RBB Bancorp Reports First Quarter 2025 Earnings
LOS ANGELES, April 28, 2025 (GLOBE NEWSWIRE) -- RBB Bancorp $(RBB)$ and its subsidiaries, Royal Business Bank (the "Bank") and RBB Asset Management Company ("RAM"), collectively referred to herein as the "Company," announced financial results for the quarter ended March 31, 2025.
First Quarter 2025 Highlights
-- Net income totaled $2.3 million, or $0.13 diluted earnings per share
-- Return on average assets of 0.24%, compared to 0.44% for the quarter
ended December 31, 2024
-- Net interest margin expanded to 2.88%, up from 2.76% for the quarter
ended December 31, 2024
-- Net loans held for investment growth of $89.8 million, or 12% annualized
-- Nonperforming assets decreased $16.5 million, or 20.3%, to $64.6 million
at March 31, 2025, down from $81.0 million at December 31, 2024
-- Book value and tangible book value per share(1) increased to $28.77 and
$24.63 at March 31, 2025, up from $28.66 and $24.51 at December 31, 2024
The Company reported net income of $2.3 million, or $0.13 diluted earnings per share, for the quarter ended March 31, 2025, compared to net income of $4.4 million, or $0.25 diluted earnings per share, for the quarter ended December 31, 2024. First quarter of 2025 net income included $6.7 million in pre-tax provision for credit losses mostly related to reducing exposure to nonperforming loans, including higher specific reserves.
"First quarter net income declined to $2.3 million, or 13 cents per share, as we took decisive action to address our nonperforming loans," said David Morris, Chief Executive Officer of RBB Bancorp. "We reduced our net exposure to nonperforming loans to $51 million, including specific reserves, or 32% since year end. We remain focused on resolving our nonperforming loans as quickly as possible while minimizing the impact to earnings and capital and we think our actions in the first quarter reflect this."
"Our loan production was relatively strong during the first quarter driven by continued execution of our initiatives, which resulted in 12% annualized net loan growth. Our loan prospect pipeline continues to be healthy, and we anticipate loan growth to continue in the second quarter, albeit likely at a more moderate pace," said Johnny Lee, President of RBB Bancorp and President and Chief Executive Officer of the Bank. "While the market environment is volatile, we have not observed significant signs of financial impact to our clients at this time."
(1 ) Reconciliations of the non--U.S. generally accepted
accounting principles ("GAAP") measures included at
the end of this press release.
Net Interest Income and Net Interest Margin
Net interest income was $26.2 million for the first quarter of 2025, compared to $26.0 million for the fourth quarter of 2024. The $186,000 increase was due to a $2.4 million decrease in interest expense, offset by a $2.2 million decrease in interest income. The decrease in interest income was mostly due to the impact of fewer days in the quarter of $1.2 million and lower average excess liquidity (cash and cash equivalents and investment securities) of $1.5 million. The decrease in interest expense was mostly due to the impact of lower average funding rates of $1.5 million, fewer days in the quarter of $621,000 and lower average interest-bearing liabilities of $336,000. The $1.5 million attributed to lower average funding rates included $1.8 million due to a 29 basis point decrease in the average cost of interest-bearing deposits.
The net interest margin ("NIM") was 2.88% for the first quarter of 2025, an increase of 12 basis points from 2.76% for the fourth quarter of 2024. The NIM expansion was due to a 17 basis point decrease in the overall cost of funds, partially offset by a 3 basis point decrease in the yield on average interest-earning assets. The yield on average interest-earning assets decreased to 5.76% for the first quarter of 2025 from 5.79% for the fourth quarter of 2024 due mainly to a decrease in the yield on average cash and cash equivalents of 32 basis points and average loans of 2 basis points, partially offset by the benefit of a change in the mix in average-earning assets. Average loans represented 84% of average interest-earning assets in the first quarter of 2025, as compared to 82% in the fourth quarter of 2024.
The average cost of funds decreased to 3.15% for the first quarter of 2025 from 3.32% for the fourth quarter of 2024, driven by a 29 basis point decrease in the average cost of interest-bearing deposits, partially offset by a 38 basis point increase in the average cost of borrowings. The average cost of interest-bearing deposits decreased to 3.77% for the first quarter of 2025 from 4.06% for the fourth quarter of 2024. During the first quarter of 2025, $150.0 million in Federal Home Loan Bank ("FHLB") advances with an average cost of 1.18% matured and were largely replaced with $110.0 million in FHLB advances with various terms at an average rate of 3.88%. The overall funding mix for the first quarter of 2025 remained relatively unchanged from the fourth quarter of 2024 with total deposits representing 90% of the funding mix and average noninterest-bearing deposits representing 17% of average total deposits. The all-in average spot rate for total deposits was 3.06% at March 31, 2025.
Provision for Credit Losses
The provision for credit losses was $6.7 million for the first quarter of 2025 compared to $6.0 million for the fourth quarter of 2024. The first quarter of 2025 provision for credit losses was due to an increase in specific reserves of $2.8 million, net charge-offs of $2.6 million and an increase in general reserves of $1.3 million due mainly to net loan growth. The first quarter increase in specific reserves related mostly to two lending relationships. Net charge-offs included $1.4 million related to a bulk sale of $10.8 million in underperforming single-family residential ("SFR") mortgage loans, of which $6.5 million were on nonaccrual at the end of the year, and $1.2 million related to an $8.8 million loan transferred to other real estate owned ("OREO") and subsequently sold. Net charge-offs on an annualized basis represented 0.35% of average loans for the first quarter of 2025 compared to 0.26% for the fourth quarter of 2024. The first quarter provision also took into consideration factors such as changes in loan balances, the loan portfolio mix, the outlook for economic conditions and market interest rates, and changes in credit quality metrics, including changes in nonperforming loans, special mention and substandard loans during the period.
Noninterest Income
Noninterest income for the first quarter of 2025 was $2.3 million, a decrease of $434,000 from $2.7 million for the fourth quarter of 2024. This decrease was mostly due to the fourth quarter of 2024 including $258,000 of income from a Bank Enterprise Award grant (included in other income) and lower net gain on sale of loans as compared to the fourth quarter of 2024.
Noninterest Expense
Noninterest expense for the first quarter of 2025 was $18.5 million, an increase of $873,000 from $17.6 million for the fourth quarter of 2024. This increase was mostly due to higher salaries and employee benefits expense of $716,000 attributed to higher payroll taxes and annual pay increases, which are typically reflected in the first quarter of the year. The annualized noninterest expenses to average assets ratio was 1.90% for the first quarter of 2025, up from 1.76% for the fourth quarter of 2024. The efficiency ratio was 65.1% for the first quarter of 2025, up from 61.5% for the fourth quarter of 2024 due mostly to higher noninterest expense.
Income Taxes
The effective tax rate was 28.2% for the first quarter of 2025 and 13.3% for the fourth quarter of 2024. The increase in the effective tax rate for the first quarter was due in part to lower tax credits combined with higher estimated pre-tax net income for the full year of 2025 as compared to the prior quarter.2
Balance Sheet
At March 31, 2025, total assets were $4.0 billion, a $16.9 million increase compared to December 31, 2024, and a $131.4 million increase compared to March 31, 2024.
Loan and Securities Portfolio
Loans held for investment ("HFI") totaled $3.1 billion as of March 31, 2025, an increase of $89.8 million, or 12% annualized, compared to December 31, 2024 and an increase of $115.7 million, or 3.8%, compared to March 31, 2024. The first quarter of 2025 net loan growth included $201 million in new production with an average yield of 6.77%. When loan sales, charge-offs, and foreclosures totaling $28.6 million are considered, the annualized first quarter net loan growth rate was 16%. The increase from December 31, 2024 was primarily due to a $51.8 million increase in SFR mortgage loans, a $44.0 million increase in commercial real estate ("CRE") loans, a $6.0 million increase in commercial and industrial ("C&I") loans and a $3.4 million increase in Small Business Administration ("SBA") loans, partially offset by a $14.4 million decrease in construction and land development ("C&D") loans. The loan to deposit ratio was 98.4% at March 31, 2025, compared to 97.5% at December 31, 2024 and 98.6% at March 31, 2024.
As of March 31, 2025, available for sale securities totaled $378.2 million, a decrease of $42.0 million from December 31, 2024, primarily related to the net decrease in short-term commercial paper of $41.4 million due to maturity and purchase activity during the first quarter of 2025. As of March 31, 2025, net unrealized losses totaled $25.0 million, a $4.2 million decrease, when compared to net unrealized losses of $29.2 million as of December 31, 2024.
Deposits
Total deposits were $3.1 billion as of March 31, 2025, an increase of $58.8 million, or 7.7% annualized, compared to December 31, 2024 and an increase of $114.3 million, or 3.8%, compared to March 31, 2024. The increase during the first quarter of 2025 was due to a $93.6 million increase in interest-bearing deposits, while noninterest-bearing deposits decreased $34.8 million. The increase in interest-bearing deposits included increases in non-maturity deposits of $58.2 million and time deposits of $35.5 million. Wholesale deposits totaled $158.5 million at March 31, 2025, and $147.5 million at December 31, 2024. Noninterest-bearing deposits totaled $528.2 million and represented 16.8% of total deposits at March 31, 2025 compared to $563.0 million and 18.3% at December 31, 2024.
Credit Quality
Nonperforming assets totaled $64.6 million, or 1.61% of total assets, at March 31, 2025, down from $81.0 million, or 2.03% of total assets, at December 31, 2024. The $16.5 million decrease in nonperforming assets was due to sales totaling $20.0 million and payoffs or paydowns of $1.8 million, partially offset by the addition of one $5.3 million CRE loan placed on nonaccrual status in the first quarter of 2025. Nonperforming assets included one $4.2 million OREO (included in "Accrued interest and other assets") at March 31, 2025, which was a nonaccrual loan at December 31, 2024.
Special mention loans totaled $64.3 million, or 2.05% of total loans, at March 31, 2025, down from $65.3 million, or 2.14% of total loans, at December 31, 2024. The $1.1 million decrease was primarily due to the upgrade of one $1.7 million CRE loan to a pass-rated loan, offset by the addition of one $578,000 C&I loan. All special mention loans are paying current.
Substandard loans totaled $76.4 million at March 31, 2025, down from $100.3 million at December 31, 2024. This $24.0 million decrease was primarily due to loan sales totaling $11.7 million, transfers to OREO totaling $12.8 million, of which $8.8 million was subsequently sold during the first quarter of 2025, and payoffs and paydowns totaling $5.4 million, partially offset by the downgrade of two loans totaling $6.2 million. Of the total substandard loans at March 31, 2025, there were $16.0 million on accrual status.
30-89 day delinquent loans, excluding nonperforming loans, totaled $5.9 million, or 0.19% of total loans, at March 31, 2025, down from $22.1 million, or 0.72% of total loans, at December 31, 2024. The $16.2 million decrease was mostly due to $16.3 million in loans returning to current status, $2.9 million in SFR mortgage loans included in the bulk sale of several underperforming SFR mortgage loans and $398,000 in paydowns and payoffs, offset by $3.5 million in new delinquent loans.3
As of March 31, 2025, the allowance for credit losses totaled $52.6 million and was comprised of an allowance for loan losses of $51.9 million and a reserve for unfunded commitments of $629,000 (included in "Accrued interest and other liabilities"). This compares to the allowance for credit losses of $48.5 million, comprised of an allowance for loan losses of $47.7 million and a reserve for unfunded commitments of $729,000 at December 31, 2024. The $4.1 million increase in the allowance for credit losses for the first quarter of 2025 was due to a $6.7 million provision for credit losses offset by net charge-offs of $2.6 million. Net charge-offs included $1.4 million related to a bulk sale of $10.8 million in underperforming SFR mortgage loans, of which $6.5 million were on nonaccrual at the end of the year, and $1.2 million related to an $8.8 million loan transferred to OREO and subsequently sold. The allowance for loan losses as a percentage of loans HFI increased to 1.65% at March 31, 2025, compared to 1.56% at December 31, 2024, due to an increase in specific reserves. The allowance for loan losses as a percentage of nonperforming loans HFI was 86% at March 31, 2025, an increase from 68% at December 31, 2024.
For the Three Months Ended March 31,
2025
---------------------------------------
Reserve for
Allowance unfunded Allowance
for loan loan for credit
(dollars in thousands) losses commitments losses
---------- ------------ -----------
Beginning balance $ 47,729 $ 729 $ 48,458
Provision for (reversal
of) credit losses 6,846 (100) 6,746
Less loans charged-off (2,727) -- (2,727)
Recoveries on loans
charged-off 84 -- 84
--------- ----------- -------
Ending balance $ 51,932 $ 629 $ 52,561
========= =========== =======
Shareholders' Equity
At March 31, 2025, total shareholders' equity was $510.3 million, a $2.4 million increase compared to December 31, 2024, and a $3.7 million decrease compared to March 31, 2024. The increase in shareholders' equity for the first quarter of 2025 was due to lower net unrealized losses on available for sale securities of $3.0 million, net income of $2.3 million and equity compensation activity of $43,000, offset by common stock cash dividends paid of $2.9 million. The decrease in shareholders' equity for the last twelve months was due to common stock repurchases of $19.2 million and dividends paid of $11.6 million on common stock, offset by net income of $20.9 million, lower net unrealized losses on available for sale securities of $3.7 million, and equity compensation activity of $2.5 million. Book value per share and tangible book value per share(1) increased to $28.77 and $24.63 at March 31, 2025, up from $28.66 and $24.51 at December 31, 2024 and up from $27.67 and $23.68 at March 31, 2024.
Contact:
Lynn Hopkins, Chief Financial Officer
(213) 716-8066
lhopkins@rbbusa.com
-------------------------------------
(1 ) Reconciliations of the non--U.S. generally accepted
accounting principles ("GAAP") measures included at
the end of this press release.
Corporate Overview
RBB Bancorp is a community-based financial holding company headquartered in Los Angeles, California. As of March 31, 2025, the Company had total assets of $4.0 billion. Its wholly-owned subsidiary, Royal Business Bank, is a full service commercial bank, which provides consumer and business banking services predominately to the Asian-centric communities in Los Angeles County, Orange County, and Ventura County in California, in Las Vegas, Nevada, in Brooklyn, Queens, and Manhattan in New York, in Edison, New Jersey, in the Chicago neighborhoods of Chinatown and Bridgeport, Illinois, and on Oahu, Hawaii. Bank services include remote deposit, E-banking, mobile banking, commercial and investor real estate loans, business loans and lines of credit, commercial and industrial loans, SBA 7A and 504 loans, 1-4 single family residential loans, trade finance, a full range of depository account products and wealth management services. The Bank has nine branches in Los Angeles County, two branches in Ventura County, one branch in Orange County, California, one branch in Las Vegas, Nevada, three branches and one loan operation center in Brooklyn, three branches in Queens, one branch in Manhattan in New York, one branch in Edison, New Jersey, two branches in Chicago, Illinois, and one branch in Honolulu, Hawaii. The Company's administrative and lending center is located at 1055 Wilshire Blvd., Los Angeles, California 90017, and its operations center is located at 7025 Orangethorpe Ave., Buena Park, California 90621. The Company's website address is www.royalbusinessbankusa.com.
Conference Call
Management will hold a conference call at 11:00 a.m. Pacific time/2:00 p.m. Eastern time on Tuesday, April 29, 2025, to discuss the Company's first quarter 2025 financial results.
To listen to the conference call, please dial 1-888-506-0062 or 1-973-528-0011, the Participant ID code is 534591, conference ID RBBQ125. A replay of the call will be made available at 1-877-481-4010 or 1-919-882-2331, the passcode is 52277, approximately one hour after the conclusion of the call and will remain available through May 13, 2025.
The conference call will also be simultaneously webcast over the Internet; please visit our Royal Business Bank website at www.royalbusinessbankusa.com and click on the "Investors" tab to access the call from the site. This webcast will be recorded and available for replay on our website approximately two hours after the conclusion of the conference call.
Disclosure
This press release contains certain non-GAAP financial disclosures for tangible common equity and tangible assets and adjusted earnings. The Company uses certain non-GAAP financial measures to provide meaningful supplemental information regarding the Company's operational performance and to enhance investors' overall understanding of such financial performance. Please refer to the tables at the end of this release for a presentation of performance ratios in accordance with GAAP and a reconciliation of the non-GAAP financial measures to the GAAP financial measures.
Safe Harbor
Certain matters set forth herein (including the exhibits hereto) constitute forward-looking statements relating to the Company's current business plans and expectations and our future financial position and operating results. These forward-looking statements are subject to risks and uncertainties that could cause actual results, performance and/or achievements to differ materially from those projected. These risks and uncertainties include, but are not limited to, the effectiveness of the Company's internal control over financial reporting and disclosure controls and procedures; the potential for additional material weaknesses in the Company's internal controls over financial reporting or other potential control deficiencies of which the Company is not currently aware or which have not been detected; business and economic conditions generally and in the financial services industry, nationally and within our current and future geographic markets, including the tight labor market, ineffective management of the United States ("U.S.") federal budget or debt or turbulence or uncertainly in domestic or foreign financial markets; the strength of the U.S. economy in general and the strength of the local economies in which we conduct operations; adverse developments in the banking industry highlighted by high-profile bank failures and the potential impact of such developments on customer confidence, liquidity and regulatory responses to these developments; possible additional provisions for credit losses and charge-offs; credit risks of lending activities and deterioration in asset or credit quality; extensive laws and regulations and supervision that we are subject to, including potential supervisory action by bank supervisory authorities; compliance with the Bank Secrecy Act and other money laundering statutes and regulations; potential goodwill impairment; liquidity risk; failure to comply with debt covenants; fluctuations in interest rates; risks associated with acquisitions and the expansion of our business into new markets; inflation and deflation; real estate market conditions and the value of real estate collateral; the effects of having concentrations in our loan portfolio, including commercial real estate and the risks of geographic and industry concentrations; environmental liabilities; our ability to compete with larger competitors; our ability to retain key personnel; successful management of reputational risk; severe weather, natural disasters, earthquakes, fires, including direct and indirect costs and impacts on clients, the Company and its employees from the January 2025 Los Angeles County wildfires; or other adverse external events could harm our business; geopolitical conditions, including acts or threats of terrorism, actions taken by the U.S. or other governments in response to acts or threats of terrorism and/or military conflicts, including the conflicts between Russia and Ukraine, in the Middle East, and increasing tensions between China and Taiwan, which could impact business and economic conditions in the U.S. and abroad; tariffs, trade policies, and related tensions, which could impact our clients, specific industry sectors, and/or broader economic conditions and financial market; public health crises and pandemics, and their effects on the economic and business environments in which we operate, including our credit quality and business operations, as well as the impact on general economic and financial market conditions; general economic or business conditions in Asia, and other regions where the Bank has operations; failures, interruptions, or security breaches of our information systems; climate change, including any enhanced regulatory, compliance, credit and reputational risks and costs; cybersecurity threats and the cost of defending against them; our ability to adapt our systems to the expanding use of technology in banking; risk management processes and strategies; adverse results in legal proceedings; the impact of regulatory enforcement actions, if any; certain provisions in our charter and bylaws that may affect acquisition of the Company; changes in tax laws and regulations; the impact of governmental efforts to restructure the U.S. financial regulatory system and increased costs of compliance and other risks associated with changes in regulation, including any amendments to the Dodd-Frank Wall Street Reform and Consumer Protection Act; the impact of changes in the Federal Deposit Insurance Corporation ("FDIC") insurance assessment rate and the rules and regulations related to the calculation of the FDIC insurance assessments; the effect of changes in accounting policies and practices or accounting standards, as may be adopted from time-to-time by bank regulatory agencies, the SEC, the Public Company Accounting Oversight Board, the Financial Accounting Standards Board or other accounting standards setters; fluctuations in the Company's stock price; restrictions on dividends and other distributions by laws and regulations and by our regulators and our capital structure; our ability to raise additional capital, if needed, and the potential resulting dilution of interests of holders of our common stock; the soundness of other financial institutions; our ongoing relations with our various federal and state regulators, including the SEC, FDIC, FRB and California Department of Financial Protection and Innovation; 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, 2024, and particularly the discussion of risk factors within that document. The Company does not undertake, and specifically disclaims any obligation, to update any forward-looking statements to reflect occurrences or unanticipated events or circumstances after the date of such statements except as required by law. Any statements about future operating results, such as those concerning accretion and dilution to the Company's earnings or shareholders, are for illustrative purposes only, are not forecasts, and actual results may differ.
RBB BANCORP AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(Dollars in thousands)
December September
March 31, 31, 30, June 30, March 31,
2025 2024 2024 2024 2024
---------- ---------- ---------- ---------- ----------
Assets
Cash and due from banks $ 25,315 $ 27,747 $ 26,388 $ 23,313 $ 21,887
Interest-earning deposits
with financial
institutions 213,508 229,998 323,002 229,456 247,356
--------- --------- --------- --------- ---------
Cash and cash
equivalents 238,823 257,745 349,390 252,769 269,243
Interest-earning time
deposits with financial
institutions 600 600 600 600 600
Investment securities
available for sale 378,188 420,190 305,666 325,582 335,194
Investment securities held
to maturity 5,188 5,191 5,195 5,200 5,204
Loans held for sale 655 11,250 812 3,146 3,903
Loans held for investment 3,143,063 3,053,230 3,091,896 3,047,712 3,027,361
Allowance for loan losses (51,932) (47,729) (43,685) (41,741) (41,688)
--------- --------- --------- --------- ---------
Net loans held for
investment 3,091,131 3,005,501 3,048,211 3,005,971 2,985,673
Premises and equipment,
net 24,308 24,601 24,839 25,049 25,363
Federal Home Loan Bank
(FHLB) stock 15,000 15,000 15,000 15,000 15,000
Cash surrender value of
bank owned life
insurance 60,699 60,296 59,889 59,486 59,101
Goodwill 71,498 71,498 71,498 71,498 71,498
Servicing assets 6,766 6,985 7,256 7,545 7,794
Core deposit intangibles 1,839 2,011 2,194 2,394 2,594
Right-of-use assets 26,779 28,048 29,283 30,530 31,231
Accrued interest and other
assets 87,926 83,561 70,644 63,416 65,608
--------- --------- --------- --------- ---------
Total assets $4,009,400 $3,992,477 $3,990,477 $3,868,186 $3,878,006
========= ========= ========= ========= =========
Liabilities and
shareholders' equity
Deposits:
Noninterest-bearing
demand $ 528,205 $ 563,012 $ 543,623 $ 542,971 $ 539,517
Savings, NOW and
money market
accounts 721,216 663,034 666,089 647,770 642,840
Time deposits,
$250,000 and under 1,000,106 1,007,452 1,052,462 1,014,189 1,083,898
Time deposits,
greater than
$250,000 893,101 850,291 830,010 818,675 762,074
--------- --------- --------- --------- ---------
Total deposits 3,142,628 3,083,789 3,092,184 3,023,605 3,028,329
FHLB advances 160,000 200,000 200,000 150,000 150,000
Long-term debt, net of
issuance costs 119,624 119,529 119,433 119,338 119,243
Subordinated debentures 15,211 15,156 15,102 15,047 14,993
Lease liabilities -
operating leases 28,483 29,705 30,880 32,087 32,690
Accrued interest and other
liabilities 33,148 36,421 23,150 16,818 18,765
--------- --------- --------- --------- ---------
Total liabilities 3,499,094 3,484,600 3,480,749 3,356,895 3,364,020
--------- --------- --------- --------- ---------
Shareholders' equity:
Common stock 260,284 259,957 259,280 266,160 271,645
Additional paid-in capital 3,360 3,645 3,520 3,456 3,348
Retained earnings 263,885 264,460 262,946 262,518 259,903
Non-controlling interest 72 72 72 72 72
Accumulated other
comprehensive loss, net (17,295) (20,257) (16,090) (20,915) (20,982)
--------- --------- --------- --------- ---------
Total shareholders'
equity 510,306 507,877 509,728 511,291 513,986
--------- --------- --------- --------- ---------
Total liabilities
and shareholders'
equity $4,009,400 $3,992,477 $3,990,477 $3,868,186 $3,878,006
========= ========= ========= ========= =========
RBB BANCORP AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(In thousands, except share and per share data)
For the Three Months Ended
-------------------------------------
March 31, December March 31,
2025 31, 2024 2024
----------- ----------- -----------
Interest and dividend
income:
Interest and fees
on loans $ 45,621 $ 46,374 $ 45,547
Interest on
interest-earning
deposits 2,014 3,641 5,040
Interest on
investment
securities 4,136 3,962 3,611
Dividend income on
FHLB stock 330 330 331
Interest on federal
funds sold and
other 235 248 266
---------- ---------- ----------
Total interest and
dividend income 52,336 54,555 54,795
---------- ---------- ----------
Interest expense:
Interest on savings
deposits, NOW and
money market
accounts 4,468 4,671 4,478
Interest on time
deposits 19,084 21,361 23,322
Interest on
long-term debt and
subordinated
debentures 1,632 1,660 1,679
Interest on FHLB
advances 989 886 439
---------- ---------- ----------
Total interest
expense 26,173 28,578 29,918
---------- ---------- ----------
Net interest
income before
provision for
credit losses 26,163 25,977 24,877
Provision for credit
losses 6,746 6,000 --
---------- ---------- ----------
Net interest
income after
provision for
credit losses 19,417 19,977 24,877
---------- ---------- ----------
Noninterest income:
Service charges and
fees 1,017 988 992
Gain on sale of
loans 81 376 312
Loan servicing
fees, net of
amortization 588 492 589
Increase in cash
surrender value of
life insurance 403 407 382
Gain on OREO -- -- 724
Other income 206 466 373
---------- ---------- ----------
Total noninterest
income 2,295 2,729 3,372
---------- ---------- ----------
Noninterest expense:
Salaries and
employee benefits 10,643 9,927 9,927
Occupancy and
equipment
expenses 2,407 2,403 2,443
Data processing 1,602 1,499 1,420
Legal and
professional 1,515 1,355 880
Office expenses 408 399 356
Marketing and
business
promotion 197 251 172
Insurance and
regulatory
assessments 730 677 982
Core deposit
premium 172 182 201
Other expenses 848 956 588
---------- ---------- ----------
Total noninterest
expense 18,522 17,649 16,969
---------- ---------- ----------
Income before
income taxes 3,190 5,057 11,280
Income tax expense 900 672 3,244
---------- ---------- ----------
Net income $ 2,290 $ 4,385 $ 8,036
========== ========== ==========
Net income per
share
Basic $ 0.13 $ 0.25 $ 0.43
Diluted $ 0.13 $ 0.25 $ 0.43
Cash dividends
declared per
common share $ 0.16 $ 0.16 $ 0.16
Weighted-average
common shares
outstanding
Basic 17,727,712 17,704,992 18,601,277
Diluted 17,770,588 17,796,840 18,666,683
RBB BANCORP AND SUBSIDIARIES
AVERAGE BALANCE SHEET AND NET INTEREST INCOME
(Unaudited)
For the Three Months Ended
------------------------------------------------------------------------------------------------------
March 31, 2025 December 31, 2024 March 31, 2024
----------------------------- ------------------------------- ------------------------------
Yield Yield
(tax-equivalent basis, Average Interest / Average Interest Yield / Average Interest /
dollars in thousands) Balance & Fees Rate Balance & Fees Rate Balance & Fees Rate
---------- ---------- ----- ---------- ---------- ------- ---------- ---------- ------
Interest-earning assets
Cash and cash equivalents
(1) $ 194,236 $ 2,249 4.70% $ 308,455 $ 3,890 5.02% $ 364,979 $ 5,306 5.85%
FHLB Stock 15,000 330 8.92% 15,000 330 8.75% 15,000 331 8.88%
Securities
Available for sale (2) 390,178 4,113 4.28% 361,253 3,939 4.34% 320,015 3,589 4.51%
Held to maturity (2) 5,189 49 3.83% 5,194 48 3.68% 5,207 46 3.55%
Total loans (3) 3,079,224 45,621 6.01% 3,059,786 46,374 6.03% 3,018,423 45,547 6.07%
--------- ------ --------- ------ --------- ------
Total
interest-earning
assets 3,683,827 $ 52,362 5.76% 3,749,688 $ 54,581 5.79% 3,723,624 $ 54,819 5.92%
====== ====== ======
Total
noninterest-earning
assets 260,508 244,609 246,341
--------- --------- ---------
Total average assets $3,944,335 $3,994,297 $3,969,965
========= ========= =========
Interest-bearing
liabilities
NOW 61,222 321 2.13% $ 53,879 $ 254 1.88% $ 58,946 $ 298 2.03%
Money market 463,443 3,625 3.17% 463,850 3,735 3.20% 411,751 3,526 3.44%
Saving deposits 155,116 522 1.36% 162,351 682 1.67% 157,227 654 1.67%
Time deposits, $250,000
and under 989,622 10,046 4.12% 1,034,946 11,583 4.45% 1,175,804 13,805 4.72%
Time deposits, greater
than $250,000 864,804 9,038 4.24% 835,583 9,778 4.66% 785,172 9,517 4.88%
--------- ------ --------- ------ --------- ------
Total interest-bearing
deposits 2,534,207 23,552 3.77% 2,550,609 26,032 4.06% 2,588,900 27,800 4.32%
FHLB advances 176,833 989 2.27% 200,000 886 1.76% 150,000 439 1.18%
Long-term debt 119,562 1,295 4.39% 119,466 1,295 4.31% 119,180 1,295 4.37%
Subordinated debentures 15,175 337 9.01% 15,121 365 9.60% 14,957 384 10.33%
--------- ------ --------- ------ --------- ------
Total
interest-bearing
liabilities 2,845,777 26,173 3.73% 2,885,196 28,578 3.94% 2,873,037 29,918 4.19%
--------- ------ --------- ------ --------- ------
Noninterest-bearing
liabilities
Noninterest-bearing
deposits 520,145 539,900 528,346
Other noninterest-bearing
liabilities 66,151 56,993 55,795
--------- --------- ---------
Total
noninterest-bearing
liabilities 586,296 596,893 584,141
--------- --------- ---------
Shareholders' equity 512,262 512,208 512,787
--------- --------- ---------
Total liabilities and
shareholders'
equity $3,944,335 $3,994,297 $3,969,965
========= ========= =========
Net interest income /
interest rate spreads $ 26,189 2.03% $ 26,003 1.85% $ 24,901 1.73%
====== ====== ======
Net interest margin 2.88% 2.76% 2.69%
===== ======= ======
Total cost of deposits $3,054,352 $ 23,552 3.13% $3,090,509 $ 26,032 3.35% $3,117,246 $ 27,800 3.59%
Total cost of funds $3,365,922 $ 26,173 3.15% $3,425,096 $ 28,578 3.32% $3,401,383 $ 29,918 3.54%
(1 ) Includes income and average balances for interest-earning
time deposits and other miscellaneous interest-earning
assets.
(2 ) Interest income and average rates for tax-exempt securities
are presented on a tax-equivalent basis.
(3 ) Average loan balances relate to loans held for investment
and loans held for sale and include nonaccrual loans.
Interest income on loans includes the effects of discount
accretion and net deferred loan origination fees and
costs accounted for as yield adjustments.
RBB BANCORP AND SUBSIDIARIES
SELECTED FINANCIAL HIGHLIGHTS
(Unaudited)
At or for the Three Months Ended
------------------------------------------------
March 31, December 31, March 31,
2025 2024 2024
----------- --- ------------- -----------
Per share data
(common stock)
Book value $ 28.77 $ 28.66 $ 27.67
Tangible book
value (1) $ 24.63 $ 24.51 $ 23.68
Performance
ratios
Return on average
assets,
annualized 0.24% 0.44% 0.81%
Return on average
shareholders'
equity,
annualized 1.81% 3.41% 6.30%
Return on average
tangible common
equity,
annualized (1) 2.12% 3.98% 7.37%
Noninterest income
to average
assets,
annualized 0.24% 0.27% 0.34%
Noninterest
expense to
average assets,
annualized 1.90% 1.76% 1.72%
Yield on average
earning assets 5.76% 5.79% 5.92%
Yield on average
loans 6.01% 6.03% 6.07%
Cost of average
total deposits
(2) 3.13% 3.35% 3.59%
Cost of average
interest-bearing
deposits 3.77% 4.06% 4.32%
Cost of average
interest-bearing
liabilities 3.73% 3.94% 4.19%
Net interest
spread 2.03% 1.85% 1.73%
Net interest
margin 2.88% 2.76% 2.69%
Efficiency ratio
(3) 65.09% 61.48% 60.07%
Common stock
dividend payout
ratio 123.08% 64.00% 37.21%
(1 ) Non-GAAP measure. See Non--GAAP reconciliations set
forth at the end of this press release.
(2 ) Total deposits include non-interest bearing deposits
and interest-bearing deposits.
(3 ) Ratio calculated by dividing noninterest expense by
the sum of net interest income before provision for
credit losses and noninterest income.
RBB BANCORP AND SUBSIDIARIES
SELECTED FINANCIAL HIGHLIGHTS
(Unaudited)
(Dollars in thousands)
At or for the quarter ended
------------------------------------------------
March 31, December 31, March 31,
2025 2024 2024
----------- -------------- -----------
Credit Quality
Data:
Special mention
loans $ 64,279 $ 65,329 $ 20,580
Special mention
loans to total
loans 2.05% 2.14% 0.68%
Substandard loans
HFI $ 76,372 $ 89,141 $ 57,170
Substandard loans
HFS $ -- $ 11,195 $ --
Substandard loans
HFI to total
loans HFI 2.43% 2.92% 1.89%
Loans 30-89 days
past due,
excluding
nonperforming
loans $ 5,927 $ 22,086 $ 20,950
Loans 30-89 days
past due,
excluding
nonperforming
loans, to total
loans 0.19% 0.72% 0.69%
Nonperforming
loans HFI $ 60,380 $ 69,843 $ 35,935
Nonperforming
loans HFS $ -- $ 11,195 $ --
OREO $ 4,170 $ -- $ 1,071
------- ---------- -------
Nonperforming
assets $ 64,550 $ 81,038 $ 37,006
======= ========== =======
Nonperforming
loans HFI to
total loans HFI 1.92% 2.29% 1.19%
Nonperforming
assets to total
assets 1.61% 2.03% 0.95%
Allowance for loan
losses $ 51,932 $ 47,729 $ 41,688
Allowance for loan
losses to total
loans HFI 1.65% 1.56% 1.38%
Allowance for loan
losses to
nonperforming
loans HFI 86.01% 68.34% 116.01%
Net charge-offs $ 2,643 $ 2,006 $ 184
Net charge-offs to
average loans 0.35% 0.26% 0.02%
Capital ratios
(1)
Tangible common
equity to
tangible assets
(2) 11.10% 11.08% 11.56%
Tier 1 leverage
ratio 12.07% 11.92% 12.16%
Tier 1 common
capital to
risk-weighted
assets 17.87% 17.94% 19.10%
Tier 1 capital to
risk-weighted
assets 18.45% 18.52% 19.72%
Total capital to
risk-weighted
assets 24.41% 24.49% 25.91%
(1 ) March 31, 2025 capital ratios are preliminary.
(2 ) Non-GAAP measure. See Non-GAAP reconciliations set
forth at the end of this press release.
RBB BANCORP AND SUBSIDIARIES
SELECTED FINANCIAL HIGHLIGHTS
(Unaudited)
As of December 31, As of March 31,
Loan Portfolio Detail As of March 31, 2025 2024 2024
---------------------- -------------------- ------------------
(dollars in thousands) $ % $ % $ %
---------- --------- ---------- ------- ---------- -----
Loans:
Commercial and
industrial $ 135,538 4.3% $ 129,585 4.2% $ 121,441 4.0%
SBA 50,651 1.6% 47,263 1.5% 54,677 1.8%
Construction and land
development 158,883 5.1% 173,290 5.7% 198,070 6.5%
Commercial real estate
(1) 1,245,402 39.6% 1,201,420 39.3% 1,178,498 38.9%
Single-family
residential
mortgages 1,545,822 49.2% 1,494,022 48.9% 1,463,497 48.4%
Other loans 6,767 0.2% 7,650 0.4% 11,178 0.4%
--------- ----- --------- ------- --------- -----
Total loans (2) $3,143,063 100.0% $3,053,230 100.0% $3,027,361 100.0%
===== ======= =====
Allowance for loan
losses (51,932) (47,729) (41,688)
--------- --------- ---------
Total loans, net $3,091,131 $3,005,501 $2,985,673
========= ========= =========
(1 ) Includes non-farm and non-residential loans, multi-family
residential loans and non-owner occupied single family
residential loans.
(2 ) Net of discounts and deferred fees and costs of $808,
$488, and $474 as of March 31, 2025, December 31,
2024, and March 31, 2024, respectively.
As of December 31, As of March 31,
Deposits As of March 31, 2025 2024 2024
--------------------- ------------------- -----------------
(dollars in thousands) $ % $ % $ %
---------- --------- ---------- ------- ---------- -----
Deposits:
Noninterest-bearing
demand $ 528,205 16.8% $ 563,012 18.3% $ 539,517 17.8%
Savings, NOW and money
market accounts 721,216 22.9% 663,034 21.5% 642,840 21.2%
Time deposits,
$250,000 and under 863,962 27.5% 882,438 28.6% 901,738 29.8%
Time deposits, greater
than $250,000 870,708 27.8% 827,854 26.8% 746,611 24.7%
Wholesale deposits (1) 158,537 5.0% 147,451 4.8% 197,623 6.5%
--------- ----- --------- ------- --------- -----
Total deposits $3,142,628 100.0% $3,083,789 100.0% $3,028,329 100.0%
========= ===== ========= ======= ========= =====
(1 ) Includes brokered deposits, collateralized deposits
from the State of California, and deposits acquired
through internet listing services.
Non-GAAP Reconciliations
Tangible Book Value Reconciliations
Tangible book value per share is a non-GAAP disclosure. Management measures tangible book value per share to assess the Company's capital strength and business performance and believes this is helpful to investors as additional tools for further understanding our performance. The following is a reconciliation of tangible book value to the Company shareholders' equity computed in accordance with GAAP, as well as a calculation of tangible book value per share as of March 31, 2025, December 31, 2024, and March 31, 2024.
(dollars in thousands,
except share and per March 31, December March 31,
share data) 2025 31, 2024 2024
----------- ----------- -----------
Tangible common equity:
Total shareholders'
equity $ 510,306 $ 507,877 $ 513,986
Adjustments
Goodwill (71,498) (71,498) (71,498)
Core deposit
intangible (1,839) (2,011) (2,594)
---------- ---------- ----------
Tangible common equity $ 436,969 $ 434,368 $ 439,894
========== ========== ==========
Tangible assets:
Total assets-GAAP $ 4,009,400 $ 3,992,477 $ 3,878,006
Adjustments
Goodwill (71,498) (71,498) (71,498)
Core deposit
intangible (1,839) (2,011) (2,594)
---------- ---------- ----------
Tangible assets $ 3,936,063 $ 3,918,968 $ 3,803,914
========== ========== ==========
Common shares
outstanding 17,738,628 17,720,416 18,578,132
Common equity to assets
ratio 12.73% 12.72% 13.25%
Tangible common equity
to tangible assets
ratio 11.10% 11.08% 11.56%
Book value per share $ 28.77 $ 28.66 $ 27.67
Tangible book value per
share $ 24.63 $ 24.51 $ 23.68
Return on Average Tangible Common Equity
Management measures return on average tangible common equity ("ROATCE") to assess the Company's capital strength and business performance and believes this is helpful to investors as an additional tool for further understanding our performance. Tangible equity excludes goodwill and other intangible assets (excluding mortgage servicing rights) and is reviewed by banking and financial institution regulators when assessing a financial institution's capital adequacy. This non-GAAP financial measure should not be considered a substitute for operating results determined in accordance with GAAP and may not be comparable to other similarly titled measures used by other companies. The following table reconciles ROATCE to its most comparable GAAP measure:
Three Months Ended
-------------------------------------
March March
31, December 31,
(dollars in thousands) 2025 31, 2024 2024
-------- --------- --------
Net income available to
common shareholders $ 2,290 $ 4,385 $ 8,036
Average shareholders'
equity 512,262 512,208 512,787
Adjustments:
Average goodwill (71,498) (71,498) (71,498)
Average core
deposit
intangible (1,951) (2,129) (2,726)
------- -------- -------
Adjusted average
tangible common equity $438,813 $ 438,581 $438,563
======= ======== =======
Return on average common
equity, annualized 1.81% 3.41% 6.30%
Return on average
tangible common equity,
annualized 2.12% 3.98% 7.37%
(END) Dow Jones Newswires
April 28, 2025 16:30 ET (20:30 GMT)
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