RBB Bancorp Reports Third Quarter Earnings for 2020

Conference Call and Webcast Scheduled for Tuesday, October 27, 2020 at 11:00 a.m. Pacific Time/2:00 p.m. Eastern Time 

Third Quarter 2020 Highlights

  • Net income of $8.5 million, or $0.43 diluted earnings per share
  • Loans held for investment increased by $160.5 million, or 24.6% annualized growth, from the end of the prior quarter
  • Total deposits (excluding brokered deposits) increased by $160.2 million, or 26.2% annualized growth, from the end of the prior quarter
  • Nonperforming assets to total assets of 0.54%, improving 2 basis points from the prior quarter
  • Loans modified under the CARES Act decreased by 76% from the end of the prior quarter and now represent 4% of loans outstanding
  • Net interest margin of 3.59% increased by 17 basis points from the prior quarter and was flat from the third quarter of 2019
  • Announced resumption of our stock repurchase program

LOS ANGELES--()--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, 2020.

The Company reported net income of $8.5 million, or $0.43 diluted earnings per share, for the three months ended September 30, 2020, compared to net income of $6.5 million, or $0.33 diluted earnings per share, and $8.0 million, or $0.39 diluted earnings per share, for the three months ended June 30, 2020 and September 30, 2019, respectively.

Our performance in the third quarter demonstrated the strength of our growing franchise as we generated strong earnings, increasing net interest margin, and asset and deposit growth,” said Mr. Alan Thian, Chairman, President and CEO of RBB Bancorp. “Effective management of our loan exposure in prior quarters – which resulted in lower concentrations of CRE and C&I loans relative to our peers – created an opportunity to selectively originate attractive loans in markets in which our competitors were forced to pull back. Strong deposit growth was accompanied by declines in corresponding costs as we benefited from ongoing efforts to improve our deposit franchise and a declining rate environment. Our asset quality remains solid and we remain well capitalized with ample access to liquidity. Loans modified under the CARES Act outstanding decreased 76% over the quarter to just 4% of loans outstanding.”

Our board of directors approved the reinstatement of the stock repurchase program to the maximum of what the plan allows, which will further enhance shareholder value,” Mr. Thian concluded.

Key Performance Ratios

Net income of $8.5 million for the third quarter of 2020 produced an annualized return on average assets of 1.05%, an annualized return on average tangible common equity of 9.81%, and an annualized return on average equity of 8.06%. This compares to an annualized return on average assets of 0.83%, an annualized return on average tangible common equity of 7.77%, and an annualized return on average equity of 6.34% for the second quarter of 2020. The efficiency ratio for the third quarter of 2020 was 46.63%, compared to 54.40% for the prior quarter. The improvement in the efficiency ratio was primarily due to improved net interest income.

Net Interest Income and Net Interest Margin

Net interest income, before provision for loan losses, was $27.3 million for the third quarter of 2020, compared to $25.0 million for the second quarter of 2020. The $2.2 million increase was primarily attributable to a $71.8 million increase in average earning assets and a $37.4 million increase in average noninterest-bearing deposits, partially offset by a $27.0 million increase in average interest-bearing liabilities. Net interest income was also favorably impacted by a 17 basis point increase in the net interest margin. Accretion of purchase discounts from prior acquisitions contributed $634,000 to net interest income in the third quarter of 2020, compared to $818,000 in the second quarter of 2020.

Compared to the third quarter of 2019, net interest income, before provision for loan losses, increased $3.7 million from $23.5 million. The increase was primarily attributable to a $418.9 million increase in average earning assets and a $170.3 million increase in average noninterest-bearing deposits, partially offset by a $268.1 million increase in average interest-bearing liabilities. The net interest margin was unchanged at 3.59% between the third quarters of 2020 and 2019. The increases in average earning assets and total deposits were primarily due to the Pacific Global Bank (“PGB”) acquisition and increased loan and deposit originations.

Net interest margin was 3.59% for the third quarter of 2020, an increase from 3.42% in the second quarter of 2020. The increase was primarily attributable to a 51 basis point decrease in the cost of total deposits and a 48 basis point decrease in the cost of borrowings (FHLB advances, long-term debt and subordinated debentures), partially offset by a 2 basis point decrease in the yield on average earning assets. Loan discount accretion contributed 8 basis points to the net interest margin in the third quarter of 2020, compared to 14 basis points in the second quarter of 2020.

Noninterest Income

Noninterest income was $2.7 million for the third quarter of 2020, an increase of $519,000 from $2.2 million in the second quarter of 2020. The increase was driven by an increase in gain on loan sales of $679,000 as the Company sold $28.2 million more loans in the third quarter than in the prior quarter generally due to increased market activity following the initial impact of the COVID-19 pandemic. The Company expects gain on sale of loan income to return to prior levels in the fourth quarter.

The Company sold $17.7 million in FNMA qualified mortgage loans for a net gain of $537,000 and sold $11.8 million in non-qualified mortgage loans to private investors for a gain of $227,000 during the third quarter of 2020. This compared to $5.2 million in FNMA qualified mortgage loans for a net gain of $105,000 during the second quarter of 2020. The Company sold no SBA loans during the third quarter of 2020, compared to $1.4 million in SBA loans sold for a net gain of $70,000 during the second quarter of 2020.

Compared to the third quarter of 2019, noninterest income decreased by $73,000 from $2.8 million. The decrease was primarily attributable to a decrease of $281,000 in loan servicing fees.

Noninterest Expense

Noninterest expense for the third quarter of 2020 was $14.0 million, compared to $14.8 million for the second quarter of 2020. The $855,000 decrease was primarily attributable to a $424,000 decrease in salaries and employee benefits expenses, $214,000 decrease in merger expenses, $167,000 decrease in occupancy and equipment expenses, partially offset by a $318,000 increase in data processing expenses and a $128,000 increase in insurance and regulatory assessments. The decrease in salary and employee benefits was primarily attributable to severance paid in the second quarter for employees affected by restructuring related to the completion of the PGB acquisition.

RBB incurred $62,000 in merger and conversion expenses in the third quarter of 2020, of which $20,000 is a reversal of expenses related to the First American International Corp. acquisition and $82,000 to the PGB acquisition, a decrease of $214,000 from the prior quarter.

Noninterest expense increased from $13.8 million in the third quarter of 2019. The $192,000 increase was primarily due to a $226,000 increase in data processing expense, a $240,000 increase in legal and professional expense, and a $190,000 increase in insurance and regulatory assessments. These were partially offset by a $122,000 decrease salaries and employee benefit expense, a $117,000 decrease in marketing and business promotion expense.

Income Taxes

The effective tax rate was 29.8% for the third quarter of 2020, 30.8% for the second quarter of 2020, and 31.5% for the third quarter of 2019. The slightly lower effective tax rate in the third quarter of 2020 was a result of affordable housing tax credits.

Loan Portfolio

Loans held for investment, net of deferred fees and discounts, totaled $2.8 billion as of September 30, 2020, an increase of $160.5 million from June 30, 2020, and an increase of $629.0 million from September 30, 2019. The increase from the prior quarter was primarily due to organic loan growth. Single-family residential mortgages decreased by $10.9 million, net of payoffs, paydowns and loan sales, and was driven by loan sales. Commercial real estate loans increased by $74.9 million, construction and land development loans increased by $37.8 million, SBA loans increased by $7.1 million, and commercial and industrial loans increased by $50.4 million.

During the third quarter of 2020, single-family residential mortgage production was $82.6 million (mortgage loans held for investment and held for sale), payoffs and paydowns were $45.7 million, and single-family residential mortgage loan sales were $29.5 million. During the second quarter of 2020, single-family residential mortgage production was $117.6 million, payoffs and paydowns were $36.0 million, and loan sales were $1.4 million.

Mortgage loans held for sale were $23.9 million as of September 30, 2020, an increase of $8.4 million from $15.5 million at June 30, 2020 and a decrease of $235.4 million from $259.3 million as of September 30, 2019. The Company originated approximately $28.7 million in mortgage loans for sale for the third quarter of 2020, compared with $19.0 million during the prior quarter. In the third quarter, SBA loan production was $7.2 million. In the prior quarter, SBA loan production was $33.1 million, which consisted exclusively of PPP loans and total loan sales were $1.4 million.

Deposits

Deposits were $2.6 billion at September 30, 2020, an increase of $160.2 million from June 30, 2020, and an increase of $445.0 million from September 30, 2019, excluding brokered deposits. The increase in total deposits from the prior quarter was primarily attributable to organic deposit growth. Noninterest-bearing deposits increased by $66.5 million and interest-bearing non-maturity deposits increased by $53.7 million. Time deposits increased by $55.0 million, including a $15.0 million increase in brokered CDs. As of September 30, 2020, time deposits included $17.4 million in brokered CDs, as compared to $2.4 million as of June 30, 2020 and $102.6 million as of September 30, 2019.

Asset Quality

Nonperforming assets totaled $18.3 million, or 0.54% of total assets at September 30, 2020, compared to $17.5 million, or 0.56%, of total assets at June 30, 2020. The decrease in nonperforming assets was primarily due to an increase in total assets. Nonperforming assets consist of OREO, loans modified under troubled debt restructurings (“TDR”), non-accrual loans, and loans past due 90 days or more and still accruing interest.

Loans held-for-investment 30 to 89 days past due decreased by $2.2 million to $21.7 million at September 30, 2020 from $23.9 million at June 30, 2020.

In the third quarter of 2020, there were $47,000 in net charge-offs, down from $320,000 in the prior quarter.

The Company recorded a provision for credit losses of $3.9 million for the third quarter of 2020, an increase from $3.0 million in the prior quarter, primarily attributable to the higher loan balances and the impact of the COVID-19 pandemic.

The allowance for loan losses totaled $26.6 million, or 0.97% of loans held for investment at September 30, 2020, compared with $22.8 million, or 0.88%, of total loans at June 30, 2020.

The following table, as of September 30, 2020, is intended to summarize the Company’s overall loan exposure to major industries that are considered “at-risk” for business interruption due to the COVID-19 pandemic:

Industry / Property Type

 

Total Exposure ($000)

 

 

% of Total HFI Loans

 

General retail (excluding SBA)

 

$

235,153

 

 

 

8.5

%

Mixed use commercial

 

 

106,166

 

 

 

3.9

%

Commercial

 

 

62,678

 

 

 

2.3

%

Hospitality (excluding SBA)

 

 

27,666

 

 

 

1.0

%

Service stations (excluding SBA)

 

 

13,825

 

 

 

0.5

%

SBA loans

 

 

111,193

 

 

 

4.0

%

Shared National Credits (excluding airlines, cruise lines and hotels)

 

 

35,998

 

 

 

1.3

%

Airlines, cruise lines and hotels (SNC)

 

 

11,825

 

 

 

0.4

%

Restaurants (excluding SBA)

 

 

5,520

 

 

 

0.2

%

Total loans

 

$

610,024

 

 

 

22.1

%

In the above table, the general retail exposure now includes warehouse loans and the mixed use commercial exposure now includes residential mixed use loans.

As of September 30, 2020, borrowers representing 260 loans totaling $32.9 million, or 1.2% of the Company’s total loan portfolio, have funded under the SBA’s Paycheck Protection Program due to the COVID-19 pandemic.

Under the CARES Act SBA loan payments were made through September 30, 2020 by the SBA. We have contacted nearly all of our SBA borrowers and the following table details new deferments of SBA loans:

 

 

Requested SBA Loan Deferments

 

 

 

Number

 

 

Principal Amount ($000)

 

 

Principal Amount Average LTV%

 

 

Guaranteed Amount ($000)

 

 

Unguaranteed Amount ($000)

 

 

Unguaranteed Amount to Total SBA Loans

 

Hospitality

 

 

9

 

 

$

38,965

 

 

 

75

%

 

$

29,224

 

 

$

9,741

 

 

 

8.8

%

General retail

 

 

5

 

 

 

5,051

 

 

 

51

%

 

 

3,794

 

 

 

1,257

 

 

 

1.1

%

Restaurant

 

 

2

 

 

 

2,681

 

 

 

81

%

 

 

2,016

 

 

 

665

 

 

 

0.6

%

Transportation

 

 

3

 

 

 

1,042

 

 

 

30

%

 

 

782

 

 

 

261

 

 

 

0.2

%

Fitness

 

 

1

 

 

 

101

 

 

 

N/A

 

 

86

 

 

 

15

 

 

 

0.0

%

Mixed use commercial

 

 

1

 

 

 

45

 

 

 

N/A

 

 

33

 

 

 

11

 

 

 

0.0

%

 

 

 

21

 

 

$

47,885

 

 

 

 

 

 

$

35,935

 

 

$

11,950

 

 

 

10.7

%

We have not been able to contact four borrowers listed in the above table to determine if they need a deferment under SBA guidelines. The unguaranteed balance of those four loans is $27,665. All four have not made their payments as of October 15, 2020. There are two loans with an unguaranteed balance of $54,766 that will not qualify for a SBA deferment due to delinquency or deferment issues prior to COVID-19. Those two loans are not listed above and the borrowers have not made their payments as of October 15, 2020.

The following table provides details regarding the Company's COVID-19 loan deferral activity through October 21, 2020.

 

 

As of June 30, 2020

 

 

As of October 23, 2020

 

 

 

Deferred Loans

 

 

Loans Resuming Payments

 

 

Loans Deferred

 

 

 

Number

 

 

Principal Amount ($000)

 

 

% of Total HFI Loans

 

 

Number

 

 

Principal Amount ($000)

 

 

Number

 

 

Principal Amount ($000)

 

General retail (excluding SBA)

 

 

34

 

 

$

94,251

 

 

 

3.4

%

 

 

31

 

 

$

67,411

 

 

 

3

 

 

$

26,840

 

Mixed use commercial

 

 

38

 

 

 

58,841

 

 

 

2.1

%

 

 

34

 

 

 

48,294

 

 

 

4

 

 

 

10,547

 

Hospitality (excluding SBA)

 

 

5

 

 

 

25,343

 

 

 

0.9

%

 

 

3

 

 

 

12,414

 

 

 

2

 

 

 

12,929

 

Restaurants (excluding SBA)

 

 

11

 

 

 

4,186

 

 

 

0.2

%

 

 

10

 

 

 

4,186

 

 

 

1

 

 

 

12

 

Multifamily

 

 

6

 

 

 

9,086

 

 

 

0.3

%

 

 

6

 

 

 

9,086

 

 

 

 

 

 

 

Commercial, office and other (1)

 

 

6

 

 

 

22,983

 

 

 

0.8

%

 

 

1

 

 

 

3,102

 

 

 

5

 

 

 

19,881

 

SFR mortgage loans - Western region

 

 

183

 

 

 

118,484

 

 

 

4.3

%

 

 

145

 

 

 

88,880

 

 

 

38

 

 

 

29,604

 

SFR mortgage loans - Eastern region

 

 

203

 

 

 

85,935

 

 

 

3.1

%

 

 

194

 

 

 

82,699

 

 

 

10

 

 

 

4,106

 

SFR mortgage loans - Chicago metropolitan

 

 

84

 

 

 

14,824

 

 

 

0.5

%

 

 

83

 

 

 

14,575

 

 

 

4

 

 

 

719

 

Total

 

 

570

 

 

$

433,933

 

 

 

15.7

%

 

 

507

 

 

$

330,647

 

 

 

67

 

 

$

104,638

 

(1) Loan with a principal amount of $17 million is on a principal deferment only.

The Company does not have any shared national credits or loans backed by service stations, airlines or cruise lines on deferral as of October 20, 2020.

Properties

On March 31, 2020, we closed the Grand Street branch in New York City as the lease for this branch expired in April 2020. Branch operations and staff were transferred to the Bowery Street branch.

The Bank plans to open a new full service banking branch in Edison, New Jersey in November of 2020. The branch will be located at 561 US-1, in the Wicks Shopping Plaza in Edison. The Bank purchased a property located at 2057 86th Street, Brooklyn, New York, in the Bensonhurst neighborhood, to house a full-service branch. We expect this branch to open in 2021. The Bank has leased a location on Canal Street in Manhattan to move our Bowery Street branch.

Corporate Overview

RBB Bancorp is a community-based financial holding company headquartered in Los Angeles, California. The Company has total assets of $3.4 billion. Its wholly-owned subsidiary, Royal Business 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, and three branches in the Chicago neighborhoods of Chinatown and Bridgeport. 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 Irvine, California, one branch in Las Vegas, Nevada, six branches and one loan operation center in Brooklyn, Queens and Manhattan in New York, and three branches in Chicago, Illinois. 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 Avenue, 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 27, 2020, to discuss the Company’s third quarter 2020 financial results.

To listen to the conference call, please dial 1-833-519-1355 or 1-918-922-6505, passcode 8574857. A replay of the call will be made available at 1-800-585-8367 or 1-404-537-3406, passcode 8574857, approximately one hour after the conclusion of the call and will remain available through November 3, 2020.

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, including our recent acquisition of PGB Holdings, Inc. and its wholly-owned subsidiary, Pacific Global Bank, and our recently completed acquisition of First American International Corp., 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 for the year ended December 31, 2019, 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, 2019)

(Dollars in thousands)

 

 

 

September
30

 

 

June
30

 

 

March
31

 

 

December
31

 

 

September
30

 

 

 

2020

 

 

2020

 

 

2020

 

 

2019

 

 

2019

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and due from banks

 

$

121,630

 

 

$

94,844

 

 

$

285,667

 

 

$

114,763

 

 

$

136,076

 

Federal funds sold and other cash equivalents

 

 

57,000

 

 

 

57,000

 

 

 

75,300

 

 

 

67,000

 

 

 

47,000

 

Total cash and cash equivalents

 

 

178,630

 

 

 

151,844

 

 

 

360,967

 

 

 

181,763

 

 

 

183,076

 

Interest-bearing deposits in other financial institutions

 

 

600

 

 

 

600

 

 

 

600

 

 

 

600

 

 

 

949

 

Investment securities available for sale

 

 

214,662

 

 

 

185,756

 

 

 

126,294

 

 

 

126,069

 

 

 

72,923

 

Investment securities held to maturity

 

 

7,569

 

 

 

7,615

 

 

 

7,825

 

 

 

8,332

 

 

 

8,724

 

Mortgage loans held for sale

 

 

23,886

 

 

 

15,479

 

 

 

52,096

 

 

 

108,194

 

 

 

259,339

 

Loans held for investment

 

 

2,755,153

 

 

 

2,594,620

 

 

 

2,399,982

 

 

 

2,196,934

 

 

 

2,126,145

 

Allowance for loan losses

 

 

(26,634

)

 

 

(22,820

)

 

 

(20,130

)

 

 

(18,816

)

 

 

(19,386

)

Net loans held for investment

 

 

2,728,519

 

 

 

2,571,800

 

 

 

2,379,852

 

 

 

2,178,118

 

 

 

2,106,759

 

Premises and equipment, net

 

 

24,237

 

 

 

23,965

 

 

 

24,472

 

 

 

16,813

 

 

 

16,871

 

Federal Home Loan Bank (FHLB) stock

 

 

15,641

 

 

 

15,641

 

 

 

15,630

 

 

 

15,000

 

 

 

15,000

 

Net deferred tax assets

 

 

1,080

 

 

 

 

 

 

 

 

 

2,326

 

 

 

4,378

 

Cash surrender value of life insurance

 

 

34,930

 

 

 

34,736

 

 

 

34,544

 

 

 

34,353

 

 

 

34,158

 

Goodwill

 

 

69,243

 

 

 

69,209

 

 

 

69,790

 

 

 

58,563

 

 

 

58,383

 

Servicing assets

 

 

14,724

 

 

 

15,595

 

 

 

16,826

 

 

 

17,083

 

 

 

17,180

 

Core deposit intangibles

 

 

5,519

 

 

 

5,876

 

 

 

6,234

 

 

 

6,100

 

 

 

6,444

 

Accrued interest and other assets

 

 

40,336

 

 

 

38,065

 

 

 

33,523

 

 

 

35,221

 

 

 

36,118

 

Total assets

 

$

3,359,576

 

 

$

3,136,181

 

 

$

3,128,653

 

 

$

2,788,535

 

 

$

2,820,302

 

Liabilities and shareholders' equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing demand

 

$

642,332

 

 

$

574,553

 

 

$

504,324

 

 

$

458,763

 

 

$

446,141

 

Savings, NOW and money market accounts

 

 

654,378

 

 

 

601,941

 

 

 

571,870

 

 

 

537,490

 

 

 

493,965

 

Time deposits

 

 

1,315,038

 

 

 

1,260,026

 

 

 

1,359,787

 

 

 

1,252,685

 

 

 

1,311,817

 

Total deposits

 

 

2,611,748

 

 

 

2,436,520

 

 

 

2,435,981

 

 

 

2,248,938

 

 

 

2,251,923

 

Net deferred tax liabilities

 

 

 

 

 

656

 

 

 

312

 

 

 

 

 

 

 

FHLB advances

 

 

190,000

 

 

 

150,000

 

 

 

150,000

 

 

 

 

 

 

35,000

 

Long-term debt, net of debt issuance costs

 

 

104,305

 

 

 

104,220

 

 

 

104,135

 

 

 

104,049

 

 

 

103,964

 

Subordinated debentures

 

 

14,229

 

 

 

14,174

 

 

 

14,120

 

 

 

9,673

 

 

 

9,632

 

Accrued interest and other liabilities

 

 

17,878

 

 

 

16,586

 

 

 

16,112

 

 

 

18,185

 

 

 

20,942

 

Total liabilities

 

 

2,938,160

 

 

 

2,722,156

 

 

 

2,720,660

 

 

 

2,380,845

 

 

 

2,421,461

 

Shareholders' equity:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shareholder's equity

 

 

420,329

 

 

 

412,827

 

 

 

407,332

 

 

 

407,379

 

 

 

398,438

 

Non-controlling interest

 

 

72

 

 

 

72

 

 

 

72

 

 

 

72

 

 

 

72

 

Accumulated other comprehensive income (loss) - Net of tax

 

 

1,015

 

 

 

1,126

 

 

 

589

 

 

 

239

 

 

 

331

 

Total shareholders' equity

 

 

421,416

 

 

 

414,025

 

 

 

407,993

 

 

 

407,690

 

 

 

398,841

 

Total liabilities and stockholders’ equity

 

$

3,359,576

 

 

$

3,136,181

 

 

$

3,128,653

 

 

$

2,788,535

 

 

$

2,820,302

 

RBB BANCORP AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

(Dollars in thousands, except per share amounts)

 

 

 

For the three months ended

 

 

 

September 30,
2020

 

 

June 30,
2020

 

 

September 30,
2019

 

Interest and dividend income:

 

 

 

 

 

 

 

 

 

 

 

 

Interest and fees on loans

 

$

34,153

 

 

$

32,633

 

 

$

32,902

 

Interest on interest-bearing deposits

 

 

61

 

 

 

74

 

 

 

429

 

Interest on investment securities

 

 

621

 

 

 

887

 

 

 

703

 

Dividend income on FHLB stock

 

 

190

 

 

 

187

 

 

 

238

 

Interest on federal funds sold and other

 

 

100

 

 

 

322

 

 

 

397

 

Total interest income

 

 

35,125

 

 

 

34,103

 

 

 

34,669

 

Interest expense:

 

 

 

 

 

 

 

 

 

 

 

 

Interest on savings deposits, NOW and money market accounts

 

 

779

 

 

 

782

 

 

 

1,117

 

Interest on time deposits

 

 

4,746

 

 

 

5,933

 

 

 

8,038

 

Interest on subordinated debentures and long term debt

 

 

1,905

 

 

 

1,915

 

 

 

1,921

 

Interest on other borrowed funds

 

 

444

 

 

 

439

 

 

 

81

 

Total interest expense

 

 

7,874

 

 

 

9,069

 

 

 

11,157

 

Net interest income before provision for loan losses

 

 

27,251

 

 

 

25,034

 

 

 

23,512

 

Provision for loan losses

 

 

3,861

 

 

 

3,009

 

 

 

824

 

Net interest income after provision for loan losses

 

 

23,390

 

 

 

22,025

 

 

 

22,688

 

Noninterest income:

 

 

 

 

 

 

 

 

 

 

 

 

Service charges, fees and other

 

 

1,143

 

 

 

1,065

 

 

 

934

 

Gain on sale of loans

 

 

760

 

 

 

81

 

 

 

813

 

Loan servicing fees, net of amortization

 

 

546

 

 

 

708

 

 

 

827

 

Recoveries on loans acquired in business combinations

 

 

32

 

 

 

5

 

 

 

12

 

Increase in cash surrender value of life insurance

 

 

194

 

 

 

191

 

 

 

195

 

Gain on sale of securities

 

 

52

 

 

 

158

 

 

 

7

 

Gain on sale of other real estate owned

 

 

 

 

 

 

 

 

11

 

Total noninterest income

 

 

2,727

 

 

 

2,208

 

 

 

2,799

 

Noninterest expense:

 

 

 

 

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

 

7,599

 

 

 

8,103

 

 

 

7,801

 

Occupancy and equipment expenses

 

 

2,360

 

 

 

2,527

 

 

 

2,434

 

Data processing

 

 

1,200

 

 

 

882

 

 

 

974

 

Legal and professional

 

 

675

 

 

 

670

 

 

 

435

 

Office expenses

 

 

271

 

 

 

337

 

 

 

335

 

Marketing and business promotion

 

 

131

 

 

 

111

 

 

 

248

 

Insurance and regulatory assessments

 

 

363

 

 

 

234

 

 

 

172

 

Core deposit premium

 

 

357

 

 

 

357

 

 

 

384

 

OREO expenses/(income)

 

 

3

 

 

 

14

 

 

 

(1

)

Merger and conversion expenses

 

 

62

 

 

 

276

 

 

 

154

 

Other expenses

 

 

957

 

 

 

1,308

 

 

 

850

 

Total noninterest expense

 

 

13,978

 

 

 

14,819

 

 

 

13,786

 

Income before income taxes

 

 

12,139

 

 

 

9,414

 

 

 

11,701

 

Income tax expense

 

 

3,619

 

 

 

2,901

 

 

 

3,689

 

Net income

 

$

8,520

 

 

$

6,513

 

 

$

8,012

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income per share

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.43

 

 

$

0.33

 

 

$

0.40

 

Diluted

 

$

0.43

 

 

$

0.33

 

 

$

0.39

 

Cash Dividends declared per common share

 

$

0.06

 

 

$

0.06

 

 

$

0.10

 

Weighted-average common shares outstanding

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

19,717,568

 

 

 

19,710,330

 

 

 

20,067,847

 

Diluted

 

 

19,804,892

 

 

 

19,806,304

 

 

 

20,425,966

 

RBB BANCORP AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

(Dollars in thousands, except per share amounts)

 

 

 

For the nine months ended

 

 

 

September 30,
2020

 

 

September 30,
2019

 

Interest and dividend income:

 

 

 

 

 

 

 

 

Interest and fees on loans

 

$

99,062

 

 

$

102,981

 

Interest on interest-earning deposits

 

 

586

 

 

 

1,412

 

Interest on investment securities

 

 

2,329

 

 

 

1,976

 

Dividend income on FHLB stock

 

 

379

 

 

 

815

 

Interest on federal funds sold and other

 

 

900

 

 

 

634

 

Total interest income

 

 

103,256

 

 

 

107,818

 

Interest expense:

 

 

 

 

 

 

 

 

Interest on savings deposits, NOW and money market accounts

 

 

2,804

 

 

 

3,649

 

Interest on time deposits

 

 

17,765

 

 

 

21,788

 

Interest on subordinated debentures and long term debt

 

 

5,776

 

 

 

5,783

 

Interest on other borrowed funds

 

 

1,033

 

 

 

2,857

 

Total interest expense

 

 

27,378

 

 

 

34,077

 

Net interest income

 

 

75,878

 

 

 

73,741

 

Provision for loan losses

 

 

8,815

 

 

 

1,731

 

Net interest income after provision for loans losses

 

 

67,063

 

 

 

72,010

 

Noninterest income:

 

 

 

 

 

 

 

 

Service charges, fees and other

 

 

3,287

 

 

 

2,976

 

Gain on sale of loans

 

 

3,552

 

 

 

6,131

 

Loan servicing fees, net of amortization

 

 

1,846

 

 

 

2,566

 

Recoveries on loans acquired in business combinations

 

 

79

 

 

 

73

 

Unrealized gain on equity investments

 

 

 

 

 

147

 

Increase in cash surrender value of life insurance

 

 

576

 

 

 

580

 

Gain on sale of securities

 

 

210

 

 

 

7

 

Gain on sale of fixed assets

 

 

 

 

 

6

 

Loss on sale of other real estate owned

 

 

 

 

 

11

 

Total noninterest income

 

 

9,550

 

 

 

12,497

 

Noninterest expense:

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

 

25,207

 

 

 

25,088

 

Occupancy and equipment expenses

 

 

7,291

 

 

 

7,360

 

Data processing

 

 

3,224

 

 

 

3,202

 

Legal and professional

 

 

1,949

 

 

 

1,516

 

Office expenses

 

 

931

 

 

 

965

 

Marketing and business promotion

 

 

456

 

 

 

926

 

Insurance and regulatory assessments

 

 

774

 

 

 

754

 

Amortization of intangibles

 

 

1,071

 

 

 

1,157

 

OREO expenses

 

 

31

 

 

 

161

 

Merger expenses

 

 

741

 

 

 

240

 

Other expenses

 

 

3,385

 

 

 

2,641

 

Total noninterest expense

 

 

45,060

 

 

 

44,010

 

Income before income taxes

 

 

31,553

 

 

 

40,497

 

Income tax expense

 

 

9,772

 

 

 

11,963

 

Net income

 

$

21,781

 

 

$

28,534

 

 

 

 

 

 

 

 

 

 

Net income per share

 

 

 

 

 

 

 

 

Basic

 

$

1.10

 

 

$

1.42

 

Diluted

 

$

1.09

 

 

$

1.40

 

Cash Dividends declared per common share

 

$

0.24

 

 

$

0.30

 

Weighted-average common shares outstanding

 

 

 

 

 

 

 

 

Basic

 

 

19,799,617

 

 

 

20,063,479

 

Diluted

 

 

19,958,612

 

 

 

20,435,867

 

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, 2020

 

 

June 30, 2020

 

 

September 30, 2019

 

 

 

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)

 

$

179,521

 

 

$

351

 

 

 

0.78

%

 

$

231,943

 

 

$

583

 

 

 

1.01

%

 

$

144,131

 

 

$

1,064

 

 

 

2.93

%

Securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Available for sale

 

 

168,151

 

 

 

558

 

 

 

1.32

%

 

 

171,298

 

 

 

823

 

 

 

1.93

%

 

 

92,292

 

 

 

631

 

 

 

2.71

%

Held to maturity (2)

 

 

7,604

 

 

 

71

 

 

 

3.71

%

 

 

7,661

 

 

 

72

 

 

 

3.78

%

 

 

8,730

 

 

 

81

 

 

 

3.68

%

Mortgage loans held for sale

 

 

19,848

 

 

 

171

 

 

 

3.43

%

 

 

25,130

 

 

 

303

 

 

 

4.85

%

 

 

253,492

 

 

 

3,050

 

 

 

4.77

%

Loans held for investment: (3)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Real estate

 

 

2,266,752

 

 

 

29,616

 

 

 

5.20

%

 

 

2,147,646

 

 

 

28,216

 

 

 

5.28

%

 

 

1,749,371

 

 

 

23,963

 

 

 

5.43

%

Commercial

 

 

377,789

 

 

 

4,366

 

 

 

4.60

%

 

 

364,189

 

 

 

4,114

 

 

 

4.54

%

 

 

352,795

 

 

 

5,889

 

 

 

6.62

%

Total loans

 

 

2,644,541

 

 

 

33,982

 

 

 

5.11

%

 

 

2,511,835

 

 

 

32,330

 

 

 

5.18

%

 

 

2,102,166

 

 

 

29,852

 

 

 

5.63

%

Total earning assets

 

 

3,019,665

 

 

$

35,133

 

 

 

4.63

%

 

 

2,947,867

 

 

$

34,111

 

 

 

4.65

%

 

 

2,600,811

 

 

$

34,678

 

 

 

5.29

%

Noninterest-earning assets

 

 

204,638

 

 

 

 

 

 

 

 

 

 

 

206,833

 

 

 

 

 

 

 

 

 

 

 

169,691

 

 

 

 

 

 

 

 

 

Total assets

 

$

3,224,303

 

 

 

 

 

 

 

 

 

 

$

3,154,700

 

 

 

 

 

 

 

 

 

 

$

2,770,502

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NOW and money market deposits

 

$

514,271

 

 

$

748

 

 

 

0.58

%

 

$

462,027

 

 

$

751

 

 

 

0.65

%

 

$

364,127

 

 

$

1,070

 

 

 

1.17

%

Savings deposits

 

 

126,635

 

 

 

31

 

 

 

0.10

%

 

 

123,868

 

 

 

31

 

 

 

0.10

%

 

 

95,725

 

 

 

47

 

 

 

0.19

%

Time deposits

 

 

1,284,351

 

 

 

4,746

 

 

 

1.47

%

 

 

1,314,232

 

 

 

5,933

 

 

 

1.82

%

 

 

1,340,751

 

 

 

8,038

 

 

 

2.38

%

Total interest-bearing deposits

 

 

1,925,257

 

 

 

5,525

 

 

 

1.14

%

 

 

1,900,127

 

 

 

6,715

 

 

 

1.42

%

 

 

1,800,603

 

 

 

9,155

 

 

 

2.02

%

FHLB advances

 

 

151,739

 

 

 

444

 

 

 

1.16

%

 

 

150,000

 

 

 

439

 

 

 

1.18

%

 

 

13,261

 

 

 

81

 

 

 

2.42

%

Long-term debt

 

 

104,252

 

 

 

1,748

 

 

 

6.67

%

 

 

104,168

 

 

 

1,747

 

 

 

6.75

%

 

 

103,912

 

 

 

1,748

 

 

 

6.67

%

Subordinated debentures

 

 

14,195

 

 

 

157

 

 

 

4.40

%

 

 

14,141

 

 

 

168

 

 

 

4.78

%

 

 

9,606

 

 

 

173

 

 

 

7.15

%

Total interest-bearing liabilities

 

 

2,195,443

 

 

 

7,874

 

 

 

1.43

%

 

 

2,168,436

 

 

 

9,069

 

 

 

1.68

%

 

 

1,927,382

 

 

 

11,157

 

 

 

2.30

%

Noninterest-bearing liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing deposits

 

 

595,264

 

 

 

 

 

 

 

 

 

 

 

557,903

 

 

 

 

 

 

 

 

 

 

 

424,908

 

 

 

 

 

 

 

 

 

Other noninterest-bearing liabilities

 

 

13,270

 

 

 

 

 

 

 

 

 

 

 

15,509

 

 

 

 

 

 

 

 

 

 

 

20,490

 

 

 

 

 

 

 

 

 

Total noninterest-bearing liabilities

 

 

608,534

 

 

 

 

 

 

 

 

 

 

 

573,412

 

 

 

 

 

 

 

 

 

 

 

445,398

 

 

 

 

 

 

 

 

 

Shareholders' equity

 

 

420,326

 

 

 

 

 

 

 

 

 

 

 

412,852

 

 

 

 

 

 

 

 

 

 

 

397,722

 

 

 

 

 

 

 

 

 

Total liabilities and shareholders' equity

 

$

3,224,303

 

 

 

 

 

 

 

 

 

 

$

3,154,700

 

 

 

 

 

 

 

 

 

 

$

2,770,502

 

 

 

 

 

 

 

 

 

Net interest income / interest rate spreads

 

 

 

 

 

$

27,259

 

 

 

3.20

%

 

 

 

 

 

$

25,042

 

 

 

2.97

%

 

 

 

 

 

$

23,521

 

 

 

2.99

%

Net interest margin

 

 

 

 

 

 

 

 

 

 

3.59

%

 

 

 

 

 

 

 

 

 

 

3.42

%

 

 

 

 

 

 

 

 

 

 

3.59

%


(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, 2020

 

 

September 30, 2019

 

 

 

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)

 

$

220,195

 

 

$

1,865

 

 

 

1.13

%

 

$

122,563

 

 

$

2,861

 

 

 

3.12

%

Securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Available for sale

 

 

159,373

 

 

 

2,136

 

 

 

1.79

%

 

 

82,868

 

 

 

1,749

 

 

 

2.82

%

Held to maturity (2)

 

 

7,760

 

 

 

218

 

 

 

3.75

%

 

 

9,159

 

 

 

255

 

 

 

3.72

%

Mortgage loans held for sale

 

 

40,936

 

 

 

1,454

 

 

 

4.74

%

 

 

352,110

 

 

 

12,785

 

 

 

4.85

%

Loans held for investment: (3)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Real estate

 

 

2,141,022

 

 

 

84,261

 

 

 

5.26

%

 

 

1,759,253

 

 

 

72,842

 

 

 

5.54

%

Commercial

 

 

359,907

 

 

 

13,347

 

 

 

4.95

%

 

 

350,823

 

 

 

17,354

 

 

 

6.61

%

Total loans

 

 

2,500,929

 

 

 

97,608

 

 

 

5.21

%

 

 

2,110,076

 

 

 

90,196

 

 

 

5.72

%

Total earning assets

 

 

2,929,193

 

 

$

103,281

 

 

 

4.71

%

 

 

2,676,776

 

 

$

107,846

 

 

 

5.39

%

Noninterest-earning assets

 

 

208,000

 

 

 

 

 

 

 

 

 

 

 

167,887

 

 

 

 

 

 

 

 

 

Total assets

 

$

3,137,193

 

 

 

 

 

 

 

 

 

 

$

2,844,663

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NOW and money market deposits

 

$

484,157

 

 

$

2,687

 

 

 

0.74

%

 

$

388,298

 

 

$

3,500

 

 

 

1.21

%

Savings deposits

 

 

121,836

 

 

 

117

 

 

 

0.13

%

 

 

97,959

 

 

 

149

 

 

 

0.20

%

Time deposits

 

 

1,318,947

 

 

 

17,765

 

 

 

1.80

%

 

 

1,273,604

 

 

 

21,788

 

 

 

2.29

%

Total interest-bearing deposits

 

 

1,924,940

 

 

 

20,569

 

 

 

1.43

%

 

 

1,759,861

 

 

 

25,437

 

 

 

1.93

%

FHLB advances

 

 

118,029

 

 

 

1,033

 

 

 

1.17

%

 

 

148,101

 

 

 

2,857

 

 

 

2.58

%

Long-term debt

 

 

104,168

 

 

 

5,243

 

 

 

6.72

%

 

 

103,827

 

 

 

5,243

 

 

 

6.75

%

Subordinated debentures

 

 

14,221

 

 

 

533

 

 

 

5.01

%

 

 

9,565

 

 

 

540

 

 

 

7.55

%

Total interest-bearing liabilities

 

 

2,161,358

 

 

$

27,378

 

 

 

1.69

%

 

 

2,021,354

 

 

$

34,077

 

 

 

2.25

%

Noninterest-bearing liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing deposits

 

 

546,419

 

 

 

 

 

 

 

 

 

 

 

412,845

 

 

 

 

 

 

 

 

 

Other noninterest-bearing liabilities

 

 

14,606

 

 

 

 

 

 

 

 

 

 

 

19,888

 

 

 

 

 

 

 

 

 

Total noninterest-bearing liabilities

 

 

561,025

 

 

 

 

 

 

 

 

 

 

 

432,733

 

 

 

 

 

 

 

 

 

Shareholders' equity

 

 

414,810

 

 

 

 

 

 

 

 

 

 

 

390,576

 

 

 

 

 

 

 

 

 

Total liabilities and shareholders' equity

 

$

3,137,193

 

 

 

 

 

 

 

 

 

 

$

2,844,663

 

 

 

 

 

 

 

 

 

Net interest income / interest rate spreads

 

 

 

 

 

$

75,903

 

 

 

3.02

%

 

 

 

 

 

$

73,769

 

 

 

3.13

%

Net interest margin

 

 

 

 

 

 

 

 

 

 

3.46

%

 

 

 

 

 

 

 

 

 

 

3.68

%

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

 

 

 

2020

 

 

2020

 

 

2019

 

Per share data (common stock)

 

 

 

 

 

 

 

 

 

 

 

 

Earnings

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.43

 

 

$

0.33

 

 

$

0.40

 

Diluted

 

$

0.43

 

 

$

0.33

 

 

$

0.39

 

Dividends declared

 

$

0.06

 

 

$

0.06

 

 

$

0.10

 

Basic, excluding merger and conversion expense

 

$

0.43

 

 

$

0.34

 

 

$

0.40

 

Diluted, excluding merger and conversion expense

 

$

0.43

 

 

$

0.34

 

 

$

0.40

 

Book value

 

$

21.35

 

 

$

20.97

 

 

$

19.91

 

Tangible book value

 

$

17.56

 

 

$

17.17

 

 

$

16.67

 

Weighted average shares outstanding

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

19,717,568

 

 

 

19,710,330

 

 

 

20,067,847

 

Diluted

 

 

19,804,892

 

 

 

19,806,304

 

 

 

20,425,966

 

Shares outstanding at period end

 

 

19,739,280

 

 

 

19,739,280

 

 

 

20,030,866

 

Performance ratios

 

 

 

 

 

 

 

 

 

 

 

 

Return on average assets, annualized

 

 

1.05

%

 

 

0.83

%

 

 

1.15

%

Return on average shareholders' equity, annualized

 

 

8.06

%

 

 

6.34

%

 

 

7.99

%

Return on average tangible common equity, annualized

 

 

9.81

%

 

 

7.77

%

 

 

9.56

%

Noninterest income to average assets, annualized

 

 

0.34

%

 

 

0.28

%

 

 

0.40

%

Noninterest expense to average assets, annualized

 

 

1.72

%

 

 

1.89

%

 

 

1.97

%

Yield on average earning assets

 

 

4.63

%

 

 

4.65

%

 

 

5.29

%

Cost of average total deposits

 

 

0.87

%

 

 

1.10

%

 

 

1.63

%

Cost of average interest-bearing deposits

 

 

1.14

%

 

 

1.42

%

 

 

2.02

%

Cost of average interest-bearing liabilities

 

 

1.43

%

 

 

1.68

%

 

 

2.30

%

Accretion on loans to average earning assets

 

 

0.08

%

 

 

0.14

%

 

 

0.10

%

Net interest spread

 

 

3.20

%

 

 

2.97

%

 

 

2.99

%

Net interest margin

 

 

3.59

%

 

 

3.42

%

 

 

3.59

%

Efficiency ratio

 

 

46.63

%

 

 

54.40

%

 

 

52.40

%

Common stock dividend payout ratio

 

 

13.95

%

 

 

18.18

%

 

 

25.00

%

RBB BANCORP AND SUBSIDIARIES

SELECTED FINANCIAL HIGHLIGHTS

(Unaudited)

(Dollars in thousands, except per share amounts)

 

 

 

For the nine months ended September 30,

 

 

 

2020

 

 

2019

 

Per share data (common stock)

 

 

 

 

 

 

 

 

Earnings

 

 

 

 

 

 

 

 

Basic

 

$

1.10

 

 

$

1.42

 

Diluted

 

$

1.09

 

 

$

1.40

 

Basic, excluding merger expense

 

$

1.13

 

 

$

1.44

 

Diluted, excluding merger expense

 

$

1.12

 

 

$

1.41

 

Dividends declared

 

$

0.24

 

 

$

0.30

 

Book value

 

$

21.35

 

 

$

19.91

 

Tangible book value

 

$

17.56

 

 

$

16.67

 

Weighted average shares outstanding

 

 

 

 

 

 

 

 

Basic

 

 

19,799,617

 

 

 

20,063,479

 

Diluted

 

 

19,958,612

 

 

 

20,435,867

 

Shares outstanding at period end

 

 

19,739,280

 

 

 

20,030,866

 

Performance ratios

 

 

 

 

 

 

 

 

Return on average assets, annualized

 

 

0.93

%

 

 

1.34

%

Return on average shareholders' equity, annualized

 

 

7.01

%

 

 

9.77

%

Return on average tangible common equity, annualized

 

 

8.59

%

 

 

11.73

%

Noninterest income to average assets, annualized

 

 

0.41

%

 

 

0.59

%

Noninterest expense to average assets, annualized

 

 

1.92

%

 

 

2.07

%

Yield on average earning assets

 

 

4.71

%

 

 

5.39

%

Cost of average deposits

 

 

1.11

%

 

 

1.57

%

Cost of average interest-bearing deposits

 

 

1.43

%

 

 

1.93

%

Cost of average interest-bearing liabilities

 

 

1.69

%

 

 

2.25

%

Accretion on loans to average earning assets

 

 

0.10

%

 

 

0.12

%

Net interest spread

 

 

3.02

%

 

 

3.13

%

Net interest margin

 

 

3.46

%

 

 

3.68

%

Efficiency ratio

 

 

52.75

%

 

 

51.03

%

Common stock dividend payout ratio

 

 

21.82

%

 

 

21.13

%

RBB BANCORP AND SUBSIDIARIES

SELECTED FINANCIAL HIGHLIGHTS

(Unaudited)

(Dollars in thousands, except per share amounts)

 

 

 

As of

 

 

 

September 30,

 

 

June 30,

 

 

September 30,

 

 

 

2020

 

 

2020

 

 

2019

 

Loan to deposit ratio

 

 

105.49

%

 

 

106.49

%

 

 

94.41

%

Core deposits / total deposits

 

 

99.34

%

 

 

76.84

%

 

 

68.32

%

Net non-core funding dependence ratio

 

 

14.47

%

 

 

13.39

%

 

 

25.41

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Credit Quality Data:

 

 

 

 

 

 

 

 

 

 

 

 

Loans 30-89 days past due

 

$

21,735

 

 

$

23,872

 

 

$

4,578

 

Loans 30-89 days past due to total loans

 

 

0.79

%

 

 

0.92

%

 

 

0.22

%

Nonperforming loans

 

$

17,975

 

 

$

17,217

 

 

$

9,628

 

Nonperforming loans to total loans

 

 

0.65

%

 

 

0.66

%

 

 

0.39

%

Nonperforming assets

 

$

18,268

 

 

$

17,510

 

 

$

10,895

 

Nonperforming assets to total assets

 

 

0.54

%

 

 

0.56

%

 

 

0.39

%

Allowance for loan losses to total loans

 

 

0.97

%

 

 

0.88

%

 

 

0.91

%

Allowance for loan losses to nonperforming loans

 

 

148.17

%

 

 

132.54

%

 

 

201.35

%

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

 

 

0.01

%

 

 

0.05

%

 

 

0.00

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Regulatory and other capital ratios—Company

 

 

 

 

 

 

 

 

 

 

 

 

Tangible common equity to tangible assets

 

 

10.55

%

 

 

11.07

%

 

 

12.12

%

Tier 1 leverage ratio

 

 

11.47

%

 

 

11.48

%

 

 

12.74

%

Tier 1 common capital to risk-weighted assets

 

 

14.11

%

 

 

14.87

%

 

 

16.95

%

Tier 1 capital to risk-weighted assets

 

 

14.69

%

 

 

15.49

%

 

 

17.44

%

Total capital to risk-weighted assets

 

 

20.05

%

 

 

21.10

%

 

 

23.71

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Regulatory capital ratios—Bank only

 

 

 

 

 

 

 

 

 

 

 

 

Tier 1 leverage ratio

 

 

14.16

%

 

 

14.14

%

 

 

14.98

%

Tier 1 common capital to risk-weighted assets

 

 

18.16

%

 

 

19.09

%

 

 

20.53

%

Tier 1 capital to risk-weighted assets

 

 

18.16

%

 

 

19.09

%

 

 

20.53

%

Total capital to risk-weighted assets

 

 

19.29

%

 

 

20.13

%

 

 

21.54

%

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

 

2020

 

 

2020

 

 

2020

 

 

2019

 

 

2019

 

Interest income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans, including fees

 

$

34,153

 

 

$

32,633

 

 

$

32,276

 

 

$

32,178

 

 

$

32,902

 

Investment securities and other

 

 

972

 

 

 

1,470

 

 

 

1,752

 

 

 

1,729

 

 

 

1,767

 

Total interest income

 

 

35,125

 

 

 

34,103

 

 

 

34,028

 

 

 

33,907

 

 

 

34,669

 

Interest expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

 

5,525

 

 

 

6,715

 

 

 

8,329

 

 

 

8,796

 

 

 

9,155

 

Interest on subordinated debentures and other

 

 

1,905

 

 

 

1,915

 

 

 

1,956

 

 

 

1,915

 

 

 

1,921

 

Other borrowings

 

 

444

 

 

 

439

 

 

 

150

 

 

 

73

 

 

 

81

 

Total interest expense

 

 

7,874

 

 

 

9,069

 

 

 

10,435

 

 

 

10,784

 

 

 

11,157

 

Net interest income before provision for loan losses

 

 

27,251

 

 

 

25,034

 

 

 

23,593

 

 

 

23,123

 

 

 

23,512

 

Provision for loan losses

 

 

3,861

 

 

 

3,009

 

 

 

1,945

 

 

 

659

 

 

 

824

 

Net interest income after provision for loan losses

 

 

23,390

 

 

 

22,025

 

 

 

21,648

 

 

 

22,464

 

 

 

22,688

 

Noninterest income

 

 

2,727

 

 

 

2,208

 

 

 

4,615

 

 

 

5,823

 

 

 

2,799

 

Noninterest expense

 

 

13,978

 

 

 

14,819

 

 

 

16,263

 

 

 

13,463

 

 

 

13,786

 

Earnings before income taxes

 

 

12,139

 

 

 

9,414

 

 

 

10,000

 

 

 

14,824

 

 

 

11,701

 

Income taxes

 

 

3,619

 

 

 

2,901

 

 

 

3,252

 

 

 

4,149

 

 

 

3,689

 

Net income

 

$

8,520

 

 

$

6,513

 

 

$

6,748

 

 

$

10,675

 

 

$

8,012

 

Net income per common share - basic

 

$

0.43

 

 

$

0.33

 

 

$

0.34

 

 

$

0.53

 

 

$

0.40

 

Net income per common share - diluted

 

$

0.43

 

 

$

0.33

 

 

$

0.33

 

 

$

0.52

 

 

$

0.39

 

Cash dividends declared per common share

 

$

0.06

 

 

$

0.06

 

 

$

0.12

 

 

$

0.10

 

 

$

0.10

 

Cash dividends declared on common shares

 

$

3,592

 

 

$

1,184

 

 

$

2,407

 

 

$

2,003

 

 

$

2,016

 

Yield on average assets, annualized

 

 

1.05

%

 

 

0.83

%

 

 

0.90

%

 

 

1.51

%

 

 

1.15

%

Yield on average earning assets

 

 

4.63

%

 

 

4.60

%

 

 

4.86

%

 

 

5.09

%

 

 

5.29

%

Cost of average deposits

 

 

0.87

%

 

 

1.09

%

 

 

1.38

%

 

 

1.55

%

 

 

1.63

%

Cost of average interest-bearing deposits

 

 

1.14

%

 

 

1.41

%

 

 

1.72

%

 

 

1.93

%

 

 

2.02

%

Cost of average interest-bearing liabilities

 

 

1.43

%

 

 

1.66

%

 

 

1.98

%

 

 

2.21

%

 

 

2.30

%

Accretion on loans to average earning assets

 

 

0.08

%

 

 

0.13

%

 

 

0.10

%

 

 

0.10

%

 

 

0.10

%

Net interest margin

 

 

3.59

%

 

 

3.38

%

 

 

3.37

%

 

 

3.47

%

 

 

3.59

%

RBB BANCORP AND SUBSIDIARIES

SELECTED FINANCIAL HIGHLIGHTS

(Unaudited, except for December 31, 2019)

(Dollars in thousands, except per share amounts)

 

Loan Portfolio Detail

 

As of September 30,
2020

 

 

As of June 30,
2020

 

 

As of March 31,
2020

 

 

As of December 31,
2019

 

 

As of September 30,
2019

 

(dollars in thousands)

 

$

 

 

%

 

 

$

 

 

%

 

 

$

 

 

%

 

 

$

 

 

%

 

 

$

 

 

%

 

Loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial and industrial

 

$

317,891

 

 

 

11.5

 

 

$

267,481

 

 

 

10.3

 

 

$

275,602

 

 

 

11.5

 

 

$

274,586

 

 

 

12.5

 

 

$

276,478

 

 

 

13.0

 

SBA

 

 

111,193

 

 

 

4.0

 

 

 

104,069

 

 

 

4.0

 

 

 

77,566

 

 

 

3.2

 

 

 

74,985

 

 

 

3.4

 

 

 

70,978

 

 

 

3.3

 

Construction and land development

 

 

183,569

 

 

 

6.7

 

 

 

145,754

 

 

 

5.6

 

 

 

120,115

 

 

 

5.0

 

 

 

96,020

 

 

 

4.4

 

 

 

101,649

 

 

 

4.8

 

Commercial real estate (1)

 

 

975,187

 

 

 

35.4

 

 

 

900,302

 

 

 

34.7

 

 

 

854,580

 

 

 

35.6

 

 

 

793,268

 

 

 

36.1

 

 

 

787,927

 

 

 

37.1

 

Single-family residential mortgages

 

 

1,163,982

 

 

 

42.2

 

 

 

1,174,927

 

 

 

45.3

 

 

 

1,070,649

 

 

 

44.6

 

 

 

957,254

 

 

 

43.6

 

 

 

888,577

 

 

 

41.8

 

Other loans

 

 

3,331

 

 

 

0.1

 

 

 

2,087

 

 

 

0.1

 

 

 

1,470

 

 

 

0.1

 

 

 

821

 

 

 

0.0

 

 

 

536

 

 

 

0.0

 

Total loans (2)

 

$

2,755,153

 

 

 

99.9

 

 

$

2,594,620

 

 

 

100.0

 

 

$

2,399,982

 

 

 

100.0

 

 

$

2,196,934

 

 

 

100.0

 

 

$

2,126,145

 

 

 

100.0

 

Allowance for loan losses

 

 

(26,634

)

 

 

 

 

 

 

(22,820

)

 

 

 

 

 

 

(20,130

)

 

 

 

 

 

 

(18,816

)

 

 

 

 

 

 

(19,386

)

 

 

 

 

Total loans, net

 

$

2,728,519

 

 

 

 

 

 

$

2,571,800

 

 

 

 

 

 

$

2,379,852

 

 

 

 

 

 

$

2,178,118

 

 

 

 

 

 

$

2,106,759

 

 

 

 

 


(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)

 

2020

 

 

2019

 

 

2020

 

 

2019

 

Beginning balance

 

$

22,820

 

 

$

18,561

 

 

$

18,816

 

 

$

17,577

 

Additions to the allowance charged to expense

 

 

3,861

 

 

 

824

 

 

 

8,815

 

 

 

1,731

 

Net (charge-offs) recoveries on loans

 

 

(47

)

 

 

1

 

 

 

(997

)

 

 

78

 

Ending balance

 

$

26,634

 

 

$

19,386

 

 

$

26,634

 

 

$

19,386

 

Tangible Book Value Reconciliations (non-GAAP)

The tangible book value per share is a non-GAAP disclosure. The Company uses certain non-GAAP financial measures to provide supplemental information regarding the Company’s 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, 2020 and 2019.

 

 

September 30,

 

(dollars in thousands, except per share data)

 

2020

 

 

2019

 

Tangible common equity:

 

 

 

 

 

 

 

 

Total shareholders' equity

 

$

421,416

 

 

$

398,841

 

Adjustments

 

 

 

 

 

 

 

 

Goodwill

 

 

(69,243

)

 

 

(58,383

)

Core deposit intangible

 

 

(5,519

)

 

 

(6,444

)

Tangible common equity

 

$

346,654

 

 

$

334,014

 

Tangible assets:

 

 

 

 

 

 

 

 

Total assets-GAAP

 

$

3,359,576

 

 

$

2,820,302

 

Adjustments

 

 

 

 

 

 

 

 

Goodwill

 

 

(69,243

)

 

 

(58,383

)

Core deposit intangible

 

 

(5,519

)

 

 

(6,444

)

Tangible assets

 

$

3,284,814

 

 

$

2,755,475

 

Common shares outstanding

 

 

19,739,280

 

 

 

20,030,866

 

Tangible common equity to tangible assets ratio

 

 

10.55

%

 

 

12.12

%

Book value per share

 

$

21.35

 

 

$

19.91

 

Tangible book value per share

 

$

17.56

 

 

$

16.67

 

Earnings Per Share Excluding Merger and Conversion Expense (non-GAAP)

Earnings per share excluding merger and conversion expense is a non-GAAP disclosure. The Company uses certain non-GAAP financial measures to provide supplemental information regarding the Company’s performance. The following is a calculation of earnings per share with after-tax net income excluding tax-affected merger and conversion expense. This EPS calculation is presented for the quarters ended September 30, 2020, June 30, 2020 and September 30, 2019, plus for the nine-month periods ending September 30, 2020 and 2019.

 

 

For the three months ended

 

 

For the nine months ended

 

 

 

September 30,
2020

 

 

June 30,
2020

 

 

September 30,
2019

 

 

September 30,
2020

 

 

September 30,
2019

 

Earnings Per Share Excluding Merger and Conversion Expense (non-GAAP)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income after tax

 

$

8,520

 

 

$

6,513

 

 

$

8,012

 

 

$

21,781

 

 

$

28,534

 

Merger and conversion expense

 

 

62

 

 

 

276

 

 

 

100

 

 

 

741

 

 

 

282

 

Tax on merger and conversion expense

 

 

(18

)

 

 

(85

)

 

 

(32

)

 

 

(229

)

 

 

(83

)

Net adjustment

 

 

44

 

 

 

191

 

 

 

68

 

 

 

512

 

 

 

199

 

Adjusted net income after tax

 

$

8,564

 

 

$

6,704

 

 

$

8,080

 

 

$

22,293

 

 

$

28,733

 

Weighted average shares outstanding

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

19,717,568

 

 

 

19,710,330

 

 

 

20,067,847

 

 

 

19,799,617

 

 

 

20,063,479

 

Diluted

 

 

19,804,892

 

 

 

19,806,304

 

 

 

20,425,966

 

 

 

19,958,612

 

 

 

20,435,867

 

Adjusted Earnings Per Share

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic, excluding merger and conversion expense

 

$

0.43

 

 

$

0.34

 

 

$

0.40

 

 

$

1.13

 

 

$

1.44

 

Diluted, excluding merger and conversion expense

 

$

0.43

 

 

$

0.34

 

 

$

0.40

 

 

$

1.12

 

 

$

1.41

 

Efficiency Ratio (non-GAAP)

The efficiency ratio is a non-GAAP disclosure. The Company uses certain non-GAAP financial measures to provide supplemental information regarding the Company’s performance. The efficiency ratio is non-interest expense divided by net interest income plus non-interest income. The efficiency ratio is presented for the quarters ended September 30, 2020, June 30, 2020 and September 30, 2019, plus the nine-month periods ending September 30, 2020 and 2019.

 

 

For the three months ended

 

 

For the nine months ended

 

 

 

September 30,
2020

 

 

June 30,
2020

 

 

September 30,
2019

 

 

September 30,
2020

 

 

September 30,
2019

 

Efficiency Ratio (non-GAAP)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest expense

 

$

13,978

 

 

$

14,819

 

 

$

13,786

 

 

$

45,060

 

 

$

44,010

 

Net interest income

 

 

27,251

 

 

 

25,034

 

 

 

23,512

 

 

 

75,878

 

 

 

73,741

 

Noninterest income

 

 

2,727

 

 

 

2,208

 

 

 

2,799

 

 

 

9,550

 

 

 

12,497

 

Net interest income and non-interest income

 

$

29,978

 

 

$

27,242

 

 

$

26,311

 

 

$

85,428

 

 

$

86,238

 

Efficiency ratio

 

 

46.63

%

 

 

54.40

%

 

 

52.40

%

 

 

52.75

%

 

 

51.03

%

 

Contacts

Yee Phong (Alan) Thian
Chairman, President and CEO
(626) 307-7559

David Morris
Executive Vice President and CFO
(714) 670-2488

Contacts

Yee Phong (Alan) Thian
Chairman, President and CEO
(626) 307-7559

David Morris
Executive Vice President and CFO
(714) 670-2488