rbb-8k_20190124.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): April 23, 2019 (April 22, 2019)

 

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 April 22, 2019, RBB Bancorp issued a press release setting forth the financial results for the quarter ended March 31, 2019, 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 hereby incorporated by reference.

Item 8.01 Other Events.

On April 22, 2019, RBB Bancorp announced that its Board of Directors declared a cash dividend of $0.10 per share of its common stock. The dividend is payable on May 8, 2019 to shareholders of record as of April 30, 2019.  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 April 22, 2019, announcing the financial results of RBB Bancorp for the quarter ended March 31, 2019.

99.2

 

Press Release, dated April 22, 2019, announcing RBB Bancorp declared a quarterly cash dividend of $0.10 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:  April 23, 2019

By:

 

/s/ David Morris

 

 

 

David Morris

 

 

 

Executive Vice President and

Chief Financial Officer

 

3

rbb-ex991_11.htm

 

Exhibit 99.1

Press Release

For Immediate Release

 

 

Contacts:

Yee Phong (Alan) Thian

 

Chairman, President and CEO

 

(626) 307-7559

 

David Morris

 

Executive Vice President and CFO

 

(714) 670-2488

 

RBB Bancorp Reports First Quarter Earnings for 2019

Conference Call and Webcast Scheduled for Tuesday, April 23, 2019 at

11:00 a.m. Pacific Time/2:00 p.m. Eastern Time

Net income was $10.4 million, or $0.51 diluted earnings per share

Total deposits increased by $40.3 million, or 7.5% annualized growth, from the end of the prior quarter

Sold approximately $129.8 million  of mortgage loans for a net gain on sale of $1.9 million

Loan recoveries (net) were $109,000 compared to net charge-offs of $490,000 in the fourth quarter of 2018

Los Angeles, CA, April 22, 2019 – RBB Bancorp (NASDAQ:RBB) and its subsidiaries, Royal Business Bank (“the Bank”) and RBB Asset Management Company (“RAM”), collectively referred to herein as “the Company”, announced financial results for the quarter ended March 31, 2019.

The Company reported net income of $10.4 million, or $0.51 diluted earnings per share, for the three months ended March 31, 2019, compared to net income of $9.5 million, or $0.48 diluted earnings per share, and $8.8 million, or $0.52 diluted earnings per share, for the three months ended December 31, 2018 and March 31, 2018, respectively.

“We are pleased with our operating performance for the first quarter,” said Mr. Alan Thian, Chairman, President and CEO. “We delivered another solid quarter of net income, driven by an increase in average loan balances, stable fee income and strong credit quality. We continued to execute on our plan to reduce the size of our loans held for sale, as we sold $129.8 million during the first quarter and plan to sell approximately $150 million per quarter going forward.”

“We are making progress with our integration of First American International Corp., introducing many of our business deposit products to their branch network, with commercial lending to follow. We are also on schedule for additional systems conversion, which we anticipate will generate incremental savings. In addition, we have been successful in selling some of First American’s FNMA loan portfolio as part of our balance sheet management strategy.”

“We see 2019 as a rebalancing year, as we remain focused on reducing the size of our portfolio of loans held for sale, which will likely offset the growth in our loans held for investment. We will continue to invest in our business to diversify our revenue mix and provide additional catalysts for generating increased profitability, all with the view of creating additional long-term value for our shareholders,” concluded Mr. Thian.

 

1


 

Key Performance Ratios

Net income of $10.4 million for the first quarter of 2019 produced an annualized return on average assets of 1.44%, an annualized return on average tangible common equity of 13.29%, and an annualized return on average equity of 10.98%.  This compares to an annualized return on average assets of 1.35%, an annualized return on average tangible common equity of 12.29%, and an annualized return on average equity of 10.98% for the fourth quarter of 2018.  The efficiency ratio for the first quarter of 2019 was 50.9%, compared to 49.9% for the prior quarter.

Net Interest Income and Net Interest Margin

Net interest income, before provision for loan losses, was $25.9 million for the first quarter of 2019, compared to $25.6 million for the fourth quarter of 2018.  The $330,000 increase was primarily attributable to a $119.1 million increase in average earning assets, mainly due to a $106.2 million increase in average total loans, partially offset by a $112.7 million increase in interest-bearing liabilities.  Net interest income was slightly impacted by a decrease of 4 basis points in the net interest margin.  Accretion of purchase discounts contributed $1.1 million to net interest income in the first quarter of 2019, compared to $0.9 million in the fourth quarter of 2018. The increase in accretion income was due to loans acquired in the First American merger.

Compared to the first quarter of 2018, net interest income, before provision for loan losses, increased from $16.4 million. The increase was primarily attributable to a $1.2 billion increase in average earning assets, partially offset by a 42 basis point decrease in the net interest margin.

Net interest margin was 3.84% for the first quarter of 2019, a decrease from 3.88% in the fourth quarter of 2018. The decrease was primarily attributable to a 26 basis point increase in the cost of interest bearing liabilities, partially offset by an 18 basis point increase in the yield on average earning assets resulting from higher yields on loans and higher loan discount accretion.  Loan discount accretion contributed 16 basis points to the net interest margin in the first quarter of 2019, compared to 14 basis points in the fourth quarter of 2018.

Noninterest Income

Noninterest income was $4.2 million for the first quarter of 2019, a decrease of $1.3 million from $5.5 million in the fourth quarter of 2018.  In the first quarter, recoveries on loans acquired in business combinations decreased by $1.4 million, service charges, fees and other decreased by $307,000. These were partially offset by the gain on loan sales increase of $97,000 and net loan servicing fees increased by $154,000.

The Company sold $129.8 million in mortgage loans for a net gain of $1.9 million during the quarter ended March 31, 2019, compared to $123.9 million in mortgage loan sales for a net gain of $1.8 million during the quarter ended December 31, 2018. The Company originated $66.2 million in mortgage loans for sale for the quarter ended March 31, 2019, compared with $74.5 million during the quarter ended December 31, 2018.

The Company sold $3.7 million in SBA loans for a net gain of $125,000 during the first quarter of 2019, compared to $7.3 million in SBA loans sold for a net gain of $312,000 during the fourth quarter of 2018.  SBA loan originations for the first quarter were $6.7         million, compared to $9.6 million for the fourth quarter of 2018.

The company sold $8.8 million in commercial real estate loans for a net gain of $154,000 in the first quarter of 2019.  None were sold in the prior quarter or in the first quarter of 2018.

Compared to the first quarter of 2018, noninterest income increased by $1.7 million. The increase was primarily attributable to a $354,000 increase in service charges, fees and other income, an increase of $383,000 increase in gains on sales of loans and an increase of $871,000 in loan servicing fees.  

Noninterest Expense

Noninterest expense for the first quarter of 2019 was $15.3 million, compared to $15.5 million for the fourth quarter of 2018.  The decrease was primarily attributable to a $1.0 million decrease in merger related expenses and a $230,000 decrease in legal and professional expenses, partially offset by a $440,000 increase in salaries and employee benefits expenses, a $338,000 increase in occupancy and equipment expenses, and a $157,000 increase in data processing expenses.

 

Compared to the first quarter of 2018, noninterest expense increased from $8.3 million to $15.3 million. The $7.0 million increase was primarily due to an increase in salaries and employee benefits of $4.2 million, occupancy and equipment expenses of $1.5 million, data processing expenses of $536,000, and amortization of intangibles of $307,000.  The increase in salary expense is attributable to additional staff for expansion and the First American acquisition.  The increase in occupancy expense is mainly due to the First

2


 

American acquisition, including the new Roosevelt Avenue location in Flushing, NY and due to our new Irvine location in Orange County, CA.

Income Taxes

The effective tax rate was 27.1%, including the impact of a deduction for stock options exercised in the amount of $133,000. for the three months ended March 31, 2019, 30.6%, including the impact of a deduction for stock options exercised in the amount of $401,000, for the three months ended December 31, 2018, and 15.2% for the three months ended March 31, 2018, which included the impact of a deduction for stock options exercised in the amount of $1.4 million.  

Loan Portfolio

Loans held for investment, net of deferred fees and discounts, totaled $2.1 billion as of March 31, 2019, a decrease of $21.6 million from December 31, 2018, and an increase of $858.5 million from March 31, 2018.  The decrease in loans held for investment from the end of the prior quarter was primarily due to loan sales, as we reclassified certain loans that were held for investment during the quarter and subsequently sold them for a premium.    

Mortgage loans held for sale were $375.4 million as of March 31, 2018, a decrease of $59.1 million from $434.5 million at December 31, 2018.  

Deposits

Deposits were $2.2 billion at March 31, 2019, an increase of $40.3 million from December 31, 2018, and an increase of $810.8 million from March 31, 2018. The increase in total deposits from the end of the prior quarter was primarily attributable to a $69.0 million increase in brokered time deposits.  We experienced customers moving funds to time deposits from savings, NOW and money market accounts, given the current outlook for stable interest rates. Those non-maturity deposits decreased by $118.1 million in the quarter. As of March 31, 2019, deposits included $182.8 million in brokered CDs.

Noninterest-bearing deposits decreased $19.8 million to $419.0 million as of March 31, 2019. The decrease was driven by a number of factors, including certain import customers investing in inventory ahead of potential additional tariffs on Chinese imports, as well as other customers drawing on their funds to make investments. Compared to March 31, 2018 noninterest-bearing deposits increased $102.9 million from $316.0 million.  

Asset Quality

Nonperforming assets totaled $4.6 million, or 0.16% of total assets at March 31, 2019, compared to $4.4 million, or 0.15%, of total assets at December 31, 2018.  Nonperforming assets consist of Other Real Estate Owned, loans modified under troubled debt restructurings (TDR), non-accrual loans, and loans past due 90 days or more and still accruing interest.  

Loans held-for-investment 30 to 89 days past due increased to $5.7 million at March 31, 2019, from $4.1 million at December 31, 2018.  

In the first quarter of 2019, net recoveries were $109,000, which was for a commercial and industrial loan.  There were no charge-offs in the first quarter.

The Company recorded a provision for loan losses of $550,000 for the first quarter of 2019, which was primarily attributable to the growth in total average loans during the quarter.  

The allowance for loan losses totaled $18.2 million, or 0.86% of total loans held for investment at March 31, 2019, compared with $17.6 million, or 0.82%, of total loans at December 31, 2018.  

Properties

Our headquarters office is located at 1055 Wilshire Blvd. in Los Angeles, California, and also houses our risk management unit, including compliance and BSA groups, and our single-family residential mortgage group.  With the October 15, 2018, acquisition of First American, we added eight branches and two loan offices in the New York City market. We will close two non-banking offices and one branch in 2019.  We have also opened one additional branch in Flushing, NY in February 2019.

3


 

Corporate Overview

RBB Bancorp is a community-based financial holding company headquartered in Los Angeles, California.  The Company has total assets of approximately $3.0 billion. Its wholly-owned subsidiary, the Bank is a full service commercial bank, which provides business banking services to the Chinese-American communities in Los Angeles County, Orange County and Ventura County in California, in Las Vegas, Nevada, and in Brooklyn, Queens, and Manhattan in New York.  Bank services include remote deposit, E-banking, mobile banking, commercial and investor real estate loans, business loans and lines of credit, commercial and industrial loans, SBA 7A and 504 loans, 1-4 single family residential loans, automobile lending, trade finance, a full range of depository account products and wealth management services.  The Bank has ten branches in Los Angeles County, two branches in Ventura County, one branch in Irvine, California, one branch in Las Vegas, Nevada, and nine branches and two loan offices in Brooklyn, Queens and Manhattan in New York. The Company's administrative and lending center is located at 1055 Wilshire Blvd., Los Angeles, California 90017, and its finance and operations center is located at 7025 Orangethorpe Avenue, Buena Park, California 90621. The Company's website address is www.royalbusinessbankusa.com.

Conference Call

Management will hold a conference call at 11:00 a.m. PDT/2:00 p.m. EDT on Tuesday, April 23, 2019, to discuss the Company’s first quarter 2019 financial results.

To listen to the conference call, please dial 1-833-659-7620 or 1-430-775-1348, passcode 9854556. A replay of the call will be made available at 1-855-859-2056 or 1-404-537-3406, passcode 8099618, approximately one hour after the conclusion of the call and will remain available through April 30, 2019.

The conference call will also be simultaneously webcast over the Internet; please visit our Royal Business Bank website at www.royalbusinessbankusa.com and click on the “Investors” tab to access the call from the site. This webcast will be recorded and available for replay on our website approximately two hours after the conclusion of the conference call.

Disclosure

This press release contains certain non-GAAP financial disclosures for tangible common equity and tangible assets and adjusted earnings. The Company uses certain non-GAAP financial measures to provide meaningful supplemental information regarding the Company’s operational performance and to enhance investors’ overall understanding of such financial performance. Please refer to the tables at the end of this release for a presentation of performance ratios in accordance with GAAP and a reconciliation of the non-GAAP financial measures to the GAAP financial measures.

4


 

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, including our recently completed acquisition of FAIC, whether we are able to obtain any required governmental or shareholder approvals in connection with any such acquisitions or dispositions, and/or our ability to realize the contemplated financial or business benefits associated with any such acquisitions or dispositions; the effect of changes in laws, regulations and applicable judicial decisions (including laws, regulations and judicial decisions concerning financial reforms, taxes, banking capital levels, consumer, commercial or secured lending, securities and securities trading and hedging, compliance, employment, executive compensation, insurance, vendor management and information security) with which we and our subsidiaries must comply or believe we should comply; changes in estimates of future reserve requirements and minimum capital requirements based upon the periodic review thereof under relevant regulatory and accounting requirements, including changes in the Basel Committee framework establishing capital standards for credit, operations and market risk; inflation, interest rate, securities market and monetary fluctuations; changes in government interest rates or monetary policies; changes in the amount and availability of deposit insurance; cyber-security threats, including loss of system functionality or theft or loss of Company or customer data or money; political instability; acts of war or terrorism, or natural disasters, such as earthquakes, drought, or the effects of pandemic diseases; the timely development and acceptance of new banking products and services and the perceived overall value of these products and services by our customers and potential customers; the Company’s relationships with and reliance upon vendors with respect to the operation of certain of the Company’s key internal and external systems and applications; changes in commercial or consumer spending, borrowing and savings preferences or behaviors; technological changes and the expanding use of technology in banking (including the adoption of mobile banking and funds transfer applications); the ability to retain and increase market share, retain and grow customers and control expenses; changes in the competitive and regulatory environment among financial and bank holding companies, banks and other financial service providers; volatility in the credit and equity markets and its effect on the general economy or local or regional business conditions; fluctuations in the price of the Company’s common stock or other securities; and the resulting impact on the Company’s ability to raise capital or make acquisitions, the effect of changes in accounting policies and practices, as may be adopted from time-to-time by our regulatory agencies, as well as by the Public Company Accounting Oversight Board, the Financial Accounting Standards Board and other accounting standard-setters; changes in our organization, management, compensation and benefit plans, and our ability to retain or expand our workforce, management team and/or our board of directors; the costs and effects of legal, compliance and regulatory actions, changes and developments, including the initiation and resolution of legal proceedings (such as securities, consumer or employee class action litigation), regulatory or other governmental inquiries or investigations, and/or the results of regulatory examinations or reviews; our ongoing relations with our various federal and state regulators, including the SEC, FDIC, FRB and California DBO; our success at managing the risks involved in the foregoing items and all other factors set forth in the Company’s public reports, including its Annual Report as filed under Form 10-K for the year ended December 31, 2018, 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)

 

 

 

March 31

 

 

December 31,

 

 

September 30,

 

 

June 30,

 

 

March 31,

 

 

 

2019

 

 

2018

 

 

2018

 

 

2018

 

 

2018

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and due from banks

 

$

250,675

 

 

$

147,685

 

 

$

171,553

 

 

$

72,788

 

 

$

53,535

 

Federal funds sold and other cash equivalents

 

 

 

 

 

 

 

 

 

 

 

 

 

 

25,000

 

Total cash and cash equivalents

 

 

250,675

 

 

 

147,685

 

 

 

171,553

 

 

 

72,788

 

 

 

78,535

 

Interest-bearing deposits in other financial

   institutions

 

 

600

 

 

 

600

 

 

 

600

 

 

 

600

 

 

 

600

 

Investment securities available for sale

 

 

58,537

 

 

 

73,762

 

 

 

87,066

 

 

 

61,299

 

 

 

82,848

 

Investment securities held to maturity

 

 

9,449

 

 

 

9,961

 

 

 

9,974

 

 

 

9,986

 

 

 

9,998

 

Mortgage loans held for sale

 

 

375,430

 

 

 

434,522

 

 

 

378,943

 

 

 

281,755

 

 

 

183,391

 

Loans held for investment

 

 

2,120,413

 

 

 

2,142,015

 

 

 

1,381,218

 

 

 

1,284,082

 

 

 

1,261,928

 

Allowance for loan losses

 

 

(18,236

)

 

 

(17,577

)

 

 

(16,178

)

 

 

(14,657

)

 

 

(13,957

)

Net loans held for investment

 

 

2,102,177

 

 

 

2,124,438

 

 

 

1,365,040

 

 

 

1,269,425

 

 

 

1,247,971

 

Premises and equipment, net

 

 

17,342

 

 

 

17,307

 

 

 

8,119

 

 

 

7,502

 

 

 

6,687

 

Federal Home Loan Bank (FHLB) stock

 

 

8,899

 

 

 

9,707

 

 

 

7,738

 

 

 

7,738

 

 

 

6,770

 

Net deferred tax assets

 

 

4,389

 

 

 

4,642

 

 

 

7,320

 

 

 

7,089

 

 

 

6,460

 

Income tax receivable

 

 

 

 

 

656

 

 

 

1,845

 

 

 

2,170

 

 

 

272

 

Other real estate owned (OREO)

 

 

2,056

 

 

 

1,101

 

 

 

293

 

 

 

293

 

 

 

293

 

Cash surrender value of life insurance

 

 

33,769

 

 

 

33,578

 

 

 

33,380

 

 

 

33,180

 

 

 

32,980

 

Goodwill

 

 

58,383

 

 

 

58,383

 

 

 

29,940

 

 

 

29,940

 

 

 

29,940

 

Servicing assets

 

 

17,288

 

 

 

17,370

 

 

 

6,248

 

 

 

6,134

 

 

 

5,979

 

Core deposit intangibles

 

 

7,212

 

 

 

7,601

 

 

 

1,203

 

 

 

1,280

 

 

 

1,357

 

Accrued interest and other assets

 

 

31,912

 

 

 

32,689

 

 

 

27,577

 

 

 

25,693

 

 

 

21,023

 

Total assets

 

$

2,978,118

 

 

$

2,974,002

 

 

$

2,136,839

 

 

$

1,816,872

 

 

$

1,715,104

 

Liabilities and shareholders' equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing demand

 

$

418,953

 

 

$

438,764

 

 

$

287,274

 

 

$

306,362

 

 

$

316,047

 

Savings, NOW and money market accounts

 

 

480,959

 

 

 

579,247

 

 

 

462,737

 

 

 

424,261

 

 

 

399,892

 

Time deposits

 

 

1,284,428

 

 

 

1,126,030

 

 

 

814,953

 

 

 

693,783

 

 

 

657,565

 

Total deposits

 

 

2,184,340

 

 

 

2,144,041

 

 

 

1,564,964

 

 

 

1,424,406

 

 

 

1,373,504

 

Reserve for unfunded commitments

 

 

639

 

 

 

688

 

 

 

550

 

 

 

483

 

 

 

575

 

Income tax payable

 

 

3,009

 

 

 

 

 

 

 

 

 

 

 

 

1,563

 

FHLB advances

 

 

275,000

 

 

 

319,500

 

 

 

210,000

 

 

 

40,000

 

 

 

 

Subordinated debentures

 

 

103,793

 

 

 

103,708

 

 

 

49,637

 

 

 

49,601

 

 

 

49,564

 

Long-term debt

 

 

9,548

 

 

 

9,506

 

 

 

3,492

 

 

 

3,470

 

 

 

3,447

 

Accrued interest and other liabilities

 

 

16,986

 

 

 

21,938

 

 

 

13,198

 

 

 

12,710

 

 

 

10,629

 

Total liabilities

 

 

2,593,315

 

 

 

2,599,381

 

 

 

1,841,841

 

 

 

1,530,670

 

 

 

1,439,282

 

Shareholders' equity:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shareholder's equity

 

 

385,395

 

 

 

375,887

 

 

 

296,514

 

 

 

287,509

 

 

 

276,862

 

Non-controlling interest

 

 

72

 

 

 

72

 

 

 

 

 

 

 

 

 

 

Accumulated other comprehensive income (loss) - Net of tax

 

 

(664

)

 

 

(1,338

)

 

 

(1,516

)

 

 

(1,307

)

 

 

(1,040

)

Total shareholders' equity

 

 

384,803

 

 

 

374,621

 

 

 

294,998

 

 

 

286,202

 

 

 

275,822

 

Total liabilities and stockholders’ equity

 

$

2,978,118

 

 

$

2,974,002

 

 

$

2,136,839

 

 

$

1,816,872

 

 

$

1,715,104

 

 

6


 

RBB BANCORP AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

(Dollars in thousands, except per share amounts)

 

 

For the three months ended

 

 

 

March 31, 2019

 

 

December 31, 2018

 

 

March 31, 2018

 

Interest and dividend income:

 

 

 

 

 

 

 

 

 

 

 

 

Interest and fees on loans

 

$

35,839

 

 

$

33,829

 

 

$

19,074

 

Interest on interest-bearing deposits

 

 

468

 

 

 

357

 

 

 

187

 

Interest on investment securities

 

 

588

 

 

 

628

 

 

 

560

 

Dividend income on FHLB stock

 

 

215

 

 

 

265

 

 

 

119

 

Interest on federal funds sold and other

 

 

96

 

 

 

102

 

 

 

237

 

Total interest income

 

 

37,206

 

 

 

35,181

 

 

 

20,177

 

Interest expense:

 

 

 

 

 

 

 

 

 

 

 

 

Interest on savings deposits, NOW and money market accounts

 

 

1,294

 

 

 

1,563

 

 

 

702

 

Interest on time deposits

 

 

5,953

 

 

 

5,098

 

 

 

2,046

 

Interest on subordinated debentures and other

 

 

1,747

 

 

 

1,168

 

 

 

913

 

Interest on other borrowed funds

 

 

2,300

 

 

 

1,771

 

 

 

71

 

Total interest expense

 

 

11,294

 

 

 

9,600

 

 

 

3,732

 

Net interest income

 

 

25,912

 

 

 

25,581

 

 

 

16,445

 

Provision for loan losses

 

 

550

 

 

 

1,889

 

 

 

184

 

Net interest income after provision for loan losses

 

 

25,362

 

 

 

23,692

 

 

 

16,261

 

Noninterest income:

 

 

 

 

 

 

 

 

 

 

 

 

Service charges, fees and other

 

 

820

 

 

 

1,127

 

 

 

466

 

Gain on sale of loans

 

 

2,198

 

 

 

2,101

 

 

 

1,815

 

Loan servicing fees, net of amortization

 

 

840

 

 

 

686

 

 

 

(31

)

Recoveries on loans acquired in business combinations

 

 

6

 

 

 

1,371

 

 

 

6

 

Unrealized gain on equity investments

 

 

147

 

 

 

 

 

 

 

Increase in cash surrender value of life insurance

 

 

191

 

 

 

199

 

 

 

199

 

Gain on sale of securities

 

 

 

 

 

5

 

 

 

 

 

 

 

4,202

 

 

 

5,489

 

 

 

2,455

 

Noninterest expense:

 

 

 

 

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

 

9,118

 

 

 

8,678

 

 

 

4,951

 

Occupancy and equipment expenses

 

 

2,252

 

 

 

1,914

 

 

 

791

 

Data processing

 

 

1,009

 

 

 

852

 

 

 

473

 

Legal and professional

 

 

425

 

 

 

655

 

 

 

258

 

Office expenses

 

 

336

 

 

 

330

 

 

 

171

 

Marketing and business promotion

 

 

362

 

 

 

358

 

 

 

203

 

Insurance and regulatory assessments

 

 

298

 

 

 

306

 

 

 

210

 

Amortization of intangibles

 

 

388

 

 

 

340

 

 

 

81

 

OREO expenses

 

 

81

 

 

 

12

 

 

 

7

 

Merger expenses

 

 

71

 

 

 

1,086

 

 

 

 

Other expenses

 

 

985

 

 

 

972

 

 

 

1,144

 

 

 

 

15,325

 

 

 

15,503

 

 

 

8,289

 

Income before income taxes

 

 

14,239

 

 

 

13,678

 

 

 

10,427

 

Income tax expense

 

 

3,859

 

 

 

4,188

 

 

 

1,580

 

Net income

 

$

10,380

 

 

$

9,490

 

 

$

8,847

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income per share

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.52

 

 

$

0.49

 

 

$

0.55

 

Diluted

 

$

0.51

 

 

$

0.48

 

 

$

0.52

 

Cash Dividends declared per common share

 

$

0.10

 

 

$

 

 

$

0.08

 

Weighted-average common shares outstanding

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

20,047,716

 

 

 

19,442,080

 

 

 

16,082,895

 

Diluted

 

 

20,436,741

 

 

 

19,927,765

 

 

 

17,162,320

 

 

 

 

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

 

 

 

 

March 31, 2019

 

December 31, 2018

 

 

 

March 31, 2018

 

 

 

 

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)

1

 

$

92,692

 

 

$

779

 

 

 

3.41

 

%

 

$

65,843

 

 

$

724

 

 

 

4.36

 

%

 

$

97,741

 

 

$

543

 

 

 

2.25

 

Securities (2)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Available for sale

2

 

 

68,708

 

 

 

508

 

 

 

3.00

 

 

 

 

77,899

 

 

 

545

 

 

 

2.78

 

 

 

 

70,742

 

 

 

477

 

 

 

2.74

 

Held to maturity

3

 

 

9,629

 

 

 

89

 

 

 

3.73

 

 

 

 

14,444

 

 

 

92

 

 

 

2.54

 

 

 

 

10,005

 

 

 

92

 

 

 

3.75

 

Mortgage loans held for sale

4

 

 

449,828

 

 

 

5,490

 

 

 

4.95

 

 

 

 

435,887

 

 

 

5,100

 

 

 

4.64

 

 

 

 

158,820

 

 

 

1,838

 

 

 

4.69

 

Loans held for investment: (3)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Real estate

5

 

 

1,764,813

 

 

 

24,486

 

 

 

5.63

 

 

 

 

1,650,917

 

 

 

22,638

 

 

 

5.44

 

 

 

 

829,971

 

 

 

11,097

 

 

 

5.42

 

Commercial (4)

6

 

 

352,428

 

 

 

5,864

 

 

 

6.75

 

 

 

 

374,016

 

 

 

6,091

 

 

 

6.46

 

 

 

 

398,811

 

 

 

6,139

 

 

 

6.24

 

Total loans

 

 

 

2,117,241

 

 

 

30,350

 

 

 

5.81

 

 

 

 

2,024,934

 

 

 

28,730

 

 

 

5.63

 

 

 

 

1,228,782

 

 

 

17,236

 

 

 

5.69

 

Total earning assets

 

 

 

2,738,098

 

 

$

37,216

 

 

 

5.51

 

 

 

 

2,619,008

 

 

$

35,182

 

 

 

5.33

 

 

 

 

1,566,090

 

 

$

20,187

 

 

 

5.23

 

Noninterest-earning assets

 

 

 

176,813

 

 

 

 

 

 

 

 

 

 

 

 

167,156

 

 

 

 

 

 

 

 

 

 

 

 

102,693

 

 

 

 

 

 

 

 

 

Total assets

7

 

$

2,914,911

 

 

 

 

 

 

 

 

 

 

 

$

2,786,164

 

 

 

 

 

 

 

 

 

 

 

$

1,668,783

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NOW and money market deposits

8

 

$

413,952

 

 

$

1,241

 

 

 

1.22

 

%

 

$

480,416

 

 

$

1,484

 

 

 

1.23

 

%

 

$

360,151

 

 

$

667

 

 

 

0.75

 

Savings deposits

9

 

 

100,623

 

 

 

53

 

 

 

0.21

 

 

 

 

93,401

 

 

 

79

 

 

 

0.34

 

 

 

 

32,648

 

 

 

35

 

 

 

0.44

 

Time deposits

10

 

 

1,139,214

 

 

 

5,953

 

 

 

2.12

 

 

 

 

1,066,080

 

 

 

5,098

 

 

 

1.90

 

 

 

 

645,654

 

 

 

2,046

 

 

 

1.29

 

Total interest-bearing deposits

 

 

 

1,653,789

 

 

 

7,247

 

 

 

1.78

 

 

 

 

1,639,897

 

 

 

6,661

 

 

 

1.61

 

 

 

 

1,038,453

 

 

 

2,748

 

 

 

1.07

 

FHLB short-term advances

11

 

 

339,406

 

 

 

2,114

 

 

 

2.53

 

 

 

 

275,076

 

 

 

1,613

 

 

 

2.33

 

 

 

 

17,771

 

 

 

71

 

 

 

1.62