RBB Bancorp Reports Fourth Quarter and Full Year Earnings for 2022

Conference Call and Webcast Scheduled for Tuesday, January 24, 2023 at 11:00 a.m. Pacific Time/2:00 p.m. Eastern Time  

Fourth Quarter 2022 Highlights 

  • Record net income of $17.6 million, or $0.92 diluted earnings per share, increased $929,000, or 5.6%, from the prior quarter and increased $1.9 million, or 11.9%, from the fourth quarter of 2021



  • Loans grew by $114.4 million, or 14.1% annualized, from the end of the prior quarter



  • Declared $0.16 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 and year ended December 31, 2022.

The Company reported net income of $17.6 million, or $0.92 diluted earnings per share, for the quarter ended December 31, 2022, compared to net income of $16.7 million, or $0.87 diluted earnings per share, and $15.7 million, or $0.79 diluted earnings per share, for the quarter ended September 30, 2022 and December 31, 2021, respectively.

“Loan growth, increasing loan yields and declining expenses drove record fourth quarter and 2022 results,” said David Morris, President, CEO and CFO of RBB Bancorp. “The organizational re-alignment we began in the first quarter of last year is well underway with new hires and clearly defined responsibilities contributing to results. I’m also pleased to announce that we have concluded all internal investigations and have taken previously disclosed steps to address shortcomings and prevent future lapses.

While we made tremendous progress in 2022, we’re not immune from market forces and the impact of the rate environment. We saw significant pressure on deposit costs in the fourth quarters which we anticipate will continue over the next few quarters.”

“Despite the challenges Royal Business Bank faced in 2022, the strength of the franchise and focus of the management team delivered a record year of results and loan growth,” said Dr. James Kao, Chairman of RBB Bancorp. “As shareholders, the RBB Board of Directors appreciates management’s efforts over the past twelve months and looks forward to continuing to build on the momentum they have achieved.”

Key Performance Ratios

Net income of $17.6 million for the fourth quarter of 2022 produced an annualized return on average assets ("ROA") of 1.80% and an annualized return on average shareholders' equity ("ROE") of 14.59% compared to an annualized ROA of 1.72% and an annualized ROE of 13.93% for the third quarter of 2022. The efficiency ratio, which is defined in Selected Financial Highlights section, for the fourth quarter of 2022 was 31.67%, compared to 40.22% for the third quarter of 2022.

Net Interest Income and Net Interest Margin

Net interest income, before provision for credit losses, was $39.0 million for the fourth quarter of 2022, compared to $39.0 million for the third quarter of 2022. Net interest income remained flat as revenues from a $162.7 million increase in higher-yielding average commercial real estate and mortgage loans was offset by costs of a $250.0 million increase in average time deposits.

Compared to the fourth quarter of 2021, net interest income, before provision for credit losses, increased $5.8 million from $33.2 million. The $5.8 million increase was primarily attributable to a $414.1 million increase in average commercial real estate and mortgage loans partially offset by a $161.0 million increase in average time deposits and due to increasing rates.

Net interest margin was 4.26% for the fourth quarter of 2022, a decrease of 5 basis points from 4.31% in the third quarter of 2022 primarily due to a 111 basis point increase in the average cost on interest-bearing deposits from 0.82% in the third quarter of 2022 to 1.93% in the fourth quarter of 2022. Cost of interest-bearing deposits increased due increasing market rates and peer bank deposit competition.

Noninterest Income

Noninterest income was $2.4 million for the fourth quarter of 2022, a decrease of $183,000 from $2.5 million in the third quarter of 2022. The decrease was primarily driven by a $153,000 decrease in gain on sale of loans and a $143,000 decrease in loan servicing fees due to loan payoffs in the third quarter of 2022, offset by an $85,000 increase in recoveries on purchased loans during the quarter.

During the fourth quarter loan sale volume and margins on loan sales decreased. The Company sold $2.8 million in FNMA qualified mortgage loans for a net gain of $69,000 during the fourth quarter of 2022 compared to $3.8 million in FNMA qualified mortgage loans sold for a net gain of $135,000 during the third quarter of 2022. The Company sold $834,000 in SBA loans during the fourth quarter of 2022 for a net gain of $43,000, compared to $2.5 million SBA loans sold for a net gain of $130,000 during the third quarter of 2022.

Compared to the fourth quarter of 2021, noninterest income decreased by $804,000 from $3.2 million. The decrease was primarily attributable to a $1.7 million decrease in gain on sale of loans due to rate hikes that caused both sellable loan volume and premium decreases, offset by a $323,000 increase in loan servicing fees due to loan payoffs slowing down in 2022, a $300,000 decrease in unrealized loss on equity investments, and a $265,000 increase in gain on derivatives.

Noninterest Expense

Noninterest expense for the fourth quarter of 2022 was $13.1 million, compared to $16.7 million for the third quarter of 2022. The $3.6 million decrease was primarily attributable to a $2.6 million decrease in salaries and employee benefits expenses due to bonus reversals related to executive compensation and lower commission expenses for decreased loan originations in the fourth quarter of 2022, a $902,000 decrease in the provision for off balance sheet commitments due to the conversion to CECL, and a $103,000 decrease in data processing expenses.

Noninterest expense decreased from $13.3 million in the fourth quarter of 2021. The $207,000 decrease was primarily due to a $641,000 decrease in legal and professional expenses due to the completion of the previously disclosed Board special investigation, offset by a $365,000 increase in data processing expenses.

Income Taxes

The effective tax rate was 30.5% for the fourth quarter of 2022, 27.8% for the third quarter of 2022, and 30.0% for the fourth quarter of 2021. The Company recognized a tax benefit from stock option exercises of $9,000, $276,000 and $215,000 for the fourth quarter of 2022, the third quarter of 2022, and the fourth 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 $3.3 billion as of December 31, 2022, an increase of $115.5 million from September 30, 2022, and an increase of $405.1 million from December 31, 2021. The increase from September 30, 2022 was primarily due to a $107.8 million increase in single-family residential mortgage loans and a $91.3 million increase in commercial real estate loans, offset by a $76.6 million decrease in construction and land development loans and a $3.6 million decrease in commercial and industrial loans. The increase from December 31, 2021 was primarily due to a $459.5 million increase in single-family residential mortgages and a $64.1 million increase in commercial real estate loans, offset by a $67.5 million decrease in commercial and industrial loans and a $26.3 million decrease in construction and land development loans.

During the fourth quarter of 2022, single-family residential mortgage production was $130.8 million while net payoffs and paydowns were $21.4 million. During the third quarter of 2022, single-family residential mortgage production was $191.8 million while payoffs and paydowns were $36.2 million.

There were no mortgage loans held for sale as of December 31, 2022 compared to $1.2 million as of September 30, 2022 and $6.0 million as of December 31, 2021. The Company originated approximately $889,000 in FNMA mortgage loans for sale for the fourth quarter of 2022, compared with $1.8 million during the third quarter of 2022.

In the fourth quarter of 2022, SBA loan production was $10.2 million and total SBA loan sales were $834,000 compared to SBA loan production of $7.7 million and total SBA loan sales of $2.5 million in the third quarter of 2022.

As of December 31, 2022, the Bank’s total available-for-sale securities maturing in over 12 months were $234.8 million. As of December 31, 2022 the Bank recorded gross unrealized losses of $31.2 million compared to gross unrealized losses of $2.3 million as of December 31, 2021.

Deposits

Deposits were $3.0 billion at December 31, 2022, which was an increase of $18.0 million compared to September 30, 2022. During the fourth quarter of 2022, noninterest-bearing deposits decreased by $117.6 million due to the continued reduction of a single deposit relationship, interest-bearing non-maturity deposits decreased by $266.8 million, and time deposits increased by $402.4 million. As of December 31, 2022, there were $255.0 million in brokered CDs, as compared to $105.5 million brokered CDs as of September 30, 2022 and $2.4 million brokered CDs as of December 31, 2021. Compared to December 31, 2021, total deposits decreased by $407.8 million primarily due to a $492.7 million decrease in noninterest-bearing demand deposits, and a $312.3 million decrease in interest-bearing non-maturity deposits, offset by a $397.2 million increase in time deposits.

Asset Quality

Nonperforming assets totaled $12.1 million, or 0.31% of total assets at December 31, 2022, compared to $11.8 million, or 0.30% of total assets at September 30, 2022. The increase in nonperforming assets was due to the foreclosure of a property in the amount of $284,000 that was transferred to Other Real Estate Owned (OREO) in the fourth 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 decreased $24.7 million to $15.2 million as of December 31, 2022 compared to $39.9 million as of September 30, 2022. 30-89 days past due loans at December 31, 2022 decreased primarily due to the completion of extensions on a construction loan of $11.3 million on a project that is substantially complete and a commercial real estate loan of $8.8 million. Both loans were delinquent for 52 days at September 30, 2022, and extended and back to current in October 2022.

In the fourth quarter of 2022, there were $85,000 in net charge-offs, compared to net recoveries of $127,000 in the third quarter of 2022 and net recoveries of $46,000 in the fourth quarter of 2021.

The Company's emerging growth company (“EGC”) status expired on December 31, 2022. The Company adopted ASU 2016-13 “Accounting for Credit Losses” (“CECL”) retrospectively to January 1, 2022. Due to the adoption of CECL, the Company recorded a $2.1 million transition adjustment for the credit for loan losses and a provision for unfunded commitments of $1.0 million through retained earnings on January 1, 2022. Subsequent to CECL adoption, the Company recorded a provision for credit losses of $3.0 million in the fourth quarter of 2022 compared to $1.8 million in third quarter of 2022. The Company also recorded a reversal of provision for off-balance sheet commitments of $930,000 in the fourth quarter of 2022 compared to a reversal of $28,000 in the third quarter of 2022.

The allowance for credit losses totaled $41.0 million, or 1.23% of loans held for investment at December 31, 2022, compared with $36.0 million, or 1.12%, of total loans at September 30, 2022.

Stock Repurchase

During the fourth quarter of 2022, the Company repurchased 48,896 common shares at a weighted average price of $20.77.

Corporate Overview

RBB Bancorp is a community-based financial holding company headquartered in Los Angeles, California. As of December 31, 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 on Tuesday, January 24, 2023, to discuss the Company’s fourth quarter and year-end 2022 financial results.

To listen to the conference call, please dial 1-888-506-0062 or 1-973-528-0011, the Participant ID code is 200944, conference ID RBBQ422. A replay of the call will be made available at 1-877-481-4010 or 1-919-882-2331, the passcode is 47492, approximately one hour after the conclusion of the call and will remain available through February 7, 2023.

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

Disclosure

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

Safe Harbor

Certain matters set forth herein (including the exhibits hereto) constitute forward-looking statements relating to the Company’s current business plans and expectations and our future financial position and operating results. These forward-looking statements are subject to risks and uncertainties that could cause actual results, performance and/or achievements to differ materially from those projected. These risks and uncertainties include, but are not limited to, 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 credit 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)

 

 

 

December 31,

 

 

September 30,

 

 

June 30,

 

 

March 31,

 

 

December 31,

 

 

 

2022

 

 

2022

 

 

2022

 

 

2022

 

 

2021

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and due from banks

 

$

83,548

 

 

$

134,179

 

 

$

224,736

 

 

$

149,767

 

 

$

501,372

 

Federal funds sold and other cash equivalents

 

 

 

 

 

40,000

 

 

 

100,000

 

 

 

200,000

 

 

 

193,000

 

Total cash and cash equivalents

 

 

83,548

 

 

 

174,179

 

 

 

324,736

 

 

 

349,767

 

 

 

694,372

 

Interest-bearing deposits in other financial institutions

 

 

600

 

 

 

600

 

 

 

600

 

 

 

600

 

 

 

600

 

Investment securities available for sale

 

 

256,830

 

 

 

266,270

 

 

 

358,135

 

 

 

420,448

 

 

 

368,260

 

Investment securities held to maturity

 

 

5,729

 

 

 

5,735

 

 

 

5,741

 

 

 

6,246

 

 

 

6,252

 

Mortgage loans held for sale

 

 

 

 

 

1,185

 

 

 

-

 

 

 

3,572

 

 

 

5,957

 

Loans held for investment

 

 

3,336,449

 

 

 

3,220,913

 

 

 

3,045,946

 

 

 

3,006,484

 

 

 

2,931,350

 

Allowance for credit losses

 

 

(41,047

)

 

 

(36,047

)

 

 

(34,154

)

 

 

(33,292

)

 

 

(32,912

)

Net loans held for investment

 

 

3,295,402

 

 

 

3,184,866

 

 

 

3,011,792

 

 

 

2,973,192

 

 

 

2,898,438

 

Premises and equipment, net

 

 

27,009

 

 

 

26,850

 

 

 

27,104

 

 

 

27,455

 

 

 

27,199

 

Federal Home Loan Bank (FHLB) stock

 

 

15,000

 

 

 

15,000

 

 

 

15,000

 

 

 

15,000

 

 

 

15,000

 

Cash surrender value of life insurance

 

 

57,310

 

 

 

56,975

 

 

 

56,642

 

 

 

56,313

 

 

 

55,988

 

Goodwill

 

 

71,498

 

 

 

71,498

 

 

 

71,498

 

 

 

71,498

 

 

 

69,243

 

Servicing assets

 

 

9,521

 

 

 

10,054

 

 

 

10,456

 

 

 

11,048

 

 

 

11,517

 

Core deposit intangibles

 

 

3,718

 

 

 

3,971

 

 

 

4,248

 

 

 

4,525

 

 

 

4,075

 

Right-of-use assets- operating leases

 

 

25,447

 

 

 

24,768

 

 

 

25,931

 

 

 

22,451

 

 

 

22,454

 

Accrued interest and other assets

 

 

66,074

 

 

 

63,278

 

 

 

57,154

 

 

 

51,454

 

 

 

48,839

 

Total assets

 

$

3,917,686

 

 

$

3,905,229

 

 

$

3,969,037

 

 

$

4,013,569

 

 

$

4,228,194

 

Liabilities and shareholders' equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing demand

 

$

798,741

 

 

$

916,301

 

 

$

1,045,009

 

 

$

1,159,703

 

 

$

1,291,484

 

Savings, NOW and money market accounts

 

 

615,339

 

 

 

882,126

 

 

 

868,307

 

 

 

885,050

 

 

 

927,609

 

Time deposits, less than $250,000

 

 

837,369

 

 

 

608,489

 

 

 

574,050

 

 

 

570,274

 

 

 

587,940

 

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

 

 

726,234

 

 

 

552,754

 

 

 

540,199

 

 

 

553,226

 

 

 

578,499

 

Total deposits

 

 

2,977,683

 

 

 

2,959,670

 

 

 

3,027,565

 

 

 

3,168,253

 

 

 

3,385,532

 

FHLB advances

 

 

220,000

 

 

 

240,000

 

 

 

250,000

 

 

 

150,000

 

 

 

150,000

 

Long-term debt, net of debt issuance costs

 

 

173,585

 

 

 

173,441

 

 

 

173,296

 

 

 

173,152

 

 

 

173,007

 

Subordinated debentures

 

 

14,720

 

 

 

14,665

 

 

 

14,611

 

 

 

14,556

 

 

 

14,502

 

Lease liabilities - operating leases

 

 

26,523

 

 

 

25,701

 

 

 

26,823

 

 

 

23,314

 

 

 

23,282

 

Accrued interest and other liabilities

 

 

20,612

 

 

 

19,953

 

 

 

13,035

 

 

 

19,469

 

 

 

15,188

 

Total liabilities

 

 

3,433,123

 

 

 

3,433,430

 

 

 

3,505,330

 

 

 

3,548,744

 

 

 

3,761,511

 

Shareholders' equity:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shareholder's equity

 

 

506,156

 

 

 

494,248

 

 

 

479,382

 

 

 

475,077

 

 

 

468,267

 

Non-controlling interest

 

 

72

 

 

 

72

 

 

 

72

 

 

 

72

 

 

 

72

 

Accumulated other comprehensive loss - Net of tax

 

 

(21,665

)

 

 

(22,521

)

 

 

(15,747

)

 

 

(10,324

)

 

 

(1,656

)

Total shareholders' equity

 

 

484,563

 

 

 

471,799

 

 

 

463,707

 

 

 

464,825

 

 

 

466,683

 

Total liabilities and shareholders’ equity

 

$

3,917,686

 

 

$

3,905,229

 

 

$

3,969,037

 

 

$

4,013,569

 

 

$

4,228,194

 

 

RBB BANCORP AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

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

 

 

 

For the Three Months Ended

 

 

 

December 31,

2022

 

 

September 30,

2022

 

 

December 31,

2021

 

Interest and dividend income:

 

 

 

 

 

 

 

 

 

 

 

 

Interest and fees on loans

 

$

49,468

 

 

$

43,588

 

 

$

36,783

 

Interest on interest-bearing deposits

 

 

697

 

 

 

373

 

 

 

160

 

Interest on investment securities

 

 

1,874

 

 

 

1,784

 

 

 

1,069

 

Dividend income on FHLB stock

 

 

265

 

 

 

224

 

 

 

227

 

Interest on federal funds sold and other

 

 

347

 

 

 

445

 

 

 

205

 

Total interest income

 

 

52,651

 

 

 

46,414

 

 

 

38,444

 

Interest expense:

 

 

 

 

 

 

 

 

 

 

 

 

Interest on savings deposits, NOW and money market accounts

 

 

2,471

 

 

 

1,529

 

 

 

683

 

Interest on time deposits

 

 

7,798

 

 

 

2,460

 

 

 

1,748

 

Interest on subordinated debentures and long term debt

 

 

2,491

 

 

 

2,427

 

 

 

2,343

 

Interest on other borrowed funds

 

 

898

 

 

 

1,020

 

 

 

445

 

Total interest expense

 

 

13,658

 

 

 

7,436

 

 

 

5,219

 

Net interest income before provision for credit losses

 

 

38,993

 

 

 

38,978

 

 

 

33,225

 

Provision for credit losses

 

 

2,950

 

 

 

1,766

 

 

 

635

 

Net interest income after provision for credit losses

 

 

36,043

 

 

 

37,212

 

 

 

32,590

 

Noninterest income:

 

 

 

 

 

 

 

 

 

 

 

 

Service charges, fees and other

 

 

1,196

 

 

 

1,277

 

 

 

1,323

 

Gain on sale of loans

 

 

112

 

 

 

265

 

 

 

1,788

 

Gain on transfer of OREO

 

 

22

 

 

 

 

 

 

-

 

Loan servicing fees, net of amortization

 

 

581

 

 

 

724

 

 

 

258

 

Recoveries on loans acquired in business combinations

 

 

90

 

 

 

5

 

 

 

4

 

Unrealized loss on equity investments

 

 

 

 

 

 

 

 

(300

)

Unrealized gain/(loss)on derivatives

 

 

16

 

 

 

(68

)

 

 

(249

)

Increase in cash surrender value of life insurance

 

 

335

 

 

 

332

 

 

 

332

 

Total noninterest income

 

 

2,352

 

 

 

2,535

 

 

 

3,156

 

Noninterest expense:

 

 

 

 

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

 

6,958

 

 

 

9,561

 

 

 

6,812

 

Occupancy and equipment expenses

 

 

2,364

 

 

 

2,349

 

 

 

2,125

 

Data processing

 

 

1,203

 

 

 

1,306

 

 

 

838

 

Legal and professional

 

 

1,045

 

 

 

1,077

 

 

 

1,686

 

Office expenses

 

 

405

 

 

 

382

 

 

 

359

 

Marketing and business promotion

 

 

406

 

 

 

364

 

 

 

418

 

Insurance and regulatory assessments

 

 

489

 

 

 

441

 

 

 

475

 

Core deposit premium

 

 

253

 

 

 

277

 

 

 

252

 

OREO expenses

 

 

6

 

 

 

4

 

 

 

4

 

Merger expenses

 

 

1

 

 

 

 

 

 

38

 

Other expenses

 

 

(37

)

 

 

936

 

 

 

293

 

Total noninterest expense

 

 

13,093

 

 

 

16,697

 

 

 

13,300

 

Income before income taxes

 

 

25,302

 

 

 

23,050

 

 

 

22,446

 

Income tax expense

 

 

7,721

 

 

 

6,398

 

 

 

6,740

 

Net income

 

$

17,581

 

 

$

16,652

 

 

$

15,706

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income per share

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.93

 

 

$

0.88

 

 

$

0.81

 

Diluted

 

$

0.92

 

 

$

0.87

 

 

$

0.79

 

Cash Dividends declared per common share

 

$

0.14

 

 

$

0.14

 

 

$

0.13

 

Weighted-average common shares outstanding

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

18,971,250

 

 

 

18,988,443

 

 

 

19,444,148

 

Diluted

 

 

19,086,586

 

 

 

19,130,447

 

 

 

19,851,202

 

 

RBB BANCORP AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Unaudited, except for December 31, 2021)

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

 

 

 

For the Year Ended

 

 

 

December 31,

2022

 

 

December 31,

2021

 

Interest and dividend income:

 

 

 

 

 

 

 

 

Interest and fees on loans

 

$

171,099

 

 

$

141,569

 

Interest on interest-earning deposits

 

 

1,353

 

 

 

552

 

Interest on investment securities

 

 

6,084

 

 

 

3,379

 

Dividend income on FHLB stock

 

 

938

 

 

 

869

 

Interest on federal funds sold and other

 

 

1,496

 

 

 

694

 

Total interest income

 

 

180,970

 

 

 

147,063

 

Interest expense:

 

 

 

 

 

 

 

 

Interest on savings deposits, NOW and money market accounts

 

 

5,561

 

 

 

2,786

 

Interest on time deposits

 

 

13,338

 

 

 

9,170

 

Interest on subordinated debentures and long term debt

 

 

9,645

 

 

 

8,999

 

Interest on other borrowed funds

 

 

2,872

 

 

 

1,765

 

Total interest expense

 

 

31,416

 

 

 

22,720

 

Net interest income

 

 

149,554

 

 

 

124,343

 

Provision for credit losses

 

 

5,998

 

 

 

3,959

 

Net interest income after provision for credit losses

 

 

143,556

 

 

 

120,384

 

Noninterest income:

 

 

 

 

 

 

 

 

Service charges, fees and other

 

 

5,096

 

 

 

7,276

 

Gain on sale of loans

 

 

1,895

 

 

 

9,991

 

Gain on transfer of OREO

 

 

22

 

 

 

 

Loan servicing fees, net of amortization

 

 

2,209

 

 

 

684

 

Recoveries on loans acquired in business combinations

 

 

198

 

 

 

82

 

Unrealized loss on equity investments

 

 

 

 

 

(360

)

Unrealized (loss) gain on derivatives

 

 

(247

)

 

 

5

 

Increase in cash surrender value of life insurance

 

 

1,322

 

 

 

1,067

 

Gain on sale of fixed assets

 

 

757

 

 

 

 

Total noninterest income

 

 

11,252

 

 

 

18,745

 

Noninterest expense:

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

 

35,517

 

 

 

33,568

 

Occupancy and equipment expenses

 

 

9,092

 

 

 

8,691

 

Data processing

 

 

5,060

 

 

 

4,474

 

Legal and professional

 

 

5,383

 

 

 

3,773

 

Office expenses

 

 

1,438

 

 

 

1,197

 

Marketing and business promotion

 

 

1,578

 

 

 

1,157

 

Insurance and regulatory assessments

 

 

1,850

 

 

 

1,561

 

Core deposit premium

 

 

1,086

 

 

 

1,121

 

OREO expenses

 

 

23

 

 

 

17

 

Merger expenses

 

 

61

 

 

 

137

 

Other expenses

 

 

2,375

 

 

 

2,496

 

Total noninterest expense

 

 

63,463

 

 

 

58,192

 

Income before income taxes

 

 

91,345

 

 

 

80,937

 

Income tax expense

 

 

27,018

 

 

 

24,031

 

Net income

 

$

64,327

 

 

$

56,906

 

 

 

 

 

 

 

 

 

 

Net income per share

 

 

 

 

 

 

 

 

Basic

 

$

3.37

 

 

$

2.92

 

Diluted

 

$

3.33

 

 

$

2.86

 

Cash Dividends declared per common share

 

$

0.56

 

 

$

0.51

 

Weighted-average common shares outstanding

 

 

 

 

 

 

 

 

Basic

 

 

19,099,509

 

 

 

19,423,549

 

Diluted

 

 

19,332,639

 

 

 

19,834,306

 

 

RBB BANCORP AND SUBSIDIARIES

AVERAGE BALANCE SHEET AND NET INTEREST INCOME

(Unaudited)

 

 

 

For the Three Months Ended

 

 

 

December 31, 2022

 

 

September 30, 2022

 

 

December 31, 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)

 

$

94,932

 

 

$

1,310

 

 

 

5.47

%

 

$

141,737

 

 

$

1,042

 

 

 

2.92

%

 

$

587,980

 

 

$

592

 

 

 

0.40

%

Securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Available for sale (2)

 

 

245,348

 

 

 

1,847

 

 

 

2.99

%

 

 

318,066

 

 

 

1,758

 

 

 

2.19

%

 

 

376,601

 

 

 

1,037

 

 

 

1.09

%

Held to maturity (2)

 

 

5,733

 

 

 

50

 

 

 

3.46

%

 

 

5,738

 

 

 

50

 

 

 

3.46

%

 

 

6,256

 

 

 

56

 

 

 

3.55

%

Mortgage loans held for sale

 

 

192

 

 

 

3

 

 

 

6.20

%

 

 

420

 

 

 

6

 

 

 

5.48

%

 

 

3,721

 

 

 

40

 

 

 

4.26

%

Loans held for investment: (3)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Real estate

 

 

3,006,293

 

 

 

43,864

 

 

 

5.79

%

 

 

2,820,022

 

 

 

38,999

 

 

 

5.49

%

 

 

2,492,396

 

 

 

31,978

 

 

 

5.09

%

Commercial

 

 

280,326

 

 

 

5,601

 

 

 

7.93

%

 

 

303,899

 

 

 

4,583

 

 

 

5.98

%

 

 

380,098

 

 

 

4,765

 

 

 

4.97

%

Total loans

 

 

3,286,619

 

 

 

49,465

 

 

 

5.97

%

 

 

3,123,921

 

 

 

43,582

 

 

 

5.53

%

 

 

2,872,494

 

 

 

36,743

 

 

 

5.07

%

Total earning assets

 

 

3,632,824

 

 

$

52,675

 

 

 

5.75

%

 

 

3,589,882

 

 

$

46,438

 

 

 

5.13

%

 

 

3,847,052

 

 

$

38,468

 

 

 

3.97

%

Noninterest-earning assets

 

 

247,574

 

 

 

 

 

 

 

 

 

 

 

250,737

 

 

 

 

 

 

 

 

 

 

 

240,059

 

 

 

 

 

 

 

 

 

Total assets

 

$

3,880,398

 

 

 

 

 

 

 

 

 

 

$

3,840,619

 

 

 

 

 

 

 

 

 

 

$

4,087,111

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NOW

 

$

67,854

 

 

$

77

 

 

 

0.45

%

 

$

74,518

 

 

$

91

 

 

 

0.48

%

 

$

73,896

 

 

$

48

 

 

 

0.26

%

Money Market

 

 

561,575

 

 

 

2,337

 

 

 

1.65

%

 

 

612,743

 

 

 

1,376

 

 

 

0.89

%

 

 

668,742

 

 

 

602

 

 

 

0.36

%

Saving deposits

 

 

136,623

 

 

 

57

 

 

 

0.17

%

 

 

147,349

 

 

 

62

 

 

 

0.17

%

 

 

138,906

 

 

 

33

 

 

 

0.09

%

Time deposits, less than $250,000

 

 

716,476

 

 

 

3,884

 

 

 

2.15

%

 

 

566,730

 

 

 

1,221

 

 

 

0.85

%

 

 

599,119

 

 

 

827

 

 

 

0.55

%

Time deposits, $250,000 and over

 

 

631,897

 

 

 

3,914

 

 

 

2.46

%

 

 

531,655

 

 

 

1,239

 

 

 

0.92

%

 

 

588,265

 

 

 

921

 

 

 

0.62

%

Total interest-bearing deposits

 

 

2,114,425

 

 

 

10,269

 

 

 

1.93

%

 

 

1,932,995

 

 

 

3,989

 

 

 

0.82

%

 

 

2,068,928

 

 

 

2,431

 

 

 

0.47

%

FHLB advances

 

 

196,304

 

 

 

898

 

 

 

1.81

%

 

 

239,674

 

 

 

1,020

 

 

 

1.69

%

 

 

150,000

 

 

 

445

 

 

 

1.18

%

Long-term debt

 

 

173,491

 

 

 

2,194

 

 

 

5.02

%

 

 

173,345

 

 

 

2,194

 

 

 

5.02

%

 

 

172,912

 

 

 

2,195

 

 

 

5.04

%

Subordinated debentures

 

 

14,684

 

 

 

297

 

 

 

8.02

%

 

 

14,629

 

 

 

233

 

 

 

6.32

%

 

 

14,466

 

 

 

148

 

 

 

4.06

%

Total interest-bearing liabilities

 

 

2,498,904

 

 

 

13,658

 

 

 

2.17

%

 

 

2,360,643

 

 

 

7,436

 

 

 

1.25

%

 

 

2,406,306

 

 

 

5,219

 

 

 

0.86

%

Noninterest-bearing liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing deposits

 

 

856,917

 

 

 

 

 

 

 

 

 

 

 

964,867

 

 

 

 

 

 

 

 

 

 

 

1,177,948

 

 

 

 

 

 

 

 

 

Other noninterest-bearing liabilities

 

 

46,613

 

 

 

 

 

 

 

 

 

 

 

41,003

 

 

 

 

 

 

 

 

 

 

 

39,483

 

 

 

 

 

 

 

 

 

Total noninterest-bearing liabilities

 

 

903,530

 

 

 

 

 

 

 

 

 

 

 

1,005,870

 

 

 

 

 

 

 

 

 

 

 

1,217,431

 

 

 

 

 

 

 

 

 

Shareholders' equity

 

 

477,964

 

 

 

 

 

 

 

 

 

 

 

474,106

 

 

 

 

 

 

 

 

 

 

 

463,374

 

 

 

 

 

 

 

 

 

Total liabilities and shareholders' equity

 

$

3,880,398

 

 

 

 

 

 

 

 

 

 

$

3,840,619

 

 

 

 

 

 

 

 

 

 

$

4,087,111

 

 

 

 

 

 

 

 

 

Net interest income / interest rate spreads

 

 

 

 

 

$

39,017

 

 

 

3.58

%

 

 

 

 

 

$

39,002

 

 

 

3.88

%

 

 

 

 

 

$

33,249

 

 

 

3.11

%

Net interest margin

 

 

 

 

 

 

 

 

 

 

4.26

%

 

 

 

 

 

 

 

 

 

 

4.31

%

 

 

 

 

 

 

 

 

 

 

3.43

%

_____________________

(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, except for December 31, 2021)

 

 

 

For the Year Ended

 

 

 

December 31, 2022

 

 

December 31, 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)

 

$

276,923

 

 

$

3,788

 

 

 

1.37

%

 

$

504,809

 

 

$

2,115

 

 

 

0.42

%

Securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Available for sale (2)

 

 

338,437

 

 

 

5,973

 

 

 

1.76

%

 

 

320,544

 

 

 

3,217

 

 

 

1.00

%

Held to maturity (2)

 

 

5,865

 

 

 

208

 

 

 

3.55

%

 

 

6,543

 

 

 

238

 

 

 

3.64

%

Mortgage loans held for sale

 

 

1,263

 

 

 

66

 

 

 

5.23

%

 

 

20,817

 

 

 

670

 

 

 

3.22

%

Loans held for investment: (3)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Real estate

 

 

2,774,348

 

 

 

151,164

 

 

 

5.45

%

 

 

2,363,846

 

 

 

122,204

 

 

 

5.17

%

Commercial

 

 

322,438

 

 

 

19,869

 

 

 

6.16

%

 

 

381,646

 

 

 

18,695

 

 

 

4.90

%

Total loans

 

 

3,096,786

 

 

 

171,033

 

 

 

5.52

%

 

 

2,745,492

 

 

 

140,899

 

 

 

5.13

%

Total earning assets

 

 

3,719,274

 

 

$

181,068

 

 

 

4.87

%

 

 

3,598,205

 

 

$

147,139

 

 

 

4.09

%

Noninterest-earning assets

 

 

244,891

 

 

 

 

 

 

 

 

 

 

 

235,267

 

 

 

 

 

 

 

 

 

Total assets

 

$

3,964,165

 

 

 

 

 

 

 

 

 

 

$

3,833,472

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NOW

 

$

73,335

 

 

$

262

 

 

 

0.36

%

 

$

69,211

 

 

$

184

 

 

 

0.27

%

Money Market

 

 

631,094

 

 

 

5,114

 

 

 

0.81

%

 

 

637,539

 

 

 

2,468

 

 

 

0.39

%

Saving deposits

 

 

144,409

 

 

 

185

 

 

 

0.13

%

 

 

137,534

 

 

 

134

 

 

 

0.10

%

Time deposits, less than $250,000

 

 

609,464

 

 

 

6,583

 

 

 

1.08

%

 

 

640,747

 

 

 

4,462

 

 

 

0.70

%

Time deposits, $250,000 and over

 

 

565,059

 

 

 

6,755

 

 

 

1.20

%

 

 

597,770

 

 

 

4,708

 

 

 

0.79

%

Total interest-bearing deposits

 

 

2,023,361

 

 

 

18,899

 

 

 

0.93

%

 

 

2,082,801

 

 

 

11,956

 

 

 

0.57

%

FHLB advances

 

 

192,438

 

 

 

2,872

 

 

 

1.49

%

 

 

150,000

 

 

 

1,765

 

 

 

1.18

%

Long-term debt

 

 

173,275

 

 

 

8,777

 

 

 

5.07

%

 

 

157,719

 

 

 

8,404

 

 

 

5.33

%

Subordinated debentures

 

 

14,603

 

 

 

868

 

 

 

5.94

%

 

 

14,385

 

 

 

595

 

 

 

4.14

%

Total interest-bearing liabilities

 

 

2,403,677

 

 

$

31,416

 

 

 

1.31

%

 

 

2,404,905

 

 

$

22,720

 

 

 

0.94

%

Noninterest-bearing liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing deposits

 

 

1,050,063

 

 

 

 

 

 

 

 

 

 

 

938,710

 

 

 

 

 

 

 

 

 

Other noninterest-bearing liabilities

 

 

39,644

 

 

 

 

 

 

 

 

 

 

 

42,143

 

 

 

 

 

 

 

 

 

Total noninterest-bearing liabilities

 

 

1,089,707

 

 

 

 

 

 

 

 

 

 

 

980,853

 

 

 

 

 

 

 

 

 

Shareholders' equity

 

 

470,781

 

 

 

 

 

 

 

 

 

 

 

447,714

 

 

 

 

 

 

 

 

 

Total liabilities and shareholders' equity

 

$

3,964,165

 

 

 

 

 

 

 

 

 

 

$

3,833,472

 

 

 

 

 

 

 

 

 

Net interest income / interest rate spreads

 

 

 

 

 

$

149,652

 

 

 

3.56

%

 

 

 

 

 

$

124,419

 

 

 

3.15

%

Net interest margin

 

 

 

 

 

 

 

 

 

 

4.02

%

 

 

 

 

 

 

 

 

 

 

3.46

%

________________

(1)

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

(2)

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

(3)

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

 

RBB BANCORP AND SUBSIDIARIES

SELECTED FINANCIAL HIGHLIGHTS

(Unaudited)

 

 

 

For the Three Months Ended

 

 

 

December 31,

 

 

September 30,

 

 

December 31,

 

 

 

2022

 

 

2022

 

 

2021

 

Per share data (common stock)

 

 

 

 

 

 

 

 

 

 

 

 

Earnings

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.93

 

 

$

0.88

 

 

$

0.81

 

Diluted

 

$

0.92

 

 

$

0.87

 

 

$

0.79

 

Dividends declared

 

$

0.14

 

 

$

0.14

 

 

$

0.13

 

Book value

 

$

25.55

 

 

$

24.82

 

 

$

23.99

 

Tangible book value (1)

 

$

21.58

 

 

$

20.85

 

 

$

20.22

 

Weighted average shares outstanding

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

18,971,250

 

 

 

18,988,443

 

 

 

19,444,148

 

Diluted

 

 

19,086,586

 

 

 

19,130,447

 

 

 

19,851,202

 

Shares outstanding at period end

 

 

18,965,776

 

 

 

19,011,672

 

 

 

19,455,544

 

Performance ratios

 

 

 

 

 

 

 

 

 

 

 

 

Return on average assets, annualized

 

 

1.80

%

 

 

1.72

%

 

 

1.52

%

Return on average shareholders' equity, annualized

 

 

14.59

%

 

 

13.93

%

 

 

13.45

%

Return on average tangible common equity, annualized (1)

 

 

17.33

%

 

 

16.58

%

 

 

15.98

%

Noninterest income to average assets, annualized

 

 

0.24

%

 

 

0.26

%

 

 

0.31

%

Noninterest expense to average assets, annualized

 

 

1.34

%

 

 

1.72

%

 

 

1.29

%

Yield on average earning assets

 

 

5.75

%

 

 

5.13

%

 

 

3.97

%

Cost of average total deposits

 

 

1.37

%

 

 

0.55

%

 

 

0.30

%

Cost of average interest-bearing deposits

 

 

1.93

%

 

 

0.82

%

 

 

0.47

%

Cost of average interest-bearing liabilities

 

 

2.17

%

 

 

1.25

%

 

 

0.86

%

Accretion on loans to average earning assets

 

 

0.00

%

 

 

0.01

%

 

 

0.02

%

Net interest spread

 

 

3.58

%

 

 

3.88

%

 

 

3.11

%

Net interest margin

 

 

4.26

%

 

 

4.31

%

 

 

3.43

%

Efficiency ratio (2)

 

 

31.67

%

 

 

40.22

%

 

 

36.56

%

Common stock dividend payout ratio

 

 

15.05

%

 

 

15.91

%

 

 

16.05

%

____________________

(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 credit losses and noninterest income.

 

RBB BANCORP AND SUBSIDIARIES

SELECTED FINANCIAL HIGHLIGHTS

(Unaudited, except for December 31, 2021)

 

 

 

For the Year Ended December 31,

 

 

 

2022

 

 

2021

 

Per share data (common stock)

 

 

 

 

 

 

 

 

Earnings

 

 

 

 

 

 

 

 

Basic

 

$

3.37

 

 

$

2.92

 

Diluted

 

$

3.33

 

 

$

2.86

 

Dividends declared

 

$

0.56

 

 

$

0.51

 

Book value

 

$

25.55

 

 

$

23.99

 

Tangible book value (1)

 

$

21.58

 

 

$

20.22

 

Weighted average shares outstanding

 

 

 

 

 

 

 

 

Basic

 

 

19,099,509

 

 

 

19,423,549

 

Diluted

 

 

19,332,639

 

 

 

19,834,306

 

Shares outstanding at period end

 

 

18,965,776

 

 

 

19,455,544

 

Performance ratios

 

 

 

 

 

 

 

 

Return on average assets, annualized

 

 

1.62

%

 

 

1.48

%

Return on average shareholders' equity, annualized

 

 

13.66

%

 

 

12.71

%

Return on average tangible common equity, annualized (1)

 

 

16.26

%

 

 

15.22

%

Noninterest income to average assets, annualized

 

 

0.28

%

 

 

0.49

%

Noninterest expense to average assets, annualized

 

 

1.60

%

 

 

1.52

%

Yield on average earning assets

 

 

4.87

%

 

 

4.09

%

Cost of average deposits

 

 

0.61

%

 

 

0.40

%

Cost of average interest-bearing deposits

 

 

0.93

%

 

 

0.57

%

Cost of average interest-bearing liabilities

 

 

1.31

%

 

 

0.94

%

Accretion on loans to average earning assets

 

 

0.01

%

 

 

0.03

%

Net interest spread

 

 

3.56

%

 

 

3.15

%

Net interest margin

 

 

4.02

%

 

 

3.46

%

Efficiency ratio (2)

 

 

39.47

%

 

 

40.67

%

Common stock dividend payout ratio

 

 

16.62

%

 

 

17.47

%

______________________

(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 credit losses and noninterest income.

 

RBB BANCORP AND SUBSIDIARIES

SELECTED FINANCIAL HIGHLIGHTS

(Unaudited)

(Dollars in thousands)

 

 

 

As of

 

 

 

December 31,

 

 

September 30,

 

 

December 31,

 

 

 

2022

 

 

2022

 

 

2021

 

Loan to deposit ratio

 

 

112.05

%

 

 

108.83

%

 

 

86.58

%

Core deposits (1) / total deposits

 

 

75.61

%

 

 

81.32

%

 

 

82.91

%

Net non-core funding dependence ratio (2)

 

 

17.96

%

 

 

11.09

%

 

 

-6.50

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Credit Quality Data:

 

 

 

 

 

 

 

 

 

 

 

 

Loans 30-89 days past due

 

$

15,249

 

 

$

39,938

 

 

$

17,640

 

Loans 30-89 days past due to total loans

 

 

0.46

%

 

 

1.24

%

 

 

0.60

%

Nonperforming loans

 

$

11,525

 

 

$

11,503

 

 

$

20,725

 

Nonperforming loans to total loans

 

 

0.35

%

 

 

0.36

%

 

 

0.71

%

Nonperforming assets

 

$

12,102

 

 

$

11,796

 

 

$

21,018

 

Nonperforming assets to total assets

 

 

0.31

%

 

 

0.30

%

 

 

0.50

%

Allowance for credit losses to total loans

 

 

1.23

%

 

 

1.12

%

 

 

1.12

%

Allowance for credit losses to nonperforming loans

 

 

356.16

%

 

 

313.37

%

 

 

158.80

%

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

 

 

0.01

%

 

 

(0.02

%)

 

 

(0.01

%)

 

 

 

 

 

 

 

 

 

 

 

 

 

Regulatory and other capital ratios—Company

 

 

 

 

 

 

 

 

 

 

 

 

Tangible common equity to tangible assets (2)

 

 

10.65

%

 

 

10.35

%

 

 

9.47

%

Tier 1 leverage ratio

 

 

11.67

%

 

 

11.47

%

 

 

10.21

%

Tier 1 common capital to risk-weighted assets

 

 

16.04

%

 

 

15.52

%

 

 

14.86

%

Tier 1 capital to risk-weighted assets

 

 

16.58

%

 

 

16.06

%

 

 

15.40

%

Total capital to risk-weighted assets

 

 

24.28

%

 

 

23.72

%

 

 

23.15

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Regulatory capital ratios—Bank only

 

 

 

 

 

 

 

 

 

 

 

 

Tier 1 leverage ratio

 

 

14.89

%

 

 

14.57

%

 

 

12.45

%

Tier 1 common capital to risk-weighted assets

 

 

21.16

%

 

 

20.41

%

 

 

18.80

%

Tier 1 capital to risk-weighted assets

 

 

21.16

%

 

 

20.41

%

 

 

18.80

%

Total capital to risk-weighted assets

 

 

22.41

%

 

 

21.67

%

 

 

20.05

%

__________________

(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 data)

 

 

 

4th Quarter

 

 

3rd Quarter

 

 

2nd Quarter

 

 

1st Quarter

 

 

4th Quarter

 

Quarterly Consolidated Statements of Earnings

 

2022

 

 

2022

 

 

2022

 

 

2022

 

 

2021

 

Interest income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans, including fees

 

$

49,468

 

 

$

43,588

 

 

$

40,157

 

 

$

37,886

 

 

$

36,783

 

Investment securities and other

 

 

3,183

 

 

 

2,826

 

 

 

2,181

 

 

 

1,680

 

 

 

1,661

 

Total interest income

 

 

52,651

 

 

 

46,414

 

 

 

42,338

 

 

 

39,566

 

 

 

38,444

 

Interest expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

 

10,269

 

 

 

3,989

 

 

 

2,350

 

 

 

2,292

 

 

 

2,431

 

Interest on subordinated debentures and other

 

 

2,491

 

 

 

2,427

 

 

 

2,379

 

 

 

2,348

 

 

 

2,343

 

Other borrowings

 

 

898

 

 

 

1,020

 

 

 

519

 

 

 

435

 

 

 

445

 

Total interest expense

 

 

13,658

 

 

 

7,436

 

 

 

5,248

 

 

 

5,075

 

 

 

5,219

 

Net interest income before provision for credit losses

 

 

38,993

 

 

 

38,978

 

 

 

37,090

 

 

 

34,491

 

 

 

33,225

 

Provision for credit losses

 

 

2,950

 

 

 

1,766

 

 

 

915

 

 

 

366

 

 

 

635

 

Net interest income after provision for credit losses

 

 

36,043

 

 

 

37,212

 

 

 

36,175

 

 

 

34,125

 

 

 

32,590

 

Noninterest income

 

 

2,352

 

 

 

2,535

 

 

 

3,422

 

 

 

2,944

 

 

 

3,156

 

Noninterest expense

 

 

13,093

 

 

 

16,697

 

 

 

17,612

 

 

 

16,061

 

 

 

13,300

 

Earnings before income taxes

 

 

25,302

 

 

 

23,050

 

 

 

21,985

 

 

 

21,008

 

 

 

22,446

 

Income taxes

 

 

7,721

 

 

 

6,398

 

 

 

6,508

 

 

 

6,391

 

 

 

6,740

 

Net income

 

$

17,581

 

 

$

16,652

 

 

$

15,477

 

 

$

14,617

 

 

$

15,706

 

Net income per common share - basic

 

$

0.93

 

 

$

0.88

 

 

$

0.81

 

 

$

0.75

 

 

$

0.81

 

Net income per common share - diluted

 

$

0.92

 

 

$

0.87

 

 

$

0.80

 

 

$

0.74

 

 

$

0.79

 

Cash dividends declared per common share

 

$

0.14

 

 

$

0.14

 

 

$

0.14

 

 

$

0.14

 

 

$

0.13

 

Cash dividends declared on common shares

 

$

2,655

 

 

$

2,663

 

 

$

2,687

 

 

$

2,724

 

 

$

2,537

 

Yield on average assets, annualized

 

 

1.80

%

 

 

1.72

%

 

 

1.60

%

 

 

1.39

%

 

 

1.52

%

Yield on average earning assets

 

 

5.75

%

 

 

5.13

%

 

 

4.66

%

 

 

4.00

%

 

 

3.97

%

Cost of average deposits

 

 

1.37

%

 

 

0.55

%

 

 

0.31

%

 

 

0.27

%

 

 

0.30

%

Cost of average interest-bearing deposits

 

 

1.93

%

 

 

0.82

%

 

 

0.49

%

 

 

0.44

%

 

 

0.47

%

Cost of average interest-bearing liabilities

 

 

2.17

%

 

 

1.25

%

 

 

0.91

%

 

 

0.84

%

 

 

0.86

%

Accretion on loans to average earning assets

 

 

0.00

%

 

 

0.01

%

 

 

0.01

%

 

 

0.02

%

 

 

0.02

%

Net interest margin

 

 

4.26

%

 

 

4.31

%

 

 

4.08

%

 

 

3.49

%

 

 

3.43

%

 

RBB BANCORP AND SUBSIDIARIES

SELECTED FINANCIAL HIGHLIGHTS

(Unaudited, except for December 31, 2021)

 

Loan Portfolio Detail

 

As of December 31,

2022

 

 

As of September 30,

2022

 

 

As of June 30,

2022

 

 

As of March 31,

2022

 

 

As of December 31,

2021

 

(dollars in thousands)

 

$

 

 

%

 

 

$

 

 

%

 

 

$

 

 

%

 

 

$

 

 

%

 

 

$

 

 

%

 

Loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial and industrial

 

$

201,223

 

 

 

6.0

%

 

$

204,817

 

 

 

6.4

%

 

$

238,045

 

 

 

7.8

%

 

$

280,825

 

 

 

9.3

%

 

$

268,709

 

 

 

9.2

%

SBA

 

 

61,411

 

 

 

1.9

%

 

 

61,934

 

 

 

1.9

%

 

 

59,303

 

 

 

1.9

%

 

 

67,688

 

 

 

2.3

%

 

 

76,136

 

 

 

2.6

%

Construction and land development

 

 

276,876

 

 

 

8.3

%

 

 

353,473

 

 

 

11.0

%

 

 

356,772

 

 

 

11.7

%

 

 

346,766

 

 

 

11.5

%

 

 

303,144

 

 

 

10.3

%

Commercial real estate (1)

 

 

1,312,132

 

 

 

39.3

%

 

 

1,220,791

 

 

 

37.9

%

 

 

1,160,350

 

 

 

38.1

%

 

 

1,217,985

 

 

 

40.5

%

 

 

1,247,999

 

 

 

42.6

%

Single-family residential mortgages

 

 

1,464,108

 

 

 

43.9

%

 

 

1,356,342

 

 

 

42.1

%

 

 

1,205,732

 

 

 

39.6

%

 

 

1,064,581

 

 

 

35.4

%

 

 

1,004,576

 

 

 

34.3

%

Other loans

 

 

20,699

 

 

 

0.6

%

 

 

23,556

 

 

 

0.7

%

 

 

25,744

 

 

 

0.9

%

 

 

28,639

 

 

 

1.0

%

 

 

30,786

 

 

 

1.0

%

Total loans (2)

 

$

3,336,449

 

 

 

100.0

%

 

$

3,220,913

 

 

 

100.0

%

 

$

3,045,946

 

 

 

100.0

%

 

$

3,006,484

 

 

 

100.0

%

 

$

2,931,350

 

 

 

100.0

%

Allowance for credit losses

 

 

(41,047

)

 

 

 

 

 

 

(36,047

)

 

 

 

 

 

 

(34,154

)

 

 

 

 

 

 

(33,292

)

 

 

 

 

 

 

(32,912

)

 

 

 

 

Total loans, net

 

$

3,295,402

 

 

 

 

 

 

$

3,184,866

 

 

 

 

 

 

$

3,011,792

 

 

 

 

 

 

$

2,973,192

 

 

 

 

 

 

$

2,898,438

 

 

 

 

 

__________________

(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

 

 

Year Ended

 

Change in Allowance for Credit Losses

 

December 31,

 

 

December 31,

 

(dollars in thousands)

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Beginning balance

 

$

36,047

 

 

$

32,231

 

 

$

32,912

 

 

$

29,337

 

ASU 2016-13 transition adjustment

 

 

2,135

 

 

 

 

 

 

2,135

 

 

 

 

Adjusted Beginning balance

 

 

38,182

 

 

 

32,231

 

 

 

35,047

 

 

 

29,337

 

Additions to the allowance charged to expense

 

 

2,950

 

 

 

635

 

 

 

5,998

 

 

 

3,959

 

Net (charge-offs)/recoveries on loans

 

 

(85

)

 

 

46

 

 

 

2

 

 

 

(384

)

Ending balance

 

$

41,047

 

 

$

32,912

 

 

$

41,047

 

 

$

32,912

 

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 December 31, 2022, September 30, 2022, and December 31, 2021.

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

December 31,

2022

 

 

September 30,

2022

 

 

December 31,

2021

 

Tangible common equity:

 

 

 

 

 

 

 

 

 

 

 

 

Total shareholders' equity

 

$

484,563

 

 

$

471,799

 

 

$

466,683

 

Adjustments

 

 

 

 

 

 

 

 

 

 

 

 

Goodwill

 

 

(71,498

)

 

 

(71,498

)

 

 

(69,243

)

Core deposit intangible

 

 

(3,718

)

 

 

(3,971

)

 

 

(4,075

)

Tangible common equity

 

$

409,347

 

 

$

396,330

 

 

$

393,365

 

Tangible assets:

 

 

 

 

 

 

 

 

 

 

 

 

Total assets-GAAP

 

$

3,917,686

 

 

$

3,905,229

 

 

$

4,228,194

 

Adjustments

 

 

 

 

 

 

 

 

 

 

 

 

Goodwill

 

 

(71,498

)

 

 

(71,498

)

 

 

(69,243

)

Core deposit intangible

 

 

(3,718

)

 

 

(3,971

)

 

 

(4,075

)

Tangible assets

 

$

3,842,470

 

 

$

3,829,760

 

 

$

4,154,876

 

Common shares outstanding

 

 

18,965,776

 

 

 

19,011,672

 

 

 

19,455,544

 

Tangible common equity to tangible assets ratio

 

 

10.65

%

 

 

10.35

%

 

 

9.47

%

Book value per share

 

$

25.55

 

 

$

24.82

 

 

$

23.99

 

Tangible book value per share

 

$

21.58

 

 

$

20.85

 

 

$

20.22

 

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

 

 

Year Ended

 

 

 

December 31,

 

 

December 31,

 

(dollars in thousands)

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Net income available to common shareholders

 

$

17,581

 

 

$

15,706

 

 

$

64,327

 

 

$

56,906

 

Average shareholders' equity

 

 

477,964

 

 

 

463,374

 

 

 

470,781

 

 

 

447,714

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Goodwill

 

 

(71,498

)

 

 

(69,243

)

 

 

(70,948

)

 

 

(69,243

)

Core deposit intangible

 

 

(3,882

)

 

 

(4,239

)

 

 

(4,131

)

 

 

(4,657

)

Adjusted average tangible common equity

 

$

402,584

 

 

$

389,892

 

 

$

395,702

 

 

$

373,814

 

Return on average tangible common equity

 

 

17.33

%

 

 

15.98

%

 

 

16.26

%

 

 

15.22

%

Non-core Funding Dependency Ratio

The Bank measures core deposits by reviewing all relationships over $250,000 on a quarterly basis. The Company tracks 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 the Company (as a director or shareholder); (ii) deposits within the Company’s market area; (iii) additional non-deposit services with the Company; (iv) electronic banking services with the Company; (v) active demand deposit account with the Company; (vi) deposits at market interest rates; and (vii) longevity of the relationship with the Company. The Company considers 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. The Company believes 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)

 

December 31,

2022

 

 

December 31,

2021

 

 

 

 

 

 

 

 

 

 

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

 

$

726,234

 

 

$

578,499

 

Short term borrowing outstanding

 

 

70,000

 

 

 

 

Adjusted non-core liabilities

 

 

796,234

 

 

 

578,499

 

Short term assets (1)

 

 

137,302

 

 

 

837,941

 

Adjustment to short term assets:

 

 

 

 

 

 

 

 

Purchased receivables with maturities less than 90-days

 

 

 

 

 

 

Adjusted short term assets

 

 

137,302

 

 

 

837,941

 

Net non-core funding

 

$

658,932

 

 

$

(259,442

)

Total earning assets

 

 

3,668,447

 

 

 

3,988,715

 

Net non-core funding dependency ratio

 

 

17.96

%

 

 

-6.50

%

______________

(1)

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

 

Contacts

David Morris

President, CEO and CFO

(714) 670-2488

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