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Press Release

RBB Bancorp Reports First Quarter Earnings for 2020

April 20, 2020 at 4:11 PM EDT
Conference Call and Webcast Scheduled for Tuesday, April 21, 2020 at 11:00 a.m. Pacific Time/2:00 p.m. Eastern Time
First Quarter 2020 Highlights
- Net income of $6.7 million, or $0.33 diluted earnings per share
- Completed the acquisition of Pacific Global Bank ("PGB") on January 10, 2020 and the system conversion on March 15, 2020
- Loans held for investment increased by $202.8 million, or 37.1% annualized growth, from the end of the prior quarter, including a $173.2 million contribution from PGB
- Total deposits (excluding brokered deposits) increased by $220.9 million, or 8.32%, from the end of the prior quarter, including a $188.4 million contribution from PGB
- Sold $100.5 million of mortgage loans for a net gain of $2.7 million
COVID-19 Update
- The Company has fully implemented its Business Continuity Plan
- All branches remain open, with routine banking services offered through online banking, drive-up windows and limited lobby access
- Implemented a number of actions to support a healthy workforce
- - Flexible work practices such as work-from-home options, working in shifts and placing greater distances between employees
- - Discontinued non-essential business travel and meetings
- - Utilizing online meeting platforms
- Actively addressing client needs, including offering loan relief to all impacted clients
- Enrolling clients in the SBA Paycheck Protection Program
- - As of April 17, 2020, have received approvals from the SBA for 117 loans in the total amount of $21.8 million

LOS ANGELES, April 20, 2020 /PRNewswire/ -- 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 March 31, 2020.

The Company reported net income of $6.7 million, or $0.33 diluted earnings per share, for the three months ended March 31, 2020, compared to net income of $10.7 million, or $0.52 diluted earnings per share, and $10.4 million, or $0.51 diluted earnings per share, for the three months ended December 31, 2019 and March 31, 2019, respectively.

"The onset of the COVID-19 pandemic has created unprecedented challenges in our country and the world," said Mr. Alan Thian, Chairman, President and CEO of RBB Bancorp.  "The physical and financial health of our customers, investors and employees are our paramount concerns.  We are committed to helping our local businesses and the communities that we serve during these extremely challenging times.  We expect to grant loan deferrals to our customers who need temporary relief, and we will partner with the Small Business Administration to offer loans to affected clients through the Payroll Protection Program.  However, we plan to continue to originate new loans across all of our business lines in a disciplined manner." 

"Though the pandemic did impact our results in the form of lower organic loan growth and an increased provision for loan losses, our overall credit quality remained relatively stable, and our operating expenses were in line with our expectations," added Mr. Thian.  "I am generally pleased with our first-quarter financial performance and the healthy underlying fundamentals of the company. We remain focused on maintaining adequate liquidity to help our existing customers manage through this public health crisis and we continue to evaluate opportunities to expand our franchise beyond our existing markets."

On January 10, 2020 the Company completed the acquisition of PGB Holdings, Inc. and its wholly-owned subsidiary Pacific Global Bank based in Chicago, IL in a cash transaction valued at approximately $32.9 million. Principally serving the Chinese-American communities in Chicago, Pacific Global Bank has three branches located in the Chicago neighborhoods of Chinatown and Bridgeport, offering consumer and business banking and loan products and services.

Key Performance Ratios

Net income of $6.7 million for the first quarter of 2020 produced an annualized return on average assets of 0.90%, an annualized return on average tangible common equity of 8.13%, and an annualized return on average equity of 6.60%.  This compares to an annualized return on average assets of 1.51%, an annualized return on average tangible common equity of 12.50%, and an annualized return on average equity of 10.49% for the fourth quarter of 2019.  The efficiency ratio for the first quarter of 2020 was 57.65%, compared to 46.52% for the prior quarter.

Net Interest Income and Net Interest Margin

Net interest income, before provision for loan losses, was $23.6 million for the first quarter of 2020, compared to $23.1 million for the fourth quarter of 2019.  The $470,000 increase was primarily attributable to a $195.0 million increase in average earning assets, partially offset by a $182.3 million increase in average interest-bearing liabilities.  The increases in both categories were primarily due to the acquisition of PGB.  Net interest income was also adversely impacted by a 12 basis point decrease in the net interest margin.  Accretion of purchase discounts from prior acquisitions contributed $685,000 to net interest income in the first quarter of 2020, compared to $633,000 in the fourth quarter of 2019.

During the quarter, the Company obtained a 5-year FHLB $150 million advance to secure funding at an attractive interest rate.  The Company had no FHLB advances at December 31, 2019.

Compared to the first quarter of 2019, net interest income, before provision for loan losses, decreased $2.3 million from $25.9 million. The decrease was primarily attributable to a 49 basis point decrease in the net interest margin, and a $13.4 million increase in average interest-bearing liabilities, partially offset by a $98.3 million increase in average earning assets and an $80.4 million increase in average noninterest-bearing deposits.  The increases in average earning assets and total deposits were primarily due to the PGB acquisition.  

Net interest margin was 3.35% for the first quarter of 2020, a decrease from 3.47% in the fourth quarter of 2019. The decrease was primarily attributable to a 26 basis point decrease in the yield on average earning assets resulting from higher balances and lower yields on cash equivalents and short term securities, and lower average loan yields partially offset by a 23 basis point decrease in the cost of interest bearing liabilities.  Loan discount accretion contributed 10 basis points to the net interest margin in the first quarter of 2020, consistent with the fourth quarter of 2019.

Noninterest Income

Noninterest income was $4.6 million for the first quarter of 2020, a decrease of $1.2 million from $5.8 million in the fourth quarter of 2019.  The decrease was driven by a decrease in gain on loan sales of $1.1 million.

The Company sold $31.5 million in FNMA direct and indirect mortgage loans, and $69.2 million in mortgage loans to private investors for a net gain of $1.4 million and $1.2 million, respectively during the first quarter of 2020, compared to $61.3 million in FNMA direct and indirect mortgage loans, and $100.3 million in mortgage loans to private investors for a net gain of $1.9 million and $1.7 million, respectively during the fourth quarter of 2019.    

The Company sold $1.2 million in SBA loans for a net gain of $89,000 during the first quarter of 2020, compared to $3.8 million in SBA loans sold for a net gain of $171,000 during the fourth quarter of 2019. 

Compared to the first quarter of 2019, noninterest income increased by $413,000 from $4.2 million. The increase was primarily attributable to an increase of $513,000 in gains on loan sales.

Noninterest Expense

Noninterest expense for the first quarter of 2020 was $16.3 million, compared to $13.5 million for the fourth quarter of 2019.  The $2.8 million increase was primarily attributable to a $1.7 million increase in salaries and benefits expenses, $645,000 increase in data processing expenses, $288,000 increase in legal and professional expenses, partially offset by a $252,000 decrease in travel expenses, $168,000 decrease in marketing and business promotion expenses, and a $162,000 decrease in OREO expenses.  The increases in salaries and benefits, data processing expenses and legal and professional fees were primarily due to the acquisition of PGB.

RBB incurred $403,000 in merger and conversion expenses in the first quarter of 2020, of which $59,000 related to the First American International Corp. acquisition and $334,000 to the PGB acquisition, an increase of $172,000 from the prior quarter.

Noninterest expense increased from $15.3 million in the first quarter of 2019.  The $938,000 increase was primarily due to a $387,000 increase in salaries and employee benefits, a $332,000 increase in merger expenses, a $179,000 increase in legal and professional expenses, and a $152,000 increase in occupancy and equipment expenses.  These were partially offset by a $148,000 decrease in marketing and business promotion expenses and $121,000 decrease in insurance and regulatory expenses.  The increases in salaries and benefits, data processing expenses, legal and professional fees and merger expenses was primarily due to the acquisition of PGB.

Income Taxes

The effective tax rate was 32.5%, including the impact of a deduction for stock options exercised in the amount of $28,000 for the first quarter of 2020, 28.0% with no stock options exercised for the fourth quarter of 2019, and 27.1% for the first quarter of 2019 including the tax impact of a deduction for stock options exercised in the amount of $92,000

Loan Portfolio

Loans held for investment, net of deferred fees and discounts, totaled $2.4 billion as of March 31, 2020, an increase of $202.8 million from December 31, 2019, and an increase of $279.4 million from March 31, 2019. The increase from the prior quarter was primarily due to the PGB acquisition.  Single-family residential mortgages increased by $113.2 million on a net basis, driven by a combination of acquired loans, new production, partially offset by an approximately $13.1 million net transfer of loans to the available for sale category.  In addition commercial real estate loans increased by $61.3 million, construction and land development loans increased by  $24.1 million, SBA loans increased by $3.2 million and commercial and industrial loans increased by $1.0 million.  Approximately $33.4 million of the increase in commercial real estate and construction loans were attributable to the PGB acquisition.

During the first quarter of 2020, single-family residential mortgage production was $106.6 million (mortgage loans held for investment and held for sale), payoffs and paydowns were $39.3 million, and single-family residential mortgage loan sales were $100.5 million.  During the fourth quarter of 2019, production was $125.8 million, payoffs and paydowns were $46.2 million, and loan sales were $161.7 million.

Mortgage loans held for sale were $52.3 million as of March 31, 2020, a decrease of $55.9 million from $108.2 million at December 31, 2019 and a decrease of $323.1 million from $375.4 million as of March 31, 2019.  The Company originated approximately $32.4 million in mortgage loans for sale for the first quarter of 2020, compared with $38.1 million during the prior quarter. 

In the first quarter, SBA loan production was $6.2 million and total loan sales were $1.2 million.  In the prior quarter, SBA loan production was $4.7 million and total loan sales were $3.8 million.

The Company is expected to significantly increase its SBA lending during the second quarter of 2020 as many of its customers seek to participate in the SBA Paycheck Protection Program. As of April 17, 2020, the Company has processed approximately 117 PPP loans with the SBA in the total amount of approximately $21.8 million.

As of April 17, 2020, borrowers representing approximately 154 loans totaling $25.8 million, or 2% of the Company's total non-single-family residential mortgage loan portfolio, have requested some form of payment deferral. It is too early in the stage of the pandemic-induced economic slowdown to determine the total amount of loans that will ultimately require payment deferrals. The following table 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
($ millions)


% of Total Loans


General Retail (excluding SBA)

$

183.4


 

7.8

%

Mixed Use Commercial


79.4


 

3.4

%

Hospitality (excluding SBA)


58.2


 

2.5

%

Service Stations (excluding SBA)


22.7


 

1.0

%

Restaurants (excluding SBA)


6.4


 

0.3

%

SBA Loans


78.2


 

3.3

%

Shared National Credits (excluding Airlines and Cruise Lines)


38.5


 

1.6

%

Airlines and Cruise Lines (SNC)


9.7


 

0.4

%

Deposits

Deposits were $2.4 billion at March 31, 2020, an increase of $187.0 million from December 31, 2019, and an increase of $251.6 million from March 31, 2019. The increase in total deposits from the prior quarter was primarily attributable to the PGB acquisition.  Time deposits increased by $107.1 million, partially offset by a $34.0 million decrease in brokered CDs, noninterest-bearing deposits increased by $45.6 and interest-bearing non-maturity deposits increased by $34.4 million.  As of March 31, 2020, time deposits included $33.1 million in brokered CDs, as compared to $67.1 million as of December 31, 2019 and $182.8 million as of March 31, 2019. Excluding brokered deposits, total deposits increased by $220.9 million from December 31, 2019.

Asset Quality

Nonperforming assets totaled $20.8 million, or 0.66% of total assets at March 31, 2020, compared to $13.5 million, or 0.48%, of total assets at December 31, 2019.  The increase in nonperforming assets was primarily due to the additions in non-accrual loans of two SBA loans totaling $3.6 million, five commercial and industrial loans totaling $1.4 million and four mortgage loans totaling $1.6 million, the addition of one mortgage past due 90 days and still accruing loan in the amount of $225,000 and the addition of a commercial and industrial TDR loan in the amount of $506,000.  Five of these loan additions were the result of the PGB acquisition.  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 increased to $22.5 million at March 31, 2020, up from $5.3 million at December 31, 2019

In the first quarter of 2020, there were $631,000 in net charge-offs, down from $1.2 million in the prior quarter.

The Company recorded a provision for credit losses of $1.9 million for the first quarter of 2020, up from $659,000 in the prior quarter, primarily attributable to the higher loan balances, an increase in 30-89 day past due loans, non-performing loans and the expected impact of the COVID-19 pandemic. 

The allowance for loan losses totaled $20.1 million, or 0.84% of loans held for investment at March 31, 2020, compared with $18.8 million, or 0.86%, of total loans at December 31, 2019.

Properties

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

With the acquisition of PGB, three branches are located in the Chicago neighborhoods of Chinatown and Bridgeport

The Bank plans to open a new full service banking branch in Edison, New Jersey in the second half of 2020. The branch will be located at 561 US-1, in the Wicks Shopping Plaza in Edison. 

Corporate Overview

RBB Bancorp is a community-based financial holding company headquartered in Los Angeles, California.  The Company has total assets of $3.1 billion. Its wholly-owned subsidiary, the Bank is a full service commercial bank, which provides business banking services to the Chinese-American communities in Los Angeles County, Orange County and Ventura County in California, in Las Vegas, Nevada, in Brooklyn, Queens, and Manhattan in New York, 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 ten branches in Los Angeles County, two branches in Ventura County, one branch in Irvine, California, one branch in Las Vegas, Nevada, seven 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, April 21, 2020, to discuss the Company's first quarter 2020 financial results.

To listen to the conference call, please dial 1-833-659-7620 or 1-430-775-1348, passcode 2075599. A replay of the call will be made available at 1-855-859-2056 or 1-404-537-3406, passcode 2075599, approximately one hour after the conclusion of the call and will remain available through April 28, 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 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)

(Dollars in thousands)




March 31



December 31



September 30



June 30



March 31




2020



2019



2019



2019



2019


Assets





















Cash and due from banks


$

285,667



$

114,763



$

136,076



$

185,643



$

250,079


Federal funds sold and other cash equivalents



75,300




67,000




47,000




20,000





Total cash and cash equivalents



360,967




181,763




183,076




205,643




250,079


Interest-bearing deposits in other financial institutions



600




600




949




1,196




1,196


Investment securities available for sale



126,294




126,069




72,923




71,629




58,537


Investment securities held to maturity



7,825




8,332




8,724




8,733




9,449


Mortgage loans held for sale



52,311




108,194




259,339




249,596




375,430


Loans held for investment



2,399,767




2,196,934




2,126,145




2,092,438




2,120,413


Allowance for loan losses



(20,130)




(18,816)




(19,386)




(18,561)




(18,236)


Net loans held for investment



2,379,637




2,178,118




2,106,759




2,073,877




2,102,177


Premises and equipment, net



24,472




16,813




16,871




17,214




17,342


Federal Home Loan Bank (FHLB) stock



15,630




15,000




15,000




15,000




8,899


Net deferred tax assets



-




2,326




4,378




4,318




4,389


Cash surrender value of life insurance



34,544




34,353




34,158




33,963




33,769


Goodwill



70,074




58,563




58,383




58,383




58,383


Servicing assets



16,826




17,083




17,180




17,587




17,288


Core deposit intangibles



6,234




6,100




6,444




6,828




7,212


Accrued interest and other assets



33,523




35,221




36,118




37,989




33,968


Total assets


$

3,128,937



$

2,788,535



$

2,820,302



$

2,801,956



$

2,978,118


Liabilities and shareholders' equity





















Deposits:





















Noninterest-bearing demand


$

504,324



$

458,763



$

446,141



$

435,629



$

418,953


Savings, NOW and money market accounts



571,870




537,490




493,965




462,448




480,959


Time deposits



1,359,786




1,252,685




1,311,817




1,337,257




1,284,428


Total deposits



2,435,980




2,248,938




2,251,923




2,235,334




2,184,340


Net deferred tax liabilities



312














FHLB advances



150,000







35,000




40,000




275,000


Long-term debt, net of debt issuance costs



104,135




104,049




103,964




103,878




103,793


Subordinated debentures



14,120




9,673




9,632




9,590




9,548


Accrued interest and other liabilities



16,397




18,185




20,942




19,334




20,634


Total liabilities



2,720,944




2,380,845




2,421,461




2,408,136




2,593,315


Shareholders' equity:





















Shareholder's equity



407,332




407,379




398,438




393,758




385,395


Non-controlling interest



72




72




72




72




72


Accumulated other comprehensive income (loss) - Net of tax



589




239




331




(10)




(664)


Total shareholders' equity



407,993




407,690




398,841




393,820




384,803


Total liabilities and stockholders' equity


$

3,128,937



$

2,788,535



$

2,820,302



$

2,801,956



$

2,978,118


 

RBB BANCORP AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

(Dollars in thousands, except per share amounts) 




For the three months ended




March 31, 2020



December 31, 2019



March 31, 2019


Interest and dividend income:













Interest and fees on loans


$

32,276



$

32,178



$

35,839


Interest on interest-bearing deposits



451




373




468


Interest on investment securities



821




676




588


Dividend income on FHLB stock



2




264




198


Interest on federal funds sold and other



478




416




113


Total interest income



34,028




33,907




37,206


Interest expense:













Interest on savings deposits, NOW and money market accounts



1,243




1,237




1,294


Interest on time deposits



7,086




7,559




5,953


Interest on subordinated debentures and long term debt



1,956




1,915




1,747


Interest on other borrowed funds



150




73




2,300


Total interest expense



10,435




10,784




11,294


Net interest income



23,593




23,123




25,912


Provision for loan losses



1,945




659




550


Net interest income after provision for loan losses



21,648




22,464




25,362


Noninterest income:













Service charges, fees and other



1,079




1,096




820


Gain on sale of loans



2,711




3,762




2,198


Loan servicing fees, net of amortization



592




817




840


Recoveries on loans acquired in business combinations



42




70




6


Unrealized gain on equity investments









147


Increase in cash surrender value of life insurance



191




195




191


(Loss)/Gain on sale of other real estate owned






(117)








4,615




5,823




4,202


Noninterest expense:













Salaries and employee benefits



9,505




7,821




9,118


Occupancy and equipment expenses



2,404




2,390




2,252


Data processing



1,142




497




1,009


Legal and professional



604




316




425


Office expenses



323




292




336


Marketing and business promotion



214




382




362


Insurance and regulatory assessments



177




146




298


Core deposit premium



357




344




388


OREO expenses/(income)



14




176




81


Merger and conversion expenses



403




231




71


Other expenses



1,120




868




985





16,263




13,463




15,325


Income before income taxes



10,000




14,824




14,239


Income tax expense



3,252




4,149




3,859


Net income


$

6,748



$

10,675



$

10,380















Net income per share













Basic


$

0.34



$

0.53



$

0.52


Diluted


$

0.33



$

0.52



$

0.51


Cash Dividends declared per common share


$

0.12



$

0.10



$

0.10


Weighted-average common shares outstanding













Basic



19,971,856




20,001,916




20,047,716


Diluted



20,266,328




20,389,099




20,436,741


 

RBB BANCORP AND SUBSIDIARIES

AVERAGE BALANCE SHEET AND NET INTEREST INCOME

(Unaudited)

(Dollars in thousands, except per share amounts)




For the three months ended



March 31, 2020


December 31, 2019


March 31, 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)


$

266,864



$

931



1.40%


$

172,431



$

1,053



2.42%


$

92,692



$

779



3.41%

Securities































Available for sale



138,574




755



2.19%



94,400




605



2.54%



68,708




508



3.00%

Held to maturity (2)



8,016




74



3.71%



8,441




80



3.76%



9,629




89



3.75%

Mortgage loans held for sale



78,063




981



5.05%



244,706




2,969



4.81%



449,828




5,490



4.95%

Loans held for investment: (3)































Real estate



2,007,286




26,428



5.30%



1,793,647




24,182



5.35%



1,764,813




24,486



5.63%

Commercial



337,548




4,867



5.80%



327,765




5,027



6.08%



352,428




5,864



6.75%

Total loans



2,344,834




31,295



5.37%



2,121,412




29,209



5.46%



2,117,241




30,350



5.81%

Total earning assets



2,836,351



$

34,036



4.83%



2,641,390



$

33,916



5.09%



2,738,098



$

37,216



5.51%

Noninterest-earning assets



195,272










165,659










176,813








Total assets


$

3,031,623









$

2,807,049









$

2,914,911







































Interest-bearing liabilities































NOW and money market deposits


$

475,843



$

1,188



1.00%


$

416,380



$

1,190



1.13%


$

413,952



$

1,241



1.22%

Savings deposits



114,951




55



0.19%



96,813




48



0.20%



100,623




53



0.21%

Time deposits



1,358,639




7,086



2.10%



1,296,379




7,559



2.31%



1,139,214




5,953



2.12%

Total interest-bearing deposits



1,949,433




8,329



1.72%



1,809,572




8,797



1.93%



1,653,789




7,247



1.78%

FHLB advances



51,978




150



1.16%



14,348




71



1.96%



339,406




2,114



2.53%

Long-term debt



104,083




1,748



6.75%



103,997




1,748



6.67%



103,742




1,747



6.83%

Subordinated debentures



14,327




208



5.84%



9,648




167



6.87%



9,523




186



7.92%

Total interest-bearing liabilities



2,119,821




10,435



1.98%



1,937,565




10,784



2.21%



2,106,460




11,294



2.17%

Noninterest-bearing liabilities































Noninterest-bearing deposits



485,555










445,891










405,190








Other noninterest-bearing liabilities



15,056










19,851










19,987








Total noninterest-bearing liabilities



500,611










465,742










425,177








Shareholders' equity



411,191










403,742










383,274








Total liabilities and shareholders' equity


$

3,031,623









$

2,807,049









$

2,914,911








Net interest income / interest rate spreads






$

23,601



2.85%






$

23,133



2.88%






$

25,922



3.34%

Net interest margin










3.35%










3.47%










3.84%







(1)

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

(2)

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

(3)

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

 

RBB BANCORP AND SUBSIDIARIES

SELECTED FINANCIAL HIGHLIGHTS

(Unaudited)

(Dollars in thousands, except per share amounts)




For the three months ended




March 31,



December 31,



March 31,




2020



2019



2019


Per share data (common stock)













Earnings













Basic


$

0.34



$

0.53



$

0.52


Diluted


$

0.33



$

0.52



$

0.51


Dividends declared


$

0.12



$

0.10



$

0.10


Basic, excluding merger and conversion expense


$

0.35



$

0.54



$

0.52


Diluted, excluding merger and conversion expense


$

0.35



$

0.53



$

0.51


Book value


$

20.67



$

20.35



$

19.17


Tangible book value


$

16.80



$

17.12



$

15.90


Weighted average shares outstanding













Basic



19,971,856




20,001,916




20,047,716


Diluted



20,266,328




20,389,099




20,436,741


Shares outstanding at period end



19,739,280




20,030,866




20,073,991


Performance ratios













Return on average assets, annualized


0.90%




1.51%




1.44%


Return on average shareholders' equity, annualized


6.60%



10.49%




10.98%


Return on average tangible common equity, annualized


8.13%



12.50%




13.26%


Noninterest income to average assets, annualized


0.61%



0.82%




0.58%


Noninterest expense to average assets, annualized


2.16%



1.90%




2.13%


Yield on average earning assets


4.83%




5.09%



5.51%


Cost of average total deposits


1.38%




1.55%




1.43%


Cost of average interest-bearing deposits


1.72%




1.93%



1.78%


Cost of average interest-bearing liabilities


1.98%




2.21%



2.17%


Accretion on loans to average earning assets


0.10%



0.10%




0.16%


Net interest spread


2.85%




2.88%



3.34%


Net interest margin


3.35%




3.47%



3.84%


Efficiency ratio


57.65%



46.52%




50.89%


Common stock dividend payout ratio


35.29%



18.87%




19.69%


 

RBB BANCORP AND SUBSIDIARIES

SELECTED FINANCIAL HIGHLIGHTS

(Unaudited)

(Dollars in thousands, except per share amounts)




As of




March 31,



December 31,



March 31,




2020



2019



2019


Loan to deposit ratio


98.51%




97.69%



97.07%


Core deposits / total deposits


72.75%



70.46%




75.16%


Net non-core funding dependence ratio



14.91%




9.00%




14.94%















Credit Quality Data:













Loans 30-89 days past due


$

22,488



$

5,277



$

5,665


Loans 30-89 days past due to total loans


0.94%




0.24%




0.27%


Loans 90 days past due and still accruing


$

225



$



$


Nonperforming loans


$

20,499



$

13,218



$

2,586


Nonperforming loans to total loans


0.85%



0.60%




0.12%


Nonperforming assets


$

20,792



$

13,511



$

4,642


Nonperforming assets to total assets


0.66%



0.48%




0.16%


Allowance for loan losses to total loans


0.84%



0.86%



0.86%


Allowance for loan losses to nonperforming loans


98.20%



142.35%



705.18%


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


0.11%



0.23%




-0.02%















Regulatory and other capital ratios—Company













Tangible common equity to tangible assets



10.87%




12.59%




10.96%


Tier 1 leverage ratio



11.73%




12.89%




11.61%


Tier 1 common capital to risk-weighted assets



15.43%




17.16%




16.29%


Tier 1 capital to risk-weighted assets



16.09%




17.65%




16.77%


Total capital to risk-weighted assets



21.90%




23.82%




22.98%















Regulatory capital ratios—Bank only













Tier 1 leverage ratio



14.44%




15.23%




13.43%


Tier 1 common capital to risk-weighted assets



19.78%




20.87%




19.39%


Tier 1 capital to risk-weighted assets



19.78%




20.87%




19.39%


Total capital to risk-weighted assets



20.76%




21.86%




20.35%


 

RBB BANCORP AND SUBSIDIARIES

SELECTED FINANCIAL HIGHLIGHTS

(Unaudited)

(Dollars in thousands, except per share amounts)




1st Quarter



4th Quarter



3rd Quarter



2nd Quarter



1st Quarter


Quarterly Consolidated Statements of Earnings


2020



2019



2019



2019



2019


Interest income





















Loans, including fees


$

32,276



$

32,178



$

32,902



$

34,240



$

35,839


Investment securities and other



1,752




1,729




1,767




1,703




1,367


Total interest income



34,028




33,907




34,669




35,943




37,206


Interest expense





















Deposits



8,329




8,796




9,155




9,035




7,247


Interest on subordinated debentures and other



1,956




1,915




1,921




1,929




1,933


Other borrowings



150




73




81




662




2,114


Total interest expense



10,435




10,784




11,157




11,626




11,294


Net interest income before provision for loan losses



23,593




23,123




23,512




24,317




25,912


Provision for loan losses



1,945




659




824




357




550


Net interest income after provision for loan losses



21,648




22,464




22,688




23,960




25,362


Noninterest income



4,615




5,823




2,799




5,496




4,202


Noninterest expense



16,263




13,463




13,786




14,899




15,325


Earnings before income taxes



10,000




14,824




11,701




14,557




14,239


Income taxes



3,252




4,149




3,689




4,415




3,859


Net income


$

6,748



$

10,675



$

8,012



$

10,142



$

10,380


Net income per common share - basic


$

0.34



$

0.53



$

0.40



$

0.51



$

0.52


Net income per common share - diluted


$

0.33



$

0.52



$

0.39



$

0.50



$

0.51


Cash dividends declared per common share


$

0.12



$

0.10



$

0.10



$

0.10



$

0.10


Cash dividends declared on common shares


$

2,407



$

2,003



$

2,016



$

2,007



$

2,007


Yield on average assets, annualized


0.90%



1.51%



1.15%



1.43%



1.44%


Yield on average earning assets


4.83%




5.09%



5.29%



5.37%




5.51%


Cost of average deposits


1.38%




1.55%



1.63%



1.62%




1.43%


Cost of average interest-bearing deposits


1.72%




1.93%



2.02%



1.99%




1.78%


Cost of average interest-bearing liabilities


1.98%




2.21%



2.30%



2.29%




2.17%


Accretion on loans to average earning assets


0.10%



0.10%




0.10%




0.11%




0.16%


Net interest margin


3.35%




3.47%



3.59%



3.64%




3.84%


 

RBB BANCORP AND SUBSIDIARIES

SELECTED FINANCIAL HIGHLIGHTS

(Unaudited)

(Dollars in thousands, except per share amounts)


Loan Portfolio Detail


As of

March 31, 2020



As of

December 31, 2019



As of

September 30, 2019



As of

June 30, 2019



As of

March 31, 2019


(dollars in thousands)


$



%



$



%



$



%



$



%



$



%


Loans:









































Commercial and industrial


$

275,602




11.5



$

274,586




12.5



$

276,478




13.0



$

283,920




13.6



$

269,556