rbb-8k_20190630.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): July 23, 2019 (July 18, 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.)

 

 

 

1055 Wilshire Blvd., 12th floor,

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))

Securities registered pursuant to Section 12 (b) of the Act:

Title of each class

 

Trading

Symbol(s)

 

Name of exchange on which registered

Common Stock, No Par Value

 

RBB

 

NASDAQ Global Select Market

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 July 22, 2019, RBB Bancorp issued a press release setting forth the financial results for the quarter ended June 30, 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 July 18, 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 August 15, 2019 to shareholders of record as of July 31, 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 July 22, 2019, announcing the financial results of RBB Bancorp for the quarter ended June 30, 2019.

99.2

 

Press Release, dated July 18, 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:  July 23, 2019

By:

 

/s/ David Morris

 

 

 

David Morris

 

 

 

Executive Vice President and

Chief Financial Officer

 

3

rbb-ex991_7.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 Second Quarter Earnings for 2019

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

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

Net income was $10.1 million, or $0.50 diluted earnings per share

Total deposits increased by $51.0 million, or 9.4% annualized growth, from the end of the prior quarter

Sold approximately $175.0 million of mortgage loans for a net gain on sale of $2.5 million

Los Angeles, CA, July 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 June 30, 2019.

The Company reported net income of $10.1 million, or $0.50 diluted earnings per share, for the three months ended June 30, 2019, compared to net income of $10.4 million, or $0.51 diluted earnings per share, and $9.4 million, or 0.54 diluted earnings per share, for the three months ended March 31, 2019 and June 30, 2018, respectively.

“We are pleased with our operating performance for the second quarter,” said Mr. Alan Thian, Chairman, President and CEO. “We made significant progress on our balance sheet initiatives, selling $175.0 million in residential mortgage loans during the quarter and reducing our reliance on wholesale funding by $235.0 million. Our focus on increasing core deposits helped drive our deposit growth and we continued to experience low credit costs and well-managed expenses.  These factors all contributed to another solid quarter of net income.

“Our integration of First American International Corp. is nearly complete. We have optimized its operational footprint, with the closing of two non-banking offices and one branch and the opening of one new branch. We have also renegotiated and entered into new contracts with our core system vendor.  We are making good progress on introducing our business deposit and commercial lending products to the First American branch network and anticipate future growth from that franchise.  Our last project is to implement a common residential mortgage origination platform for both regions.

“With our balance sheet repositioning nearly complete and given our loan pipeline, we are looking forward to resuming growth at a more normalized rate. In addition to organic growth opportunities, we plan to continue to expand our franchise through a combination of acquisitions and de novo branch openings,” concluded Mr. Thian.

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Key Performance Ratios

Net income of $10.1 million for the second quarter of 2019 produced an annualized return on average assets of 1.43%, an annualized return on average tangible common equity of 12.51%, and an annualized return on average equity of 10.42%.  This compares to an annualized return on average assets of 1.44%, an annualized return on average tangible common equity of 13.26%, and an annualized return on average equity of 10.98% for the first quarter of 2019.  The efficiency ratio for the second quarter of 2019 was 50.0%, compared to 50.9% for the prior quarter. Normalizing for the 1,035,000 shares issued for options in 2018 and the 3,011,787 shares issued as a result of the First American International Corp. acquisition, diluted earnings per share would have been $0.52 for the quarter ended June 30, 2019 and $0.48 for the quarter ended June 30, 2018.

Net Interest Income and Net Interest Margin

Net interest income, before provision for loan losses, was $24.3 million for the second quarter of 2019, compared to $25.9 million for the first quarter of 2019.  The $1.6 million decrease was primarily attributable to a $94.7 million decrease in average loans held for sale and a $6.3 million decrease in average total loans held for investment, partially offset by a $74.3 million decrease in average interest-bearing liabilities.  Net interest income was also impacted by a 20 basis point decrease in the net interest margin.  Accretion of purchase discounts contributed $753,000 to net interest income in the second quarter of 2019, compared to $1.1 million in the first quarter of 2019.

Compared to the second quarter of 2018, net interest income, before provision for loan losses, increased from $17.8 million. The increase was primarily attributable to a $1.0 billion increase in average earning assets, partially offset by a 73 basis point decrease in the net interest margin.

Net interest margin was 3.64% for the second quarter of 2019, a decrease from 3.84% in the first quarter of 2019. The decrease was primarily attributable to a 12 basis point increase in the cost of interest bearing liabilities, and a 14 basis point decrease in the yield on average earning assets resulting from lower average loan yields.  Loan discount accretion contributed 11 basis points to the net interest margin in the second quarter of 2019, compared to 16 basis points in the first quarter of 2019.

Noninterest Income

Noninterest income was $5.5 million for the second quarter of 2019, an increase of $1.3 million from $4.2 million in the first quarter of 2019.  The increase was driven by an increase in gain on loan sales of $922,000, higher service charges and fees of $402,000, higher net loan servicing fees of $59,000, and an increase in recoveries on loans acquired in business combinations of $49,000. These were partially offset by a decrease in unrealized gain on equity investments of $147,000.

The Company sold $175.0 million in mortgage loans for a net gain of $2.5 million during the second quarter of 2019, compared to $129.8 million in mortgage loan sales for a net gain of $1.9 million during the first quarter. The Company originated $28.3 million in mortgage loans for sale for the second quarter of 2019, compared with $49.0 million during the prior quarter.

The Company sold $10.0 million in SBA loans for a net gain of $616,000 during the second quarter of 2019, compared to $3.7 million in SBA loans sold for a net gain of $125,000 during the first quarter of 2019.  

The Company sold $1.6 million in commercial real estate loans for a net gain of $24,000 in the second quarter of 2019.  In the prior quarter, $8.8 million loans were sold for a gain of $154,000.  

Compared to the second quarter of 2018, noninterest income increased by $2.7 million from $2.8 million. The increase was primarily attributable to an increase of $1.0 million in gain on sale of loans and a $776,000 increase in service charges and fees, and an increase of $841,000 in net loan servicing fees, mostly attributable to the First American International Bank merger.

Noninterest Expense

Noninterest expense for the second quarter of 2019 was $14.9 million, compared to $15.3 million for the first quarter of 2019.  The $426,000 decrease was primarily attributable to a $949,000 decrease in salaries and employee benefits expenses and a $235,000 decrease in merger and other expenses, partially offset by a $422,000 increase in occupancy and equipment expenses, of which $225,000 was for prior period New York City property taxes, a $231,000 increase in legal and professional expenses and a $210,000 increase in data processing expenses, of which $82,000 was for duplicative services which were not yet converted.

Compared to the second quarter of 2018, noninterest expense increased from $8.2 million to $14.9 million. The $6.7 million increase was primarily due to an increase in salaries and employee benefits of $3.5 million, occupancy and equipment expenses of $1.8 million, data processing expenses of $732,000, and amortization of intangibles of $308,000.  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 International Corp. acquisition, including the new branch in Flushing, NY and our new Irvine location in Orange County, CA.

Income Taxes

The effective tax rate was 30.3%, including the tax impact for stock options exercised in the amount of $52,000 for the second quarter of 2019, 27.1%, including the impact of a deduction for stock options exercised in the amount of $92,000, for the first quarter, and 19.5% for the second quarter of 2018, which included the impact of a deduction for stock options exercised in the amount of $1.2 million.  

Loan Portfolio

Loans held for investment, net of deferred fees and discounts, totaled $2.1 billion as of June 30, 2019, a decrease of $28.0 million from March 31, 2019, and an increase of $808.4 million from June 30, 2018.  The slight decline in loans held for investment from the end of the first quarter was primarily due to loans sold that were previously classified as loans held for investment of $107.7 million, partially offset by an increase in loan production.

Mortgage loans held for sale were $249.6 million as of June 30, 2019, a decrease of $125.8 million from $375.4 million at March 31, 2019.  

Deposits

Deposits were $2.2 billion at June 30, 2019, an increase of $51.0 million from March 31, 2019, and an increase of $810.9 million from June 30, 2018. The increase in total deposits from the end of the prior quarter was primarily attributable to a $91.3 million increase in retail time deposits, partially offset by a decrease of $47.9 million in brokered time deposits.  We continue to experience customers moving funds to time deposits from savings, NOW and money market accounts, given the current expectations for lower interest rates. Non-maturity deposits decreased by $1.8 million in the quarter. As of June 30, 2019, deposits included $135.0 million in brokered CDs.

In the second quarter, noninterest-bearing deposits increased $16.7 million to $435.6 million as of June 30, 2019. The increase was due to a partial return of deposits that were withdrawn in the first quarter due to customer concern over uncertain international trade issues. Compared to June 30, 2018, noninterest-bearing deposits increased $129.3 million from $306.4 million.  

Asset Quality

Nonperforming assets totaled $8.6 million, or 0.31% of total assets at June 30, 2019, compared to $4.6 million, or 0.16%, of total assets at March 31, 2019. The increase in nonperforming assets was primarily due to the addition of a $2.9 million SBA loan. 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 decreased to $3.4 million at June 30, 2019, from $5.2 million at March 31, 2019.  

In the second quarter of 2019, there was one charge-off of $32,000 attributed to a commercial and industrial loan.  There were $109,000 in net recoveries in the first quarter.

The Company recorded a provision for loan losses of $357,000 for the second quarter of 2019, which was primarily attributable to a change in the loan mix during the quarter.  

The allowance for loan losses totaled $18.6 million, or 0.89% of total loans held for investment at June 30, 2019, compared with $18.2 million, or 0.86%, of total loans at March 31, 2019.  

Properties

Our headquarters office is located at 1055 Wilshire Blvd. in Los Angeles, California. In 2019, we have closed one non-banking office and one branch and opened one new branch in New York City, with one additional non-banking office vacant but still paying rent.

3


 

Corporate Overview

RBB Bancorp is a community-based financial holding company headquartered in Los Angeles, California.  The Company has total assets of $2.8 billion. Its wholly-owned subsidiary, the Bank is a full service commercial bank, which provides business banking services to the Chinese-American communities in Los Angeles County, Orange County and Ventura County in California, in Las Vegas, Nevada, 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. Pacific time/2:00 p.m. Eastern time on Tuesday, July 23, 2019, to discuss the Company’s second quarter 2019 financial results.

To listen to the conference call, please dial 1-833-659-7620 or 1-430-775-1348, passcode 4677186. A replay of the call will be made available at 1-855-859-2056 or 1-404-537-3406, passcode 4677186, approximately one hour after the conclusion of the call and will remain available through July 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)

 

 

 

June 30

 

 

March 31

 

 

December 31,

 

 

September 30,

 

 

June 30,

 

 

 

2019

 

 

2019

 

 

2018

 

 

2018

 

 

2018

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and due from banks

 

$

185,643

 

 

$

250,079

 

 

$

147,685

 

 

$

171,553

 

 

$

72,788

 

Federal funds sold and other cash equivalents

 

 

20,000

 

 

 

 

 

 

 

 

 

 

 

 

 

Total cash and cash equivalents

 

 

205,643

 

 

 

250,079

 

 

 

147,685

 

 

 

171,553

 

 

 

72,788

 

Interest-bearing deposits in other financial

   institutions

 

 

1,196

 

 

 

1,196

 

 

 

600

 

 

 

600

 

 

 

600

 

Investment securities available for sale

 

 

71,629

 

 

 

58,537

 

 

 

73,762

 

 

 

87,066

 

 

 

61,299

 

Investment securities held to maturity

 

 

8,733

 

 

 

9,449

 

 

 

9,961

 

 

 

9,974

 

 

 

9,986

 

Mortgage loans held for sale

 

 

249,596

 

 

 

375,430

 

 

 

434,522

 

 

 

378,943

 

 

 

281,755

 

Loans held for investment

 

 

2,092,438

 

 

 

2,120,413

 

 

 

2,142,015

 

 

 

1,381,218

 

 

 

1,284,082

 

Allowance for loan losses

 

 

(18,561

)

 

 

(18,236

)

 

 

(17,577

)

 

 

(16,178

)

 

 

(14,657

)

Net loans held for investment

 

 

2,073,877

 

 

 

2,102,177

 

 

 

2,124,438

 

 

 

1,365,040

 

 

 

1,269,425

 

Premises and equipment, net

 

 

17,214

 

 

 

17,342

 

 

 

17,307

 

 

 

8,119

 

 

 

7,502

 

Federal Home Loan Bank (FHLB) stock

 

 

15,000

 

 

 

8,899

 

 

 

9,707

 

 

 

7,738

 

 

 

7,738

 

Net deferred tax assets

 

 

4,318

 

 

 

4,389

 

 

 

4,642

 

 

 

7,320

 

 

 

7,089

 

Income tax receivable

 

 

3,001

 

 

 

 

 

 

656

 

 

 

1,845

 

 

 

2,170

 

Other real estate owned (OREO)

 

 

2,075

 

 

 

2,056

 

 

 

1,101

 

 

 

293

 

 

 

293

 

Cash surrender value of life insurance

 

 

33,963

 

 

 

33,769

 

 

 

33,578

 

 

 

33,380

 

 

 

33,180

 

Goodwill

 

 

58,383

 

 

 

58,383

 

 

 

58,383

 

 

 

29,940

 

 

 

29,940

 

Servicing assets

 

 

17,587

 

 

 

17,288

 

 

 

17,370

 

 

 

6,248

 

 

 

6,134

 

Core deposit intangibles

 

 

6,828

 

 

 

7,212

 

 

 

7,601

 

 

 

1,203

 

 

 

1,280

 

Accrued interest and other assets

 

 

32,913

 

 

 

31,912

 

 

 

32,689

 

 

 

27,577

 

 

 

25,693

 

Total assets

 

$

2,801,956

 

 

$

2,978,118

 

 

$

2,974,002

 

 

$

2,136,839

 

 

$

1,816,872

 

Liabilities and shareholders' equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing demand

 

$

435,629

 

 

$

418,953

 

 

$

438,764

 

 

$

287,274

 

 

$

306,362

 

Savings, NOW and money market accounts

 

 

462,448

 

 

 

480,959

 

 

 

579,247

 

 

 

462,737

 

 

 

424,261

 

Time deposits

 

 

1,337,257

 

 

 

1,284,428

 

 

 

1,126,030

 

 

 

814,953

 

 

 

693,783

 

Total deposits

 

 

2,235,334

 

 

 

2,184,340

 

 

 

2,144,041

 

 

 

1,564,964

 

 

 

1,424,406

 

Reserve for unfunded commitments

 

 

621

 

 

 

639

 

 

 

688

 

 

 

550

 

 

 

483

 

Income tax payable

 

 

1,610

 

 

 

3,009

 

 

 

 

 

 

 

 

 

 

FHLB advances

 

 

40,000

 

 

 

275,000

 

 

 

319,500

 

 

 

210,000

 

 

 

40,000

 

Long-term debt, net of debt issuance costs

 

 

103,878

 

 

 

103,793

 

 

 

103,708

 

 

 

49,637

 

 

 

49,601

 

Subordinated debentures

 

 

9,590

 

 

 

9,548

 

 

 

9,506

 

 

 

3,492

 

 

 

3,470

 

Accrued interest and other liabilities

 

 

17,103

 

 

 

16,986

 

 

 

21,938

 

 

 

13,198

 

 

 

12,710

 

Total liabilities

 

 

2,408,136

 

 

 

2,593,315

 

 

 

2,599,381

 

 

 

1,841,841

 

 

 

1,530,670

 

Shareholders' equity:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shareholder's equity

 

 

393,758

 

 

 

385,395

 

 

 

375,887

 

 

 

296,514

 

 

 

287,509

 

Non-controlling interest

 

 

72

 

 

 

72

 

 

 

72

 

 

 

 

 

 

 

Accumulated other comprehensive income (loss) - Net of tax

 

 

(10

)

 

 

(664

)

 

 

(1,338

)

 

 

(1,516

)

 

 

(1,307

)

Total shareholders' equity

 

 

393,820

 

 

 

384,803

 

 

 

374,621

 

 

 

294,998

 

 

 

286,202

 

Total liabilities and stockholders’ equity

 

$

2,801,956

 

 

$

2,978,118

 

 

$

2,974,002

 

 

$

2,136,839

 

 

$

1,816,872

 

 

6


 

RBB BANCORP AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

(Dollars in thousands, except per share amounts)

 

 

 

For the three months ended

 

 

 

June 30, 2019

 

 

March 31, 2019

 

 

June 30, 2018

 

Interest and dividend income:

 

 

 

 

 

 

 

 

 

 

 

 

Interest and fees on loans

 

$

34,240

 

 

$

35,839

 

 

$

21,132

 

Interest on interest-bearing deposits

 

 

515

 

 

 

468

 

 

 

209

 

Interest on investment securities

 

 

685

 

 

 

588

 

 

 

603

 

Dividend income on FHLB stock

 

 

379

 

 

 

198

 

 

 

134

 

Interest on federal funds sold and other

 

 

124

 

 

 

113

 

 

 

206

 

Total interest income

 

 

35,943

 

 

 

37,206

 

 

 

22,284

 

Interest expense:

 

 

 

 

 

 

 

 

 

 

 

 

Interest on savings deposits, NOW and money market accounts

 

 

1,238

 

 

 

1,294

 

 

 

998

 

Interest on time deposits

 

 

7,797

 

 

 

5,953

 

 

 

2,410

 

Interest on subordinated debentures and long term debt

 

 

1,929

 

 

 

1,933

 

 

 

920

 

Interest on other borrowed funds

 

 

662

 

 

 

2,114

 

 

 

129

 

Total interest expense

 

 

11,626

 

 

 

11,294

 

 

 

4,457

 

Net interest income

 

 

24,317

 

 

 

25,912

 

 

 

17,827

 

Provision for loan losses

 

 

357

 

 

 

550

 

 

 

700

 

Net interest income after provision for loan losses

 

 

23,960

 

 

 

25,362

 

 

 

17,127

 

Noninterest income:

 

 

 

 

 

 

 

 

 

 

 

 

Service charges, fees and other

 

 

1,222

 

 

 

820

 

 

 

446

 

Gain on sale of loans

 

 

3,120

 

 

 

2,198

 

 

 

2,085

 

Loan servicing fees, net of amortization

 

 

899

 

 

 

840

 

 

 

58

 

Recoveries on loans acquired in business combinations

 

 

55

 

 

 

6

 

 

 

5

 

Unrealized gain on equity investments

 

 

 

 

 

147

 

 

 

 

Increase in cash surrender value of life insurance

 

 

194

 

 

 

191

 

 

 

199

 

Gain on sale of fixed assets

 

 

6

 

 

 

 

 

 

 

 

 

 

5,496

 

 

 

4,202

 

 

 

2,793

 

Noninterest expense:

 

 

 

 

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

 

8,169

 

 

 

9,118

 

 

 

4,709

 

Occupancy and equipment expenses

 

 

2,674

 

 

 

2,252

 

 

 

834

 

Data processing

 

 

1,219

 

 

 

1,009

 

 

 

487

 

Legal and professional

 

 

656

 

 

 

425

 

 

 

423

 

Office expenses

 

 

294

 

 

 

336

 

 

 

192

 

Marketing and business promotion

 

 

316

 

 

 

362

 

 

 

262

 

Insurance and regulatory assessments

 

 

284

 

 

 

298

 

 

 

213

 

Amortization of intangibles

 

 

385

 

 

 

388

 

 

 

77

 

OREO expenses

 

 

81

 

 

 

81

 

 

 

 

Merger expenses

 

 

15

 

 

 

71

 

 

 

183

 

Other expenses

 

 

806

 

 

 

985

 

 

 

811

 

 

 

 

14,899

 

 

 

15,325

 

 

 

8,191

 

Income before income taxes

 

 

14,557

 

 

 

14,239

 

 

 

11,729

 

Income tax expense

 

 

4,415

 

 

 

3,859

 

 

 

2,292

 

Net income

 

$

10,142

 

 

$

10,380

 

 

$

9,437

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income per share

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.51

 

 

$

0.52

 

 

$

0.58

 

Diluted

 

$

0.50

 

 

$

0.51

 

 

$

0.54

 

Cash Dividends declared per common share

 

$

0.10

 

 

$

0.10

 

 

$

0.09

 

Weighted-average common shares outstanding

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

20,074,651

 

 

 

20,047,716

 

 

 

16,407,439

 

Diluted

 

 

20,445,013

 

 

 

20,436,741

 

 

 

17,322,800

 

 

7


 

RBB BANCORP AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

(Dollars in thousands, except per share amounts)

 

 

 

For the six months ended

 

 

 

June 30, 2019

 

 

June 30, 2018

 

Interest and dividend income:

 

 

 

 

 

 

 

 

Interest and fees on loans

 

$

70,079

 

 

$

40,206

 

Interest on interest-earning deposits

 

 

983

 

 

 

395

 

Interest on investment securities

 

 

1,273

 

 

 

1,163

 

Dividend income on FHLB stock

 

 

577

 

 

 

253

 

Interest on federal funds sold and other

 

 

237

 

 

 

443

 

Total interest income

 

 

73,149

 

 

 

42,460

 

Interest expense:

 

 

 

 

 

 

 

 

Interest on savings deposits, NOW and money market accounts

 

 

2,532

 

 

 

1,700

 

Interest on time deposits

 

 

13,750

 

 

 

4,456

 

Interest on subordinated debentures and long term debt

 

 

3,862

 

 

 

1,833

 

Interest on other borrowed funds

 

 

2,776

 

 

 

200

 

Total interest expense

 

 

22,920

 

 

 

8,189

 

Net interest income

 

 

50,229

 

 

 

34,271

 

Provision for loan losses

 

 

907

 

 

 

884

 

Net interest income after provision for loans losses

 

 

49,322

 

 

 

33,387

 

Noninterest income:

 

 

 

 

 

 

 

 

Service charges, fees and other

 

 

2,042

 

 

 

912

 

Gain on sale of loans

 

 

5,318

 

 

 

3,900

 

Loan servicing fees, net of amortization

 

 

1,739

 

 

 

27

 

Recoveries on loans acquired in business combinations

 

 

61

 

 

 

11

 

Unrealized gain on equity investments

 

 

147

 

 

 

 

Increase in cash surrender value of life insurance

 

 

385

 

 

 

398

 

Gain on sale of fixed assets

 

 

6

 

 

 

 

 

 

 

9,698

 

 

 

5,248

 

Noninterest expense:

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

 

17,287

 

 

 

9,660

 

Occupancy and equipment expenses

 

 

4,926

 

 

 

1,626

 

Data processing

 

 

2,228

 

 

 

960

 

Legal and professional

 

 

1,081

 

 

 

680

 

Office expenses

 

 

630

 

 

 

363

 

Marketing and business promotion

 

 

678

 

 

 

465

 

Insurance and regulatory assessments

 

 

582

 

 

 

422

 

Amortization of intangibles

 

 

773

 

 

 

158

 

OREO expenses

 

 

162

 

 

 

7

 

Merger expenses

 

 

86

 

 

 

223

 

Other expenses

 

 

1,791

 

 

 

1,916

 

 

 

 

30,224

 

 

 

16,480

 

Income before income taxes

 

 

28,796

 

 

 

22,155

 

Income tax expense

 

 

8,274

 

 

 

3,872

 

Net income

 

$

20,522

 

 

$

18,283

 

 

 

 

 

 

 

 

 

 

Net income per share

 

 

 

 

 

 

 

 

Basic

 

$

1.02

 

 

$

1.13

 

Diluted

 

$

1.00

 

 

$

1.06

 

Cash Dividends declared per common share

 

$

0.20

 

 

$

0.17

 

Weighted-average common shares outstanding

 

 

 

 

 

 

 

 

Basic

 

 

20,061,258

 

 

 

16,246,063

 

Diluted

 

 

20,440,900

 

 

 

17,248,125

 

 

 

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

 

 

 

June 30, 2019

 

March 31, 2019

 

June 30, 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)

 

$

120,818

 

 

$

1,018

 

 

3.38%

 

$

92,692

 

 

$

779

 

 

3.41%

 

$

79,065

 

 

$

549

 

 

 

2.78

%

Securities (2)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Available for sale

 

 

87,347

 

 

 

610

 

 

2.80%

 

 

68,708

 

 

 

508

 

 

3.00%

 

 

74,836

 

 

 

519

 

 

 

2.78

%

Held to maturity

 

 

9,127

 

 

 

84

 

 

3.69%

 

 

9,629

 

 

 

89

 

 

3.75%

 

 

9,992

 

 

 

92

 

 

 

3.68

%

Mortgage loans held for sale

 

 

355,168

 

 

 

4,245

 

 

4.79%

 

 

449,828

 

 

 

5,490

 

 

4.95%

 

 

209,423

 

 

 

2,428

 

 

 

4.65

%

Loans held for investment: (3)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Real estate

 

 

1,763,749

 

 

 

24,394

 

 

5.55%

 

 

1,764,813

 

 

 

24,486

 

 

5.63%

 

 

885,630

 

 

 

12,635

 

 

 

5.72

%

Commercial (4)

 

 

347,236

 

 

 

5,601

 

 

6.47%

 

 

352,428

 

 

 

5,864

 

 

6.75%

 

 

377,077

 

 

 

6,069

 

 

 

6.46

%

Total loans

 

 

2,110,985

 

 

 

29,995

 

 

5.70%

 

 

2,117,241

 

 

 

30,350

 

 

5.81%

 

 

1,262,707

 

 

 

18,704

 

 

 

5.94

%

Total earning assets

 

 

2,683,445

 

 

$

35,952

 

 

5.37%

 

 

2,738,098

 

 

$

37,216

 

 

5.51%

 

 

1,636,023

 

 

$

22,292