RBB Bancorp Announces Appointment of Lynn
Hopkins as Executive Vice President and Chief Financial
Officer
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 March 31, 2024.
First Quarter 2024 Highlights
- Net income totaled $8.0 million, or $0.43 diluted earnings per
share.
- Return on average assets of 0.81%, compared to 1.20% for last
quarter.
- Net interest margin of 2.69%, down 4 basis points, compared to
2.73% for last quarter.
- Return on average common equity of 6.30% and return on average
tangible common equity(1) of 7.37%, down from 9.48% and 11.12% for
last quarter.
- Board authorized a stock repurchase program for up to 1 million
shares of common stock.
- Repurchased 80,285 shares of common stock for $1.5 million
during the first quarter.
- Book value and tangible book value per share(1) increased to
$27.67 and $23.68, up from $27.47 and $23.48 at the end of last
quarter.
The Company reported net income of $8.0 million, or $0.43
diluted earnings per share, for the quarter ended March 31, 2024,
compared to net income of $12.1 million, or $0.64 diluted earnings
per share, for the quarter ended December 31, 2023. The results for
the quarter ended December 31, 2023 included a Community
Development Financial Institution (“CDFI”) Equitable Recovery
Program (“ERP”) award of $5.0 million on a pre-tax basis.
“First, I am happy to share the formal appointment of Lynn
Hopkins as the Company’s Chief Financial Officer. We have sincerely
appreciated her expertise since joining RBB in late 2024 with her
interim title and we now look forward to her ongoing contributions
as an official member of our Company’s leadership team.
“Turning to our first quarter financial performance, our
earnings and margins showed signs of stabilizing in the first
quarter with loan balances remaining flat and our net interest
margin declining just 4 basis points,” said David Morris, CEO of
RBB Bancorp. “While changing expectations about the timing and size
of rate cuts makes forecasting challenging, we are cautiously
optimistic that margins should start to recover as deposit costs
stabilize and loan yields continue to increase.”
“The team has done a good job stabilizing results during a
challenging period,” said Dr. James Kao, Chairman of the Company.
“The Board of Directors believes we are well-positioned to succeed
and enhance shareholder value over the coming quarters.”
(1)
Reconciliations of the non–U.S. generally
accepted accounting principles (“GAAP”) measures included at the
end of this press release.
Net Interest Income and Net Interest Margin
Net interest income was $24.9 million for the first quarter of
2024, compared to $25.7 million for the fourth quarter of 2023. The
$792,000 decrease in net interest income was due to higher interest
expense of $755,000 and lower interest income of $37,000. The
increase in interest expense was due to higher average rates paid
on total interest-bearing liabilities, offset by lower average
balances of total interest-bearing liabilities, including the
impact of the Company’s $55 million redemption of subordinated
notes in the prior quarter.
Net interest margin was 2.69% for the first quarter of 2024, a
decrease of four basis points from 2.73% in the fourth quarter of
2023. The decrease was due to the 16 basis point increase in the
overall cost of funds exceeding the 10 basis point increase in the
yield on average total interest-earning assets. The yield on
average total interest-earning assets increased to 5.92% for the
first quarter of 2024 compared to 5.82% for the fourth quarter of
2023 due mainly to an 11 basis point increase in the yield on
average total loans to 6.07% for the first quarter of 2024 compared
to 5.96% for the fourth quarter of 2023. The 16 basis point
increase in the overall cost of funds was due primarily to a 24
basis point increase in the average cost of total interest-bearing
deposits to 4.32% in the first quarter of 2024, offset by the
positive impact of the Company’s $55 million redemption of
subordinated notes during the fourth quarter of 2023. The cost of
total interest-bearing deposits increased due primarily to
repricing deposits as a result of the higher interest rate
environment and peer bank deposit competition. In addition, while
average noninterest-bearing deposits decreased $7.2 million, the
ratio of average noninterest-bearing deposits to average total
funding sources remained unchanged from the prior quarter at
16%.
Provision for Credit Losses
The Company recorded no provision for credit losses for the
first quarter of 2024 compared to a reversal of its provision for
credit losses of $431,000 in the fourth quarter of 2023. The $0
provision for the first quarter of 2024 took into consideration
factors including: lower specific reserves, changes in the loan
portfolio mix, ongoing uncertainty in the economy related to
inflation and outlook on market interest rates, and credit quality
metrics, including higher nonperforming loans at the end of the
first quarter of 2024 compared to the end of 2023.
Noninterest Income
Noninterest income for the first quarter of 2024 was $3.4
million, a decrease of $4.0 million from $7.4 million in the fourth
quarter of 2023. The decrease was due primarily to the CDFI ERP
award of $5.0 million on a pre-tax basis recognized in the fourth
quarter of 2023 with no similar income in the first quarter of
2024. This decrease was partially offset by gain on the transfer of
loans to other real estate owned (“OREO”) of $560,000 and higher
net gains on the sale of OREO of $221,000 (both of which are
included in “Gain/(loss) on OREO”). We also recognized higher gain
on sale of loans of $196,000.
Noninterest Expense
Noninterest expense for the first quarter of 2024 was $17.0
million, an increase of $576,000 from $16.4 million for the fourth
quarter of 2023. This increase was due primarily to higher salaries
and employee benefits expenses of $1.1 million, partially offset by
lower legal and professional fees of $411,000 and lower insurance
and regulatory assessments of $140,000. The increase in salaries
and benefits is attributed to the timing of taxes and benefits,
which are higher in the first quarter of the year. The annualized
operating expense ratio for the first quarter of 2024 was 1.72%, up
from 1.63% for the fourth quarter of 2023.
Income Taxes
The effective tax rate was 28.8% for the first quarter of 2024
and 29.4% for the fourth quarter of 2023. The effective tax rate
includes the impact of lower income housing tax credits. The
effective tax rate for 2024 is estimated to be 29.5%.
Balance Sheet
At March 31, 2024, total assets were $3.9 billion, a $148.0
million decrease compared to December 31, 2023, and a $232.1
million decrease compared to March 31, 2023.
Loan and Securities Portfolio
Loans held for investment, net of deferred fees and discounts,
totaled $3.0 billion as of March 31, 2024, a decrease of $4.5
million from December 31, 2023. The decrease from December 31, 2023
was primarily due to a $24.3 million decrease in single-family
residential mortgages, an $8.7 million decrease in commercial and
industrial loans, and a $1.4 million decrease in other loans,
partially offset by a $16.6 million increase in construction and
land development loans, a $10.6 million increase in commercial real
estate loans, and a $2.6 million increase in Small Business
Administration (“SBA”) loans. The loan to deposit ratio was 98.6%
at March 31, 2024 compared to 94.2% at December 31, 2023 and 104.7%
at March 31, 2023.
As of March 31, 2024, available-for-sale securities totaled
$335.2 million, including $288.3 million maturing in over 12
months. As of March 31, 2024, gross unrealized losses totaled $30.2
million, a $2.1 million increase due to increases in market
interest rates, compared to gross unrealized losses of $28.1
million as of December 31, 2023.
Deposits
Total deposits were $3.0 billion as of March 31, 2024, a $146.4
million, or 4.6%, decrease compared to December 31, 2023. This
decrease was due to a decrease in interest-bearing deposits as
noninterest-bearing deposits remained relatively stable at $539.5
million. The decrease in interest-bearing deposits included a
decrease in time deposits of $156.4 million, offset by an increase
in non-maturity deposits of $10.1 million. The decrease in time
deposits included a $171.9 million decrease in wholesale deposits
(brokered deposits and collateralized State of California
certificates of deposit). Wholesale deposits totaled $163.0 million
at March 31, 2024 and $334.9 million at December 31, 2023.
Credit Quality
Nonperforming assets totaled $37.0 million, or 0.95% of total
assets, at March 31, 2024, compared to $31.6 million, or 0.79% of
total assets, at December 31, 2023. The $5.4 million increase in
nonperforming assets was due to loans placed on non-accrual status
of $7.7 million, consisting primarily of single-family residential
mortgages, and new OREO of $1.1 million (included in “Accrued
interest and other assets”), partially offset by payoffs or
paydowns of $3.0 million of non-accrual loans, loans that migrated
to accruing status of $257,000, and non-accrual loan charge-offs of
$125,000.
Special mention loans totaled $20.6 million, or 0.68% of total
loans, at March 31, 2024, compared to $32.8 million, or 1.08% of
total loans, at December 31, 2023. The decrease was due to upgrades
to pass loans of $6.5 million, a downgrade to substandard loans of
$3.9 million, and loan paydowns of $2.7 million, partially offset
by additional special mention loans of $674,000.
Substandard loans totaled $57.2 million, or 1.89% of total
loans, at March 31, 2024, compared to $61.1 million, or 2.02% of
total loans, at December 31, 2023. The $3.9 million decrease was
due to loan paydowns of $11.0 million, upgrades to pass loans of
$277,000, an upgrade to special mention loans of $200,000, and
substandard loan charge-offs of $125,000, partially offset by a
downgrade from special mention loans of $3.9 million and additional
substandard loans of $3.8 million.
30-89 day delinquent loans, excluding nonperforming loans,
increased $4.1 million to $21.0 million as of March 31, 2024
compared to $16.8 million as of December 31, 2023. The increase in
past due loans was due to $19.6 million in new delinquent loans,
partially offset by $7.3 million in loans that converted to
non-accrual status, $5.9 million in loans that migrated back to
past due for less than 30 days, and $2.2 million in loan payoffs or
paydowns.
As of March 31, 2024, the allowance for credit losses totaled
$42.4 million and was comprised of an allowance for loan losses of
$41.7 million and a reserve for unfunded commitments of $671,000
(included in “Accrued interest and other liabilities”). This
compares to the allowance for credit losses of $42.5 million
comprised of an allowance for loan losses of $41.9 million and a
reserve for unfunded commitments of $640,000 at December 31, 2023.
The allowance for credit losses decreased $184,000 during the first
quarter of 2024 due to net charge-offs. The allowance for loan
losses as a percentage of loans held for investment was 1.38% at
March 31, 2024, unchanged from December 31, 2023. The allowance for
loan losses as a percentage of nonperforming loans was 116% at
March 31, 2024, a decrease from 133% at December 31, 2023.
(dollars in thousands)
For the Three Months Ended
March 31, 2024
Allowance For Loan
Losses
Reserve for Unfunded Loan
Commitments
Allowance For Credit
Losses
Beginning balance
$
41,903
$
640
$
42,543
(Reversal)/provision for credit losses
(31
)
31
—
Less loans charged-off
(214
)
—
(214
)
Recoveries on loans charged-off
30
—
30
Ending balance
$
41,688
$
671
$
42,359
Shareholders' Equity and Capital Actions
At March 31, 2024, total shareholders' equity was $514.0
million, a $2.7 million increase compared to December 31, 2023, and
a $19.2 million increase compared to March 31, 2023. The increase
in shareholders' equity for the first quarter was due to net
earnings of $8.0 million and $542,000 from the exercise of stock
options, offset by dividends paid of $3.0 million, share
repurchases totaling $1.5 million, and higher net unrealized losses
on available-for-sale securities of $1.5 million. As a result, book
value per share increased to $27.67 from $27.47 and tangible book
value per share(1) increased to $23.68 from $23.48.
On April 18, 2024, the Company announced the Board of Directors
had declared a common stock cash dividend of $0.16 per share,
payable on May 13, 2024 to shareholders of record on May 1,
2024.
On February 29, 2024, the Board of Directors authorized the
repurchase of up to 1,000,000 shares of common stock, of which
956,465 shares were available as of March 31, 2024. 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 Securities and Exchange
Commission (“SEC”) Rules 10b5-1 and 10b-8. The Company repurchased
80,285 shares at a weighted average share price of $18.39 during
the first quarter of 2024.
Appointment of Lynn Hopkins as Executive Vice President and
Chief Financial Officer
The Company appointed Ms. Lynn M. Hopkins as Executive Vice
President and Chief Financial Officer of the Bank and RBB Bancorp
effective April 22, 2024. With over 30 years of financial services
industry experience, Ms. Hopkins brings a wealth of knowledge as a
chief financial officer at various financial institutions,
including expertise in banking risk management, corporate
governance and operations, strategic planning and forecasting,
liquidity, treasury and asset liability risk management, mergers
and acquisitions, integration and conversion activities, technical
accounting, and additional experience that will be beneficial to
the Company.
(1)
Reconciliations of the non–U.S. generally
accepted accounting principles (“GAAP”) measures included at the
end of this press release.
Corporate Overview
RBB Bancorp is a community-based financial holding company
headquartered in Los Angeles, California. As of March 31, 2024, the
Company had total assets of $3.9 billion. Its wholly-owned
subsidiary, Royal Business Bank, is a full service commercial bank,
which provides consumer and business banking services to
predominately 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, 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 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, April 23, 2024, to discuss
the Company’s first quarter 2024 financial results.
To listen to the conference call, please dial 1-888-506-0062 or
1-973-528-0011, the Participant ID code is 123643, conference ID
RBBQ124. A replay of the call will be made available at
1-877-481-4010 or 1-919-882-2331, the passcode is 50324,
approximately one hour after the conclusion of the call and will
remain available through May 6, 2024.
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, the Bank’s ability to comply with the requirements of
the consent order we have entered into with the Federal Deposit
Insurance Corporation (“FDIC”) and the California Department of
Financial Protection and Innovation (“DFPI”) and the possibility
that we may be required to incur additional expenses or be subject
to additional regulatory action, if we are unable to timely and
satisfactorily comply with the consent order; the effectiveness of
the Company’s internal control over financial reporting and
disclosure controls and procedures; the potential for additional
material weaknesses in the Company’s internal controls over
financial reporting or other potential control deficiencies of
which the Company is not currently aware or which have not been
detected; 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 United States (“U.S.”) federal budget
or debt or turbulence or uncertainly in domestic of foreign
financial markets; the strength of the U.S. 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; 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 U.S. 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 U.S. and abroad;
public health crises and pandemics, 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 FDIC insurance assessment rate and
the rules and regulations related to the calculation of the FDIC
insurance assessments; 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 Company’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
DFPI; 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 for
the year ended December 31, 2023, 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)
March 31,
December 31,
March 31,
2024
2023
2023
Assets
Cash and due from banks
$
269,243
$
431,373
$
230,703
Interest-bearing deposits in other
financial institutions
600
600
600
Investment securities available for
sale
335,194
318,961
293,371
Investment securities held to maturity
5,204
5,209
5,722
Mortgage loans held for sale
3,903
1,911
—
Loans held for investment
3,027,361
3,031,861
3,342,416
Allowance for loan losses
(41,688
)
(41,903
)
(43,071
)
Net loans held for investment
2,985,673
2,989,958
3,299,345
Premises and equipment, net
25,363
25,684
27,040
Federal Home Loan Bank (FHLB) stock
15,000
15,000
15,000
Cash surrender value of bank owned life
insurance
59,101
58,719
57,645
Goodwill
71,498
71,498
71,498
Servicing assets
7,794
8,110
9,159
Core deposit intangibles
2,594
2,795
3,481
Right-of-use assets
31,231
29,803
29,931
Accrued interest and other assets
65,608
66,404
66,589
Total assets
$
3,878,006
$
4,026,025
$
4,110,084
Liabilities and shareholders'
equity
Deposits:
Noninterest-bearing demand
$
539,517
$
539,621
$
672,177
Savings, NOW and money market accounts
642,840
632,729
617,100
Time deposits, $250,000 and under
1,083,898
1,190,821
1,122,687
Time deposits, greater than $250,000
762,074
811,589
739,098
Total deposits
3,028,329
3,174,760
3,151,062
FHLB advances
150,000
150,000
220,000
Long-term debt, net of issuance costs
119,243
119,147
173,730
Subordinated debentures
14,993
14,938
14,774
Lease liabilities - operating leases
32,690
31,191
31,078
Accrued interest and other liabilities
18,765
24,729
24,683
Total liabilities
3,364,020
3,514,765
3,615,327
Shareholders' equity:
Shareholders' equity
534,896
530,700
514,563
Non-controlling interest
72
72
72
Accumulated other comprehensive loss, net
of tax
(20,982
)
(19,512
)
(19,878
)
Total shareholders' equity
513,986
511,260
494,757
Total liabilities and shareholders’
equity
$
3,878,006
$
4,026,025
$
4,110,084
RBB BANCORP AND
SUBSIDIARIES
CONDENSED CONSOLIDATED
STATEMENTS OF INCOME
(Unaudited)
(In thousands, except share
and per share data)
For the Three Months
Ended
March 31, 2024
December 31, 2023
March 31, 2023
Interest and dividend income:
Interest and fees on loans
$
45,547
$
45,895
$
49,942
Interest on interest-bearing deposits
5,040
4,650
791
Interest on investment securities
3,611
3,706
2,536
Dividend income on FHLB stock
331
312
265
Interest on federal funds sold and
other
266
269
217
Total interest and dividend income
54,795
54,832
53,751
Interest expense:
Interest on savings deposits, NOW and
money market accounts
4,478
4,026
2,296
Interest on time deposits
23,322
22,413
13,406
Interest on long-term debt and
subordinated debentures
1,679
2,284
2,539
Interest on other borrowed funds
439
440
1,409
Total interest expense
29,918
29,163
19,650
Net interest income before
provision/(reversal) for credit losses
24,877
25,669
34,101
Provision/(reversal) for credit losses
—
(431
)
2,014
Net interest income after
provision/(reversal) for credit losses
24,877
26,100
32,087
Noninterest income:
Service charges and fees
992
972
1,023
Gain on sale of loans
312
116
29
Loan servicing fees, net of
amortization
589
616
731
Increase in cash surrender value of life
insurance
382
374
335
Gain/(loss) on OREO
724
(57
)
—
Other income
373
5,373
244
Total noninterest income
3,372
7,394
2,362
Noninterest expense:
Salaries and employee benefits
9,927
8,860
9,864
Occupancy and equipment expenses
2,443
2,387
2,398
Data processing
1,420
1,357
1,299
Legal and professional
880
1,291
3,013
Office expenses
356
349
375
Marketing and business promotion
172
241
300
Insurance and regulatory assessments
982
1,122
504
Core deposit premium
201
215
237
Other expenses
588
571
921
Total noninterest expense
16,969
16,393
18,911
Income before income taxes
11,280
17,101
15,538
Income tax expense
3,244
5,028
4,568
Net income
$
8,036
$
12,073
$
10,970
Net income per share
Basic
$
0.43
$
0.64
$
0.58
Diluted
$
0.43
$
0.64
$
0.58
Cash Dividends declared per common
share
$
0.16
$
0.16
$
0.16
Weighted-average common shares
outstanding
Basic
18,601,277
18,938,005
18,985,846
Diluted
18,666,683
18,948,087
19,049,685
RBB BANCORP AND
SUBSIDIARIES
AVERAGE BALANCE SHEET AND NET
INTEREST INCOME
(Unaudited)
For the Three Months
Ended
March 31, 2024
December 31, 2023
March 31, 2023
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)
$
379,979
$
5,637
5.97
%
$
348,940
$
5,231
5.95
%
$
110,750
$
1,272
4.66
%
Securities
Available for sale (2)
320,015
3,589
4.51
%
329,426
3,684
4.44
%
277,206
2,510
3.67
%
Held to maturity (2)
5,207
46
3.55
%
5,212
46
3.50
%
5,727
51
3.61
%
Mortgage loans held for sale
1,215
26
8.61
%
1,609
29
7.15
%
88
1
6.45
%
Loans held for investment: (3)
Real estate
2,837,603
41,765
5.92
%
2,870,227
41,950
5.80
%
3,092,667
44,903
5.89
%
Commercial
179,605
3,756
8.41
%
183,396
3,916
8.47
%
249,911
5,038
8.18
%
Total loans held for investment
3,017,208
45,521
6.07
%
3,053,623
45,866
5.96
%
3,342,578
49,941
6.06
%
Total interest-earning assets
3,723,624
$
54,819
5.92
%
3,738,810
$
54,856
5.82
%
3,736,349
$
53,775
5.84
%
Total noninterest-earning assets
246,341
253,385
239,956
Total average assets
$
3,969,965
$
3,992,195
$
3,976,305
Interest-bearing liabilities
NOW
$
58,946
$
298
2.03
%
$
54,378
$
214
1.56
%
$
63,401
$
108
0.69
%
Money Market
411,751
3,526
3.44
%
422,582
3,252
3.05
%
458,824
2,140
1.89
%
Saving deposits
157,227
654
1.67
%
148,354
560
1.50
%
120,695
49
0.16
%
Time deposits, $250,000 and under
1,175,804
13,805
4.72
%
1,162,014
13,244
4.52
%
912,694
7,425
3.30
%
Time deposits, greater than $250,000
785,172
9,517
4.88
%
781,833
9,169
4.65
%
762,770
5,981
3.18
%
Total interest-bearing deposits
2,588,900
27,800
4.32
%
2,569,161
26,439
4.08
%
2,318,384
15,703
2.75
%
FHLB advances
150,000
439
1.18
%
150,000
440
1.16
%
229,778
1,409
2.49
%
Long-term debt
119,180
1,295
4.37
%
155,536
1,895
4.83
%
173,635
2,194
5.12
%
Subordinated debentures
14,957
384
10.33
%
14,902
389
10.36
%
14,739
344
9.47
%
Total interest-bearing liabilities
2,873,037
29,918
4.19
%
2,889,599
29,163
4.00
%
2,736,536
19,650
2.91
%
Noninterest-bearing liabilities
Noninterest-bearing deposits
528,346
535,554
698,351
Other noninterest-bearing liabilities
55,795
61,858
49,118
Total noninterest-bearing liabilities
584,141
597,412
747,469
Shareholders' equity
512,787
505,184
492,300
Total liabilities and shareholders'
equity
$
3,969,965
$
3,992,195
$
3,976,305
Net interest income / interest rate
spreads
$
24,901
1.73
%
$
25,693
1.82
%
$
34,125
2.93
%
Net interest margin
2.69
%
2.73
%
3.70
%
Total cost of deposits
$
3,117,246
$
27,800
3.59
%
$
3,104,715
$
26,439
3.38
%
$
3,016,735
$
15,703
2.11
%
Total cost of funds
$
3,401,383
$
29,918
3.54
%
$
3,425,153
$
29,163
3.38
%
$
3,434,887
$
19,650
2.32
%
(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 non-accrual
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
March 31,
December 31,
March 31,
2024
2023
2023
Per share data (common stock)
Book value
$
27.67
$
27.47
$
26.05
Tangible book value (1)
$
23.68
$
23.48
$
22.10
Performance ratios
Return on average assets, annualized
0.81
%
1.20
%
1.12
%
Return on average shareholders' equity,
annualized
6.30
%
9.48
%
9.04
%
Return on average tangible common equity,
annualized (1)
7.37
%
11.12
%
10.66
%
Noninterest income to average assets,
annualized
0.34
%
0.73
%
0.24
%
Noninterest expense to average assets,
annualized
1.72
%
1.63
%
1.93
%
Yield on average earning assets
5.92
%
5.82
%
5.84
%
Yield on average loans
6.07
%
5.96
%
6.06
%
Cost of average total deposits (2)
3.59
%
3.38
%
2.11
%
Cost of average interest-bearing
deposits
4.32
%
4.08
%
2.75
%
Cost of average interest-bearing
liabilities
4.19
%
4.00
%
2.91
%
Net interest spread
1.73
%
1.82
%
2.93
%
Net interest margin
2.69
%
2.73
%
3.70
%
Efficiency ratio (3)
60.07
%
49.58
%
51.86
%
Common stock dividend payout ratio
37.21
%
25.00
%
27.59
%
(1)
Non-GAAP measure. See Non–GAAP
reconciliations set forth at the end of this press release.
(2)
Total deposits include non-interest
bearing deposits and interest-bearing deposits.
(3)
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)
At or for the quarter
ended
March 31,
December 31,
March 31,
2024
2023
2023
Credit Quality Data:
Special mention loans
$
20,580
$
32,842
$
89,029
Special mention loans to total loans
0.68
%
1.08
%
2.66
%
Substandard loans
$
57,170
$
61,099
$
77,688
Substandard loans to total loans
1.89
%
2.02
%
2.32
%
Loans 30-89 days past due, excluding
nonperforming loans
$
20,950
$
16,803
$
14,288
Loans 30-89 days past due, excluding
nonperforming loans, to total loans
0.69
%
0.55
%
0.43
%
Nonperforming loans
$
35,935
$
31,619
$
26,436
OREO
1,071
—
577
Nonperforming assets
$
37,006
$
31,619
$
27,013
Nonperforming loans to total loans
1.19
%
1.04
%
0.79
%
Nonperforming assets to total assets
0.95
%
0.79
%
0.66
%
Allowance for loan losses
$
41,688
$
41,903
$
43,071
Allowance for loan losses to total
loans
1.38
%
1.38
%
1.29
%
Allowance for loan losses to nonperforming
loans
116.01
%
132.52
%
162.93
%
Net charge-offs
$
184
$
109
$
157
Net charge-offs to average loans
0.02
%
0.01
%
0.02
%
Capital ratios (1)
Tangible common equity to tangible assets
(2)
11.56
%
11.06
%
10.40
%
Tier 1 leverage ratio
12.16
%
11.99
%
11.61
%
Tier 1 common capital to risk-weighted
assets
19.10
%
19.07
%
16.33
%
Tier 1 capital to risk-weighted assets
19.72
%
19.69
%
16.88
%
Total capital to risk-weighted assets
25.91
%
25.92
%
24.58
%
(1)
March 31, 2024 capital ratios are
preliminary.
(2)
Non-GAAP measure. See Non-GAAP
reconciliations set forth at the end of this press release.
RBB BANCORP AND
SUBSIDIARIES
SELECTED FINANCIAL
HIGHLIGHTS
(Unaudited)
Loan Portfolio Detail
As of March 31, 2024
As of December 31,
2023
As of March 31, 2023
(dollars in thousands)
$
%
$
%
$
%
Loans:
Commercial and industrial
$
121,441
4.0
%
$
130,096
4.3
%
$
156,023
4.7
%
SBA
54,677
1.8
%
52,074
1.7
%
58,531
1.7
%
Construction and land development
198,070
6.5
%
181,469
6.0
%
281,203
8.4
%
Commercial real estate (1)
1,178,498
38.9
%
1,167,857
38.5
%
1,288,188
38.5
%
Single-family residential mortgages
1,463,497
48.4
%
1,487,796
49.1
%
1,539,982
46.1
%
Other loans
11,178
0.4
%
12,569
0.4
%
18,489
0.6
%
Total loans (2)
$
3,027,361
100.0
%
$
3,031,861
100.0
%
$
3,342,416
100.0
%
Allowance for credit losses
(41,688
)
(41,903
)
(43,071
)
Total loans, net
$
2,985,673
$
2,989,958
$
3,299,345
(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 of $474, $542, and $91 as of March 31, 2024, December 31,
2023, and March 31, 2023, respectively.
Deposits
As of March 31, 2024
As of December 31,
2023
As of March 31, 2023
(dollars in thousands)
$
%
$
%
$
%
Deposits:
Noninterest-bearing demand
$
539,517
17.8
%
$
539,621
17.0
%
$
672,177
21.3
%
Savings, NOW and money market accounts
642,840
21.2
%
632,729
19.9
%
617,100
19.6
%
Time deposits, $250,000 and under
930,898
30.8
%
935,882
29.5
%
752,803
23.9
%
Time deposits, greater than $250,000
752,074
24.8
%
731,589
23.0
%
739,098
23.5
%
Wholesale deposits (1)
163,000
5.4
%
334,939
10.6
%
369,884
11.7
%
Total deposits
$
3,028,329
100.0
%
$
3,174,760
100.0
%
$
3,151,062
100.0
%
(1)
Includes brokered deposits and
collateralized State of California certificates of deposit.
Non-GAAP Reconciliations
Tangible Book Value Reconciliations
Tangible book value per share is a non-GAAP disclosure.
Management measures tangible book value per share to assess the
Company’s capital strength and business performance and believes
this is helpful to investors as additional tools 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 March 31, 2024, December 31, 2023, and March
31, 2023.
(dollars in thousands, except share and
per share data)
March 31, 2024
December 31, 2023
March 31, 2023
Tangible common equity:
Total shareholders' equity
$
513,986
$
511,260
$
494,757
Adjustments
Goodwill
(71,498
)
(71,498
)
(71,498
)
Core deposit intangible
(2,594
)
(2,795
)
(3,481
)
Tangible common equity
$
439,894
$
436,967
$
419,778
Tangible assets:
Total assets-GAAP
$
3,878,006
$
4,026,025
$
4,110,084
Adjustments
Goodwill
(71,498
)
(71,498
)
(71,498
)
Core deposit intangible
(2,594
)
(2,795
)
(3,481
)
Tangible assets
$
3,803,914
$
3,951,732
$
4,035,105
Common shares outstanding
18,578,132
18,609,179
18,992,903
Common equity to assets ratio
13.25
%
12.70
%
12.04
%
Tangible common equity to tangible assets
ratio
11.56
%
11.06
%
10.40
%
Book value per share
$
27.67
$
27.47
$
26.05
Tangible book value per share
$
23.68
$
23.48
$
22.10
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 this is 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
(dollars in thousands)
March 31, 2024
December 31, 2023
March 31, 2023
Net income available to common
shareholders
$
8,036
$
12,073
$
10,970
Average shareholders' equity
512,787
505,184
492,300
Adjustments:
Goodwill
(71,498
)
(71,498
)
(71,498
)
Core deposit intangible
(2,726
)
(2,935
)
(3,636
)
Adjusted average tangible common
equity
$
438,563
$
430,751
$
417,166
Return on average common equity
6.30
%
9.48
%
9.04
%
Return on average tangible common
equity
7.37
%
11.12
%
10.66
%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240421164037/en/
Lynn Hopkins, Chief Financial Officer (213)
716-8066 lhopkins@rbbusa.com
RBB Bancorp (NASDAQ:RBB)
Historical Stock Chart
From Nov 2024 to Dec 2024
RBB Bancorp (NASDAQ:RBB)
Historical Stock Chart
From Dec 2023 to Dec 2024
