• Net Income: $4.4 million or $0.25 per share.
• Net Interest Margin (NIM): Increased by 8 basis points to 2.76%.
• Loan Production: $126 million in the fourth quarter.
• Non-Interest Income: $2.7 million in the fourth quarter.
• Non-Interest Expenses: Increased by $297,000 to $17.6 million.
• Provision for Credit Losses: $6 million, up from $3.3 million in the prior quarter.
• Non-Performing Assets: Totaled $81 million or 2% of total assets.
• Total Deposits: Stable at $3.1 billion.
• Allowance for Loan Losses to Total Loans: Increased by 15 basis points to 1.56%.
• Tangible Book Value per Share: Decreased slightly to $24.51.

• Warning! GuruFocus has detected 3 Warning Sign with RBB.

Release Date: February 04, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• RBB Bancorp (NASDAQ:RBB) reported a net interest margin increase of eight basis points, primarily due to a decline in the cost of interest-bearing deposits.
• The bank achieved $126 million in loan production during the fourth quarter, maintaining a healthy pipeline for future growth.
• RBB Bancorp (NASDAQ:RBB) saw a $20 million increase in non-interest-bearing deposits, indicating strong deposit growth in this category.
• The company has a strong capital position with all capital ratios above regulatory well-capitalized levels.
• RBB Bancorp (NASDAQ:RBB) is actively involved in community support, donating $30,000 to assist families affected by Southern California wildfires.

Negative Points

• Fourth quarter net income decreased to $4.4 million, primarily due to credit issues.
• Non-performing assets increased to $81 million, representing 2% of total assets, with a significant portion attributed to a $26 million loan moving to nonaccrual status.
• The provision for credit losses rose to $6 million, reflecting challenges in credit quality.
• Loan balances declined by $28 million in the fourth quarter, partly due to high levels of paydowns and refinancing by competitors.
• The overall loan portfolio yield decreased by 10 basis points, impacted by lower yields in the commercial real estate loan segment.

Q & A Highlights

Q: Can you provide more details on the $26 million C&D loan that moved to non-accrual status? A: The project is over 50% complete, with $26.5 million outstanding. We have taken a $4.5 million specific reserve to estimate its fair value. (Rebeca Rico, Financial Analyst)

Q: What are your thoughts on capital allocation, particularly regarding stock buybacks? A: We completed a million share buyback in 2024 and are interested in considering another buyback in 2025, focusing on credit in the last quarter. (Rebeca Rico, Financial Analyst)

Q: Can you discuss the outlook for net interest margin and CD maturities? A: The net interest margin is expected to expand as CDs reprice into the current rate environment. We have $650 million in CDs maturing in the first quarter with a weighted average rate of 4.60%. (Rebeca Rico, Financial Analyst)

Q: What is your growth outlook for loans and deposits in 2025? A: We maintain a healthy pipeline, averaging $225 million. We aim for low to mid-single-digit growth, focusing on quality credit and relationship building. (Johnny Lee, President, Chief Banking Officer)

Q: How are you addressing non-performing loans and credit issues? A: We are focused on resolving non-performing loans, primarily originated before 2022, and expect to address these by the end of 2025. (Johnny Lee, President, Chief Banking Officer)

For the complete transcript of the earnings call, please refer to the full earnings call transcript.