RBB Bancorp Reports Third Quarter Earnings for 2021

October 25, 2021

Conference Call and Webcast Scheduled for Tuesday, October 26, 2021 at 11:00 a.m. Pacific Time/2:00 p.m. Eastern Time Third Quarter 2021 Highlights

Reported record net income of $15.4 million, or $0.77 diluted earnings per share, increased $2.0 million, or 14.8%, from the prior quarter and increased $6.8 million, or 80.3%, from the third quarter of 2020
Loan growth of $137.1 million, or 20.0% annualized, from the end of the prior quarter
Declared quarterly cash dividend of $0.13 per common share
Entered into an agreement in July, received regulatory approval in September to buy the Honolulu, Hawaii branch office of Bank of the Orient, which is expected to close by mid-January 2022

LOS ANGELES--(BUSINESS WIRE)--Oct. 25, 2021-- 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, 2021.

The Company reported record net income of $15.4 million, or $0.77 diluted earnings per share, for the three months ended September 30, 2021, compared to net income of $13.4 million, or $0.67 diluted earnings per share, and $8.5 million, or $0.43 diluted earnings per share, for the three months ended June 30, 2021 and September 30, 2020, respectively. Third quarter results included the impact of a $1.8 million CDFI grant that increased diluted earnings per share by approximately $0.07.

"Our differentiated business model continued to outperform in the third quarter as we reported record diluted earnings per share of $0.77 and 20% annualized loan growth,” said Alan Thian, President and CEO of RBB Bancorp. “In addition to our financial performance and growth, continued pricing discipline and focus on our cost of deposits has kept our net interest margin stable in the first 9 months of 2021 versus the same period in 2020. We are also pleased that our efforts to support the communities in which we operate were recognized by the US Treasury which awarded Royal Business Bank with a $1.8 million CDFI grant to facilitate a rapid response to the economic impacts of the COVID-19 pandemic in distressed and underserved communities.”

"I am very pleased with Royal Business Bank’s record financial performance in the third quarter," said Dr. James Kao, Chairman of RBB Bancorp. “And I am very proud that RBB’s success in community development has been recognized with a CDFI grant and with the appointment of Alan to the Community Development Advisory Board.”

Key Performance Ratios

Net income of $15.4 million for the third quarter of 2021 produced an annualized return on average assets ("ROA") of 1.54%, an annualized return on average tangible common shareholders' equity ("ROTCE") of 16.17%, and an annualized return on average shareholders' equity ("ROE") of 13.52%. This compares to an annualized return on average assets of 1.39%, an annualized return on average tangible common shareholders' equity of 14.57%, and an annualized return on average shareholders' equity of 12.13% for the second quarter of 2021. Third quarter results included the impact of a $1.8 million CDFI grant that increased ROA by 0.03%, ROTCE by 0.35%, and ROE by 0.29%. The efficiency ratio for the third quarter of 2021 was 38.87%, compared to 42.89% for the prior quarter.

Net Interest Income and Net Interest Margin

Net interest income, before provision for loan losses, was $31.6 million for the third quarter of 2021, compared to $30.1 million for the second quarter of 2021. The $1.5 million increase was primarily attributable to higher interest income due to a $92.7 million increase in average earning assets, partially offset by an $11.3 million increase in average interest-bearing liabilities. Accretion of purchase discounts from prior acquisitions contributed $289,000 to net interest income in the third quarter of 2021, compared to $183,000 in the second quarter of 2021.

Compared to the third quarter of 2020, net interest income, before provision for loan losses, increased $4.3 million from $27.3 million. The increase was primarily attributable to a $691.5 million increase in average earning assets, partially offset by a $262.0 million increase in average interest-bearing liabilities. The increases in average earning assets and total deposits were primarily due to increased loan and deposit originations.

Net interest margin was 3.38% for the third quarter of 2021, an increase of 5 basis points from 3.33% in the second quarter of 2021. The increase was primarily attributable to a $89.9 million increase in average non-interest bearing deposits, combined with an 8 basis point decrease in the cost of average interest-bearing liabilities, which was partially offset by a 2 basis point decrease in the yield on average earning assets. Loan discount accretion contributed 3 basis points to the net interest margin in the third quarter of 2021, compared to 2 basis points in the second quarter of 2021.

Noninterest Income

Noninterest income was $5.5 million for the third quarter of 2021, an increase of $1.4 million from $4.2 million in the second quarter of 2021. The increase was primarily driven by a $1.8 million grant under the US Treasury’s Rapid Response Program, partially offset by a $782,000 decrease in gain on sale of loans during the quarter. The Company sold $35.7 million fewer loans in the third quarter than in the prior quarter primarily due to selling fewer FNMA loans.

The Company sold $36.6 million in FNMA qualified mortgage loans for a net gain of $1.3 million and sold no non-qualified mortgage loans during the third quarter of 2021. This compared to $58.9 million in FNMA qualified mortgage loans sold for a net gain of $1.4 million and $13.4 million in non-qualified mortgage loans to private investors for a gain of $389,000 during the second quarter of 2021. The Company sold $5.9 million in SBA loans during the third quarter of 2021 for a net gain of $553,000, compared to $5.9 million SBA loans sold for a net gain of $747,000 during the second quarter of 2021.

Compared to the third quarter of 2020, noninterest income increased by $2.8 million from $2.7 million. The increase was primarily attributable to an increase of $1.8 million grant under the US Treasury’s Rapid Response Program and an increase of $1.0 million in gain on loan sales.

Noninterest Expense

Noninterest expense for the third quarter of 2021 was $14.4 million, compared to $14.7 million for the second quarter of 2021. The $260,000 decrease was primarily attributable to a reversal of impairment write-down on mortgage servicing assets of $416,000 and a $266,000 decrease in data processing expense, partially offset by a $210,000 increase in legal and professional expenses and a $93,000 increase in marketing and business promotion expense.

Noninterest expense increased from $14.0 million in the third quarter of 2020. The $444,000 increase was primarily due to a $1.2 million increase in salaries and employee benefits and a $193,000 increase in marketing and business promotion expenses. These were partially offset by a $475,000 decrease in mortgage servicing assets impairment write-down, a $235,000 decrease in data processing expenses and a $171,000 decrease in occupancy and equipment expenses.

Income Taxes

The effective tax rate was 28.5% for the third quarter of 2021, 29.3% for the second quarter of 2021, and 29.8% for the third quarter of 2020. The Company recognized a tax benefit from stock option exercises of $534,000, $68,000 and zero for the third quarter of 2021, the second quarter of 2021, and the third quarter of 2020, respectively.

CDFI Rapid Response Program

In mid-June, 2021 the Bank was awarded a $1.8 million grant under the US Treasury’s Rapid Response Program to facilitate a rapid response to the economic impacts of the COVID-19 pandemic in distressed and underserved communities. The award was received in August 2021 after finalization of the contract between the Bank and the US Treasury which included various performance goals and measures that specify the use of the funds to provide affordable housing. The funds were disbursed for two loans that help provide affordable housing to underserved communities.

Loan Portfolio

Loans held for investment, net of deferred fees and discounts, totaled $2.84 billion as of September 30, 2021, an increase of $131.1 million from June 30, 2021, and an increase of $85.2 million from September 30, 2020. The increase from the prior quarter was primarily due to an increase in commercial real estate and construction & land development loans. Single-family residential mortgages decreased by $9.5 million net of payoffs, paydowns and loan sales. Commercial real estate loans increased by $103.2 million, construction and land development loans increased by $34.8 million, SBA loans decreased by $9.8 million (which included a $6.2 million decrease in PPP loans), commercial and industrial loans decreased by $693,000 and other loans increased by $13.2 million.

During the third quarter of 2021, single-family residential mortgage production was $112.0 million, payoffs and paydowns were $79.0 million, and single-family residential mortgage loan sales were $36.6 million. During the second quarter of 2021, single-family residential mortgage production was $107.9 million, payoffs and paydowns were $121.0 million, and loan sales were $72.3 million.

Mortgage loans held for sale were $15.2 million as of September 30, 2021, an increase of $5.9 million from $9.2 million at June 30, 2021 and a decrease of $8.7 million from $23.9 million as of September 30, 2020. The Company originated approximately $12.2 million in FNMA mortgage loans for sale for the third quarter of 2021, compared with $29.2 million during the prior quarter.

In the third quarter of 2021, SBA loan production was $22.7 million and total SBA loan sales were $5.9 million.

Deposits and Borrowings

Deposits were $3.0 billion at September 30, 2021, a decrease of $102.1 million from June 30, 2021, and an increase of $356.1 million from September 30, 2020, including brokered deposits. The decrease in total deposits from the prior quarter was primarily attributable to a decrease in noninterest-bearing demand deposits and time deposits. During the third quarter of 2021, noninterest-bearing deposits decreased by $115.3 million, interest-bearing non-maturity deposits increased by $72.9 million, and time deposits decreased by $59.8 million. As of September 30, 2021, time deposits included $2.4 million in brokered CDs, as compared to $17.4 million as of June 30, 2021 and $17.4 million as of September 30, 2020.

Asset Quality

Nonperforming assets totaled $14.5 million, or 0.38% of total assets at September 30, 2021, compared to $19.5 million, or 0.50%, of total assets at June 30, 2021. Nonperforming assets consist of other real estate owned, loans modified under troubled debt restructurings (“TDR”), non-accrual loans, and loans past due 90 days or more and still accruing interest.

In the third quarter of 2021, there were $317,000 in net charge-offs, compared to net charge-offs of $71,000 in the second quarter.

The Company recorded a provision for credit losses of $1.2 million for the third quarter of 2021, an increase from $628,000 in the prior quarter, primarily attributable to loan growth.

The allowance for loan losses totaled $32.2 million, or 1.13% of loans held for investment at September 30, 2021, compared with $31.4 million, or 1.16%, of total loans at June 30, 2021.

As of September 30, 2021, borrowers representing 167 loans totaling $23.0 million, or 0.80% of the Company’s total loan portfolio, have funded under the SBA’s Paycheck Protection Program due to the COVID-19 pandemic. Presently none of our SBA customers are on a payment deferral plan due to the COVID-19 pandemic. The Company does not have any shared national credits or loans, backed by airlines or cruise lines, on deferral as of September 30, 2021.

As of October 15, 2021, the Company had one COVID-19 loan deferral in the amount of $241,000.

Corporate Overview

RBB Bancorp is a community-based financial holding company headquartered in Los Angeles, California. As of September 30, 2021, the company had total assets of $3.8 billion. Its wholly-owned subsidiary, the Bank is a full service commercial bank, which provides business banking services to the Chinese-American communities in Los Angeles County, Orange County, and Ventura County in California, in Las Vegas, Nevada, in Brooklyn, Queens, and Manhattan in New York, in Edison, New Jersey, and in the Chicago neighborhoods of Chinatown and Bridgeport, Illinois. Bank services include remote deposit, E-banking, mobile banking, commercial and investor real estate loans, business loans and lines of credit, commercial and industrial loans, SBA 7A and 504 loans, 1-4 single family residential loans, automobile lending, trade finance, a full range of depository account products and wealth management services. The Bank has nine branches in Los Angeles County, two branches in Ventura County, one branch in Orange County, California, one branch in Las Vegas, Nevada, two 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 and two 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 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 tomorrow, October 26, 2021, to discuss the Company’s third quarter 2021 financial results.

To listen to the conference call, please dial 1-877-876-9174 or 1-785-424-1669, passcode RBBQ321. A replay of the call will be made available at 1-888-269-5324 or 1-402-220-7325 (no passcode required) approximately one hour after the conclusion of the call and will remain available through November 2, 2021.

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-A for the year ended December 31, 2020, 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, 2020)
(Dollars in thousands)

	September 30,			June 30,			March 31,			December 31,			September 30,
	2021			2021			2021			2020			2020
Assets
Cash and due from banks	$	206,927		$	493,653		$	362,930		$	137,654		$	121,630
Federal funds sold and other cash equivalents		170,000			110,000			57,000			57,000			57,000
Total cash and cash equivalents		376,927			603,653			419,930			194,654			178,630
Interest-bearing deposits in other financial institutions		600			600			600			600			600
Investment securities available for sale		345,000			339,568			281,582			210,867			214,662
Investment securities held to maturity		6,258			6,664			6,668			7,174			7,569
Mortgage loans held for sale		15,188			9,246			37,675			49,963			23,886
Loans held for investment		2,840,354			2,709,206			2,715,205			2,706,766			2,755,153
Allowance for loan losses		(32,231	)		(31,352	)		(30,795	)		(29,337	)		(26,634	)
Net loans held for investment		2,808,123			2,677,854			2,684,410			2,677,429			2,728,519
Premises and equipment, net		27,157			27,039			27,093			27,103			24,237
Federal Home Loan Bank (FHLB) stock		15,000			15,000			15,641			15,641			15,641
Cash surrender value of life insurance		55,656			55,325			35,308			35,121			34,930
Goodwill		69,243			69,243			69,243			69,243			69,243
Servicing assets		12,141			12,558			13,264			13,965			14,724
Core deposit intangibles		4,327			4,608			4,895			5,196			5,519
Right-of-use assets- operating leases		23,735			25,050			25,500			—			—
Accrued interest and other assets		42,452			44,230			42,490			43,116			41,416
Total assets	$	3,801,807		$	3,890,638		$	3,664,299		$	3,350,072		$	3,359,576
Liabilities and shareholders' equity
Deposits:
Noninterest-bearing demand	$	824,771		$	940,041		$	787,439		$	617,206		$	642,332
Savings, NOW and money market accounts		931,517			858,597			791,486			731,084			654,378
Time deposits		1,211,525			1,271,287			1,242,368			1,286,838			1,315,038
Total deposits		2,967,813			3,069,925			2,821,293			2,635,128			2,611,748
Reserve for unfunded commitments		1,304			1,216			1,320			1,383			1,129
FHLB advances		150,000			150,000			150,000			150,000			190,000
Long-term debt, net of debt issuance costs		172,862			172,718			172,581			104,391			104,305
Subordinated debentures		14,447			14,393			14,338			14,283			14,229
Lease liabilities - operating leases		24,524			25,798			26,199			—			—
Accrued interest and other liabilities		14,833			14,263			42,900			16,399			16,749
Total liabilities		3,345,783			3,448,313			3,228,631			2,921,584			2,938,160
Shareholders' equity:
Shareholder's equity		456,490			442,086			435,746			427,287			420,329
Non-controlling interest		72			72			72			72			72
Accumulated other comprehensive (loss) income - Net of tax		(538	)		167			(150	)		1,129			1,015
Total shareholders' equity		456,024			442,325			435,668			428,488			421,416
Total liabilities and shareholders’ equity	$	3,801,807		$	3,890,638		$	3,664,299		$	3,350,072		$	3,359,576

	RBB BANCORP AND SUBSIDIARIES
	CONDENSED CONSOLIDATED STATEMENTS OF INCOME
	(Unaudited)
	*(Dollars in thousands, except per share amounts)*

		For the Three Months Ended
		September 30, 2021			June 30, 2021			September 30, 2020
	Interest and dividend income:
	Interest and fees on loans	$	35,601		$	34,669		$	34,153
	Interest on interest-bearing deposits		219			125			61
	Interest on investment securities		889			794			621
	Dividend income on FHLB stock		225			225			190
	Interest on federal funds sold and other		174			158			100
	Total interest income		37,108			35,971			35,125
	Interest expense:
	Interest on savings deposits, NOW and money market accounts		697			708			779
	Interest on time deposits		2,048			2,410			4,746
	Interest on subordinated debentures and long term debt		2,342			2,356			1,905
	Interest on other borrowed funds		445			440			444
	Total interest expense		5,532			5,914			7,874
	Net interest income before provision for loan losses		31,576			30,057			27,251
	Provision for loan losses		1,196			628			3,861
	Net interest income after provision for loan losses		30,380			29,429			23,390
	Noninterest income:
	Service charges, fees and other(1)		3,100			1,374			1,143
	Gain on sale of loans		1,790			2,572			760
	Loan servicing fees, net of amortization		62			118			546
	Recoveries on loans acquired in business combinations		68			5			32
	Unrealized (loss) on equity investments		(5	)		(35	)		—
	Gain (loss) on derivatives		178			(80	)		—
	Increase in cash surrender value of life insurance		331			217			194
	Gain on sale of securities		—			—			52
	Total noninterest income		5,524			4,171			2,727
	Noninterest expense:
	Salaries and employee benefits		8,772			8,742			7,599
	Occupancy and equipment expenses		2,189			2,135			2,360
	Data processing		965			1,231			1,200
	Legal and professional		746			536			675
	Office expenses		311			272			271
	Marketing and business promotion		324			231			131
	Insurance and regulatory assessments		384			354			363
	Core deposit premium		281			287			357
	OREO expenses		4			4			3
	Merger expenses		40			17			62
	Other expenses		404			871			957
	Total noninterest expense		14,420			14,680			13,978
	Income before income taxes		21,484			18,920			12,139
	Income tax expense		6,120			5,540			3,619
	Net income	$	15,364		$	13,380		$	8,520

	Net income per share
	Basic	$	0.79		$	0.69		$	0.43
	Diluted	$	0.77		$	0.67		$	0.43
	Cash Dividends declared per common share	$	0.13		$	0.13		$	0.06
	Weighted-average common shares outstanding
	Basic		19,343,262			19,432,204			19,717,568
	Diluted		19,798,187			19,874,969			19,804,892

(1)	Includes $1.8 million of the U.S. Treasury's CDFI rapid response program grant income.

	RBB BANCORP AND SUBSIDIARIES
	CONDENSED CONSOLIDATED STATEMENTS OF INCOME
	(Unaudited)
	*(Dollars in thousands, except per share amounts)*

		For the Nine Months Ended
		September 30, 2021			September 30, 2020
	Interest and dividend income:
	Interest and fees on loans	$	104,786		$	99,062
	Interest on interest-earning deposits		392			586
	Interest on investment securities		2,310			2,329
	Dividend income on FHLB stock		642			379
	Interest on federal funds sold and other		489			900
	Total interest income		108,619			103,256
	Interest expense:
	Interest on savings deposits, NOW and money market accounts		2,103			2,804
	Interest on time deposits		7,422			17,765
	Interest on subordinated debentures and long term debt		6,656			5,776
	Interest on other borrowed funds		1,320			1,033
	Total interest expense		17,501			27,378
	Net interest income		91,118			75,878
	Provision for loan losses		3,324			8,815
	Net interest income after provision for loans losses		87,794			67,063
	Noninterest income:
	Service charges, fees and other (1)		5,884			3,287
	Gain on sale of loans		8,203			3,552
	Loan servicing fees, net of amortization		426			1,846
	Recoveries on loans acquired in business combinations		78			79
	Unrealized (loss) on equity investments		(60	)		—
	Gain on derivatives		323			—
	Increase in cash surrender value of life insurance		735			576
	Gain on sale of securities		—			210
	Total noninterest income		15,589			9,550
	Noninterest expense:
	Salaries and employee benefits		26,756			25,207
	Occupancy and equipment expenses		6,566			7,291
	Data processing		3,636			3,224
	Legal and professional		2,087			1,949
	Office expenses		838			931
	Marketing and business promotion		739			456
	Insurance and regulatory assessments		1,086			774
	Core deposit premium		869			1,071
	OREO expenses		13			31
	Merger expenses		99			741
	Other expenses		2,203			3,385
	Total noninterest expense		44,892			45,060
	Income before income taxes		58,491			31,553
	Income tax expense		17,291			9,772
	Net income	$	41,200		$	21,781

	Net income per share
	Basic	$	2.11		$	1.10
	Diluted	$	2.07		$	1.09
	Cash Dividends declared per common share	$	0.38		$	0.24
	Weighted-average common shares outstanding
	Basic		19,416,608			19,799,617
	Diluted		19,828,612			19,958,612
(1)	Includes $1.8 million of the U.S. Treasury's CDFI rapid response program grant income.

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, 2021							June 30, 2021							September 30, 2020
	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)	$	628,020	$	618		0.39	%	$	582,554	$	508		0.35	%	$	179,521	$	351		0.78	%
Securities
Available for sale		336,130		856		1.01	%		328,004		751		0.92	%		168,151		558		1.32	%
Held to maturity (2)		6,262		56		3.55	%		6,667		60		3.61	%		7,604		71		3.71	%
Mortgage loans held for sale		5,218		46		3.50	%		21,033		173		3.30	%		19,848		171		3.43	%
Loans held for investment: (3)
Real estate		2,361,405		30,911		5.19	%		2,292,145		29,794		5.21	%		2,266,752		29,616		5.20	%
Commercial		374,125		4,644		4.92	%		388,049		4,702		4.86	%		377,789		4,366		4.60	%
Total loans		2,735,530		35,555		5.16	%		2,680,194		34,496		5.16	%		2,644,541		33,982		5.11	%
Total earning assets		3,711,160	$	37,131		3.97	%		3,618,452	$	35,988		3.99	%		3,019,665	$	35,133		4.63	%
Noninterest-earning assets		242,742							230,049							204,638
Total assets	$	3,953,902						$	3,848,501						$	3,224,303

Interest-bearing liabilities
NOW	$	71,454	$	48		0.27	%	$	66,777	$	45		0.27	%	$	59,451	$	50		0.33	%
Money Market		660,806		615		0.37	%		640,026		628		0.39	%		454,820		698		0.61	%
Saving deposits		139,555		34		0.10	%		140,418		35		0.10	%		126,635		31		0.10	%
Time deposits, less than $250,000		644,013		977		0.60	%		657,494		1,163		0.71	%		699,765		2,539		1.44	%
Time deposits, $250,000 and over		604,394		1,071		0.70	%		604,429		1,247		0.83	%		584,586		2,207		1.50	%
Total interest-bearing deposits		2,120,222		2,745		0.51	%		2,109,144		3,118		0.59	%		1,925,257		5,525		1.14	%
FHLB advances		150,000		445		1.18	%		150,000		440		1.18	%		151,739		444		1.16	%
Long-term debt		172,767		2,194		5.04	%		172,622		2,206		5.13	%		104,252		1,748		6.67	%
Subordinated debentures		14,411		148		4.07	%		14,357		150		4.19	%		14,195		157		4.40	%
Total interest-bearing liabilities		2,457,400		5,532		0.89	%		2,446,123		5,914		0.97	%		2,195,443		7,874		1.43	%
Noninterest-bearing liabilities
Noninterest-bearing deposits		1,003,304							913,442							595,264
Other noninterest-bearing liabilities		42,419							46,549							13,270
Total noninterest-bearing liabilities		1,045,723							959,991							608,534
Shareholders' equity		450,779							442,387							420,326
Total liabilities and shareholders' equity	$	3,953,902						$	3,848,501						$	3,224,303
Net interest income / interest rate spreads			$	31,599		3.08	%			$	30,074		3.02	%			$	27,259		3.20	%
Net interest margin						3.38	%						3.33	%						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, 2021							September 30, 2020
	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)	$	476,781	$	1,523		0.43	%	$	220,195	$	1,865		1.13	%
Securities
Available for sale		301,653		2,180		0.97	%		159,373		2,136		1.79	%
Held to maturity (2)		6,640		182		3.66	%		7,760		218		3.75	%
Mortgage loans held for sale		26,579		630		3.17	%		40,936		1,454		4.74	%
Loans held for investment: (3)
Real estate		2,320,524		90,226		5.20	%		2,141,022		84,261		5.26	%
Commercial		382,168		13,930		4.87	%		359,907		13,347		4.95	%
Total loans		2,702,692		104,156		5.15	%		2,500,929		97,608		5.21	%
Total earning assets		3,514,345	$	108,671		4.13	%		2,929,193	$	103,281		4.71	%
Noninterest-earning assets		233,652							208,000
Total assets	$	3,747,997						$	3,137,193

Interest-bearing liabilities
NOW	$	67,633	$	136		0.27	%	$	53,633	$	153		0.38	%
Money Market		627,024		1,866		0.40	%		430,524		2,534		0.79	%
Saving deposits		137,072		101		0.10	%		121,836		117		0.13	%
Time deposits, less than $250,000		654,776		3,635		0.74	%		720,810		9,408		1.74	%
Time deposits, $250,000 and over		600,973		3,787		0.84	%		598,137		8,357		1.87	%
Total interest-bearing deposits		2,087,478		9,525		0.61	%		1,924,940		20,569		1.43	%
FHLB advances		150,000		1,320		1.18	%		118,029		1,033		1.17	%
Long-term debt		152,600		6,209		5.44	%		104,168		5,243		6.72	%
Subordinated debentures		14,357		447		4.16	%		14,221		533		5.01	%
Total interest-bearing liabilities		2,404,435	$	17,501		0.97	%		2,161,358	$	27,378		1.69	%
Noninterest-bearing liabilities
Noninterest-bearing deposits		858,087							546,419
Other noninterest-bearing liabilities		43,038							14,606
Total noninterest-bearing liabilities		901,125							561,025
Shareholders' equity		442,437							414,810
Total liabilities and shareholders' equity	$	3,747,997						$	3,137,193
Net interest income / interest rate spreads			$	91,170		3.16	%			$	75,903		3.02	%
Net interest margin						3.47	%						3.46	%

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,
	2021			2021			2020
Per share data (common stock)
Earnings
Basic	$	0.79		$	0.69		$	0.43
Diluted	$	0.77		$	0.67		$	0.43
Dividends declared	$	0.13		$	0.13		$	0.06
Book value	$	23.37		$	22.86		$	21.35
Tangible book value	$	19.60		$	19.04		$	17.56
Weighted average shares outstanding
Basic		19,343,262			19,432,204			19,717,568
Diluted		19,798,187			19,874,969			19,804,892
Shares outstanding at period end		19,516,393			19,349,802			19,739,280
Performance ratios
Return on average assets, annualized		1.54	%		1.39	%		1.05	%
Return on average shareholders' equity, annualized		13.52	%		12.13	%		8.06	%
Return on average tangible common equity, annualized		16.17	%		14.57	%		9.81	%
Noninterest income to average assets, annualized		0.55	%		0.43	%		0.34	%
Noninterest expense to average assets, annualized		1.45	%		1.53	%		1.72	%
Yield on average earning assets		3.97	%		3.99	%		4.63	%
Cost of average total deposits		0.35	%		0.41	%		0.87	%
Cost of average interest-bearing deposits		0.51	%		0.59	%		1.14	%
Cost of average interest-bearing liabilities		0.89	%		0.97	%		1.43	%
Accretion on loans to average earning assets		0.03	%		0.02	%		0.08	%
Net interest spread		3.08	%		3.02	%		3.20	%
Net interest margin		3.38	%		3.33	%		3.59	%
Efficiency ratio		38.87	%		42.89	%		46.63	%
Common stock dividend payout ratio		16.46	%		18.84	%		13.95	%

RBB BANCORP AND SUBSIDIARIES
SELECTED FINANCIAL HIGHLIGHTS
(Unaudited)
*(Dollars in thousands, except per share amounts)*

	For the nine months ended September 30,
	2021			2020
Per share data (common stock)
Earnings
Basic	$	2.11		$	1.10
Diluted	$	2.07		$	1.09
Dividends declared	$	0.38		$	0.24
Book value	$	23.37		$	21.35
Tangible book value	$	19.60		$	17.56
Weighted average shares outstanding
Basic		19,416,608			19,799,617
Diluted		19,828,612			19,958,612
Shares outstanding at period end		19,516,393			19,739,280
Performance ratios
Return on average assets, annualized		1.47	%		0.93	%
Return on average shareholders' equity, annualized		12.45	%		7.01	%
Return on average tangible common equity, annualized		14.95	%		8.59	%
Noninterest income to average assets, annualized		0.56	%		0.41	%
Noninterest expense to average assets, annualized		1.60	%		1.92	%
Yield on average earning assets		4.13	%		4.71	%
Cost of average deposits		0.43	%		1.11	%
Cost of average interest-bearing deposits		0.61	%		1.43	%
Cost of average interest-bearing liabilities		0.97	%		1.69	%
Accretion on loans to average earning assets		0.04	%		0.10	%
Net interest spread		3.16	%		3.02	%
Net interest margin		3.47	%		3.46	%
Efficiency ratio		42.07	%		52.75	%
Common stock dividend payout ratio		18.01	%		21.82	%

RBB BANCORP AND SUBSIDIARIES
SELECTED FINANCIAL HIGHLIGHTS
(Unaudited)
*(Dollars in thousands, except per share amounts)*

	As of
	September 30,			June 30,			September 30,
	2021			2021			2020
Loan to deposit ratio		95.71	%		88.25	%		105.49	%
Core deposits / total deposits		79.87	%		80.04	%		99.34	%
Net non-core funding dependence ratio		9.27	%		0.87	%		9.69	%

Credit Quality Data:
Loans 30-89 days past due	$	7,258		$	5,449		$	21,735
Loans 30-89 days past due to total loans		0.26	%		0.20	%		0.79	%
Nonperforming loans	$	14,248		$	19,243		$	17,975
Nonperforming loans to total loans		0.50	%		0.71	%		0.65	%
Nonperforming assets	$	14,541		$	19,536		$	18,268
Nonperforming assets to total assets		0.38	%		0.50	%		0.54	%
Allowance for loan losses to total loans		1.13	%		1.16	%		0.97	%
Allowance for loan losses to nonperforming loans		226.21	%		162.93	%		148.17	%
Net charge-offs to average loans (for the quarter-to-date period)		0.05	%		0.01	%		0.01	%

Regulatory and other capital ratios—Company
Tangible common equity to tangible assets		10.26	%		9.65	%		10.55	%
Tier 1 leverage ratio		10.31	%		10.20	%		11.47	%
Tier 1 common capital to risk-weighted assets		14.82	%		14.76	%		14.11	%
Tier 1 capital to risk-weighted assets		15.38	%		15.33	%		14.69	%
Total capital to risk-weighted assets		23.30	%		23.48	%		20.05	%

Regulatory capital ratios—Bank only
Tier 1 leverage ratio		12.48	%		12.34	%		14.16	%
Tier 1 common capital to risk-weighted assets		18.64	%		18.58	%		18.13	%
Tier 1 capital to risk-weighted assets		18.64	%		18.58	%		18.13	%
Total capital to risk-weighted assets		19.89	%		19.83	%		19.26	%

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	2021			2021			2021			2020			2020
Interest income
Loans, including fees	$	35,601		$	34,669		$	34,516		$	34,832		$	34,153
Investment securities and other		1,507			1,302			1,024			1,032			972
Total interest income		37,108			35,971			35,540			35,864			35,125
Interest expense
Deposits		2,745			3,118			3,662			4,636			5,525
Interest on subordinated debentures and other		2,342			2,356			1,958			1,901			1,905
Other borrowings		445			440			435			450			444
Total interest expense		5,532			5,914			6,055			6,987			7,874
Net interest income before provision for loan losses		31,576			30,057			29,485			28,877			27,251
Provision for loan losses		1,196			628			1,500			3,008			3,861
Net interest income after provision for loan losses		30,380			29,429			27,985			25,869			23,390
Noninterest income		5,524			4,171			5,894			4,490			2,727
Noninterest expense		14,420			14,680			15,792			14,453			13,978
Earnings before income taxes		21,484			18,920			18,087			15,906			12,139
Income taxes		6,120			5,540			5,631			4,759			3,619
Net income	$	15,364		$	13,380		$	12,456		$	11,147		$	8,520
Net income per common share - basic	$	0.79		$	0.69		$	0.64		$	0.57		$	0.43
Net income per common share - diluted	$	0.77		$	0.67		$	0.63		$	0.56		$	0.43
Cash dividends declared per common share	$	0.13		$	0.13		$	0.12		$	0.09		$	0.06
Cash dividends declared on common shares	$	2,516		$	2,540		$	2,347		$	1,777		$	1,184
Yield on average assets, annualized		1.54	%		1.39	%		1.47	%		1.33	%		1.05	%
Yield on average earning assets		3.97	%		3.99	%		4.49	%		4.55	%		4.63	%
Cost of average deposits		0.35	%		0.41	%		0.55	%		0.71	%		0.87	%
Cost of average interest-bearing deposits		0.51	%		0.59	%		0.73	%		0.93	%		1.14	%
Cost of average interest-bearing liabilities		0.89	%		0.97	%		1.06	%		1.23	%		1.43	%
Accretion on loans to average earning assets		0.03	%		0.02	%		0.06	%		0.03	%		0.08	%
Net interest margin		3.38	%		3.33	%		3.73	%		3.67	%		3.59	%

RBB BANCORP AND SUBSIDIARIES
SELECTED FINANCIAL HIGHLIGHTS
(Unaudited, except for December 31, 2020)
*(Dollars in thousands, except per share amounts)*

Loan Portfolio Detail	As of September 30, 2021						As of June 30, 2021						As of March 31, 2021						As of December 30, 2020						As of September 30, 2020
(dollars in thousands)		$		%				$		%				$		%				$		%				$		%
Loans:
Commercial and industrial	$	276,387			9.7	%	$	277,080			10.2	%	$	286,016			10.5	%	$	290,139			10.7	%	$	317,891			11.5	%
SBA		88,784			3.1	%		98,572			3.6	%		111,330			4.1	%		97,821			3.6	%		111,193			4.0	%
Construction and land development		271,764			9.6	%		236,965			8.7	%		209,727			7.7	%		186,723			6.9	%		183,569			6.7	%
Commercial real estate (1)		1,205,630			42.4	%		1,102,467			40.7	%		1,063,104			39.2	%		1,003,637			37.1	%		975,187			35.4	%
Single-family residential mortgages		974,780			34.3	%		984,311			36.3	%		1,041,260			38.3	%		1,124,357			41.5	%		1,163,982			42.2	%
Other loans		23,009			0.9	%		9,811			0.5	%		3,768			0.2	%		4,089			0.2	%		3,331			0.2	%
Total loans (2)	$	2,840,354			100.0	%	$	2,709,206			100.0	%	$	2,715,205			100.0	%	$	2,706,766			100.0	%	$	2,755,153			100.0	%
Allowance for loan losses		(32,231	)					(31,352	)					(30,795	)					(29,337	)					(26,634	)
Total loans, net	$	2,808,123					$	2,677,854					$	2,684,410					$	2,677,429					$	2,728,519

(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)	2021			2020			2021			2020
Beginning balance	$	31,352		$	22,820		$	29,337		$	18,816
Additions to the allowance charged to expense		1,196			3,861			3,324			8,815
Net charge-offs on loans		(317	)		(47	)		(430	)		(997	)
Ending balance	$	32,231		$	26,634		$	32,231		$	26,634

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, 2021 and 2020 and June 30, 2021.

(dollars in thousands, except per share data)	September 30, 2021			June 30, 2021			September 30, 2020
Tangible common equity:
Total shareholders' equity	$	456,024		$	442,325		$	421,416
Adjustments
Goodwill		(69,243	)		(69,243	)		(69,243	)
Core deposit intangible		(4,327	)		(4,608	)		(5,519	)
Tangible common equity	$	382,454		$	368,474		$	346,654
Tangible assets:
Total assets-GAAP	$	3,801,807		$	3,890,638		$	3,359,576
Adjustments
Goodwill		(69,243	)		(69,243	)		(69,243	)
Core deposit intangible		(4,327	)		(4,608	)		(5,519	)
Tangible assets	$	3,728,237		$	3,816,787		$	3,284,814
Common shares outstanding	$	19,516,393			19,349,802			19,739,280
Tangible common equity to tangible assets ratio		10.26	%		9.65	%		10.55	%
Book value per share	$	23.37		$	22.86		$	21.35
Tangible book value per share	$	19.60		$	19.04		$	17.56

View source version on businesswire.com: https://www.businesswire.com/news/home/20211025005738/en/

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

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

Source: RBB Bancorp

Press Release Details

RBB Bancorp Reports Third Quarter Earnings for 2021