

344

 

 

 

332

 

Gain on sale of other real estate owned

 

 

190

 

 

 

 

 

 

 

Total noninterest income

 

 

7,728

 

 

 

2,493

 

 

 

2,535

 

Noninterest expense:

 

 

 

 

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

 

9,744

 

 

 

9,327

 

 

 

9,561

 

Occupancy and equipment expenses

 

 

2,414

 

 

 

2,430

 

 

 

2,349

 

Data processing

 

 

1,315

 

 

 

1,356

 

 

 

1,306

 

Legal and professional

 

 

1,022

 

 

 

2,872

 

 

 

1,077

 

Office expenses

 

 

437

 

 

 

350

 

 

 

382

 

Marketing and business promotion

 

 

340

 

 

 

252

 

 

 

364

 

Insurance and regulatory assessments

 

 

730

 

 

 

809

 

 

 

441

 

Core deposit premium

 

 

236

 

 

 

235

 

 

 

277

 

Other expenses

 

 

638

 

 

 

886

 

 

 

940

 

Total noninterest expense

 

 

16,876

 

 

 

18,517

 

 

 

16,697

 

Income before income taxes

 

 

17,042

 

 

 

15,522

 

 

 

23,050

 

Income tax expense

 

 

5,077

 

 

 

4,573

 

 

 

6,398

 

Net income

 

$

11,965

 

 

$

10,949

 

 

$

16,652

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income per share

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.63

 

 

$

0.58

 

 

$

0.88

 

Diluted

 

$

0.63

 

 

$

0.58

 

 

$

0.87

 

Cash Dividends declared per common share

 

$

0.16

 

 

$

0.16

 

 

$

0.14

 

Weighted-average common shares outstanding

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

18,995,303

 

 

 

18,993,483

 

 

 

18,988,443

 

Diluted

 

 

18,997,304

 

 

 

18,995,100

 

 

 

19,130,447

 

RBB BANCORP AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

(Dollars in thousands, except share and per share data)

 

 

 

For the Nine Months Ended

 

 

 

September 30, 2023

 

 

September 30, 2022

 

Interest and dividend income:

 

 

 

 

 

 

 

 

Interest and fees on loans

 

$

148,369

 

 

$

121,631

 

Interest on interest-earning deposits

 

 

6,096

 

 

 

655

 

Interest on investment securities

 

 

10,321

 

 

 

4,210

 

Dividend income on FHLB stock

 

 

814

 

 

 

673

 

Interest on federal funds sold and other

 

 

716

 

 

 

1,149

 

Total interest income

 

 

166,316

 

 

 

128,318

 

Interest expense:

 

 

 

 

 

 

 

 

Interest on savings deposits, NOW and money market accounts

 

 

8,180

 

 

 

3,091

 

Interest on time deposits

 

 

54,424

 

 

 

5,540

 

Interest on subordinated debentures and long term debt

 

 

7,668

 

 

 

7,154

 

Interest on other borrowed funds

 

 

2,428

 

 

 

1,974

 

Total interest expense

 

 

72,700

 

 

 

17,759

 

Net interest income before provision for credit losses

 

 

93,616

 

 

 

110,559

 

Provision for credit losses

 

 

3,793

 

 

 

3,048

 

Net interest income after provision for credit losses

 

 

89,823

 

 

 

107,511

 

Noninterest income:

 

 

 

 

 

 

 

 

Service charges, fees and other

 

 

9,108

 

 

 

3,745

 

Gain on sale of loans

 

 

258

 

 

 

1,783

 

Loan servicing fees, net of amortization

 

 

1,959

 

 

 

1,628

 

Increase in cash surrender value of life insurance

 

 

1,036

 

 

 

986

 

Gain on sale of fixed assets

 

 

32

 

 

 

757

 

Gain on sale of other real estate owned

 

 

190

 

 

 

 

Total noninterest income

 

 

12,583

 

 

 

8,899

 

Noninterest expense:

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

 

28,935

 

 

 

28,558

 

Occupancy and equipment expenses

 

 

7,242

 

 

 

6,728

 

Data processing

 

 

3,969

 

 

 

3,857

 

Legal and professional

 

 

6,907

 

 

 

4,337

 

Office expenses

 

 

1,163

 

 

 

1,033

 

Marketing and business promotion

 

 

892

 

 

 

1,172

 

Insurance and regulatory assessments

 

 

2,043

 

 

 

1,360

 

Core deposit premium

 

 

708

 

 

 

833

 

Other expenses

 

 

2,445

 

 

 

2,489

 

Total noninterest expense

 

 

54,304

 

 

 

50,367

 

Income before income taxes

 

 

48,102

 

 

 

66,043

 

Income tax expense

 

 

14,218

 

 

 

19,297

 

Net income

 

$

33,884

 

 

$

46,746

 

 

 

 

 

 

 

 

 

 

Net income per share

 

 

 

 

 

 

 

 

Basic

 

$

1.78

 

 

$

2.44

 

Diluted

 

$

1.78

 

 

$

2.41

 

Cash Dividends declared per common share

 

$

0.48

 

 

$

0.42

 

Weighted-average common shares outstanding

 

 

 

 

 

 

 

 

Basic

 

 

18,991,579

 

 

 

19,142,732

 

Diluted

 

 

19,013,838

 

 

 

19,415,558

 

RBB BANCORP AND SUBSIDIARIES

AVERAGE BALANCE SHEET AND NET INTEREST INCOME

(Unaudited)

 

 

 

For the Three Months Ended

 

 

 

September 30, 2023

 

 

June 30, 2023

 

 

September 30, 2022

 

 

 

Average

 

 

Interest

 

 

Yield /

 

 

Average

 

 

Interest

 

 

Yield /

 

 

Average

 

 

Interest

 

 

Yield /

 

(tax-equivalent basis, dollars in thousands)

 

Balance

 

 

& Fees

 

 

Rate

 

 

Balance

 

 

& Fees

 

 

Rate

 

 

Balance

 

 

& Fees

 

 

Rate

 

Interest-earning assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Federal funds sold, cash equivalents & other (1)

 

$

285,484

 

 

$

3,734

 

 

 

5.19

%

 

$

179,023

 

 

$

2,619

 

 

 

5.87

%

 

$

141,737

 

 

$

1,042

 

 

 

2.92

%

Securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Available for sale (2)

 

 

369,459

 

 

 

4,187

 

 

 

4.50

%

 

 

348,343

 

 

 

3,547

 

 

 

4.08

%

 

 

318,066

 

 

 

1,758

 

 

 

2.19

%

Held to maturity (2)

 

 

5,385

 

 

 

48

 

 

 

3.54

%

 

 

5,720

 

 

 

51

 

 

 

3.58

%

 

 

5,738

 

 

 

50

 

 

 

3.46

%

Mortgage loans held for sale

 

 

739

 

 

 

13

 

 

 

6.98

%

 

 

52

 

 

 

1

 

 

 

6.65

%

 

 

420

 

 

 

6

 

 

 

5.48

%

Loans held for investment: (3)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Real estate

 

 

2,968,246

 

 

 

43,583

 

 

 

5.83

%

 

 

3,064,633

 

 

 

46,304

 

 

 

6.06

%

 

 

2,820,022

 

 

 

38,999

 

 

 

5.49

%

Commercial

 

 

187,140

 

 

 

4,021

 

 

 

8.52

%

 

 

207,493

 

 

 

4,503

 

 

 

8.70

%

 

 

303,899

 

 

 

4,583

 

 

 

5.98

%

Total loans held for investment

 

 

3,155,386

 

 

 

47,604

 

 

 

5.99

%

 

 

3,272,126

 

 

 

50,807

 

 

 

6.23

%

 

 

3,123,921

 

 

 

43,582

 

 

 

5.53

%

Total interest-earning assets

 

 

3,816,453

 

 

$

55,586

 

 

 

5.78

%

 

 

3,805,264

 

 

$

57,025

 

 

 

6.01

%

 

 

3,589,882

 

 

$

46,438

 

 

 

5.13

%

Noninterest-earning assets

 

 

250,083

 

 

 

 

 

 

 

 

 

 

 

244,316

 

 

 

 

 

 

 

 

 

 

 

250,737

 

 

 

 

 

 

 

 

 

Total assets

 

$

4,066,536

 

 

 

 

 

 

 

 

 

 

$

4,049,580

 

 

 

 

 

 

 

 

 

 

$

3,840,619

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NOW

 

$

55,325

 

 

$

201

 

 

 

1.44

%

 

$

59,789

 

 

$

202

 

 

 

1.36

%

 

$

74,518

 

 

$

91

 

 

 

0.48

%

Money Market

 

 

403,300

 

 

 

2,655

 

 

 

2.61

%

 

 

432,384

 

 

 

2,519

 

 

 

2.34

%

 

 

612,743

 

 

 

1,376

 

 

 

0.89

%

Saving deposits

 

 

123,709

 

 

 

249

 

 

 

0.80

%

 

 

111,214

 

 

 

57

 

 

 

0.21

%

 

 

147,349

 

 

 

62

 

 

 

0.17

%

Time deposits, $250,000 and under

 

 

1,285,320

 

 

 

14,090

 

 

 

4.35

%

 

 

1,221,760

 

 

 

12,391

 

 

 

4.07

%

 

 

566,730

 

 

 

1,221

 

 

 

0.85

%

Time deposits, greater than $250,000

 

 

717,026

 

 

 

7,759

 

 

 

4.29

%

 

 

709,803

 

 

 

6,778

 

 

 

3.83

%

 

 

531,655

 

 

 

1,239

 

 

 

0.92

%

Total interest-bearing deposits

 

 

2,584,680

 

 

 

24,954

 

 

 

3.83

%

 

 

2,534,950

 

 

 

21,947

 

 

 

3.47

%

 

 

1,932,995

 

 

 

3,989

 

 

 

0.82

%

FHLB advances

 

 

150,000

 

 

 

440

 

 

 

1.16

%

 

 

160,220

 

 

 

579

 

 

 

1.45

%

 

 

239,674

 

 

 

1,020

 

 

 

1.69

%

Long-term debt

 

 

173,923

 

 

 

2,194

 

 

 

5.00

%

 

 

173,780

 

 

 

2,194

 

 

 

5.06

%

 

 

173,345

 

 

 

2,194

 

 

 

5.02

%

Subordinated debentures

 

 

14,848

 

 

 

385

 

 

 

10.29

%

 

 

14,793

 

 

 

356

 

 

 

9.65

%

 

 

14,629

 

 

 

233

 

 

 

6.32

%

Total interest-bearing liabilities

 

 

2,923,451

 

 

 

27,973

 

 

 

3.80

%

 

 

2,883,743

 

 

 

25,076

 

 

 

3.49

%

 

 

2,360,643

 

 

 

7,436

 

 

 

1.25

%

Noninterest-bearing liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing deposits

 

 

571,371

 

 

 

 

 

 

 

 

 

 

 

606,015

 

 

 

 

 

 

 

 

 

 

 

964,867

 

 

 

 

 

 

 

 

 

Other noninterest-bearing liabilities

 

 

67,244

 

 

 

 

 

 

 

 

 

 

 

59,760

 

 

 

 

 

 

 

 

 

 

 

41,003

 

 

 

 

 

 

 

 

 

Total noninterest-bearing liabilities

 

 

638,615

 

 

 

 

 

 

 

 

 

 

 

665,775

 

 

 

 

 

 

 

 

 

 

 

1,005,870

 

 

 

 

 

 

 

 

 

Shareholders' equity

 

 

504,470

 

 

 

 

 

 

 

 

 

 

 

500,062

 

 

 

 

 

 

 

 

 

 

 

474,106

 

 

 

 

 

 

 

 

 

Total liabilities and shareholders' equity

 

$

4,066,536

 

 

 

 

 

 

 

 

 

 

$

4,049,580

 

 

 

 

 

 

 

 

 

 

$

3,840,619

 

 

 

 

 

 

 

 

 

Net interest income / interest rate spreads

 

 

 

 

 

$

27,613

 

 

 

1.98

%

 

 

 

 

 

$

31,949

 

 

 

2.52

%

 

 

 

 

 

$

39,002

 

 

 

3.88

%

Net interest margin

 

 

 

 

 

 

 

 

 

 

2.87

%

 

 

 

 

 

 

 

 

 

 

3.37

%

 

 

 

 

 

 

 

 

 

 

4.31

%

(1)

Includes income and average balances for FHLB stock, term federal funds, interest-bearing time deposits and other miscellaneous interest-bearing assets.

(2)

Interest income and average rates for tax-exempt loans and securities are presented on a tax-equivalent basis.

(3)

Average loan balances include nonaccrual loans and loans held for sale. Interest income on loans includes - amortization of deferred loan fees, net of deferred loan costs.

RBB BANCORP AND SUBSIDIARIES

AVERAGE BALANCE SHEET AND NET INTEREST INCOME

(Unaudited)

 

 

 

For the Nine Months Ended

 

 

 

September 30, 2023

 

 

September 30, 2022

 

 

 

Average

 

 

Interest

 

 

Yield /

 

 

Average

 

 

Interest

 

 

Yield /

 

(tax-equivalent basis, dollars in thousands)

 

Balance

 

 

& Fees

 

 

Rate

 

 

Balance

 

 

& Fees

 

 

Rate

 

Interest-earning assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Federal funds sold, cash equivalents & other (1)

 

$

192,393

 

 

$

7,625

 

 

 

5.30

%

 

$

338,253

 

 

$

2,477

 

 

 

0.98

%

Securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Available for sale (2)

 

 

332,007

 

 

 

10,245

 

 

 

4.13

%

 

 

369,808

 

 

 

4,126

 

 

 

1.49

%

Held to maturity (2)

 

 

5,610

 

 

 

151

 

 

 

3.60

%

 

 

5,909

 

 

 

158

 

 

 

3.57

%

Mortgage loans held for sale

 

 

295

 

 

 

16

 

 

 

7.25

%

 

 

1,624

 

 

 

62

 

 

 

5.10

%

Loans held for investment: (3)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Real estate

 

 

3,041,393

 

 

 

134,790

 

 

 

5.93

%

 

 

2,696,183

 

 

 

107,301

 

 

 

5.32

%

Commercial

 

 

214,618

 

 

 

13,562

 

 

 

8.45

%

 

 

336,630

 

 

 

14,268

 

 

 

5.67

%

Total loans held for investment

 

 

3,256,011

 

 

 

148,352

 

 

 

6.09

%

 

 

3,032,813

 

 

 

121,569

 

 

 

5.36

%

Total interest-earning assets

 

 

3,786,316

 

 

$

166,389

 

 

 

5.88

%

 

 

3,748,407

 

 

$

128,392

 

 

 

4.58

%

Noninterest-earning assets

 

 

244,822

 

 

 

 

 

 

 

 

 

 

 

245,137

 

 

 

 

 

 

 

 

 

Total assets

 

$

4,031,138

 

 

 

 

 

 

 

 

 

 

$

3,993,544

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NOW

 

$

59,476

 

 

$

511

 

 

 

1.15

%

 

$

75,182

 

 

$

185

 

 

 

0.33

%

Money Market

 

 

431,299

 

 

 

7,314

 

 

 

2.27

%

 

 

654,522

 

 

 

2,777

 

 

 

0.57

%

Saving deposits

 

 

118,550

 

 

 

354

 

 

 

0.40

%

 

 

147,033

 

 

 

129

 

 

 

0.12

%

Time deposits, $250,000 and under

 

 

1,141,290

 

 

 

33,906

 

 

 

3.97

%

 

 

573,401

 

 

 

2,698

 

 

 

0.63

%

Time deposits, greater than $250,000

 

 

729,699

 

 

 

20,519

 

 

 

3.76

%

 

 

542,535

 

 

 

2,842

 

 

 

0.70

%

Total interest-bearing deposits

 

 

2,480,314

 

 

 

62,604

 

 

 

3.37

%

 

 

1,992,673

 

 

 

8,631

 

 

 

0.58

%

FHLB advances

 

 

179,707

 

 

 

2,428

 

 

 

1.81

%

 

 

191,136

 

 

 

1,974

 

 

 

1.38

%

Long-term debt

 

 

173,780

 

 

 

6,583

 

 

 

5.06

%

 

 

173,202

 

 

 

6,583

 

 

 

5.08

%

Subordinated debentures

 

 

14,794

 

 

 

1,084

 

 

 

9.80

%

 

 

14,575

 

 

 

571

 

 

 

5.24

%

Total interest-bearing liabilities

 

 

2,848,595

 

 

 

72,699

 

 

 

3.41

%

 

 

2,371,586

 

 

 

17,759

 

 

 

1.00

%

Noninterest-bearing liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing deposits

 

 

624,781

 

 

 

 

 

 

 

 

 

 

 

1,115,153

 

 

 

 

 

 

 

 

 

Other noninterest-bearing liabilities

 

 

58,774

 

 

 

 

 

 

 

 

 

 

 

36,257

 

 

 

 

 

 

 

 

 

Total noninterest-bearing liabilities

 

 

683,555

 

 

 

 

 

 

 

 

 

 

 

1,151,410

 

 

 

 

 

 

 

 

 

Shareholders' equity

 

 

498,988

 

 

 

 

 

 

 

 

 

 

 

470,548

 

 

 

 

 

 

 

 

 

Total liabilities and shareholders' equity

 

$

4,031,138

 

 

 

 

 

 

 

 

 

 

$

3,993,544

 

 

 

 

 

 

 

 

 

Net interest income / interest rate spreads

 

 

 

 

 

$

93,690

 

 

 

2.47

%

 

 

 

 

 

$

110,633

 

 

 

3.58

%

Net interest margin

 

 

 

 

 

 

 

 

 

 

3.31

%

 

 

 

 

 

 

 

 

 

 

3.95

%

(1)

Includes income and average balances for FHLB stock, term federal funds, interest-bearing time deposits and other miscellaneous interest-bearing assets.

(2)

Interest income and average rates for tax-exempt loans and securities are presented on a tax-equivalent basis.

(3)

Average loan balances include nonaccrual loans and loans held for sale. Interest income on loans includes - amortization of deferred loan fees, net of deferred loan costs.

RBB BANCORP AND SUBSIDIARIES

SELECTED FINANCIAL HIGHLIGHTS

(Unaudited)

 

 

 

For the Three Months Ended

 

 

 

September 30,

 

 

June 30,

 

 

September 30,

 

 

 

2023

 

 

2023

 

 

2022

 

Per share data (common stock)

 

 

 

 

 

 

 

 

 

 

 

 

Book value

 

$

26.64

 

 

$

26.34

 

 

$

24.82

 

Tangible book value (1)

 

$

22.72

 

 

$

22.40

 

 

$

20.85

 

Performance ratios

 

 

 

 

 

 

 

 

 

 

 

 

Return on average assets, annualized

 

 

1.17

%

 

 

1.08

%

 

 

1.72

%

Return on average shareholders' equity, annualized

 

 

9.41

%

 

 

8.78

%

 

 

13.93

%

Return on average tangible common equity, annualized (1)

 

 

11.04

%

 

 

10.33

%

 

 

16.58

%

Noninterest income to average assets, annualized

 

 

0.75

%

 

 

0.25

%

 

 

0.26

%

Noninterest expense to average assets, annualized

 

 

1.65

%

 

 

1.83

%

 

 

1.72

%

Yield on average earning assets

 

 

5.78

%

 

 

6.01

%

 

 

5.13

%

Cost of average total deposits

 

 

3.14

%

 

 

2.80

%

 

 

0.55

%

Cost of average interest-bearing deposits

 

 

3.83

%

 

 

3.47

%

 

 

0.82

%

Cost of average interest-bearing liabilities

 

 

3.80

%

 

 

3.49

%

 

 

1.25

%

Accretion on loans to average earning assets

 

 

0.00

%

 

 

0.04

%

 

 

0.01

%

Net interest spread

 

 

1.98

%

 

 

2.52

%

 

 

3.88

%

Net interest margin

 

 

2.87

%

 

 

3.37

%

 

 

4.31

%

Efficiency ratio (2)

 

 

47.78

%

 

 

53.80

%

 

 

40.22

%

Common stock dividend payout ratio

 

 

25.40

%

 

 

27.59

%

 

 

15.91

%

(1)

Reconciliations of the non–GAAP measures are set forth at the end of this press release.

(2)

Ratio calculated by dividing noninterest expense by the sum of net interest income before provision for credit losses and noninterest income.

RBB BANCORP AND SUBSIDIARIES

SELECTED FINANCIAL HIGHLIGHTS

(Unaudited)

 

 

 

For the Nine Months Ended September 30,

 

 

 

2023

 

 

2022

 

Per share data (common stock)

 

 

 

 

 

 

 

 

Book value

 

$

26.64

 

 

$

24.82

 

Tangible book value (1)

 

$

22.72

 

 

$

20.85

 

Performance ratios

 

 

 

 

 

 

 

 

Return on average assets, annualized

 

 

1.12

%

 

 

1.57

%

Return on average shareholders' equity, annualized

 

 

9.08

%

 

 

13.28

%

Return on average tangible common equity, annualized (1)

 

 

10.68

%

 

 

15.80

%

Noninterest income to average assets, annualized

 

 

0.42

%

 

 

0.30

%

Noninterest expense to average assets, annualized

 

 

1.80

%

 

 

1.69

%

Yield on average earning assets

 

 

5.88

%

 

 

4.58

%

Cost of average deposits

 

 

2.70

%

 

 

0.37

%

Cost of average interest-bearing deposits

 

 

3.37

%

 

 

0.58

%

Cost of average interest-bearing liabilities

 

 

3.41

%

 

 

1.00

%

Accretion on loans to average earning assets

 

 

0.02

%

 

 

0.02

%

Net interest spread

 

 

2.47

%

 

 

3.58

%

Net interest margin

 

 

3.31

%

 

 

3.95

%

Efficiency ratio (2)

 

 

51.13

%

 

 

42.16

%

Common stock dividend payout ratio

 

 

26.97

%

 

 

17.21

%

(1)

Reconciliations of the non–GAAP measures are set forth at the end of this press release.

(2)

Ratio calculated by dividing noninterest expense by the sum of net interest income before provision for credit losses and noninterest income.

RBB BANCORP AND SUBSIDIARIES

SELECTED FINANCIAL HIGHLIGHTS

(Unaudited)

(Dollars in thousands)

 

 

 

As of

 

 

 

September 30,

 

 

June 30,

 

 

September 30,

 

 

 

2023

 

 

2023

 

 

2022

 

Credit Quality Data:

 

 

 

 

 

 

 

 

 

 

 

 

Loans 30-89 days past due

 

$

19,662

 

 

$

7,242

 

 

$

39,938

 

Loans 30-89 days past due to total loans

 

 

0.63

%

 

 

0.23

%

 

 

1.24

%

Nonperforming loans

 

$

40,146

 

 

$

41,609

 

 

$

11,503

 

Nonperforming loans to total loans

 

 

1.29

%

 

 

1.30

%

 

 

0.36

%

Nonperforming assets

 

$

40,430

 

 

$

42,186

 

 

$

11,796

 

Nonperforming assets to total assets

 

 

0.99

%

 

 

1.04

%

 

 

0.30

%

Special mention loans

 

$

31,212

 

 

$

24,150

 

 

$

21,569

 

Special mention loans to total loans

 

 

1.00

%

 

 

0.76

%

 

 

0.67

%

Substandard loans

 

$

71,401

 

 

$

74,065

 

 

$

52,118

 

Substandard loans to total loans

 

 

2.29

%

 

 

2.32

%

 

 

1.62

%

Allowance for credit losses to total loans

 

 

1.36

%

 

 

1.35

%

 

 

1.12

%

Allowance for credit losses to nonperforming loans

 

 

105.69

%

 

 

102.94

%

 

 

313.37

%

Net charge-offs (recoveries)

 

$

2,206

 

 

$

580

 

 

$

(127

)

Net charge-offs to average loans (for the quarter-to-date period)

 

 

0.28

%

 

 

0.07

%

 

 

-0.02

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital ratios

 

 

 

 

 

 

 

 

 

 

 

 

Tangible common equity to tangible assets (1)

 

 

10.80

%

 

 

10.64

%

 

 

10.35

%

Tier 1 leverage ratio

 

 

11.77

%

 

 

11.60

%

 

 

11.47

%

Tier 1 common capital to risk-weighted assets

 

 

17.78

%

 

 

16.91

%

 

 

15.52

%

Tier 1 capital to risk-weighted assets

 

 

18.36

%

 

 

17.46

%

 

 

16.06

%

Total capital to risk-weighted assets

 

 

26.37

%

 

 

25.27

%

 

 

23.72

%

(1)

Reconciliations of the non-GAAP measures are set forth at the end of this press release.

RBB BANCORP AND SUBSIDIARIES

SELECTED FINANCIAL HIGHLIGHTS

(Unaudited)

 

Loan Portfolio Detail

 

As of September 30, 2023

 

 

As of June 30, 2023

 

 

As of September 30, 2022

 

(dollars in thousands)

 

$

 

 

%

 

 

$

 

 

%

 

 

$

 

 

%

 

Loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial and industrial

 

$

127,655

 

 

 

4.1

%

 

$

131,456

 

 

 

4.1

%

 

$

204,817

 

 

 

6.4

%

SBA

 

 

50,420

 

 

 

1.6

%

 

 

53,459

 

 

 

1.7

%

 

 

61,934

 

 

 

1.9

%

Construction and land development

 

 

259,778

 

 

 

8.3

%

 

 

256,916

 

 

 

8.0

%

 

 

353,473

 

 

 

11.0

%

Commercial real estate (1)

 

 

1,164,210

 

 

 

37.3

%

 

 

1,183,396

 

 

 

37.0

%

 

 

1,220,791

 

 

 

37.9

%

Single-family residential mortgages

 

 

1,505,307

 

 

 

48.2

%

 

 

1,554,713

 

 

 

48.7

%

 

 

1,356,342

 

 

 

42.1

%

Other loans

 

 

13,582

 

 

 

0.5

%

 

 

16,055

 

 

 

0.5

%

 

 

23,556

 

 

 

0.7

%

Total loans (2)

 

$

3,120,952

 

 

 

100.0

%

 

$

3,195,995

 

 

 

100.0

%

 

$

3,220,913

 

 

 

100.0

%

Allowance for credit losses

 

 

(42,430

)

 

 

 

 

 

 

(43,092

)

 

 

 

 

 

 

(36,047

)

 

 

 

 

Total loans, net

 

$

3,078,522

 

 

 

 

 

 

$

3,152,903

 

 

 

 

 

 

$

3,184,866

 

 

 

 

 

(1)

Includes non-farm and non-residential loans, multi-family residential loans and non-owner occupied single family residential loans.

(2)

Net of discounts and deferred fees and costs.

Non-GAAP Financial Measures

Tangible Book Value Reconciliations

The tangible book value per share is a non-GAAP disclosure. Management measures the tangible book value per share to assess the Company’s capital strength and business performance and believes these are helpful to investors as additional tool for further understanding our performance. The following is a reconciliation of tangible book value to the Company shareholders’ equity computed in accordance with GAAP, as well as a calculation of tangible book value per share as of September 30, 2023, June 30, 2023, and September 30, 2022.

 

 

 

 

 

 

 

 

 

 

 

 

(dollars in thousands, except share and per share data)

 

September 30, 2023

 

 

June 30, 2023

 

 

September 30, 2022

 

Tangible common equity:

 

 

 

 

 

 

 

 

 

 

 

 

Total shareholders' equity

 

$

506,003

 

 

$

500,290

 

 

$

471,799

 

Adjustments

 

 

 

 

 

 

 

 

 

 

 

 

Goodwill

 

 

(71,498

)

 

 

(71,498

)

 

 

(71,498

)

Core deposit intangible

 

 

(3,010

)

 

 

(3,246

)

 

 

(3,971

)

Tangible common equity

 

$

431,495

 

 

$

425,546

 

 

$

396,330

 

Tangible assets:

 

 

 

 

 

 

 

 

 

 

 

 

Total assets-GAAP

 

$

4,069,354

 

 

$

4,075,618

 

 

$

3,905,229

 

Adjustments

 

 

 

 

 

 

 

 

 

 

 

 

Goodwill

 

 

(71,498

)

 

 

(71,498

)

 

 

(71,498

)

Core deposit intangible

 

 

(3,010

)

 

 

(3,246

)

 

 

(3,971

)

Tangible assets

 

$

3,994,846

 

 

$

4,000,874

 

 

$

3,829,760

 

Common shares outstanding

 

 

18,995,303

 

 

 

18,995,303

 

 

 

19,011,672

 

Tangible common equity to tangible assets ratio

 

 

10.80

%

 

 

10.64

%

 

 

10.35

%

Book value per share

 

$

26.64

 

 

$

26.34

 

 

$

24.82

 

Tangible book value per share

 

$

22.72

 

 

$

22.40

 

 

$

20.85

 

Return on Average Tangible Common Equity

Management measures return on average tangible common equity (“ROATCE”) to assess the Company’s capital strength and business performance and believes these are helpful to investors as an additional tool for further understanding our performance. Tangible equity excludes goodwill and other intangible assets (excluding mortgage servicing rights), and is reviewed by banking and financial institution regulators when assessing a financial institution’s capital adequacy. This non-GAAP financial measure should not be considered a substitute for operating results determined in accordance with GAAP and may not be comparable to other similarly titled measures used by other companies. The following table reconciles ROATCE to its most comparable GAAP measure:

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

September 30,

 

 

September 30,

 

(dollars in thousands)

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Net income available to common shareholders

 

$

11,965

 

 

$

16,652

 

 

$

33,884

 

 

$

46,746

 

Average shareholders' equity

 

 

504,470

 

 

 

474,106

 

 

 

498,988

 

 

 

470,548

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Goodwill

 

 

(71,498

)

 

 

(71,498

)

 

 

(71,498

)

 

 

(70,763

)

Core deposit intangible

 

 

(3,165

)

 

 

(4,154

)

 

 

(3,398

)

 

 

(4,215

)

Adjusted average tangible common equity

 

$

429,807

 

 

$

398,454

 

 

$

424,092

 

 

$

395,570

 

Return on average tangible common equity

 

 

11.04

%

 

 

16.58

%

 

 

10.68

%

 

 

15.80

%

 

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