RBB Bancorp Reports Third Quarter Earnings for 2022

 Conference Call and Webcast Scheduled for Tuesday, October 25, 2022 at 11:00 a.m. Pacific Time/2:00 p.m. Eastern Time

Third Quarter 2022 Highlights

  • Record net income of $16.7 million, or $0.87 diluted earnings per share, increased $1.2 million, or 7.6%, from the prior quarter and increased $1.3 million, or 8.4%, from the third quarter of 2021
  • Loans grew by $176.2 million, or 22.9% annualized, from the end of the prior quarter
  • Declared $0.14 per share quarterly dividend

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, 2022.

The Company reported record net income of $16.7 million, or $0.87 diluted earnings per share, for the three months ended September 30, 2022, compared to net income of $15.5 million, or $0.80 diluted earnings per share, and $15.4 million, or $0.77 diluted earnings per share, for the three months ended June 30, 2022 and September 30, 2021, respectively.

“Increasing rates continued to drive performance to record levels in the third quarter,” said David Morris, President and CEO of RBB Bancorp. “Expenses declined as expected due to the near conclusion of the Board of Directors investigation, and net interest income increased to a record $39.0 million as loans grew and margins improved. We are starting to see pressure on deposit costs which we anticipate will continue over the next few quarters.”

“Royal Business Bank had another quarter of excellent results and loan growth in the third quarter,” said Dr. James Kao, Chairman of RBB Bancorp. “We believe it demonstrates the value of the franchise and the strength of David’s leadership and management's efforts over the past few quarters. We are also pleased to welcome David to the Board of Directors and to his new role as President and CEO of RBB Bancorp.”

Key Performance Ratios

Net income of $16.7 million for the third quarter of 2022 produced an annualized return on average assets ("ROA") of 1.72% and an annualized return on average shareholders' equity ("ROE") of 13.93% compared to an annualized ROA of 1.60% and an annualized ROE of 13.30% for the second quarter of 2022. The efficiency ratio, see definition in Selected Financial Highlights section, for the third quarter of 2022 was 40.22%, compared to 43.47% for the prior quarter.

Net Interest Income and Net Interest Margin

Net interest income, before provision for loan losses, was $39.0 million for the third quarter of 2022, compared to $37.1 million for the second quarter of 2022. The $1.9 million increase was primarily attributable to a $150.6 million decrease in lower-yielding cash and a $211.1 million increase in higher yielding commercial real estate and mortgage loans. Accretion of purchase discounts from prior acquisitions contributed $112,000 to net interest income in the third quarter of 2022, compared to $75,000 in the second quarter of 2022.

Compared to the third quarter of 2021, net interest income, before provision for loan losses, increased $7.4 million from $31.6 million. The $7.4 million increase was primarily attributable to a $202.8 million decrease in lower-yielding cash and a $396.7 million increase in higher yielding commercial real estate and mortgage loans.

Net interest margin was 4.31% for the third quarter of 2022, an increase of 23 basis points from 4.08% in the second quarter of 2022. Loan discount accretion contributed 1 basis point to the net interest margin in the third quarter of 2022 and in the second quarter of 2022.

Noninterest Income

Noninterest income was $2.5 million for the third quarter of 2022, a decrease of $887,000 from $3.4 million in the second quarter of 2022. The decrease was primarily driven by a $757,000 decrease in gain on sale of corporate real estate, a $107,000 decrease in gain on derivatives and a $93,000 decrease in recoveries on purchased loans, partially offset by a $252,000 increase in loan servicing fees during the quarter.

The Company sold $3.8 million in FNMA qualified mortgage loans for a net gain of $135,000 during the third quarter of 2022 compared to $12.6 million in FNMA qualified mortgage loans sold for a net gain of $284,000 during the second quarter of 2022. The Company sold $2.5 million in SBA loans during the third quarter of 2022 for a net gain of $130,000, compared to $1.1 million SBA loans sold for a net gain of $60,000 during the second quarter of 2022.

Compared to the third quarter of 2021, noninterest income decreased by $3.0 million from $5.5 million. The decrease was primarily attributable to a $1.8 million CDFI RRP award received in the third quarter of 2021, a $1.5 million decrease in gain on sale of loans due to rate hikes that caused both sellable loan volume and premium decreases and a $193,000 decrease in gain on derivatives, partially offset by a $662,000 increase in loan servicing fees.

Noninterest Expense

Noninterest expense for the third quarter of 2022 was $16.7 million, compared to $17.6 million for the second quarter of 2022. The $915,000 decrease was primarily attributable to a $1.2 million decrease in legal and professional expenses as the Company is getting close to completing the Board special investigation and a $137,000 decrease in marketing and business promotion expenses, partially offset by a $246,000 increase in directors RSU compensation expense and director fees and a $175,000 increase in occupancy and equipment expenses.

Noninterest expense increased from $14.4 million in the third quarter of 2021. The $2.3 million increase was primarily due to a $789,000 increase in salaries and employee benefits expenses due to new hires and salary adjustments to reflect economic inflation, a reversal of $416,000 valuation allowance on mortgage servicing rights in third quarter of 2021, a $275,000 increase in director RSU compensation expense and travel expense, a $341,000 increase in data processing expenses, a $331,000 increase in legal and professional expenses and a $160,000 increase in occupancy and equipment expenses.

Income Taxes

The effective tax rate was 27.8% for the third quarter of 2022, 29.6% for the second quarter of 2022, and 28.5% for the third quarter of 2021. The Company recognized a tax benefit from stock option exercises of $276,000, $279,000 and $534,000 for the third quarter of 2022, the second quarter of 2022, and the third quarter of 2021, respectively. The Company amended its 2020 tax returns and 2018 California state tax return and recorded a total of $300,000 tax expense reduction in the third quarter of 2022.

Loan and Securities Portfolio

Loans held for investment, net of deferred fees and discounts, totaled $3.22 billion as of September 30, 2022, an increase of $175.0 million from June 30, 2022, and an increase of $380.6 million from September 30, 2021. The increase from the prior quarter was primarily due to a $150.6 million increase in single-family residential mortgage loans and a $60.4 million increase in commercial real estate loans, partially offset by a $33.2 million decrease in commercial and industrial loans and a $3.3 million decrease in construction & land development loans. The increase from September 30, 2021 was primarily due to a $381.6 million increase in single-family residential mortgages and an $81.7 million increase in construction & land development loans offset by a $71.6 million decrease in commercial and industrial loans and a $26.9 million decrease in SBA loans.

During the third quarter of 2022, single-family residential mortgage production was $191.8 million while net payoffs and paydowns were $36.2 million. During the second quarter of 2022, single-family residential mortgage production was $216.9 million while payoffs and paydowns were $66.8 million.

There were $1.2 million mortgage loans held for sale as of September 30, 2022 compared to none as of June 30, 2022 and $15.2 million as of September 30, 2021. The Company originated approximately $1.8 million in FNMA mortgage loans for sale for the third quarter of 2022, compared with $1.2 million during the prior quarter.

In the third quarter of 2022, SBA loan production was $7.7 million and total SBA loan sales were $2.5 million compared to SBA loan production of $1.4 million and total SBA loan sales of $1.1 million in the second quarter of 2022.

As of September 30, 2022, the Bank’s total available-for-sale securities maturing in over 12 months were $237.9 million. As of September 30, 2022 the Bank recorded gross unrealized losses of $32.5 million compared to gross unrealized losses of $2.3 million as of December 31, 2022.

Deposits

Deposits were $3.0 billion at September 30, 2022, which was a decrease of $67.9 million compared to June 30, 2022. During the third quarter of 2022, noninterest-bearing deposits decreased by $128.7 million due to the continued reduction of a single deposit relationship, interest-bearing non-maturity deposits increased by $13.8 million, and time deposits increased by $47.0 million. As of September 30, 2022, there were $105.5 million in brokered CDs, as compared to $50.0 million brokered CDs as of June 30, 2022 and $2.4 million brokered CDs as of September 30, 2021. Compared to September 30, 2021, total deposits decreased by $8.1 million primarily due to a $50.3 million decrease in time deposits and a $49.4 million decrease in interest-bearing non-maturity deposits, partially offset by a $91.5 million increase in noninterest-bearing demand deposits.

Asset Quality

Nonperforming assets totaled $11.8 million, or 0.30% of total assets at September 30, 2022, compared to $14.2 million, or 0.36% of total assets at June 30, 2022. The decrease in nonperforming assets was due to the pay-off of certain nonperforming loans in the third quarter of 2022. Nonperforming assets consist of other real estate owned, loans modified under troubled debt restructurings (“TDR”), non-accrual loans, and loans past due 90 days or more and still accruing interest.

Our 30-89 day delinquent loans, excluding non-accrual loans increased to $39.9 million as of June 30, 2022 compared to $8.3 million as of June 30, 2022. The $31.6 million increase in past due loans was due in part to: one construction loan of $11.3 million on a project that is substantially complete that was delinquent for 52 days due to administrative delays in processing an extension, which was processed as of October 6, 2022, and one commercial real estate loan of $8.8 million that was delinquent for 52 days due to administrative delays in the processing of an extension, which was processed as of October 3, 2022. As of October 21, $14.5 million of loans were 30-89 days delinquent.

In the third quarter of 2022, there were $127,000 in net recoveries, compared to net charge-offs of $53,000 in the second quarter of 2022 and net charge-offs of $317,000 in the third quarter of 2021.

The Company recorded a provision for loan losses of $1.8 million for the third quarter of 2022 which was primarily attributable to loan growth. Provision for loan losses were $915,000 in the second quarter of 2022. Allowance for loan losses continue to include $625,000 of reserves taken as a precaution against COVID-19 losses in 2020 and 2021.

The allowance for loan losses totaled $36.0 million, or 1.12% of loans held for investment at September 30, 2022, compared with $34.2 million, or 1.12%, of total loans at June 30, 2022.

During the third quarter of 2022, the Company repurchased 94,539 common shares at a weighted average price of $20.93.

Corporate Overview

RBB Bancorp is a community-based financial holding company headquartered in Los Angeles, California. As of September 30, 2022, the company had total assets of $3.9 billion. Its wholly-owned subsidiary, the Bank is a full service commercial bank, which provides business banking services to the Chinese-American 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 tomorrow, October 25, 2022, to discuss the Company’s third quarter 2022 financial results.

To listen to the conference call, please dial 1-800-343-4136 or 1-203-518-9708, conference ID RBBQ322. A replay of the call will be made available at 1-877-925-9639 or 1-402-220-5391 (no passcode required) approximately one hour after the conclusion of the call and will remain available through November 1, 2022.

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, local, regional, national and international economic and market conditions and events and the impact they may have on us, our customers and our assets and liabilities; our ability to attract deposits and other sources of funding or liquidity; supply and demand for real estate and periodic deterioration in real estate prices and/or values in California or other states where we lend, including both residential and commercial real estate; a prolonged slowdown or decline in real estate construction, sales or leasing activities; changes in the financial performance and/or condition of our borrowers, depositors or key vendors or counterparties; changes in our levels of delinquent loans, nonperforming assets, allowance for loan losses and charge-offs; expectations regarding the impact of the COVID-19 pandemic; the costs or effects of acquisitions or dispositions we may make, whether we are able to obtain any required governmental or shareholder approvals in connection with any such acquisitions or dispositions, and/or our ability to realize the contemplated financial or business benefits associated with any such acquisitions or dispositions; the effect of changes in laws, regulations and applicable judicial decisions (including laws, regulations and judicial decisions concerning financial reforms, taxes, banking capital levels, consumer, commercial or secured lending, securities and securities trading and hedging, compliance, employment, executive compensation, insurance, vendor management and information security) with which we and our subsidiaries must comply or believe we should comply; changes in estimates of future reserve requirements and minimum capital requirements based upon the periodic review thereof under relevant regulatory and accounting requirements, including changes in the Basel Committee framework establishing capital standards for credit, operations and market risk; inflation, interest rate, securities market and monetary fluctuations; changes in government interest rates or monetary policies; changes in the amount and availability of deposit insurance; cyber-security threats, including loss of system functionality or theft or loss of Company or customer data or money; political instability; acts of war or terrorism, or natural disasters, such as earthquakes, drought, or the effects of pandemic diseases; the timely development and acceptance of new banking products and services and the perceived overall value of these products and services by our customers and potential customers; the Company’s relationships with and reliance upon vendors with respect to the operation of certain of the Company’s key internal and external systems and applications; changes in commercial or consumer spending, borrowing and savings preferences or behaviors; technological changes and the expanding use of technology in banking (including the adoption of mobile banking and funds transfer applications); the ability to retain and increase market share, retain and grow customers and control expenses; changes in the competitive and regulatory environment among financial and bank holding companies, banks and other financial service providers; volatility in the credit and equity markets and its effect on the general economy or local or regional business conditions; fluctuations in the price of the Company’s common stock or other securities; and the resulting impact on the Company’s ability to raise capital or make acquisitions, the effect of changes in accounting policies and practices, as may be adopted from time-to-time by our regulatory agencies, as well as by the Public Company Accounting Oversight Board, the Financial Accounting Standards Board and other accounting standard-setters, including ASU 2016-13 (Topic 326), “Measurement of Credit Losses on Financial Instruments”, commonly referenced as the Current Expected Credit Loss (“CECL”) model, which will change how we estimate credit losses and may increase the required level of our allowance for credit losses after adoption; changes in our organization, management, compensation and benefit plans, and our ability to retain or expand our workforce, management team and/or our board of directors; the costs and effects of legal, compliance and regulatory actions, changes and developments, including the initiation and resolution of legal proceedings (such as securities, consumer or employee class action litigation), regulatory or other governmental inquiries or investigations, and/or the results of regulatory examinations or reviews; our ongoing relations with our various federal and state regulators, including the SEC, FDIC, FRB and California DFPI (formerly DBO); 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/A and Form 10-K for the year ended December 31, 2021, 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, except for December 31, 2021)

(Dollars in thousands)

 

 

 

September 30,

 

June 30,

 

March 31,

 

December 31,

 

September 30,

 

 

2022

 

2022

 

2022

 

2021

 

2021

Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and due from banks

 

$

134,179

 

 

$

224,736

 

 

$

149,767

 

 

$

501,372

 

 

$

206,927

 

Federal funds sold and other cash equivalents

 

 

40,000

 

 

 

100,000

 

 

 

200,000

 

 

 

193,000

 

 

 

170,000

 

Total cash and cash equivalents

 

 

174,179

 

 

 

324,736

 

 

 

349,767

 

 

 

694,372

 

 

 

376,927

 

Interest-bearing deposits in other financial institutions

 

 

600

 

 

 

600

 

 

 

600

 

 

 

600

 

 

 

600

 

Investment securities available for sale

 

 

266,270

 

 

 

358,135

 

 

 

420,448

 

 

 

368,260

 

 

 

345,000

 

Investment securities held to maturity

 

 

5,735

 

 

 

5,741

 

 

 

6,246

 

 

 

6,252

 

 

 

6,258

 

Mortgage loans held for sale

 

 

1,185

 

 

 

 

 

 

3,572

 

 

 

5,957

 

 

 

15,188

 

Loans held for investment

 

 

3,220,913

 

 

 

3,045,946

 

 

 

3,006,484

 

 

 

2,931,350

 

 

 

2,840,354

 

Allowance for loan losses

 

 

(36,047

)

 

 

(34,154

)

 

 

(33,292

)

 

 

(32,912

)

 

 

(32,231

)

Net loans held for investment

 

 

3,184,866

 

 

 

3,011,792

 

 

 

2,973,192

 

 

 

2,898,438

 

 

 

2,808,123

 

Premises and equipment, net

 

 

26,850

 

 

 

27,104

 

 

 

27,455

 

 

 

27,199

 

 

 

27,157

 

Federal Home Loan Bank (FHLB) stock

 

 

15,000

 

 

 

15,000

 

 

 

15,000

 

 

 

15,000

 

 

 

15,000

 

Cash surrender value of life insurance

 

 

56,975

 

 

 

56,642

 

 

 

56,313

 

 

 

55,988

 

 

 

55,656

 

Goodwill

 

 

71,498

 

 

 

71,498

 

 

 

71,498

 

 

 

69,243

 

 

 

69,243

 

Servicing assets

 

 

10,054

 

 

 

10,456

 

 

 

11,048

 

 

 

11,517

 

 

 

12,141

 

Core deposit intangibles

 

 

3,971

 

 

 

4,248

 

 

 

4,525

 

 

 

4,075

 

 

 

4,327

 

Right-of-use assets- operating leases

 

 

24,768

 

 

 

25,931

 

 

 

22,451

 

 

 

22,454

 

 

 

23,735

 

Accrued interest and other assets

 

 

63,278

 

 

 

57,154

 

 

 

51,454

 

 

 

48,839

 

 

 

42,452

 

Total assets

 

$

3,905,229

 

 

$

3,969,037

 

 

$

4,013,569

 

 

$

4,228,194

 

 

$

3,801,807

 

Liabilities and shareholders' equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing demand

 

$

916,301

 

 

$

1,045,009

 

 

$

1,159,703

 

 

$

1,291,484

 

 

$

824,771

 

Savings, NOW and money market accounts

 

 

882,126

 

 

 

868,307

 

 

 

885,050

 

 

 

927,609

 

 

 

931,517

 

Time deposits, less than $250,000

 

 

608,489

 

 

 

574,050

 

 

 

570,274

 

 

 

587,940

 

 

 

614,146

 

Time deposits, greater than or equal to $250,000

 

 

552,754

 

 

 

540,199

 

 

 

553,226

 

 

 

578,499

 

 

 

597,379

 

Total deposits

 

 

2,959,670

 

 

 

3,027,565

 

 

 

3,168,253

 

 

 

3,385,532

 

 

 

2,967,813

 

FHLB advances

 

 

240,000

 

 

 

250,000

 

 

 

150,000

 

 

 

150,000

 

 

 

150,000

 

Long-term debt, net of debt issuance costs

 

 

173,441

 

 

 

173,296

 

 

 

173,152

 

 

 

173,007

 

 

 

172,862

 

Subordinated debentures

 

 

14,665

 

 

 

14,611

 

 

 

14,556

 

 

 

14,502

 

 

 

14,447

 

Lease liabilities - operating leases

 

 

25,701

 

 

 

26,823

 

 

 

23,314

 

 

 

23,282

 

 

 

24,524

 

Accrued interest and other liabilities

 

 

19,953

 

 

 

13,035

 

 

 

19,469

 

 

 

15,188

 

 

 

16,137

 

Total liabilities

 

 

3,433,430

 

 

 

3,505,330

 

 

 

3,548,744

 

 

 

3,761,511

 

 

 

3,345,783

 

Shareholders' equity:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shareholder's equity

 

 

494,248

 

 

 

479,382

 

 

 

475,077

 

 

 

468,267

 

 

 

456,490

 

Non-controlling interest

 

 

72

 

 

 

72

 

 

 

72

 

 

 

72

 

 

 

72

 

Accumulated other comprehensive (loss) income - Net of tax

 

 

(22,521

)

 

 

(15,747

)

 

 

(10,324

)

 

 

(1,656

)

 

 

(538

)

Total shareholders' equity

 

 

471,799

 

 

 

463,707

 

 

 

464,825

 

 

 

466,683

 

 

 

456,024

 

Total liabilities and shareholders’ equity

 

$

3,905,229

 

 

$

3,969,037

 

 

$

4,013,569

 

 

$

4,228,194

 

 

$

3,801,807

 

 

RBB BANCORP AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

(Dollars in thousands, except per share amounts)

 

 

 

For the Three Months Ended

 

 

 

September 30, 2022

 

 

June 30, 2022

 

 

September 30, 2021

 

 

Interest and dividend income:

 

 

 

 

 

 

 

 

 

 

 

 

Interest and fees on loans

 

$

43,588

 

 

$

40,157

 

 

$

35,601

 

Interest on interest-bearing deposits

 

 

373

 

 

 

111

 

 

 

219

 

Interest on investment securities

 

 

1,784

 

 

 

1,419

 

 

 

889

 

Dividend income on FHLB stock

 

 

224

 

 

 

222

 

 

 

225

 

Interest on federal funds sold and other

 

 

445

 

 

 

429

 

 

 

174

 

Total interest income

 

 

46,414

 

 

 

42,338

 

 

 

37,108

 

Interest expense:

 

 

 

 

 

 

 

 

 

 

 

 

Interest on savings deposits, NOW and money market accounts

 

 

1,529

 

 

 

844

 

 

 

697

 

Interest on time deposits

 

 

2,460

 

 

 

1,506

 

 

 

2,048

 

Interest on subordinated debentures and long term debt

 

 

2,427

 

 

 

2,379

 

 

 

2,342

 

Interest on other borrowed funds

 

 

1,020

 

 

 

519

 

 

 

445

 

Total interest expense

 

 

7,436

 

 

 

5,248

 

 

 

5,532

 

Net interest income before provision for loan losses

 

 

38,978

 

 

 

37,090

 

 

 

31,576

 

Provision for loan losses

 

 

1,766

 

 

 

915

 

 

 

1,196

 

Net interest income after provision for loan losses

 

 

37,212

 

 

 

36,175

 

 

 

30,380

 

Noninterest income:

 

 

 

 

 

 

 

 

 

 

 

 

Service charges, fees and other

 

 

1,277

 

 

 

1,382

 

 

 

3,153

 

Gain on sale of loans

 

 

265

 

 

 

344

 

 

 

1,790

 

Loan servicing fees, net of amortization

 

 

724

 

 

 

472

 

 

 

62

 

Recoveries on loans acquired in business combinations

 

 

5

 

 

 

98

 

 

 

68

 

Unrealized (loss) on equity investments

 

 

 

 

 

 

 

 

(5

)

Unrealized (loss) gain on derivatives

 

 

(68

)

 

 

39

 

 

 

125

 

Increase in cash surrender value of life insurance

 

 

332

 

 

 

330

 

 

 

331

 

Gain on sale of fixed assets

 

 

 

 

 

757

 

 

 

 

Total noninterest income

 

 

2,535

 

 

 

3,422

 

 

 

5,524

 

Noninterest expense:

 

 

 

 

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

 

9,561

 

 

 

9,628

 

 

 

8,772

 

Occupancy and equipment expenses

 

 

2,349

 

 

 

2,174

 

 

 

2,189

 

Data processing

 

 

1,306

 

 

 

1,293

 

 

 

965

 

Legal and professional

 

 

1,077

 

 

 

2,254

 

 

 

746

 

Office expenses

 

 

382

 

 

 

358

 

 

 

311

 

Marketing and business promotion

 

 

364

 

 

 

501

 

 

 

324

 

Insurance and regulatory assessments

 

 

441

 

 

 

478

 

 

 

384

 

Core deposit premium

 

 

277

 

 

 

277

 

 

 

281

 

OREO expenses

 

 

4

 

 

 

5

 

 

 

4

 

Merger expenses

 

 

 

 

 

23

 

 

 

40

 

Other expenses

 

 

936

 

 

 

621

 

 

 

404

 

Total noninterest expense

 

 

16,697

 

 

 

17,612

 

 

 

14,420

 

Income before income taxes

 

 

23,050

 

 

 

21,985

 

 

 

21,484

 

Income tax expense

 

 

6,398

 

 

 

6,508

 

 

 

6,120

 

Net income

 

$

16,652

 

 

$

15,477

 

 

$

15,364

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income per share

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.88

 

 

$

0.81

 

 

$

0.79

 

Diluted

 

$

0.87

 

 

$

0.80

 

 

$

0.77

 

Cash Dividends declared per common share

 

$

0.14

 

 

$

0.14

 

 

$

0.13

 

Weighted-average common shares outstanding

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

18,988,443

 

 

 

19,066,621

 

 

 

19,343,262

 

Diluted

 

 

19,130,447

 

 

 

19,324,253

 

 

 

19,798,187

 

 

RBB BANCORP AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

(Dollars in thousands, except per share amounts)

 

 

 

For the Nine Months Ended

 

 

 

September 30, 2022

 

 

September 30, 2021

 

Interest and dividend income:

 

 

 

 

 

 

 

 

Interest and fees on loans

 

$

121,631

 

 

$

104,786

 

Interest on interest-earning deposits

 

 

655

 

 

 

392

 

Interest on investment securities

 

 

4,210

 

 

 

2,310

 

Dividend income on FHLB stock

 

 

673

 

 

 

642

 

Interest on federal funds sold and other

 

 

1,149

 

 

 

489

 

Total interest income

 

 

128,318

 

 

 

108,619

 

Interest expense:

 

 

 

 

 

 

 

 

Interest on savings deposits, NOW and money market accounts

 

 

3,091

 

 

 

2,103

 

Interest on time deposits

 

 

5,540

 

 

 

7,422

 

Interest on subordinated debentures and long term debt

 

 

7,154

 

 

 

6,656

 

Interest on other borrowed funds

 

 

1,974

 

 

 

1,320

 

Total interest expense

 

 

17,759

 

 

 

17,501

 

Net interest income

 

 

110,559

 

 

 

91,118

 

Provision for loan losses

 

 

3,048

 

 

 

3,324

 

Net interest income after provision for loans losses

 

 

107,511

 

 

 

87,794

 

Noninterest income:

 

 

 

 

 

 

 

 

Service charges, fees and other

 

 

3,899

 

 

 

5,953

 

Gain on sale of loans

 

 

1,783

 

 

 

8,203

 

Loan servicing fees, net of amortization

 

 

1,628

 

 

 

426

 

Recoveries on loans acquired in business combinations

 

 

108

 

 

 

78

 

Unrealized (loss) gain on equity investments

 

 

 

 

 

(60

)

Unrealized (loss) gain on derivatives

 

 

(262

)

 

 

254

 

Increase in cash surrender value of life insurance

 

 

986

 

 

 

735

 

Gain on sale of fixed assets

 

 

757

 

 

 

 

Total noninterest income

 

 

8,899

 

 

 

15,589

 

Noninterest expense:

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

 

28,558

 

 

 

26,756

 

Occupancy and equipment expenses

 

 

6,728

 

 

 

6,566

 

Data processing

 

 

3,857

 

 

 

3,636

 

Legal and professional

 

 

4,337

 

 

 

2,087

 

Office expenses

 

 

1,033

 

 

 

838

 

Marketing and business promotion

 

 

1,172

 

 

 

739

 

Insurance and regulatory assessments

 

 

1,360

 

 

 

1,086

 

Core deposit premium

 

 

833

 

 

 

869

 

OREO expenses

 

 

17

 

 

 

13

 

Merger expenses

 

 

60

 

 

 

99

 

Other expenses

 

 

2,412

 

 

 

2,203

 

Total noninterest expense

 

 

50,367

 

 

 

44,892

 

Income before income taxes

 

 

66,043

 

 

 

58,491

 

Income tax expense

 

 

19,297

 

 

 

17,291

 

Net income

 

$

46,746

 

 

$

41,200

 

 

 

 

 

 

 

 

 

 

Net income per share

 

 

 

 

 

 

 

 

Basic

 

$

2.44

 

 

$

2.11

 

Diluted

 

$

2.41

 

 

$

2.07

 

Cash Dividends declared per common share

 

$

0.42

 

 

$

0.39

 

Weighted-average common shares outstanding

 

 

 

 

 

 

 

 

Basic

 

 

19,142,732

 

 

 

19,416,608

 

Diluted

 

 

19,415,558

 

 

 

19,828,612

 

 

RBB BANCORP AND SUBSIDIARIES

AVERAGE BALANCE SHEET AND NET INTEREST INCOME

(Unaudited)

(Dollars in thousands, except per share amounts)

 

 

 

For the Three Months Ended

 

 

 

September 30, 2022

 

 

June 30, 2022

 

 

September 30, 2021

 

 

 

Average

 

 

Interest

 

 

Yield /

 

 

Average

 

 

Interest

 

 

Yield /

 

 

Average

 

 

Interest

 

 

Yield /

 

(tax-equivalent basis, dollars in thousands)

 

Balance

 

 

& Fees

 

 

Rate

 

 

Balance

 

 

& Fees

 

 

Rate

 

 

Balance

 

 

& Fees

 

 

Rate

 

Earning assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Federal funds sold, cash equivalents & other (1)

 

$

141,737

 

 

$

1,042

 

 

 

2.92

%

 

$

249,738

 

 

$

762

 

 

 

1.22

%

 

$

628,020

 

 

$

618

 

 

 

0.39

%

Securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Available for sale (2)

 

 

318,066

 

 

 

1,758

 

 

 

2.19

%

 

 

399,321

 

 

 

1,393

 

 

 

1.40

%

 

 

336,130

 

 

 

856

 

 

 

1.01

%

Held to maturity (2)

 

 

5,738

 

 

 

50

 

 

 

3.46

%

 

 

5,744

 

 

 

50

 

 

 

3.49

%

 

 

6,262

 

 

 

56

 

 

 

3.55

%

Mortgage loans held for sale

 

 

420

 

 

 

6

 

 

 

5.48

%

 

 

892

 

 

 

13

 

 

 

5.85

%

 

 

5,218

 

 

 

46

 

 

 

3.50

%

Loans held for investment: (3)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Real estate

 

 

2,820,022

 

 

 

38,999

 

 

 

5.49

%

 

 

2,663,753

 

 

 

35,207

 

 

 

5.30

%

 

 

2,361,405

 

 

 

30,911

 

 

 

5.19

%

Commercial

 

 

303,899

 

 

 

4,583

 

 

 

5.98

%

 

 

325,861

 

 

 

4,937

 

 

 

6.08

%

 

 

374,125

 

 

 

4,644

 

 

 

4.92

%

Total loans

 

 

3,123,921

 

 

 

43,582

 

 

 

5.53

%

 

 

2,989,614

 

 

 

40,144

 

 

 

5.39

%

 

 

2,735,530

 

 

 

35,555

 

 

 

5.16

%

Total earning assets

 

 

3,589,882

 

 

$

46,438

 

 

 

5.13

%

 

 

3,645,309

 

 

$

42,362

 

 

 

4.66

%

 

 

3,711,160

 

 

$

37,131

 

 

 

3.97

%

Noninterest-earning assets

 

 

250,737

 

 

 

 

 

 

 

 

 

 

 

243,279

 

 

 

 

 

 

 

 

 

 

 

242,742

 

 

 

 

 

 

 

 

 

Total assets

 

$

3,840,619

 

 

 

 

 

 

 

 

 

 

$

3,888,588

 

 

 

 

 

 

 

 

 

 

$

3,953,902

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NOW

 

$

74,518

 

 

$

91

 

 

 

0.48

%

 

$

75,637

 

 

$

50

 

 

 

0.27

%

 

$

71,454

 

 

$

48

 

 

 

0.27

%

Money Market

 

 

612,743

 

 

 

1,376

 

 

 

0.89

%

 

 

631,807

 

 

 

759

 

 

 

0.48

%

 

 

660,806

 

 

 

615

 

 

 

0.37

%

Saving deposits

 

 

147,349

 

 

 

62

 

 

 

0.17

%

 

 

148,400

 

 

 

35

 

 

 

0.09

%

 

 

139,555

 

 

 

34

 

 

 

0.10

%

Time deposits, less than $250,000

 

 

566,730

 

 

 

1,221

 

 

 

0.85

%

 

 

553,282

 

 

 

724

 

 

 

0.52

%

 

 

644,013

 

 

 

977

 

 

 

0.60

%

Time deposits, $250,000 and over

 

 

531,655

 

 

 

1,239

 

 

 

0.92

%

 

 

526,164

 

 

 

782

 

 

 

0.60

%

 

 

604,394

 

 

 

1,071

 

 

 

0.70

%

Total interest-bearing deposits

 

 

1,932,995

 

 

 

3,989

 

 

 

0.82

%

 

 

1,935,290

 

 

 

2,350

 

 

 

0.49

%

 

 

2,120,222

 

 

 

2,745

 

 

 

0.51

%

FHLB advances

 

 

239,674

 

 

 

1,020

 

 

 

1.69

%

 

 

182,749

 

 

 

519

 

 

 

1.14

%

 

 

150,000

 

 

 

445

 

 

 

1.18

%

Long-term debt

 

 

173,345

 

 

 

2,194

 

 

 

5.02

%

 

 

173,201

 

 

 

2,195

 

 

 

5.08

%

 

 

172,767

 

 

 

2,194

 

 

 

5.04

%

Subordinated debentures

 

 

14,629

 

 

 

233

 

 

 

6.32

%

 

 

14,575

 

 

 

184

 

 

 

5.06

%

 

 

14,411

 

 

 

148

 

 

 

4.07

%

Total interest-bearing liabilities

 

 

2,360,643

 

 

 

7,436

 

 

 

1.25

%

 

 

2,305,815

 

 

 

5,248

 

 

 

0.91

%

 

 

2,457,400

 

 

 

5,532

 

 

 

0.89

%

Noninterest-bearing liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing deposits

 

 

964,867

 

 

 

 

 

 

 

 

 

 

 

1,082,793

 

 

 

 

 

 

 

 

 

 

 

1,003,304

 

 

 

 

 

 

 

 

 

Other noninterest-bearing liabilities

 

 

41,003

 

 

 

 

 

 

 

 

 

 

 

33,377

 

 

 

 

 

 

 

 

 

 

 

42,419

 

 

 

 

 

 

 

 

 

Total noninterest-bearing liabilities

 

 

1,005,870

 

 

 

 

 

 

 

 

 

 

 

1,116,170

 

 

 

 

 

 

 

 

 

 

 

1,045,723

 

 

 

 

 

 

 

 

 

Shareholders' equity

 

 

474,106

 

 

 

 

 

 

 

 

 

 

 

466,603

 

 

 

 

 

 

 

 

 

 

 

450,779

 

 

 

 

 

 

 

 

 

Total liabilities and shareholders' equity

 

$

3,840,619

 

 

 

 

 

 

 

 

 

 

$

3,888,588

 

 

 

 

 

 

 

 

 

 

$

3,953,902

 

 

 

 

 

 

 

 

 

Net interest income / interest rate spreads

 

 

 

 

 

$

39,002

 

 

 

3.88

%

 

 

 

 

 

$

37,114

 

 

 

3.75

%

 

 

 

 

 

$

31,599

 

 

 

3.08

%

Net interest margin

 

 

 

 

 

 

 

 

 

 

4.31

%

 

 

 

 

 

 

 

 

 

 

4.08

%

 

 

 

 

 

 

 

 

 

 

3.38

%

__________

(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)

(Dollars in thousands, except per share amounts)

 

 

 

For the Nine Months Ended

 

 

 

September 30, 2022

 

 

September 30, 2021

 

 

 

Average

 

 

Interest

 

 

Yield /

 

 

Average

 

 

Interest

 

 

Yield /

 

(tax-equivalent basis, dollars in thousands)

 

Balance

 

 

& Fees

 

 

Rate

 

 

Balance

 

 

& Fees

 

 

Rate

 

Earning assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Federal funds sold, cash equivalents & other (1)

 

$

338,253

 

 

$

2,477

 

 

 

0.98

%

 

$

476,780

 

 

$

1,523

 

 

 

0.43

%

Securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Available for sale (2)

 

 

369,808

 

 

 

4,126

 

 

 

1.49

%

 

 

301,653

 

 

 

2,180

 

 

 

0.97

%

Held to maturity (2)

 

 

5,909

 

 

 

158

 

 

 

3.57

%

 

 

6,640

 

 

 

182

 

 

 

3.66

%

Mortgage loans held for sale

 

 

1,624

 

 

 

62

 

 

 

5.10

%

 

 

26,579

 

 

 

630

 

 

 

3.17

%

Loans held for investment: (3)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Real estate

 

 

2,696,183

 

 

 

107,301

 

 

 

5.32

%

 

 

2,320,525

 

 

 

90,226

 

 

 

5.20

%

Commercial

 

 

336,630

 

 

 

14,268

 

 

 

5.67

%

 

 

382,168

 

 

 

13,930

 

 

 

4.87

%

Total loans

 

 

3,032,813

 

 

 

121,569

 

 

 

5.36

%

 

 

2,702,693

 

 

 

104,156

 

 

 

5.15

%

Total earning assets

 

 

3,748,407

 

 

$

128,392

 

 

 

4.58

%

 

 

3,514,345

 

 

$

108,671

 

 

 

4.13

%

Noninterest-earning assets

 

 

245,137

 

 

 

 

 

 

 

 

 

 

 

233,652

 

 

 

 

 

 

 

 

 

Total assets

 

$

3,993,544

 

 

 

 

 

 

 

 

 

 

$

3,747,997

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NOW

 

$

75,182

 

 

$

185

 

 

 

0.33

%

 

$

67,633

 

 

$

136

 

 

 

0.27

%

Money Market

 

 

654,522

 

 

 

2,777

 

 

 

0.57

%

 

 

627,024

 

 

 

1,866

 

 

 

0.40

%

Saving deposits

 

 

147,033

 

 

 

129

 

 

 

0.12

%

 

 

137,072

 

 

 

101

 

 

 

0.10

%

Time deposits, less than $250,000

 

 

573,401

 

 

 

2,698

 

 

 

0.63

%

 

 

654,776

 

 

 

3,635

 

 

 

0.74

%

Time deposits, $250,000 and over

 

 

542,535

 

 

 

2,842

 

 

 

0.70

%

 

 

600,973

 

 

 

3,787

 

 

 

0.84

%

Total interest-bearing deposits

 

 

1,992,673

 

 

 

8,631

 

 

 

0.58

%

 

 

2,087,478

 

 

 

9,525

 

 

 

0.61

%

FHLB advances

 

 

191,136

 

 

 

1,974

 

 

 

1.38

%

 

 

150,000

 

 

 

1,320

 

 

 

1.18

%

Long-term debt

 

 

173,202

 

 

 

6,583

 

 

 

5.08

%

 

 

152,600

 

 

 

6,209

 

 

 

5.44

%

Subordinated debentures

 

 

14,575

 

 

 

571

 

 

 

5.24

%

 

 

14,357

 

 

 

447

 

 

 

4.16

%

Total interest-bearing liabilities

 

 

2,371,586

 

 

$

17,759

 

 

 

1.00

%

 

 

2,404,435

 

 

$

17,501

 

 

 

0.97

%

Noninterest-bearing liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing deposits

 

 

1,115,153

 

 

 

 

 

 

 

 

 

 

 

858,087

 

 

 

 

 

 

 

 

 

Other noninterest-bearing liabilities

 

 

36,257

 

 

 

 

 

 

 

 

 

 

 

43,038

 

 

 

 

 

 

 

 

 

Total noninterest-bearing liabilities

 

 

1,151,410

 

 

 

 

 

 

 

 

 

 

 

901,125

 

 

 

 

 

 

 

 

 

Shareholders' equity

 

 

470,548

 

 

 

 

 

 

 

 

 

 

 

442,437

 

 

 

 

 

 

 

 

 

Total liabilities and shareholders' equity

 

$

3,993,544

 

 

 

 

 

 

 

 

 

 

$

3,747,997

 

 

 

 

 

 

 

 

 

Net interest income / interest rate spreads

 

 

 

 

 

$

110,633

 

 

 

3.58

%

 

 

 

 

 

$

91,170

 

 

 

3.16

%

Net interest margin

 

 

 

 

 

 

 

 

 

 

3.95

%

 

 

 

 

 

 

 

 

 

 

3.47

%

__________

(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)

(Dollars in thousands, except per share amounts)

 

 

 

For the Three Months Ended

 

 

 

September 30,

 

 

June 30,

 

 

September 30,

 

 

 

2022

 

 

2022

 

 

2021

 

Per share data (common stock)

 

 

 

 

 

 

 

 

 

 

 

 

Earnings

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.88

 

 

$

0.81

 

 

$

0.79

 

Diluted

 

$

0.87

 

 

$

0.80

 

 

$

0.77

 

Dividends declared

 

$

0.14

 

 

$

0.14

 

 

$

0.13

 

Book value

 

$

24.82

 

 

$

24.56

 

 

$

23.37

 

Tangible book value (1)

 

$

20.85

 

 

$

20.55

 

 

$

19.60

 

Weighted average shares outstanding

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

18,988,443

 

 

 

19,066,621

 

 

 

19,343,262

 

Diluted

 

 

19,130,447

 

 

 

19,324,253

 

 

 

19,798,187

 

Shares outstanding at period end

 

 

19,011,672

 

 

 

18,881,829

 

 

 

19,516,393

 

Performance ratios

 

 

 

 

 

 

 

 

 

 

 

 

Return on average assets, annualized

 

 

1.72

%

 

 

1.60

%

 

 

1.54

%

Return on average shareholders' equity, annualized

 

 

13.93

%

 

 

13.30

%

 

 

13.52

%

Return on average tangible common equity, annualized (1)

 

 

16.58

%

 

 

15.89

%

 

 

16.17

%

Noninterest income to average assets, annualized

 

 

0.26

%

 

 

0.35

%

 

 

0.55

%

Noninterest expense to average assets, annualized

 

 

1.72

%

 

 

1.82

%

 

 

1.45

%

Yield on average earning assets

 

 

5.13

%

 

 

4.66

%

 

 

3.97

%

Cost of average total deposits

 

 

0.55

%

 

 

0.31

%

 

 

0.35

%

Cost of average interest-bearing deposits

 

 

0.82

%

 

 

0.49

%

 

 

0.51

%

Cost of average interest-bearing liabilities

 

 

1.25

%

 

 

0.91

%

 

 

0.89

%

Accretion on loans to average earning assets

 

 

0.01

%

 

 

0.01

%

 

 

0.03

%

Net interest spread

 

 

3.88

%

 

 

3.75

%

 

 

3.08

%

Net interest margin

 

 

4.31

%

 

 

4.08

%

 

 

3.38

%

Efficiency ratio (2)

 

 

40.22

%

 

 

43.47

%

 

 

38.87

%

Common stock dividend payout ratio

 

 

15.91

%

 

 

17.28

%

 

 

16.46

%

__________
(1)

Reconciliations of the non–U.S. generally accepted accounting principles (“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 loan losses and noninterest income.

 

RBB BANCORP AND SUBSIDIARIES

SELECTED FINANCIAL HIGHLIGHTS

(Unaudited)

(Dollars in thousands, except per share amounts)

 

 

 

For the Nine Months Ended September 30,

 

 

 

2022

 

 

2021

 

Per share data (common stock)

 

 

 

 

 

 

 

 

Earnings

 

 

 

 

 

 

 

 

Basic

 

$

2.44

 

 

$

2.11

 

Diluted

 

$

2.41

 

 

$

2.07

 

Dividends declared

 

$

0.42

 

 

$

0.39

 

Book value

 

$

24.82

 

 

$

23.37

 

Tangible book value (1)

 

$

20.85

 

 

$

19.60

 

Weighted average shares outstanding

 

 

 

 

 

 

 

 

Basic

 

 

19,142,732

 

 

 

19,416,608

 

Diluted

 

 

19,415,558

 

 

 

19,828,612

 

Shares outstanding at period end

 

 

19,011,672

 

 

 

19,516,393

 

Performance ratios

 

 

 

 

 

 

 

 

Return on average assets, annualized

 

 

1.57

%

 

 

1.47

%

Return on average shareholders' equity, annualized

 

 

13.28

%

 

 

12.45

%

Return on average tangible common equity, annualized (1)

 

 

15.80

%

 

 

14.95

%

Noninterest income to average assets, annualized

 

 

0.30

%

 

 

0.56

%

Noninterest expense to average assets, annualized

 

 

1.69

%

 

 

1.60

%

Yield on average earning assets

 

 

4.58

%

 

 

4.13

%

Cost of average deposits

 

 

0.37

%

 

 

0.43

%

Cost of average interest-bearing deposits

 

 

0.58

%

 

 

0.61

%

Cost of average interest-bearing liabilities

 

 

1.00

%

 

 

0.97

%

Accretion on loans to average earning assets

 

 

0.02

%

 

 

0.04

%

Net interest spread

 

 

3.58

%

 

 

3.16

%

Net interest margin

 

 

3.95

%

 

 

3.47

%

Efficiency ratio (2)

 

 

42.16

%

 

 

42.07

%

Common stock dividend payout ratio

 

 

17.21

%

 

 

18.01

%

__________
(1)

Reconciliations of the non–U.S. generally accepted accounting principles (“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 loan losses and noninterest income.

 

RBB BANCORP AND SUBSIDIARIES

SELECTED FINANCIAL HIGHLIGHTS

(Unaudited)

(Dollars in thousands, except per share amounts)

 

 

 

As of

 

 

 

September 30,

 

 

June 30,

 

 

September 30,

 

 

 

2022

 

 

2022

 

 

2021

 

Loan to deposit ratio

 

 

108.83

%

 

 

100.61

%

 

 

95.71

%

Core deposits (1) / total deposits

 

 

81.32

%

 

 

82.16

%

 

 

79.87

%

Net non-core funding dependence ratio (2)

 

 

11.09

%

 

 

-0.44

%

 

 

9.27

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Credit Quality Data:

 

 

 

 

 

 

 

 

 

 

 

 

Loans 30-89 days past due

 

$

39,938

 

 

$

8,346

 

 

$

7,258

 

Loans 30-89 days past due to total loans

 

 

1.24

%

 

 

0.27

%

 

 

0.26

%

Nonperforming loans

 

$

11,503

 

 

$

13,937

 

 

$

14,248

 

Nonperforming loans to total loans

 

 

0.36

%

 

 

0.46

%

 

 

0.50

%

Nonperforming assets

 

$

11,796

 

 

$

14,230

 

 

$

14,541

 

Nonperforming assets to total assets

 

 

0.30

%

 

 

0.36

%

 

 

0.38

%

Allowance for loan losses to total loans

 

 

1.12

%

 

 

1.12

%

 

 

1.13

%

Allowance for loan losses to nonperforming loans

 

 

313.37

%

 

 

245.06

%

 

 

226.21

%

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

 

 

-0.02

%

 

 

0.00

%

 

 

0.05

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Regulatory and other capital ratios—Company

 

 

 

 

 

 

 

 

 

 

 

 

Tangible common equity to tangible assets (2)

 

 

10.35

%

 

 

9.96

%

 

 

10.26

%

Tier 1 leverage ratio

 

 

11.47

%

 

 

10.95

%

 

 

10.26

%

Tier 1 common capital to risk-weighted assets

 

 

15.52

%

 

 

14.82

%

 

 

14.82

%

Tier 1 capital to risk-weighted assets

 

 

16.06

%

 

 

15.35

%

 

 

15.38

%

Total capital to risk-weighted assets

 

 

23.72

%

 

 

22.94

%

 

 

23.30

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Regulatory capital ratios—Bank only

 

 

 

 

 

 

 

 

 

 

 

 

Tier 1 leverage ratio

 

 

14.57

%

 

 

13.90

%

 

 

12.42

%

Tier 1 common capital to risk-weighted assets

 

 

20.41

%

 

 

19.51

%

 

 

18.64

%

Tier 1 capital to risk-weighted assets

 

 

20.41

%

 

 

19.51

%

 

 

18.64

%

Total capital to risk-weighted assets

 

 

21.67

%

 

 

20.76

%

 

 

19.89

%

__________

(1)

Comprised of demand and savings deposits of any amount plus time deposits less than $250,000.

(2)

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

 

RBB BANCORP AND SUBSIDIARIES

SELECTED FINANCIAL HIGHLIGHTS

(Unaudited)

(Dollars in thousands, except per share amounts)

 

 

 

3rd Quarter

 

 

2nd Quarter

 

 

1st Quarter

 

 

4th Quarter

 

 

3rd Quarter

 

Quarterly Consolidated Statements of Earnings

 

2022

 

 

2022

 

 

2022

 

 

2021

 

 

2021

 

Interest income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans, including fees

 

$

43,588

 

 

$

40,157

 

 

$

37,886

 

 

$

36,783

 

 

$

35,601

 

Investment securities and other

 

 

2,826

 

 

 

2,181

 

 

 

1,680

 

 

 

1,661

 

 

 

1,507

 

Total interest income

 

 

46,414

 

 

 

42,338

 

 

 

39,566

 

 

 

38,444

 

 

 

37,108

 

Interest expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

 

3,989

 

 

 

2,350

 

 

 

2,292

 

 

 

2,431

 

 

 

2,745

 

Interest on subordinated debentures and other

 

 

2,427

 

 

 

2,379

 

 

 

2,348

 

 

 

2,343

 

 

 

2,342

 

Other borrowings

 

 

1,020

 

 

 

519

 

 

 

435

 

 

 

445

 

 

 

445

 

Total interest expense

 

 

7,436

 

 

 

5,248

 

 

 

5,075

 

 

 

5,219

 

 

 

5,532

 

Net interest income before provision for loan losses

 

 

38,978

 

 

 

37,090

 

 

 

34,491

 

 

 

33,225

 

 

 

31,576

 

Provision for loan losses

 

 

1,766

 

 

 

915

 

 

 

366

 

 

 

635

 

 

 

1,196

 

Net interest income after provision for loan losses

 

 

37,212

 

 

 

36,175

 

 

 

34,125

 

 

 

32,590

 

 

 

30,380

 

Noninterest income

 

 

2,535

 

 

 

3,422

 

 

 

2,944

 

 

 

3,156

 

 

 

5,524

 

Noninterest expense

 

 

16,697

 

 

 

17,612

 

 

 

16,061

 

 

 

13,300

 

 

 

14,420

 

Earnings before income taxes

 

 

23,050

 

 

 

21,985

 

 

 

21,008

 

 

 

22,446

 

 

 

21,484

 

Income taxes

 

 

6,398

 

 

 

6,508

 

 

 

6,391

 

 

 

6,740

 

 

 

6,120

 

Net income

 

$

16,652

 

 

$

15,477

 

 

$

14,617

 

 

$

15,706

 

 

$

15,364

 

Net income per common share - basic

 

$

0.88

 

 

$

0.81

 

 

$

0.75

 

 

$

0.81

 

 

$

0.79

 

Net income per common share - diluted

 

$

0.87

 

 

$

0.80

 

 

$

0.74

 

 

$

0.79

 

 

$

0.77

 

Cash dividends declared per common share

 

$

0.14

 

 

$

0.14

 

 

$

0.14

 

 

$

0.13

 

 

$

0.13

 

Cash dividends declared on common shares

 

$

2,663

 

 

$

2,687

 

 

$

2,724

 

 

$

2,537

 

 

$

2,516

 

Yield on average assets, annualized

 

 

1.72

%

 

 

1.60

%

 

 

1.39

%

 

 

1.52

%

 

 

1.54

%

Yield on average earning assets

 

 

5.13

%

 

 

4.66

%

 

 

4.00

%

 

 

3.97

%

 

 

3.97

%

Cost of average deposits

 

 

0.55

%

 

 

0.31

%

 

 

0.27

%

 

 

0.30

%

 

 

0.35

%

Cost of average interest-bearing deposits

 

 

0.82

%

 

 

0.49

%

 

 

0.44

%

 

 

0.47

%

 

 

0.51

%

Cost of average interest-bearing liabilities

 

 

1.25

%

 

 

0.91

%

 

 

0.84

%

 

 

0.86

%

 

 

0.89

%

Accretion on loans to average earning assets

 

 

0.01

%

 

 

0.01

%

 

 

0.02

%

 

 

0.02

%

 

 

0.03

%

Net interest margin

 

 

4.31

%

 

 

4.08

%

 

 

3.49

%

 

 

3.43

%

 

 

3.38

%

 

RBB BANCORP AND SUBSIDIARIES

SELECTED FINANCIAL HIGHLIGHTS

(Unaudited, except for December 31, 2021)

(Dollars in thousands, except per share amounts)

 

Loan Portfolio Detail

 

As of September 30,

2022

 

 

As of June 30,

2022

 

 

As of March 31,

2022

 

 

As of December 31,

2021

 

 

As of September 30,

2021

 

(dollars in thousands)

 

$

 

 

%

 

 

$

 

 

%

 

 

$

 

 

%

 

 

$

 

 

%

 

 

$

 

 

%

 

Loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial and industrial

 

$

204,817

 

 

 

6.4

%

 

$

238,045

 

 

 

7.8

%

 

$

280,825

 

 

 

9.3

%

 

$

268,709

 

 

 

9.2

%

 

$

276,387

 

 

 

9.7

%

SBA

 

 

61,934

 

 

 

1.9

%

 

 

59,303

 

 

 

1.9

%

 

 

67,688

 

 

 

2.3

%

 

 

76,136

 

 

 

2.6

%

 

 

88,784

 

 

 

3.1

%

Construction and land development

 

 

353,473

 

 

 

11.0

%

 

 

356,772

 

 

 

11.7

%

 

 

346,766

 

 

 

11.5

%

 

 

303,144

 

 

 

10.3

%

 

 

271,764

 

 

 

9.6

%

Commercial real estate (1)

 

 

1,220,791

 

 

 

37.9

%

 

 

1,160,350

 

 

 

38.1

%

 

 

1,217,985

 

 

 

40.5

%

 

 

1,247,999

 

 

 

42.6

%

 

 

1,205,630

 

 

 

42.4

%

Single-family residential mortgages

 

 

1,356,342

 

 

 

42.1

%

 

 

1,205,732

 

 

 

39.6

%

 

 

1,064,581

 

 

 

35.4

%

 

 

1,004,576

 

 

 

34.3

%

 

 

974,780

 

 

 

34.3

%

Other loans

 

 

23,556

 

 

 

0.7

%

 

 

25,744

 

 

 

0.9

%

 

 

28,639

 

 

 

1.0

%

 

 

30,786

 

 

 

1.0

%

 

 

23,009

 

 

 

0.9

%

Total loans (2)

 

$

3,220,913

 

 

 

100.0

%

 

$

3,045,946

 

 

 

100.0

%

 

$

3,006,484

 

 

 

100.0

%

 

$

2,931,350

 

 

 

100.0

%

 

$

2,840,354

 

 

 

100.0

%

Allowance for loan losses

 

 

(36,047

)

 

 

 

 

 

 

(34,154

)

 

 

 

 

 

 

(33,292

)

 

 

 

 

 

 

(32,912

)

 

 

 

 

 

 

(32,231

)

 

 

 

 

Total loans, net

 

$

3,184,866

 

 

 

 

 

 

$

3,011,792

 

 

 

 

 

 

$

2,973,192

 

 

 

 

 

 

$

2,898,438

 

 

 

 

 

 

$

2,808,123

 

 

 

 

 

__________

(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.

 

 

 

Three Months Ended

 

Nine Months Ended

Change in Allowance for Loan Losses

 

September 30,

 

September 30,

(dollars in thousands)

 

2022

 

 

2021

 

2022

 

 

2021

Beginning balance

 

$

34,154

 

 

$

31,352

 

 

$

32,912

 

 

$

29,337

 

Additions to the allowance charged to expense

 

 

1,766

 

 

 

1,196

 

 

 

3,048

 

 

 

3,324

 

Net recoveries (charge-offs) on loans

 

 

127

 

 

 

(317

)

 

 

87

 

 

 

(430

)

Ending balance

 

$

36,047

 

 

$

32,231

 

 

$

36,047

 

 

$

32,231

 

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, 2022 and 2021, and June 30, 2022.

 

 

 

 

 

 

 

 

 

 

(dollars in thousands, except per share data)

 

September 30, 2022

 

June 30, 2022

 

September 30, 2021

Tangible common equity:

 

 

 

 

 

 

 

 

 

Total shareholders' equity

 

$

471,799

 

 

$

463,707

 

 

$

456,024

 

Adjustments

 

 

 

 

 

 

 

 

 

Goodwill

 

 

(71,498

)

 

 

(71,498

)

 

 

(69,243

)

Core deposit intangible

 

 

(3,971

)

 

 

(4,248

)

 

 

(4,327

)

Tangible common equity

 

$

396,330

 

 

$

387,961

 

 

$

382,454

 

Tangible assets:

 

 

 

 

 

 

 

 

 

Total assets-GAAP

 

$

3,905,229

 

 

$

3,969,037

 

 

$

3,801,807

 

Adjustments

 

 

 

 

 

 

 

 

 

Goodwill

 

 

(71,498

)

 

 

(71,498

)

 

 

(69,243

)

Core deposit intangible

 

 

(3,971

)

 

 

(4,248

)

 

 

(4,327

)

Tangible assets

 

$

3,829,760

 

 

$

3,893,291

 

 

$

3,728,237

 

Common shares outstanding

 

$

19,011,672

 

 

 

18,881,829

 

 

 

19,516,393

 

Tangible common equity to tangible assets ratio

 

 

10.35

%

 

 

9.96

%

 

 

10.26

%

Book value per share

 

$

24.82

 

 

$

24.56

 

 

$

23.37

 

Tangible book value per share

 

$

20.85

 

 

$

20.55

 

 

$

19.60

 

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 return on average tangible common equity to its most comparable GAAP measure:

 

 

Three Months Ended

 

Nine Months Ended

 

 

September 30,

 

September 30,

(dollars in thousands)

 

2022

 

2021

 

2022

 

2021

Net income available to common shareholders

 

$

16,652

 

 

$

15,364

 

 

$

46,746

 

 

$

41,200

 

Average shareholders' equity

 

 

474,106

 

 

 

450,779

 

 

 

470,548

 

 

 

442,437

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

Goodwill

 

 

(71,498

)

 

 

(69,243

)

 

 

(70,763

)

 

 

(69,243

)

Core deposit intangible

 

 

(4,154

)

 

 

(4,513

)

 

 

(4,215

)

 

 

(4,797

)

Adjusted average tangible common equity

 

$

398,454

 

 

$

377,023

 

 

$

395,570

 

 

$

368,397

 

Return on average tangible common equity

 

 

16.58

%

 

 

16.17

%

 

 

15.80

%

 

 

14.95

%

Non-core Funding Dependency Ratio

The Bank measures core deposits by reviewing all relationships over $250,000 on a quarterly basis. We track all deposit relationships over $250,000 on a quarterly basis and consider a relationship to be core if there are any three or more of the following: (i) relationships with us (as a director or shareholder); (ii) deposits within our market area; (iii) additional non-deposit services with us; (iv) electronic banking services with us; (v) active demand deposit account with us; (vi) deposits at market interest rates; and (vii) longevity of the relationship with us. We consider all deposit relationships under $250,000 as a core relationship except for time deposits originated through an internet service. This differs from the traditional definition of core deposits which is demand and savings deposits plus time deposits less than $250,000. We believe it is the proper way to measure our core and non-core deposits under regulatory guidelines. The following table reconciles the non-core dependency ratio.

 

 

As of

 

(dollars in thousands)

 

September 30, 2022

 

 

December 31, 2021

 

 

 

 

 

 

 

 

 

 

Non-core deposits: Time deposits greater than $250,000

 

$

552,754

 

 

$

578,499

 

Short term borrowing outstanding

 

 

90,000

 

 

 

 

Adjusted non-core liabilities

 

 

642,754

 

 

 

578,499

 

Short term assets (1)

 

 

235,633

 

 

 

837,941

 

Adjustment to short term assets:

 

 

 

 

 

 

 

 

Purchased receivables with maturities less than 90-days

 

 

 

 

 

 

Adjusted short term assets

 

 

235,633

 

 

 

837,941

 

Net non-core funding

 

$

407,121

 

 

$

(259,442

)

Total earning assets

 

 

3,671,529

 

 

 

3,988,715

 

Net non-core funding dependency ratio

 

 

11.09

%

 

 

-6.50

%

_________

(1)

Short term assets include cash equivalents and investment with maturities less than one year

 

Contacts

Contact:

David Morris

President, CEO and CFO

(714) 670-2488

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