rbb-8k_20180118.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): January 18, 2018

 

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 January 22, 2018, RBB Bancorp issued a press release setting forth the financial results for the quarter ended December 31, 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.

Item 8.01 Other Events.

On January 18, 2018, RBB Bancorp announced that its Board of Directors declared a cash dividend of $0.08 per share of its common stock. The dividend is payable on February 15, 2018 to shareholders of record as of January 31, 2018.  A copy of the press release announcing the dividend is attached hereto as Exhibit 99.2.

The information in this report (including Exhibit 99.1 and 99.2) 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 January 22, 2018, announcing the financial results of RBB Bancorp for the quarter ended December 31, 2017

 

99.2

Press Release, dated January 18, 2018, announcing RBB Bancorp declared a quarterly cash dividend of $0.08 per share.

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:  January 23, 2018

 

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 Fourth Quarter Earnings for 2017

Conference Call and Webcast Now Scheduled for Tuesday, January 23, 2018 at

10:00 a.m. Pacific Time/1:00 p.m. Eastern Time

Net income was $4.9 million or $0.29 diluted earnings per share, including a $2.4 million or $0.14 diluted earnings per share write-down of net deferred tax assets

Total loans increased by $52.6 million, or 17.4% annualized growth, from the end of the prior quarter

Total deposits increased by $19.0 million, or 5.7% annualized growth, from the end of the prior quarter

Los Angeles, CA, January 22, 2018 – 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 December 31, 2017.

The Company reported net income of $4.9 million, or $0.29 diluted earnings per share, for the three months ended December 31, 2017, compared to net income of $6.6 million, or $0.42 diluted earnings per share, and $5.4 million, or $0.39 diluted earnings per share, for the three months ended September 30, 2017 and December 31, 2016, respectively. Included in the fourth quarter 2017 results is a $2.4 million, or $0.14 per diluted share, write-down related to the reduction in the value of the Company’s net deferred tax assets as a result of the decrease in the federal corporate tax rate.

“We had a milestone year in 2017, completing our initial public offering and generating the highest level of net income in the history of the Company,” said Mr. Alan Thian, Chairman, President and CEO of RBB Bancorp. “We continued our positive momentum in the fourth quarter, generating strong loan growth, an improvement in our efficiency ratio, and pristine asset quality.”

“In 2018, we plan to continue expanding our franchise through a combination of organic growth, acquisitions and de novo branch openings. We are investing in the business to diversify our revenue mix and provide additional catalysts for generating organic growth.  Our Wealth Management unit is up and running.  In addition we have hired a specialist to start our income property unit, mainly apartments, mobile home parks and student housing properties. We are also finalizing the hiring a new SBA manager who will lead our business development efforts, as well as recruit new team members,” concluded Mr. Thian.

Key Performance Ratios

Net income of $4.9 million for the fourth quarter of 2017 produced an annualized return on average equity of 7.31% and an annualized return on average assets of 1.18%. The efficiency ratio for the fourth quarter of 2017 was 31.8%, compared to 39.0% for the prior quarter. Adjusted annualized return on average assets and average tangible common equity for the fourth quarter of 2017 was 1.51% and 10.60%, respectively compared to 1.55% and 11.97% for the third quarter of 2017. (See adjusted earnings metrics table on page 16).


 

Net Interest Income and Net Interest Margin

Net interest income, before provision for loan losses, was $17.9 million for the fourth quarter of 2017, compared to $14.7 million for the third quarter of 2017.  The increase was primarily attributable to a $43.3 million increase in average earning assets, combined with a 71 basis point increase in the net interest margin.  Accretion of purchase discounts contributed $2.7 million to net interest income in the fourth quarter of 2017, compared to $0.6 million in the third quarter of 2017. The increase in accretion income was primarily attributable to the early payoff of one large acquired loan.

Compared to the fourth quarter of 2016, net interest income, before provision for loan losses, increased from $13.5 million. The increase was primarily attributable to a $187.8 million increase in average earning assets, partially resulting from the proceeds from the Company’s July 2017 IPO, combined with a 64 basis point increase in the net interest margin.

Net interest margin was 4.62% for the fourth quarter of 2017, an increase from 3.91% in the third quarter of 2017. The increase was primarily attributable to a 67 basis point increase in the yield on earning assets (primarily due to a favorable shift in the mix of earning assets and to higher loan discount accretion income). Loan discount accretion contributed 71 basis points to the net interest margin in the fourth quarter of 2017, compared to 17 basis points in the third quarter of 2017.

Compared to the fourth quarter of 2016, net interest margin increased from 3.98%. The increase was primarily attributable to a 62 basis point increase in the yield on earning assets, primarily due to a favorable shift in the mix of earning assets.

Noninterest Income

Noninterest income was $3.8 million for the fourth quarter of 2017, unchanged from $3.8 million in the third quarter of 2017.  In the fourth quarter, gain on loan sales increased by $366,000, but was offset by a $163,000 net decrease in service charges and loan servicing fees and a $142,000 decrease in gain on OREO sale.

The Company sold $90.3 million in mortgage loans for a net gain of $2.0 million during the quarter ended December 31, 2017, compared to $43.4 million in mortgage loans for a net gain of $1.0 million during the quarter ended September 30, 2017. The Company originated $120.5 million in mortgage loans for the quarter ended December 31, 2017, compared with $118.6 million during the quarter ended September 30, 2017.

The Company sold $16.6 million in SBA loans for a net gain of $1.0 million during the fourth quarter of 2017, compared to $22.6 million in SBA loans for a net gain of $1.6 million during the third quarter of 2017.  SBA loan originations for the fourth quarter were $1.9 million, compared to $19.3 million for the third quarter of 2017. The decrease in SBA loan originations was attributable to the departure of certain SBA business development officers.

Compared to the fourth quarter of 2016, noninterest income increased from $2.7 million. The increase was primarily attributable to an additional $1.2 million in gains on loan sales.

Noninterest Expense

Noninterest expense for the fourth quarter of 2017 was $6.9 million, compared to $7.2 million for the third quarter of 2017.  The decrease was primarily attributable to a $215,000 reduction in legal and professional expenses.

Compared to the fourth quarter of 2016, noninterest expense increased from $5.5 million. The $1.4 million increase was primarily due to an increase in salaries and employee benefits of $979,000 and an increase in other expenses of $491,000, partially offset by decreases in data processing costs.

Income Taxes

On December 22, 2017, “H.R.1”, formerly known as the “Tax Cuts and Jobs Act”, was signed into law. Among other items, H.R.1 reduces the federal corporate tax rate to 21% effective January 1, 2018.  As a result, the Company concluded that the reduction in the federal corporate tax rate required the revaluation of the Company’s net deferred tax assets.  The Company’s net deferred tax assets represents net operating loss carryforwards that will be used to reduce corporate taxes expected to be paid in the future as well as differences between the carrying amounts and tax bases of assets and liabilities carried on the Company’s balance sheet.  The Company performed an analysis and determined that the value of the deferred tax assets had declined by $2.4 million.   To reflect the decline in the value of the deferred tax assets, the Company recorded additional tax expense of $2.4 million during the fourth quarter of 2017.

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The effective tax rate for the three and twelve months ended December 31, 2017 was 60.5% and 45.5%, respectively, compared with 41.9% and 41.4% for the three and twelve months ended December 31, 2016, respectively.

As a result of the newly enacted tax legislation, the Company estimates that its effective tax rate for 2018 will be in the range of 29% and 31%. The estimated annual effective tax rate will vary depending upon tax-advantaged income, stock option exercises, and available tax credits.

Loan Portfolio

Loans held for investment, net of deferred fees and discounts, totaled $1.25 billion as of December 31, 2017, an increase of $52.6 million, or 17.4% annualized growth, from $1.2 billion at September 30, 2017, and an increase of $138.6 million, or 12.5%, from December 31, 2016.  The increase in loans held for investment from the end of the prior quarter was primarily attributable to growth in the commercial & industrial and residential real estate portfolios.

Mortgage loans held for sale were $125.8 million as of December 31, 2017, essentially unchanged from $125.7 million at September 30, 2017.  

Deposits

Deposits were at $1.34 billion at December 31, 2017, an increase of $19.0 million, or 5.7% annualized growth, from $1.32 billion at September 30, 2017, and an increase of $184.5 million, or 16.0%, from December 31, 2016. The increase in total deposits from the end of the prior quarter was attributable to growth in interest-bearing non-maturity deposits, partially offset by decreases in certificates of deposit.

Noninterest-bearing deposits decreased slightly to $285.7 million as of December 31, 2017, compared to $287.6 million at September 30, 2017 and $174.3 million at December 31, 2016.  

Asset Quality

Nonperforming assets totaled $2.9 million, or 0.17% of total assets at December 31, 2017, a decline from $4.2 million, or 0.26% of total assets, at September 30, 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 held-for-investment 30 to 89 days past due increased to $2.9 million at December 31, 2017, up from $2.4 million at September 30, 2017.  One loan held-for-sale in the amount of $697,000 that was 30 to 89 days past due at December 31, 2017, was brought current in January.

Net charge-offs were 0.01% of average loans during the fourth quarter of 2017, consisting of $83,000 in gross charge-offs, and no loan loss recoveries.

The Company recorded provision for loan losses of $2.4 million for the fourth quarter of 2017, which was primarily attributable to the growth in total loans during the quarter.  During the fourth quarter a Tomato Bank loan was paid off, eliminating the associated credit discount and thus requiring an additional $1.0 million replenishment of our loan loss provision.

The allowance for loan losses totaled $13.8 million, or 1.10% of total loans, at December 31, 2017, compared with $11.4 million, or 0.95% of total loans, at September 30, 2017.  

Properties

Our headquarters office is located at 660 South Figueroa Street, Suite 1888, Los Angeles, California. It is in downtown Los Angeles at “Metro Center” and houses our risk management unit, including compliance and BSA groups, and our single-family residential mortgage group. The lease expires in June 2018. In October 2017, the Company signed a lease for a new headquarters office at 1055 Wilshire Boulevard, Suite 1220, Los Angeles, California, which we expect to occupy in June 2018.

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Corporate Overview

RBB Bancorp is a $1.7 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. PST/1:00 p.m. EST on Tuesday, January 23, 2018, to discuss the Company’s fourth quarter 2017 financial results.

To listen to the conference call, please dial 1-833-659-7620, passcode 7797327. A replay of the call will be made available at 1-855-859-2056, passcode 7797327, approximately one hour after the conclusion of the call and will remain available through January 31, 2018 at 5:00 p.m. PST/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.

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

4


 

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.

5


 

RBB BANCORP AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(Dollars in thousands)

 

 

December 31,

 

 

September 30,

 

 

June 30,

 

 

March 31,

 

 

December 31,

 

 

 

2017

 

 

2017

 

 

2017

 

 

2017

 

 

2016

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and due from banks

 

$

70,048

 

 

$

69,552

 

 

$

104,366

 

 

$

147,547

 

 

$

74,213

 

Federal funds sold and other cash equivalents

 

 

80,000

 

 

 

96,500

 

 

 

58,500

 

 

 

20,000

 

 

 

44,500

 

Total cash and cash equivalents

 

 

150,048

 

 

 

166,052

 

 

 

162,866

 

 

 

167,547

 

 

 

118,713

 

Interest-bearing deposits in other financial

   institutions

 

 

600

 

 

 

100

 

 

 

100

 

 

 

100

 

 

 

345

 

Investment securities available for sale

 

 

64,957

 

 

 

55,697

 

 

 

40,241

 

 

 

39,155

 

 

 

39,277

 

Investment securities held to maturity

 

 

10,009

 

 

 

5,191

 

 

 

6,199

 

 

 

6,206

 

 

 

6,214

 

Mortgage loans held for sale

 

 

125,847

 

 

 

125,704

 

 

 

83,263

 

 

 

66,555

 

 

 

44,345

 

Loans held for investment

 

 

1,249,074

 

 

 

1,196,522

 

 

 

1,146,005

 

 

 

1,139,563

 

 

 

1,110,446

 

Allowance for loan losses

 

 

(13,773

)

 

 

(11,420

)

 

 

(10,627

)

 

 

(14,186

)

 

 

(14,162

)

Net loans held for investment

 

 

1,235,301

 

 

 

1,185,102

 

 

 

1,135,378

 

 

 

1,125,377

 

 

 

1,096,284

 

Premises and equipment, net

 

 

6,583

 

 

 

6,300

 

 

 

6,441

 

 

 

6,538

 

 

 

6,585

 

Federal Home Loan Bank (FHLB) stock

 

 

6,770

 

 

 

6,770

 

 

 

6,770

 

 

 

6,770

 

 

 

6,770

 

Net deferred tax assets

 

 

6,086

 

 

 

9,517

 

 

 

10,214

 

 

 

11,068

 

 

 

11,097

 

Income tax receivable

 

 

272

 

 

 

 

 

 

 

 

 

 

 

 

 

Other real estate owned (OREO)

 

 

293

 

 

 

293

 

 

 

833

 

 

 

833

 

 

 

833

 

Cash surrender value of life insurance

 

 

32,782

 

 

 

32,578

 

 

 

32,358

 

 

 

32,142

 

 

 

21,958

 

Goodwill

 

 

29,940

 

 

 

29,940

 

 

 

29,940

 

 

 

29,940

 

 

 

29,940

 

Servicing assets

 

 

5,957

 

 

 

5,370

 

 

 

4,661

 

 

 

4,223

 

 

 

3,704

 

Core deposit intangibles

 

 

1,438

 

 

 

1,525

 

 

 

1,612

 

 

 

1,699

 

 

 

1,793

 

Accrued interest and other assets

 

 

14,176

 

 

 

12,575

 

 

 

12,723

 

 

 

7,595

 

 

 

7,693

 

Total assets

 

$

1,691,059

 

 

$

1,642,714

 

 

$

1,533,599

 

 

$

1,505,748

 

 

$

1,395,551

 

Liabilities and shareholders' equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing demand

 

$

285,690

 

 

$

287,574

 

 

$

215,716

 

 

$

215,652

 

 

$

174,272

 

Savings, NOW and money market accounts

 

 

411,663

 

 

 

362,018

 

 

 

348,627

 

 

 

325,589

 

 

 

296,699

 

Time deposits

 

 

639,928

 

 

 

668,700

 

 

 

714,105

 

 

 

707,016

 

 

 

681,792

 

Total deposits

 

 

1,337,281

 

 

 

1,318,292

 

 

 

1,278,448

 

 

 

1,248,257

 

 

 

1,152,763

 

Reserve for unfunded commitments

 

 

282

 

 

 

489

 

 

 

517

 

 

 

985

 

 

 

604

 

Income tax payable

 

 

 

 

 

 

 

 

 

 

 

4,664

 

 

 

793

 

FHLB advances

 

 

25,000

 

 

 

 

 

 

 

 

 

10,000

 

 

 

 

Long-term debt

 

 

49,528

 

 

 

49,492

 

 

 

49,456

 

 

 

49,419

 

 

 

49,383

 

Subordinated debentures

 

 

3,424

 

 

 

3,402

 

 

 

3,379

 

 

 

3,357

 

 

 

3,334

 

Accrued interest and other liabilities

 

 

10,368

 

 

 

10,708

 

 

 

9,462

 

 

 

5,570

 

 

 

7,089

 

Total liabilities

 

 

1,425,883

 

 

 

1,382,383

 

 

 

1,341,262

 

 

 

1,322,252

 

 

 

1,213,966

 

Shareholders' equity:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shareholder's equity

 

 

265,620

 

 

 

260,468

 

 

 

192,427

 

 

 

183,695

 

 

 

181,852

 

Accumulated other comprehensive income

   (loss) - Net of tax

 

 

(444

)

 

 

(137

)

 

 

(90

)

 

 

(199

)

 

 

(267

)

Total shareholders' equity

 

 

265,176

 

 

 

260,331

 

 

 

192,337

 

 

 

183,496

 

 

 

181,585

 

Total liabilities and stockholders’

   equity

 

$

1,691,059

 

 

$

1,642,714

 

 

$

1,533,599

 

 

$

1,505,748

 

 

$

1,395,551

 

 

6


 

RBB BANCORP AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

(Dollars in thousands, except per share amounts)

 

 

Three Months Ended

 

 

 

December 31, 2017

 

 

September 30, 2017

 

 

December 31, 2016

 

Interest and dividend income:

 

 

 

 

 

 

 

 

 

 

 

 

Interest and fees on loans

 

$

20,297

 

 

$

17,200

 

 

$

15,846

 

Interest on interest-bearing deposits

 

 

209

 

 

 

371

 

 

 

98

 

Interest on investment securities

 

 

484

 

 

 

331

 

 

 

252

 

Dividend income on FHLB stock

 

 

119

 

 

 

118

 

 

 

384

 

Interest on federal funds sold and other

 

 

370

 

 

 

326

 

 

 

136

 

Total interest income

 

 

21,479

 

 

 

18,346

 

 

 

16,716

 

Interest expense:

 

 

 

 

 

 

 

 

 

 

 

 

Interest on savings deposits, NOW and money market accounts

 

 

684

 

 

 

649

 

 

 

486

 

Interest on time deposits

 

 

1,987

 

 

 

2,061

 

 

 

1,824

 

Interest on subordinated debentures and other

 

 

909

 

 

 

908

 

 

 

723

 

Interest on other borrowed funds

 

 

7

 

 

 

 

 

 

193

 

Total interest expense

 

 

3,587

 

 

 

3,618

 

 

 

3,226

 

Net interest income

 

 

17,892

 

 

 

14,728

 

 

 

13,490

 

Provision for loan losses

 

 

2,436

 

 

 

700

 

 

 

1,375

 

Net interest income after provision for loan losses

 

 

15,456

 

 

 

14,028

 

 

 

12,115

 

Noninterest income:

 

 

 

 

 

 

 

 

 

 

 

 

Service charges, fees and other

 

 

487

 

 

 

518

 

 

 

573

 

Gain on sale of loans

 

 

2,949

 

 

 

2,584

 

 

 

1,711

 

Loan servicing fees, net of amortization

 

 

151

 

 

 

314

 

 

 

231

 

Recoveries on loans acquired in business combinations

 

 

7

 

 

 

19

 

 

 

31

 

Increase in cash surrender value of life insurance

 

 

204

 

 

 

219

 

 

 

137

 

Gain on sale of OREO

 

 

 

 

 

142

 

 

 

 

 

 

 

3,798

 

 

 

3,796

 

 

 

2,683

 

Noninterest expense:

 

 

 

 

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

 

4,216

 

 

 

4,178

 

 

 

3,237

 

Occupancy and equipment expenses

 

 

764

 

 

 

705

 

 

 

710

 

Data processing

 

 

358

 

 

 

458

 

 

 

530

 

Legal and professional

 

 

104

 

 

 

318

 

 

 

87

 

Amortization of intangibles

 

 

87

 

 

 

87

 

 

 

104

 

Other expenses

 

 

1,355

 

 

 

1,454

 

 

 

864

 

 

 

 

6,884

 

 

 

7,200

 

 

 

5,532

 

Income before income taxes

 

 

12,370

 

 

 

10,624

 

 

 

9,266

 

Income tax expense

 

 

7,481

 

 

 

4,013

 

 

 

3,880

 

Net income

 

$

4,889

 

 

$

6,611

 

 

$

5,386

 

Net income per share

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.31

 

 

$

0.45

 

 

$

0.42

 

Diluted

 

$

0.29

 

 

$

0.42

 

 

$

0.39

 

 

7


 

RBB BANCORP AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

(Dollars in thousands, except per share amounts)

 

 

Twelve Months Ended

 

 

 

December 31,

 

 

 

2017

 

 

2016

 

Interest and dividend income:

 

 

 

 

 

 

 

 

Interest and fees on loans

 

$

70,289

 

 

$

65,888

 

Interest on interest-bearing deposits

 

 

940

 

 

 

334

 

Interest on investment securities

 

 

1,406

 

 

 

872

 

Dividend income on FHLB stock

 

 

472

 

 

 

800

 

Interest on federal funds sold and other

 

 

997

 

 

 

295

 

Total interest income

 

 

74,104

 

 

 

68,189

 

Interest expense:

 

 

 

 

 

 

 

 

Interest on savings deposits, NOW and money market accounts

 

 

2,382

 

 

 

1,975

 

Interest on time deposits

 

 

7,891

 

 

 

6,968

 

Interest on subordinated debentures and other

 

 

3,629

 

 

 

2,547

 

Interest on other borrowed funds

 

 

36

 

 

 

217

 

Total interest expense

 

 

13,938

 

 

 

11,707

 

Net interest income

 

 

60,166

 

 

 

56,482

 

Provision (recapture) for loan losses

 

 

(1,053

)

 

 

4,974

 

Net interest income after provision (recapture) for loans losses

 

 

61,219

 

 

 

51,508

 

Noninterest income:

 

 

 

 

 

 

 

 

Service charges, fees and other

 

 

2,111

 

 

 

1,758

 

Gain on sale of loans

 

 

9,318

 

 

 

5,847

 

Loan servicing fees, net of amortization

 

 

722

 

 

 

615

 

Recoveries on loans acquired in business combinations

 

 

84

 

 

 

170

 

Increase in cash surrender value of life insurance

 

 

824

 

 

 

560

 

Gain on Sale of Securities

 

 

 

 

 

19

 

Gain on Sale of OREO

 

 

142

 

 

 

 

Loss on sale of fixed assets

 

 

 

 

 

(3

)

 

 

 

13,201

 

 

 

8,966

 

Noninterest expense:

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

 

16,821

 

 

 

13,784

 

Occupancy and equipment expenses

 

 

2,940

 

 

 

3,098

 

Data processing

 

 

1,622

 

 

 

2,018

 

Legal and professional

 

 

331

 

 

 

1,565

 

Amortization of intangibles

 

 

355

 

 

 

372

 

Other expenses

 

 

5,554

 

 

 

7,069

 

 

 

 

27,623

 

 

 

27,906

 

Income before income taxes

 

 

46,797

 

 

 

32,568

 

Income tax expense

 

 

21,269

 

 

 

13,489

 

Net income

 

$

25,528

 

 

$

19,079

 

Net income per share

 

 

 

 

 

 

 

 

Basic

 

$

1.81

 

 

$

1.49

 

Diluted

 

$

1.68

 

 

$

1.39

 

Cash Dividends declared per common share

 

$

0.38

 

 

$

0.20

 

 

8


 

RBB BANCORP AND SUBSIDIARIES

AVERAGE BALANCE SHEET AND NET INTEREST INCOME

(Unaudited)

(Dollars in thousands, except per share amounts)

 

 

For the three months ended

 

 

 

December 31, 2017

 

 

September 30, 2017

 

 

December 31, 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)

 

$

155,403

 

 

$

698

 

 

 

1.78

%

 

$

202,005

 

 

$

815

 

 

 

1.60

%

 

$

126,300

 

 

$

618

 

 

 

1.95

%

Securities (2)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Available for sale

 

 

61,386

 

 

 

424

 

 

 

2.74

%

 

 

43,075

 

 

 

276

 

 

 

2.54

%

 

 

35,710

 

 

 

191

 

 

 

2.13

%

Held to maturity

 

 

6,472

 

 

 

60

 

 

 

3.68

%

 

 

5,533

 

 

 

55

 

 

 

3.92

%

 

 

6,219

 

 

 

61

 

 

 

3.90

%

Mortgage loans held for sale

 

 

132,170

 

 

 

1,531

 

 

 

4.60

%

 

 

98,807

 

 

 

1,149

 

 

 

4.61

%

 

 

58,168

 

 

 

699

 

 

 

4.78

%

Loans held for investment: (3)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Real estate

 

 

802,024

 

 

 

13,279

 

 

 

6.57

%

 

 

766,911

 

 

 

10,672

 

 

 

5.52

%

 

 

758,184

 

 

 

10,774

 

 

 

5.65

%

Commercial (4)

 

 

379,651

 

 

 

5,487

 

 

 

5.73

%

 

 

377,501

 

 

 

5,379

 

 

 

5.65

%

 

 

364,713

 

 

 

4,373

 

 

 

4.77

%

Total loans

 

 

1,181,675

 

 

 

18,766

 

 

 

6.30

%

 

 

1,144,412

 

 

 

16,051

 

 

 

5.56

%

 

 

1,122,897

 

 

 

15,147

 

 

 

5.37

%

Total earning assets

 

 

1,537,106

 

 

$

21,479

 

 

 

5.54

%

 

 

1,493,832

 

 

$

18,346

 

 

 

4.87

%

 

 

1,349,294

 

 

$

16,716

 

 

 

4.93

%

Noninterest-earning assets

 

 

104,056

 

 

 

 

 

 

 

 

 

 

 

96,555

 

 

 

 

 

 

 

 

 

 

 

79,651

 

 

 

 

 

 

 

 

 

Total assets

 

$

1,641,162

 

 

 

 

 

 

 

 

 

 

$

1,590,387

 

 

 

 

 

 

 

 

 

 

$

1,428,945

 

 

 

 

 

 

 

 

 

Interest-bearing liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NOW and money market deposits

 

$

357,972

 

 

$

643

 

 

 

0.71

%

 

$

333,471

 

 

$

606

 

 

 

0.72

%

 

$

269,972

 

 

$

443

 

 

 

0.65

%

Savings deposits

 

 

35,118

 

 

 

41

 

 

 

0.46

%

 

 

36,746

 

 

 

43

 

 

 

0.46

%

 

 

35,966

 

 

 

44

 

 

 

0.49

%

Time deposits

 

 

645,178

 

 

 

1,987

 

 

 

1.22

%

 

 

690,378

 

 

 

2,061

 

 

 

1.18

%

 

 

696,167

 

 

 

1,824

 

 

 

1.04

%

Total interest-bearing deposits

 

 

1,038,268

 

 

 

2,671

 

 

 

1.02

%

 

 

1,060,595

 

 

 

2,710

 

 

 

1.01

%

 

 

1,002,105

 

 

 

2,311

 

 

 

0.92

%

FHLB short-term advances

 

 

3,043

 

 

 

7

 

 

 

0.91

%

 

 

 

 

 

 

 

 

 

 

 

8,120

 

 

 

10

 

 

 

0.49

%

Long-term debt

 

 

49,505

 

 

 

848

 

 

 

6.80

%

 

 

49,470

 

 

 

848

 

 

 

6.80

%

 

 

49,359

 

 

 

849

 

 

 

6.84

%

Subordinated debentures

 

 

3,411

 

 

 

61

 

 

 

7.10

%

 

 

3,388

 

 

 

60

 

 

 

7.03

%

 

 

3,257

 

 

 

56

 

 

 

6.84

%

Total interest-bearing liabilities

 

 

1,094,227

 

 

$

3,587

 

 

 

1.30

%

 

 

1,113,453

 

 

$

3,618

 

 

 

1.29

%

 

 

1,062,841

 

 

$

3,226

 

 

 

1.21

%

Noninterest-bearing liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing deposits

 

 

268,588

 

 

 

 

 

 

 

 

 

 

 

227,855

 

 

 

 

 

 

 

 

 

 

 

174,967

 

 

 

 

 

 

 

 

 

Other noninterest-bearing liabilities

 

 

13,151

 

 

 

 

 

 

 

 

 

 

 

11,599

 

 

 

 

 

 

 

 

 

 

 

11,497

 

 

 

 

 

 

 

 

 

Total noninterest-bearing liabilities

 

 

281,738

 

 

 

 

 

 

 

 

 

 

 

239,454

 

 

 

 

 

 

 

 

 

 

 

186,464

 

 

 

 

 

 

 

 

 

Shareholders' equity

 

 

265,197

 

 

 

 

 

 

 

 

 

 

 

237,480

 

 

 

 

 

 

 

 

 

 

 

179,640

 

 

 

 

 

 

 

 

 

Total liabilities and shareholders'

   equity

 

$

1,641,162

 

 

 

 

 

 

 

 

 

 

$

1,590,387

 

 

 

 

 

 

 

 

 

 

$

1,428,945

 

 

 

 

 

 

 

 

 

Net interest income / interest rate

   spreads

 

 

 

 

 

$

17,892

 

 

 

4.24

%

 

 

 

 

 

$

14,728

 

 

 

3.58

%

 

 

 

 

 

$

13,490

 

 

 

3.72

%

Net interest margin

 

 

 

 

 

 

 

 

 

 

4.62

%

 

 

 

 

 

 

 

 

 

 

3.91

%

 

 

 

 

 

 

 

 

 

 

3.98

%

 

(1)

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

(2)

We have an insignificant amount of tax-exempt loans and securities, less than $1 million. Interest income and average rates for tax-exempt loans and securities are presented on a tax-equivalent basis as of December 31, 2017 and 2016.

(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.

(4)

Includes purchased receivables, which are short term loans made to investment grade companies and are used for cash - management purposes by the Company.

9


 

RBB BANCORP AND SUBSIDIARIES

AVERAGE BALANCE SHEET AND NET INTEREST INCOME

(Unaudited)

(Dollars in thousands, except per share amounts)

 

 

For the twelve months ended December 31,

 

 

 

2017

 

 

2016

 

 

 

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)

 

$

152,674

 

 

$

2,409

 

 

 

1.58

%

 

$

91,979

 

 

$

1,429

 

 

 

1.55

%

Securities (2)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Available for sale

 

 

46,035

 

 

 

1,170

 

 

 

2.54

%

 

 

30,464

 

 

 

624

 

 

 

2.05

%

Held to maturity

 

 

6,104

 

 

 

236

 

 

 

3.87

%

 

 

6,338

 

 

 

248

 

 

 

3.91

%

Mortgage loans held for sale

 

 

88,834

 

 

 

4,149

 

 

 

4.67

%

 

 

64,638

 

 

 

3,120

 

 

 

4.84

%

Loans held for investment: (3)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Real estate

 

 

775,809

 

 

 

45,268

 

 

 

5.83

%

 

 

739,679

 

 

 

45,655

 

 

 

6.17

%

Commercial (4)

 

 

376,156

 

 

 

20,872

 

 

 

5.55

%

 

 

340,769

 

 

 

17,113

 

 

 

5.02

%

Total loans

 

 

1,151,965

 

 

 

66,140

 

 

 

5.74

%

 

 

1,080,448

 

 

 

62,768

 

 

 

5.81

%

Total earning assets

 

 

1,445,612

 

 

$

74,104

 

 

 

5.13

%

 

 

1,273,867

 

 

$

68,189

 

 

 

5.35

%

Noninterest-earning assets

 

 

95,906

 

 

 

 

 

 

 

 

 

 

 

83,367

 

 

 

 

 

 

 

 

 

Total assets

 

$

1,541,518

 

 

 

 

 

 

 

 

 

 

$

1,357,234

 

 

 

 

 

 

 

 

 

Interest-bearing liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NOW and money market deposits

 

$

315,550

 

 

$

2,220

 

 

 

0.70

%

 

$

271,320

 

 

$

1,813

 

 

 

0.67

%

Savings deposits

 

 

34,939

 

 

 

162

 

 

 

0.46

%

 

 

34,149

 

 

 

162

 

 

 

0.47

%

Time deposits

 

 

682,457

 

 

 

7,891

 

 

 

1.16

%

 

 

666,804

 

 

 

6,968

 

 

 

1.05

%

Total interest-bearing deposits

 

 

1,032,946

 

 

 

10,273

 

 

 

0.99

%

 

 

972,273

 

 

 

8,943

 

 

 

0.92

%

FHLB short-term advances

 

 

4,603

 

 

 

36

 

 

 

0.78

%

 

 

6,494

 

 

 

35

 

 

 

0.54

%

Long-term debt

 

 

49,451

 

 

 

3,395

 

 

 

6.87

%

 

 

37,113

 

 

 

2,547

 

 

 

6.86

%

Subordinated debentures

 

 

3,377

 

 

 

234

 

 

 

6.93

%

 

 

2,820

 

 

 

182

 

 

 

6.45

%

Total interest-bearing liabilities

 

 

1,090,377

 

 

$

13,938

 

 

 

1.28

%

 

 

1,018,700

 

 

$

11,707

 

 

 

1.15

%

Noninterest-bearing liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing deposits

 

 

221,425

 

 

 

 

 

 

 

 

 

 

 

151,441

 

 

 

 

 

 

 

 

 

Other noninterest-bearing liabilities

 

 

10,998

 

 

 

 

 

 

 

 

 

 

 

15,953

 

 

 

 

 

 

 

 

 

Total noninterest-bearing liabilities

 

 

232,424

 

 

 

 

 

 

 

 

 

 

 

167,394

 

 

 

 

 

 

 

 

 

Shareholders' equity

 

 

218,717

 

 

 

 

 

 

 

 

 

 

 

172,140

 

 

 

 

 

 

 

 

 

Total liabilities and shareholders'

   equity

 

$

1,541,518

 

 

 

 

 

 

 

 

 

 

$

1,358,234

 

 

 

 

 

 

 

 

 

Net interest income / interest rate

   spreads

 

 

 

 

 

$

60,166

 

 

 

3.85

%

 

 

 

 

 

$

56,482

 

 

 

4.20

%

Net interest margin

 

 

 

 

 

 

 

 

 

 

4.16

%

 

 

 

 

 

 

 

 

 

 

4.43

%

 

(1)

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

(2)

We have an insignificant amount of tax-exempt loans and securities, less than $1 million. Interest income and average rates for tax-exempt loans and securities are presented on a tax-equivalent basis as of December 31, 2017 and 2016.

(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.

(4)

Includes purchased receivables, which are short term loans made to investment grade companies and are used for cash - management purposes by the Company.

10


 

RBB BANCORP AND SUBSIDIARIES

SELECTED FINANCIAL HIGHLIGHTS

(Unaudited)

(Dollars in thousands, except per share amounts)

 

 

For the three months ended

 

 

 

December 31,

 

 

September 30,

 

 

December 31,

 

 

 

2017

 

 

2017

 

 

2016

 

Per share data (common stock)

 

 

 

 

 

 

 

 

 

 

 

 

Earnings

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.31

 

 

$

0.45

 

 

$

0.42

 

Diluted

 

$

0.29

 

 

$

0.42

 

 

$

0.39

 

Book value

 

$

16.67

 

 

$

16.49

 

 

$

14.16

 

Tangible book value

 

$

14.70

 

 

$

14.49

 

 

$

11.68

 

Weighted average shares outstanding

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

15,849,285

 

 

 

14,767,457

 

 

 

12,800,990

 

Diluted

 

 

16,981,009

 

 

 

15,851,929

 

 

 

13,695,900

 

Shares outstanding at period end

 

 

15,908,893

 

 

 

15,790,611

 

 

 

12,827,803

 

Performance ratios

 

 

 

 

 

 

 

 

 

 

 

 

Return on average assets, annualized

 

 

1.18

%

 

 

1.65

%

 

 

2.38

%

Return on average shareholders' equity, annualized

 

 

7.31

%

 

 

11.04

%

 

 

18.90

%

Return on average tangible common equity, annualized

 

 

8.30

%

 

 

12.73

%

 

 

22.84

%

Noninterest income to average assets, annualized

 

 

0.92

%

 

 

0.95

%

 

 

0.88

%

Noninterest expense to average assets, annualized

 

 

1.66

%

 

 

1.80

%

 

 

1.94

%

Yield on average earning assets

 

 

5.54

%

 

 

4.87

%

 

 

4.93

%

Cost of average deposits

 

 

0.81

%

 

 

0.83

%

 

 

0.78

%

Cost of average interest-bearing deposits

 

 

1.02

%

 

 

1.01

%

 

 

0.92

%

Cost of average interest-bearing liabilities

 

 

1.30

%

 

 

1.29

%

 

 

1.21

%

Accretion on loans to average earning assets

 

 

0.71

%

 

 

0.17

%

 

 

0.38

%

Net interest spread

 

 

4.24

%

 

 

3.58

%

 

 

3.72

%

Net interest margin

 

 

4.62

%

 

 

3.91

%

 

 

3.98

%

Efficiency ratio

 

 

31.74

%

 

 

38.87

%

 

 

37.65

%

 

11


 

RBB BANCORP AND SUBSIDIARIES

SELECTED FINANCIAL HIGHLIGHTS

(Unaudited)

(Dollars in thousands, except per share amounts)

 

 

For the twelve months ended December 31,

 

 

 

2017

 

 

2016

 

Per share data (common stock)

 

 

 

 

 

 

 

 

Earnings

 

 

 

 

 

 

 

 

Basic

 

$

1.81

 

 

$

1.49

 

Diluted

 

$

1.68

 

 

$

1.39

 

Dividends declared

 

$

0.38

 

 

$

0.20

 

Book value

 

$

16.67

 

 

$

14.16

 

Tangible book value

 

$

14.70

 

 

$

11.68

 

Weighted average shares outstanding

 

 

 

 

 

 

 

 

Basic

 

 

14,078,281

 

 

 

12,800,990

 

Diluted

 

 

15,238,365

 

 

 

13,695,900

 

Shares outstanding at period end

 

 

15,908,893

 

 

 

12,827,803

 

Performance ratios

 

 

 

 

 

 

 

 

Return on average assets, annualized

 

 

1.66

%

 

 

1.41

%

Return on average shareholders' equity, annualized

 

 

11.67

%

 

 

11.08

%

Return on average tangible common equity, annualized

 

 

13.52

%

 

 

13.14

%

Noninterest income to average assets, annualized

 

 

0.86

%

 

 

0.66

%

Noninterest expense to average assets, annualized

 

 

1.79

%

 

 

2.06

%

Yield on average earning assets

 

 

5.13

%

 

 

5.35

%

Cost of average deposits

 

 

1.09

%

 

 

1.06

%

Cost of average interest-bearing deposits

 

 

0.99

%

 

 

0.92

%

Cost of average interest-bearing liabilities

 

 

1.28

%

 

 

1.15

%

Accretion on loans to average earning assets

 

 

0.23

%

 

 

0.64

%

Net interest spread

 

 

3.85

%

 

 

4.20

%

Net interest margin

 

 

4.16

%

 

 

4.43

%

Efficiency ratio

 

 

37.65

%

 

 

42.64

%

Common stock dividend payout ratio

 

 

20.95

%

 

 

13.42

%

 

12


 

RBB BANCORP AND SUBSIDIARIES

SELECTED FINANCIAL HIGHLIGHTS

(Unaudited)

(Dollars in thousands, except per share amounts)

 

  

 

For the periods ending

 

 

 

December 31,

 

 

September 30,

 

 

December 31,

 

 

 

2017

 

 

2017

 

 

2016

 

Loan to deposit ratio

 

 

93.40

%

 

 

90.76

%

 

 

96.33

%

Core deposits / total deposits

 

 

74.09

%

 

 

73.37

%

 

 

67.83

%

Net non-core funding dependence ratio

 

 

18.11

%

 

 

22.81

%

 

 

12.20

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Credit Quality Data:

 

 

 

 

 

 

 

 

 

 

 

 

Loans 30-89 days past due

 

$

3,636

 

 

$

2,432

 

 

$

343

 

Loans 30-89 days past due to total loans

 

 

0.29

%

 

 

0.20

%

 

 

0.03

%

Nonperforming loans

 

$

2,575

 

 

$

3,950

 

 

$

6,133

 

Nonperforming loans to total loans

 

 

0.21

%

 

 

0.33

%

 

 

0.55

%

Nonperforming assets

 

$

2,868

 

 

$

4,243

 

 

$

6,966

 

Nonperforming assets to total assets

 

 

0.17

%

 

 

0.26

%

 

 

0.50

%

Allowance for loan losses to total loans

 

 

1.10

%

 

 

0.95

%

 

 

1.28

%

Allowance for loan losses to nonperforming loans

 

 

534.87

%

 

 

289.12

%

 

 

230.91

%

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

 

 

0.01

%

 

 

-0.07

%

 

 

0.05

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Regulatory and other capital ratios—Company

 

 

 

 

 

 

 

 

 

 

 

 

Tangible common equity to tangible assets

 

 

14.09

%

 

 

14.20

%

 

 

10.99

%

Tier 1 leverage ratio

 

 

14.77

%

 

 

14.91

%

 

 

10.99

%

Tier 1 common capital to risk-weighted assets

 

 

17.71

%

 

 

18.23

%

 

 

13.30

%

Tier 1 capital to risk-weighted assets

 

 

17.96

%

 

 

18.49

%

 

 

13.55

%

Total capital to risk-weighted assets

 

 

22.76

%

 

 

23.37

%

 

 

19.16

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Regulatory capital ratios—bank only

 

 

 

 

 

 

 

 

 

 

 

 

Tier 1 leverage ratio

 

 

14.51

%

 

 

14.57

%

 

 

12.81

%

Tier 1 common capital to risk-weighted assets

 

 

17.66

%

 

 

18.13

%

 

 

15.81

%

Tier 1 capital to risk-weighted assets

 

 

17.66

%

 

 

18.13

%

 

 

15.81

%

Total capital to risk-weighted assets

 

 

18.73

%

 

 

19.08

%

 

 

17.06

%

 

13


 

RBB BANCORP AND SUBSIDIARIES

SELECTED FINANCIAL HIGHLIGHTS

(Unaudited)

(Dollars in thousands, except per share amounts)

 

 

4Q

 

 

3Q

 

 

2Q

 

 

1Q

 

 

4Q

 

Quarterly Consolidated Statements of Earnings

 

2017

 

 

2017

 

 

2017

 

 

2017

 

 

2016

 

Interest income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans, including fees

 

$

20,297

 

 

$

17,200

 

 

$

16,759

 

 

$

16,033

 

 

$

15,846

 

Investment securities and other

 

 

1,182

 

 

 

1,146

 

 

 

762

 

 

 

726

 

 

 

870

 

Total interest income

 

 

21,479

 

 

 

18,346

 

 

 

17,521

 

 

 

16,759

 

 

 

16,716

 

Interest expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

 

2,671

 

 

 

2,710

 

 

 

2,568

 

 

 

2,323

 

 

 

2,310

 

Interest on subordinated debentures and other

 

 

909

 

 

 

908

 

 

 

907

 

 

 

905

 

 

 

723

 

Other borrowings

 

 

7

 

 

 

 

 

 

12

 

 

 

17

 

 

 

193

 

Total interest expense

 

 

3,587

 

 

 

3,618

 

 

 

3,487

 

 

 

3,245

 

 

 

3,226

 

Net interest income before provision for loan losses

 

 

17,892

 

 

 

14,728

 

 

 

14,034

 

 

 

13,514

 

 

 

13,490

 

Provision (recapture) for loan losses

 

 

2,436

 

 

 

700

 

 

 

(4,188

)

 

 

 

 

 

1,375

 

Net interest income after provision for loan losses

 

 

15,456

 

 

 

14,028

 

 

 

18,222

 

 

 

13,514

 

 

 

12,115

 

Noninterest income

 

 

3,798

 

 

 

3,796

 

 

 

3,175

 

 

 

2,432

 

 

 

2,683

 

Noninterest expense

 

 

6,884

 

 

 

7,200

 

 

 

6,960

 

 

 

6,578

 

 

 

5,532

 

Earnings before income taxes

 

 

12,370

 

 

 

10,624

 

 

 

14,437

 

 

 

9,368

 

 

 

9,266

 

Income taxes

 

 

7,481

 

 

 

4,013

 

 

 

5,901

 

 

 

3,875

 

 

 

3,880

 

Net income

 

$

4,889

 

 

$

6,611

 

 

$

8,536

 

 

$

5,493

 

 

$

5,386

 

Net income per common share - basic

 

$

0.31

 

 

$

0.45

 

 

$

0.67

 

 

$

0.43

 

 

$

0.42

 

Net income per common share - diluted

 

$

0.29

 

 

$

0.42

 

 

$

0.62

 

 

$

0.40

 

 

$

0.39

 

Cash dividends declared per common share

 

$

0.08

 

 

 

 

 

 

 

 

$

0.30

 

 

 

 

Cash dividends declared

 

$

1,270

 

 

 

 

 

 

 

 

$

3,848

 

 

 

 

Yield on average assets, annualized

 

 

1.18

%

 

 

1.65

%

 

 

2.29

%

 

 

1.55

%

 

 

1.49

%

Yield on average earning assets

 

 

5.54

%

 

 

4.87

%

 

 

5.02

%

 

 

5.04

%

 

 

4.92

%

Cost of average deposits

 

 

0.81

%

 

 

0.83

%

 

 

0.83

%

 

 

0.80

%

 

 

0.78

%

Cost of average interest-bearing deposits

 

 

1.02

%

 

 

1.01

%

 

 

0.99

%

 

 

0.95

%

 

 

0.91

%

Cost of average interest-bearing liabilities

 

 

1.30

%

 

 

1.29

%

 

 

1.28

%

 

 

1.24

%

 

 

1.20

%

Accretion on loans to average earning assets

 

 

0.71

%

 

 

0.17

%

 

 

0.25

%

 

 

0.25

%

 

 

0.54

%

Net interest margin

 

 

4.62

%

 

 

3.91

%

 

 

4.02

%

 

 

4.06

%

 

 

3.97

%

 

14


 

RBB BANCORP AND SUBSIDIARIES

SELECTED FINANCIAL HIGHLIGHTS

(Unaudited)

(Dollars in thousands, except per share amounts)

 

Loan Portfolio Detail

 

As of December 31,

 

 

As of September 30,

 

 

As of June 30,

 

 

As of March 31,

 

 

As of December 31,

 

(dollars in thousands)

 

2017

 

 

%

 

 

2017

 

 

%

 

 

2017

 

 

%

 

 

2017

 

 

%

 

 

2016

 

 

%

 

Loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial and industrial

 

$

280,766

 

 

 

22.5

 

 

$

225,968

 

 

 

18.9

 

 

$

229,985

 

 

 

20.1

 

 

$

214,480

 

 

 

18.8

 

 

$

203,843

 

 

 

18.4

 

SBA

 

 

131,421

 

 

 

10.5

 

 

 

148,005

 

 

 

12.4

 

 

 

158,372

 

 

 

13.8

 

 

 

149,926

 

 

 

13.2

 

 

 

158,968

 

 

 

14.3

 

Construction and land

   development

 

 

91,908

 

 

 

7.4

 

 

 

94,297

 

 

 

7.9

 

 

 

100,239

 

 

 

8.7

 

 

 

89,869

 

 

 

7.9

 

 

 

89,409

 

 

 

8.1

 

Commercial real estate (1)

 

 

496,039

 

 

 

39.7

 

 

 

491,085

 

 

 

41.0

 

 

 

439,204

 

 

 

38.3

 

 

 

493,416

 

 

 

43.3

 

 

 

501,798

 

 

 

45.2

 

Single-family residential

   mortgages

 

 

248,940

 

 

 

19.9

 

 

 

237,167

 

 

 

19.8

 

 

 

218,205

 

 

 

19.0

 

 

 

191,872

 

 

 

16.8

 

 

 

156,428

 

 

 

14.1

 

Total loans (2)

 

$

1,249,074

 

 

 

100.0

 

 

$

1,196,522

 

 

 

100.0

 

 

$

1,146,005

 

 

 

100.0

 

 

$

1,139,563

 

 

 

100.0

 

 

$

1,110,446

 

 

 

100.0

 

Allowance for loan losses

 

 

(13,773

)

 

 

 

 

 

 

(11,420

)

 

 

 

 

 

 

(10,627

)

 

 

 

 

 

 

(14,186

)

 

 

 

 

 

 

(14,162

)

 

 

 

 

Total loans, net

 

$

1,235,301

 

 

 

 

 

 

$

1,185,102

 

 

 

 

 

 

$

1,135,378

 

 

 

 

 

 

$

1,125,377

 

 

 

 

 

 

$

1,096,284

 

 

 

 

 

 

(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.

 

 

Twelve months ended

 

Change in Allowance for Loan Losses

 

December 31,

 

(dollars in thousands)

 

2017

 

 

2016

 

Beginning balance

 

$

14,162

 

 

$

10,023

 

(Recapture) additions to the allowance charged to expense

 

 

(1,053

)

 

 

4,974

 

Recoveries on loans charged-off

 

 

747

 

 

 

0

 

 

 

 

13,856

 

 

 

14,997

 

Less loans charged-off

 

 

(83

)

 

 

(836

)

 

 

 

 

 

 

 

 

 

Ending balance

 

$

13,773

 

 

$

14,162

 

 

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 December 31, 2017 and 2016.

 

 

December 31,

 

(dollars in thousands, except per share data)

 

2017

 

 

2016

 

Tangible common equity:

 

 

 

 

 

 

 

 

Total shareholders' equity

 

$

265,176

 

 

$

181,585

 

Adjustments

 

 

 

 

 

 

 

 

Goodwill

 

 

(29,940

)

 

 

(29,940

)

Core deposit intangible

 

 

(1,438

)

 

 

(1,793

)

Tangible common equity

 

$

233,798

 

 

$

149,852

 

Tangible assets:

 

 

 

 

 

 

 

 

Total assets-GAAP

 

$

1,691,059

 

 

$

1,395,551

 

Adjustments

 

 

 

 

 

 

 

 

Goodwill

 

 

(29,940

)

 

 

(29,940

)

Core deposit intangible

 

 

(1,438

)

 

 

(1,793

)

Tangible assets

 

$

1,659,681

 

 

$

1,363,818

 

Common shares outstanding

 

 

15,908,893

 

 

 

12,827,803

 

Tangible common equity to tangible assets ratio

 

 

14.09

%

 

 

10.99

%

Tangible book value per share

 

$

14.70

 

 

$

11.68

 

 

15


 

Adjusted Earnings Metrics (non-GAAP)

Management uses the measure adjusted earnings to assess the performance of our core business and the strength of our capital position. We believe that this non-GAAP financial measure provides meaningful additional information about us to assist investors in evaluating our operating results. This non-GAAP financial measure should not be considered a substitute for operating results determined in accordance with GAAP and may not be comparable to other similarly titled measures used by other companies. The following table reconciles adjusted earnings, adjusted diluted earnings per share, adjusted return on average assets and adjusted return on average tangible common equity to their most comparable GAAP measures.

 

 

Three Months Ended

 

 

 

December 31,

 

 

September 30,

 

 

December 31,

 

(dollars in thousands, except per share data)

 

2017

 

 

2017

 

 

2016

 

Income before taxes - GAAP

 

$

12,370

 

 

$

10,624

 

 

$

9,266

 

Adjustments

 

 

 

 

 

 

 

 

 

 

 

 

Accretion of purchase discounts

 

 

(2,739

)

 

 

(638

)

 

 

(1,292

)

Provision for loan loss

 

 

979

 

 

 

 

 

 

1,492

 

Total pre-tax adjustments

 

 

(1,760

)

 

 

(638

)

 

 

200

 

Adjusted earnings pre-tax

 

 

10,610

 

 

 

9,986

 

 

 

9,466

 

Income taxes on adjusted earnings (1)

 

 

4,366

 

 

 

3,772

 

 

 

3,964

 

Adjusted earnings non-GAAP

 

$

6,244

 

 

$

6,214

 

 

$

5,502

 

Adjusted diluted EPS

 

$

0.37

 

 

$

0.39

 

 

$

0.40

 

Weighted average diluted common shares outstanding

 

 

16,981,009

 

 

 

15,851,929

 

 

 

13,695,900

 

Average assets

 

$

1,641,162

 

 

$

1,590,387

 

 

$

1,428,945

 

Adjusted return on average assets

 

 

1.51

%

 

 

1.55

%

 

 

1.53

%

Average tangible common equity

 

$

233,766

 

 

$

205,964

 

 

$

148,702

 

Adjusted return on average tangible common equity

 

 

10.60

%

 

 

11.97

%

 

 

14.72

%

 

 

(1)

Adjusted tax expense for the fourth quarter of 2017 does not include the decline in the value of the deferred tax assets of $2.4 million referred to above.

16

rbb-ex992_10.htm

 

 

Exhibit 99.2

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 Declares Quarterly Cash Dividend of $0.08 Per Share

Los Angeles, CA, January 18, 2018 - 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”, today announced that its Board of Directors has declared a quarterly cash dividend of $0.08 per share. The dividend is payable on February 15, 2018 to common shareholders of record as of January 31, 2018.

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, 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, Silverlake, 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.