rbb-8k_20171023.htm

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): October 23, 2017

 

RBB BANCORP

(Exact name of Registrant as Specified in Its Charter)

 

 

California

001-38149

27-2776416

(State or Other Jurisdiction
of Incorporation)

(Commission
File Number)

(IRS Employer
Identification No.)

 

 

 

660 S. Figueroa Street, Suite 1888,

Los Angeles, California

 

90017

(Address of Principal Executive Offices)

 

(Zip Code)

Registrant’s Telephone Number, Including Area Code: (213) 627-9888

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instructions A.2. below):

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. 

 

 

 

 


 

Item 2.02 Results of Operations and Financial Condition.

On October 23, 2017, RBB Bancorp issued a press release setting forth the financial results for the quarter ended September 30, 2017, and information relating to our quarterly conference call and webcast.  A copy of this press release is attached hereto as Exhibit 99.1 and is being furnished pursuant to this Item 2.02.

The information in this report (including Exhibit 99.1) shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liability of that section, and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set for the by specific reference in such filing.

 

Item 9.01 Financial Statements and Exhibits.

 

(d)

Exhibits.

 

99.1

Press Release, dated October 23, 2017, announcing the financial results of RBB Bancorp for the quarter ended September 30, 2017.

2


 

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

 

 

RBB BANCORP

(Registrant)

 

 

 

 

Date:  October 24, 2017

 

By:

/s/ David Morris

 

 

 

David Morris

 

 

 

Executive Vice President and

Chief Financial Officer

 

3

rbb-ex991_6.htm

 

Exhibit 99.1

Press Release

For Immediate Release

 

 

Contacts:

Yee Phong (Alan) Thian

 

 

Chairman, President and CEO

 

 

(213) 627-9888

 

 

David Morris

 

 

Executive Vice President and CFO

 

 

(714) 670-2488

 

RBB Bancorp Reports Third Quarter Earnings for 2017

 

Net income was $6.6 million or $0.42 diluted earnings per share

 

Total loans increased by $50.5 million, or 17.5% annualized growth, from the end of the prior quarter

 

Total deposits increased by $39.8 million, or 12.4% annualized growth, from the end of the prior quarter

Los Angeles, CA, October 23, 2017 – 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, 2017.

The Company reported net income of $6.6 million, or $0.42 diluted earnings per share, for the three months ended September 30, 2017, compared to net income of $8.5 million, or $0.62 diluted earnings per share, and $5.7 million, or $0.43 diluted earnings per share, for the three months ended June 30, 2017 and September 30, 2016, respectively. The decline in earnings per share relative to the second quarter of 2017 was attributable to the recapture of $4.2 million of provision for loan losses in the second quarter of 2017 that positively impacted the prior quarter’s results.

Mr. Alan Thian, Chairman, President and CEO of RBB Bancorp, commented on the results, “We executed well on our strategic plan in the third quarter and delivered strong financial results driven by quality balance sheet growth, higher gain on loan sale income, stable expenses and improvement in our asset quality.  Our loan pipeline remains strong and we expect to see a continuation of these positive trends going forward.  We are also on track to launch our Wealth Management business by the beginning of 2018.  We anticipate that Wealth Management will provide a stable source of non-interest income, further diversify our revenue mix, and serve as another catalyst for the continued growth of our franchise in the coming years.”

Key Performance Ratios

Net income of $6.6 million for the third quarter of 2017 produced an annualized return on average equity of 11.04% and an annualized return on average assets of 1.65%. The efficiency ratio for the third quarter of 2017 was 38.87%, compared to 40.44% for the prior quarter. Adjusted annualized return on average assets and average tangible common equity for the third quarter of 2017 was 1.55% and 11.97%, respectively compared to 1.10% and 11.06% for the third quarter of 2016.  A reconciliation of adjusted earnings to earnings according to generally accepted accounting principles (“GAAP”) is provided in the financial tables at the end of this press release.

Net Interest Income and Net Interest Margin

Net interest income, before provision for loan losses, was $14.7 million for the third quarter of 2017, compared to $14.0 million for the second quarter of 2017.  The increase was primarily attributable to a $94.5 million increase in average earning assets (mainly the result of proceeds from the Company’s July IPO), largely offset by an 11 basis point decrease in the net interest margin (which includes the impact of reduced loan discount accretion).


Compared to the third quarter of 2016, net interest income, before provision for loan losses, declined from $15.5 million. The decrease was primarily due to loan discount accretion income being lower by $2.3 million in the third quarter of 2017 as compared to the third quarter of 2016.

Net interest margin was 3.91% for the third quarter of 2017, a decrease from 4.02% in the second quarter of 2017.  The decrease was primarily attributable to a 15 basis point decrease in the yield on earning assets, primarily due to lower loan discount accretion income and a higher proportion of lower yielding assets due to excess liquidity from the IPO.

Compared to the third quarter of 2016, net interest margin declined from 4.52%.  The decrease was primarily due to lower accretion of purchased discounts between the third quarter of 2017 and the third quarter of 2016 (see adjusted earnings metrics table on page 16).

Noninterest Income

Noninterest income was $3.8 million for the third quarter of 2017, compared to $3.2 million in the second quarter of 2017.  The increase was primarily attributable to an additional $295,000 gain on loan sales, an additional $319,000 in loan servicing fees, a $142,000 gain on sale of one OREO property, partially offset by a $123,000 decrease in service charges.

The Company sold $43.4 million in mortgage loans for a net gain of $969,000 during the quarter ended September 30, 2017, compared to $37.7 million in mortgage loans for a net gain of $802,000 during the quarter ended June 30, 2017. The Company originated $118.6 million in mortgage loans for the quarter ended September 30, 2017, compared with $97.1 million during the quarter ended June 30, 2017.

The Company sold $22.4 million in SBA loans for a net gain of $1.6 million during the quarter ended September 30, 2017, compared to $23.1 million in SBA loans for a net gain of $1.5 million during the quarter ended June 30, 2017.  SBA loan originations for the quarter ending September 30, 2017 were $19.3 million, compared to $34.4 million during the quarter ended June 30, 2017.

Compared to the third quarter of 2016, noninterest income increased from $2.6 million. The increase was primarily attributable to an additional $714,000 from gains on loan sales, an increase of $219,000 in additional loan servicing fees, plus the above mentioned OREO sale.

Noninterest Expense

Noninterest expense for the third quarter of 2017 was $7.2 million, compared to $7.0 million for the second quarter of 2017.  The increase was primarily attributable to a $107,000 increase in marketing and business promotion expenses and other expense, partially offset by reductions in salaries and employee benefits, occupancy and equipment expenses and office expenses.

Compared to the third quarter of 2016, noninterest expense increased from $7.0 million. The $164,000 increase when compared to the third quarter of 2016 was primarily the result of an increase in salaries and employee benefits of $697,000, partially offset by decreases in data processing, legal & professional, and other expenses.

Income Taxes

The effective tax rate for the three and nine months ended September 30, 2017 was 37.8% and 40.1%, respectively, compared with 41.7% and 41.2% for the three and nine months ended September 30, 2016, respectively. Our estimated annual effective tax rate varies depending upon tax-advantaged income as well as available tax credits. The decrease in the effective tax rate is mainly due to stock option exercises and a resulting tax deduction of $773,000.  

Loan Portfolio

Loans held for investment, net of deferred fees and discounts, totaled $1.20 billion as of September 30, 2017, an increase of $50.5 million, or 17.5% annualized growth, from $1.15 billion at June 30, 2017, and an increase of $74.6 million, or 6.7%, from September 30, 2016.  The increase in loans held for investment from the end of the prior quarter was primarily attributable to growth in the commercial real estate and residential real estate portfolios.

Mortgage loans held for sale increased to $125.7 million as of September 30, 2017, compared to $83.3 million at June 30, 2017.  The increase was due to higher originations of single-family residential mortgage loans held for sale.

2


Deposits

Deposits were at $1.32 billion at September 30, 2017, an increase of $39.8 million, or 12.4% annualized growth, from $1.28 billion at June 30, 2017, and an increase of $119.2 million, or 9.9%, from September 30, 2016. The increase in total deposits from the end of the prior quarter was attributable to growth in non-maturity deposit types.

Noninterest-bearing deposits increased to $287.6 million as of September 30, 2017, compared to $215.7 million at June 30, 2017 and $168.6 million at September 30, 2016.  The growth in noninterest-bearing deposits is mainly due to marketing efforts by our branches and by branch management.

Asset Quality

Nonperforming assets totaled $4.2 million, or 0.26% of total assets at September 30, 2017, compared to $9.3 million, or 0.61% of total assets, at June 30, 2017.  The decline in non-performing assets was primarily attributable to a $3.6 million SBA loan guaranty payment in July 2017.  Nonperforming assets consist of Other Real Estate Owned (foreclosed properties), loans modified under troubled debt restructurings (TDRs), non-accrual loans, and loans past due 90 days or more and still accruing interest. Nonperforming assets exclude PCI loans acquired in prior acquisitions.

Loans 30 to 89 days past due declined to $2.2 million at September 30, 2017, down from $20.7 million at June 30, 2017.  The decrease was primarily attributable to one delinquent loan totaling $12.7 million that was brought current during the third quarter of 2017, while the collateral securing the loan remains in escrow.

Net charge-offs were (0.008)% of average loans during the third quarter of 2017, consisting of no gross charge-offs, and loan recoveries of $94,000.

The Company recorded provision for loan losses of $700,000 for the third quarter of 2017, which was primarily attributable to the growth in total loans during the quarter.

The allowance for loan losses totaled $11.4 million, or 0.95% of total loans, at September 30, 2017, compared with $10.6 million, or 0.93% of total loans, at June 30, 2017.  

Corporate Overview

RBB Bancorp is a $1.6 billion in assets bank holding company headquartered in Los Angeles, California. Its wholly-owned subsidiary, Royal Business Bank (the “Bank”), is a full service commercial bank which provides business banking services to the Chinese-American communities in Los Angeles County, Orange County, Ventura County and in Las Vegas, Nevada, including 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 and a full range of depository accounts. The Bank has ten branches in Los Angeles County, located in downtown Los Angeles, San Gabriel, Torrance, Rowland Heights, Monterey Park, Silver Lake, Arcadia, Cerritos, Diamond Bar, and west Los Angeles, two branches in Ventura County, located in Oxnard and Westlake Village, and one branch in Las Vegas, Nevada. The Company’s administrative and lending center is located at 123 E. Valley Blvd., San Gabriel, California 91176, and its finance and operations center is located at 7025 Orangethorpe Avenue, Buena Park, California 90621. RBB’s website address is www.royalbusinessbankusa.com.

Conference Call

Management will hold a conference call at 10:00 a.m. PDT/1:00 p.m. EDT on Tuesday, October 24, 2017, to discuss the Company’s third quarter 2017 financial results.

To listen to the conference call, please dial 1-833-659-7620, passcode 99941708. A replay of the call will be made available at 1-855-859-2056, passcode 99941708, approximately one hour after the conclusion of the call and will remain available through October 31, 2017 at 5:00 p.m. PDT/8:00 p.m. EDT.

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. Please access the website 15 minutes prior to the call to download any necessary audio software. This webcast will be recorded and available for replay on the Company’s website approximately two hours after the conclusion of the conference call, and will be available on the website for approximately 12 months.

3


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 within the meaning of the Private Securities Litigation Reform Act of 1995, including 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; the costs or effects of acquisitions or dispositions we may make, whether we are able to obtain any required governmental 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; 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 S-1 for the year ended December 31, 2016, 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.

4


RBB BANCORP AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(Dollars in thousands)

 

 

September 30,

 

 

June 30,

 

 

March 31,

 

 

December 31,

 

 

September 30,

 

 

 

2017

 

 

2017

 

 

2017

 

 

2016

 

 

2016

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and due from banks

 

$

69,552

 

 

$

104,366

 

 

$

147,547

 

 

$

74,213

 

 

$

104,270

 

Federal funds sold and other cash equivalents

 

 

96,500

 

 

 

58,500

 

 

 

20,000

 

 

 

44,500

 

 

 

51,500

 

Total cash and cash equivalents

 

 

166,052

 

 

 

162,866

 

 

 

167,547

 

 

 

118,713

 

 

 

155,770

 

Interest-bearing deposits in other financial institutions

 

 

100

 

 

 

100

 

 

 

100

 

 

 

345

 

 

 

345

 

Investment securities available for sale

 

 

55,697

 

 

 

40,241

 

 

 

39,155

 

 

 

39,277

 

 

 

30,800

 

Investment securities held to maturity

 

 

5,191

 

 

 

6,199

 

 

 

6,206

 

 

 

6,214

 

 

 

6,222

 

Mortgage loans held for sale

 

 

125,704

 

 

 

83,263

 

 

 

66,555

 

 

 

44,345

 

 

 

57,983

 

Loans held for investment:

 

 

1,196,522

 

 

 

1,146,005

 

 

 

1,139,563

 

 

 

1,110,446

 

 

 

1,121,873

 

Allowance for loan losses

 

 

(11,420

)

 

 

(10,627

)

 

 

(14,186

)

 

 

(14,162

)

 

 

(13,399

)

Net loans held for investment

 

 

1,185,102

 

 

 

1,135,378

 

 

 

1,125,377

 

 

 

1,096,284

 

 

 

1,108,474

 

Premises and equipment, net

 

 

6,300

 

 

 

6,441

 

 

 

6,538

 

 

 

6,585

 

 

 

6,740

 

Federal Home Loan Bank (FHLB) stock

 

 

6,770

 

 

 

6,770

 

 

 

6,770

 

 

 

6,770

 

 

 

6,770

 

Net deferred tax assets

 

 

9,517

 

 

 

10,214

 

 

 

11,068

 

 

 

11,097

 

 

 

12,135

 

Other real estate owned (OREO)

 

 

293

 

 

 

833

 

 

 

833

 

 

 

833

 

 

 

293

 

Cash surrender value of life insurance

 

 

32,578

 

 

 

32,358

 

 

 

32,142

 

 

 

21,958

 

 

 

21,820

 

Goodwill

 

 

29,940

 

 

 

29,940

 

 

 

29,940

 

 

 

29,940

 

 

 

29,940

 

Servicing assets

 

 

5,370

 

 

 

4,661

 

 

 

4,223

 

 

 

3,704

 

 

 

3,257

 

Core deposit intangibles

 

 

1,525

 

 

 

1,612

 

 

 

1,699

 

 

 

1,793

 

 

 

1,897

 

Accrued interest and other assets

 

 

12,575

 

 

 

12,723

 

 

 

7,595

 

 

 

7,693

 

 

 

7,009

 

Total assets

 

$

1,642,714

 

 

$

1,533,599

 

 

$

1,505,748

 

 

$

1,395,551

 

 

$

1,449,455

 

Liabilities and shareholders' equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing demand

 

$

287,574

 

 

$

215,716

 

 

$

215,652

 

 

$

174,272

 

 

$

168,627

 

Savings, NOW and money market accounts

 

 

362,018

 

 

 

348,627

 

 

 

325,589

 

 

 

296,699

 

 

 

317,222

 

Time deposits

 

 

668,700

 

 

 

714,105

 

 

 

707,016

 

 

 

681,792

 

 

 

713,284

 

Total deposits

 

 

1,318,292

 

 

 

1,278,448

 

 

 

1,248,257

 

 

 

1,152,763

 

 

 

1,199,133

 

Reserve for unfunded commitments

 

 

489

 

 

 

517

 

 

 

985

 

 

 

604

 

 

 

715

 

Income tax payable

 

 

 

 

 

 

 

 

4,664

 

 

 

793

 

 

 

2,342

 

FHLB advances

 

 

 

 

 

 

 

 

10,000

 

 

 

 

 

 

10,000

 

Long-term debt

 

 

49,492

 

 

 

49,456

 

 

 

49,419

 

 

 

49,383

 

 

 

49,347

 

Subordinated debentures

 

 

3,402

 

 

 

3,379

 

 

 

3,357

 

 

 

3,334

 

 

 

3,310

 

Accrued interest and other liabilities

 

 

10,708

 

 

 

9,462

 

 

 

5,570

 

 

 

7,089

 

 

 

8,174

 

Total liabilities

 

 

1,382,383

 

 

 

1,341,262

 

 

 

1,322,252

 

 

 

1,213,966

 

 

 

1,273,021

 

Shareholders' equity:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shareholder's equity

 

 

260,468

 

 

 

192,427

 

 

 

183,695

 

 

 

181,852

 

 

 

176,219

 

Accumulated other comprehensive income

   (loss) - Net of tax

 

 

(137

)

 

 

(90

)

 

 

(199

)

 

 

(267

)

 

 

215

 

Total shareholders' equity

 

 

260,331

 

 

 

192,337

 

 

 

183,496

 

 

 

181,585

 

 

 

176,434

 

Total liabilities and stockholders’ equity

 

$

1,642,714

 

 

$

1,533,599

 

 

$

1,505,748

 

 

$

1,395,551

 

 

$

1,449,455

 

 

5


RBB BANCORP AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

(Dollars in thousands, except per share amounts)

 

 

 

Three Months Ended

 

 

 

September 30, 2017

 

 

June 30, 2017

 

 

September 30, 2016

 

Interest and dividend income:

 

 

 

 

 

 

 

 

 

 

 

 

Interest and fees on loans

 

$

17,200

 

 

$

16,759

 

 

$

18,169

 

Interest on interest-bearing deposits

 

 

371

 

 

 

209

 

 

 

80

 

Interest on investment securities

 

 

331

 

 

 

313

 

 

 

203

 

Dividend income on FHLB stock

 

 

118

 

 

 

82

 

 

 

155

 

Interest on federal funds sold and other

 

 

326

 

 

 

158

 

 

 

92

 

Total interest income

 

 

18,346

 

 

 

17,521

 

 

 

18,699

 

Interest expense:

 

 

 

 

 

 

 

 

 

 

 

 

Interest on savings deposits, NOW and money market accounts

 

 

649

 

 

 

575

 

 

 

521

 

Interest on time deposits

 

 

2,061

 

 

 

1,993

 

 

 

1,801

 

Interest on subordinated debentures and other

 

 

908

 

 

 

907

 

 

 

903

 

Interest on other borrowed funds

 

 

 

 

 

12

 

 

 

16

 

Total interest expense

 

 

3,618

 

 

 

3,487

 

 

 

3,241

 

Net interest income

 

 

14,728

 

 

 

14,034

 

 

 

15,458

 

Provision (recapture) for loan losses

 

 

700

 

 

 

(4,188

)

 

 

1,250

 

Net interest income after provision (recapture) or credit losses

 

 

14,028

 

 

 

18,222

 

 

 

14,208

 

Noninterest income:

 

 

 

 

 

 

 

 

 

 

 

 

Service charges, fees and other

 

 

518

 

 

 

646

 

 

 

443

 

Gain on sale of loans

 

 

2,584

 

 

 

2,289

 

 

 

1,870

 

Loan servicing fees, net of amortization

 

 

314

 

 

 

(5

)

 

 

95

 

Recoveries on loans acquired in business combinations

 

 

19

 

 

 

29

 

 

 

47

 

Increase in cash surrender value of life insurance

 

 

219

 

 

 

216

 

 

 

141

 

Gain on Sale of Securities

 

 

 

 

 

 

 

 

 

Gain on Sale of OREO

 

 

142

 

 

 

 

 

 

 

 

 

 

3,796

 

 

 

3,175

 

 

 

2,596

 

Noninterest expense:

 

 

 

 

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

 

4,178

 

 

 

4,243

 

 

 

3,481

 

Occupancy and equipment expenses

 

 

705

 

 

 

727

 

 

 

766

 

Data processing

 

 

458

 

 

 

454

 

 

 

563

 

Legal and professional

 

 

318

 

 

 

296

 

 

 

511

 

Amortization of intangibles

 

 

87

 

 

 

87

 

 

 

103

 

Other expenses

 

 

1,454

 

 

 

1,153

 

 

 

1,613

 

 

 

 

7,200

 

 

 

6,960

 

 

 

7,037

 

Income before income taxes

 

 

10,624

 

 

 

14,437

 

 

 

9,767

 

Income tax expense

 

 

4,013

 

 

 

5,901

 

 

 

4,070

 

Net income

 

$

6,611

 

 

$

8,536

 

 

$

5,697

 

Net income per share

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.45

 

 

$

0.67

 

 

$

0.44

 

Diluted

 

$

0.42

 

 

$

0.62

 

 

$

0.42

 

 

 

6


RBB BANCORP AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

(Dollars in thousands, except per share amounts)

 

 

 

Nine Months Ended

 

 

 

September 30,

 

 

 

2017

 

 

2016

 

Interest and dividend income:

 

 

 

 

 

 

 

 

Interest and fees on loans

 

$

49,992

 

 

$

50,042

 

Interest on interest-bearing deposits

 

 

731

 

 

 

236

 

Interest on investment securities

 

 

922

 

 

 

620

 

Dividend income on FHLB stock

 

 

353

 

 

 

416

 

Interest on federal funds sold and other

 

 

628

 

 

 

159

 

Total interest income

 

 

52,626

 

 

 

51,473

 

Interest expense:

 

 

 

 

 

 

 

 

Interest on savings deposits, NOW and money market accounts

 

 

1,698

 

 

 

1,489

 

Interest on time deposits

 

 

5,903

 

 

 

5,144

 

Interest on subordinated debentures and other

 

 

2,720

 

 

 

1,824

 

Interest on other borrowed funds

 

 

29

 

 

 

24

 

Total interest expense

 

 

10,350

 

 

 

8,481

 

Net interest income

 

 

42,276

 

 

 

42,992

 

Provision (recapture) for loan losses

 

 

(3,488

)

 

 

3,599

 

Net interest income after provision (recapture) or credit losses

 

 

45,764

 

 

 

39,393

 

Noninterest income:

 

 

 

 

 

 

 

 

Service charges, fees and other

 

 

1,624

 

 

 

1,182

 

Gain on sale of loans

 

 

6,370

 

 

 

4,136

 

Loan servicing fees, net of amortization

 

 

571

 

 

 

384

 

Recoveries on loans acquired in business combinations

 

 

76

 

 

 

139

 

Increase in cash surrender value of life insurance

 

 

620

 

 

 

423

 

Gain on Sale of Securities

 

 

 

 

 

19

 

Gain on Sale of OREO

 

 

142

 

 

 

 

 

 

 

9,403

 

 

 

6,283

 

Noninterest expense:

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

 

12,604

 

 

 

10,547

 

Occupancy and equipment expenses

 

 

2,176

 

 

 

2,388

 

Data processing

 

 

1,264

 

 

 

1,488

 

Legal and professional

 

 

227

 

 

 

1,478

 

Amortization of intangibles

 

 

268

 

 

 

268

 

Other expenses

 

 

4,199

 

 

 

6,205

 

 

 

 

20,738

 

 

 

22,374

 

Income before income taxes

 

 

34,429

 

 

 

23,302

 

Income tax expense

 

 

13,789

 

 

 

9,609

 

Net income

 

$

20,640

 

 

$

13,693

 

Net income per share

 

 

 

 

 

 

 

 

Basic

 

$

1.53

 

 

$

1.07

 

Diluted

 

$

1.42

 

 

$

1.00

 

Cash Dividends declared per common share

 

$

0.30

 

 

$

0.20

 

 

7


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, 2017

 

 

June 30, 2017

 

 

September 30, 2016

 

 

 

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)

 

$

202,005

 

 

$

815

 

 

 

1.60

%

 

$

134,089

 

 

$

449

 

 

 

1.34

%

 

$

103,624

 

 

$

326

 

 

 

1.26

%

Securities (2)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Available for sale

 

 

43,075

 

 

 

277

 

 

 

2.55

%

 

 

40,618

 

 

 

253

 

 

 

2.50

%

 

 

30,269

 

 

 

149

 

 

 

1.97

%

Held to maturity

 

 

5,533

 

 

 

55

 

 

 

3.92

%

 

 

6,204

 

 

 

60

 

 

 

3.88

%

 

 

6,226

 

 

 

54

 

 

 

3.48

%

Mortgage loans held for sale

 

 

98,807

 

 

 

1,149

 

 

 

4.61

%

 

 

71,356

 

 

 

848

 

 

 

4.77

%

 

 

63,304

 

 

 

764

 

 

 

4.84

%

Loans held for investment: (3)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Real estate

 

 

766,911

 

 

 

10,673

 

 

 

5.52

%

 

 

768,585

 

 

 

10,645

 

 

 

5.56

%

 

 

807,197

 

 

 

12,711

 

 

 

6.32

%

Commercial (4)

 

 

377,501

 

 

 

5,379

 

 

 

5.65

%

 

 

378,436

 

 

 

5,266

 

 

 

5.58

%

 

 

361,200

 

 

 

4,696

 

 

 

5.21

%

Total loans

 

 

1,144,411

 

 

 

16,051

 

 

 

5.56

%

 

 

1,147,021

 

 

 

15,911

 

 

 

5.56

%

 

 

1,168,397

 

 

 

17,407

 

 

 

5.98

%

Total earning assets

 

 

1,493,833

 

 

$

18,346

 

 

 

4.87

%

 

 

1,399,288

 

 

$

17,521

 

 

 

5.02

%

 

 

1,371,820

 

 

$

18,699

 

 

 

5.47

%

Noninterest-earning assets

 

 

96,555

 

 

 

 

 

 

 

 

 

 

 

95,434

 

 

 

 

 

 

 

 

 

 

 

80,212

 

 

 

 

 

 

 

 

 

Total assets

 

$

1,590,388

 

 

 

 

 

 

 

 

 

 

$

1,494,722

 

 

 

 

 

 

 

 

 

 

$

1,452,032

 

 

 

 

 

 

 

 

 

Interest-bearing liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NOW and money market deposits

 

$

333,471

 

 

$

605

 

 

 

0.72

%

 

$

302,483

 

 

$

536

 

 

 

0.71

%

 

$

290,963

 

 

$

479

 

 

 

0.66

%

Savings deposits

 

 

36,746

 

 

 

43

 

 

 

0.46

%

 

 

34,203

 

 

 

39

 

 

 

0.46

%

 

 

35,533

 

 

 

41

 

 

 

0.46

%

Time deposits

 

 

690,378

 

 

 

2,061

 

 

 

1.18

%

 

 

701,314

 

 

 

1,993

 

 

 

1.14

%

 

 

713,087

 

 

 

1,802

 

 

 

1.01

%

Total interest-bearing deposits

 

 

1,060,596