rbb-8k_20190930.htm

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

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

Date of Report (Date of earliest event reported): October 21, 2019 (October 17, 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 October 21, 2019, RBB Bancorp issued a press release setting forth the financial results for the quarter ended September 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.

The information furnished under Item 2.02 and Item 9.01 of this Current Report on Form 8-K (including Exhibits 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 8.01 Other Events.

On October 17, 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 November 15, 2019, to common shareholders of record as of October 31, 2019.  A copy of the press release announcing the dividend is attached hereto as Exhibit 99.2.

Item 9.01 Financial Statements and Exhibits.

 

(d)

 

Exhibits.

 

 

 

99.1

 

Press Release, dated October 21, 2019, announcing the financial results of RBB Bancorp for the quarter ended September 30, 2019.

99.2

 

Press Release, dated October 17, 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:  October 21, 2019

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

 

(626) 307-7559

 

David Morris

 

Executive Vice President and CFO

 

(714) 670-2488

 

RBB Bancorp Reports Third Quarter Earnings for 2019

Conference Call and Webcast Scheduled for Tuesday, October 22, 2019 at

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

Net income was $8.0 million, or $0.39 diluted earnings per share

Total loans, including loans held for sale, increased by $43.5 million, or 7.4% annualized growth, from the end of the prior quarter

Total deposits increased by $16.6 million, or 2.9% annualized growth, from the end of the prior quarter

Excluding brokered deposits, total deposits, increased by $49.0 million, or 9.3% annualized growth, from the end of the prior quarter

Definitive agreement to acquire Pacific Global Bank and enter the attractive Chicago market

Los Angeles, CA, October 21, 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 September 30, 2019.

The Company reported net income of $8.0 million, or $0.39 diluted earnings per share, for the three months ended September 30, 2019, compared to net income of $10.1 million, or $0.50 diluted earnings per share, and $8.3 million, or 0.48 diluted earnings per share, for the three months ended June 30, 2019 and September 30, 2018, respectively.

“We are pleased to report financial and operating results for the third quarter that are in line with our expectations,” said Mr. Alan Thian, Chairman, President and CEO. “We have successfully completed the balance sheet repositioning that we initiated at the start of the year. We also resumed loan growth, generating strong production in both residential and commercial real estate that outpaced continued elevated levels of loan payoffs and paydowns. Our focus on increasing core deposits helped drive deposit growth and reduce our reliance on wholesale funding. While our net interest margin was negatively impacted by temporary excess liquidity, our ongoing low credit costs and well-managed expenses enabled us to meet our profitability goal for the quarter.”

In September, RBB Bancorp agreed to acquire Chicago-based PGB Holdings Inc. and its wholly-owned subsidiary Pacific Global Bank for approximately $32.5 million. The transaction is expected to close in the first quarter of 2020 and result in earnings per share (EPS) accretion in the high single-digits next year.

“We are also very pleased to be acquiring Pacific Global Bank, which enables us to expand the RBB franchise to the attractive Chicago market and serve its large community of Asian-Americans. We are excited to enter this new market and intend to open two new branches in metro Chicago next year. We believe that this transaction will position us well for continued growth and help create greater value for our shareholders in the years ahead,” concluded Mr. Thian.

1


 

Key Performance Ratios

Net income of $8.0 million for the third quarter of 2019 produced an annualized return on average assets of 1.15%, an annualized return on average tangible common equity of 9.56%, and an annualized return on average equity of 7.99%.  This compares to 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% for the second quarter of 2019.  The efficiency ratio for the third quarter of 2019 was 52.40%, compared to 50.0% for the prior quarter.

Net Interest Income and Net Interest Margin

Net interest income, before provision for loan losses, was $23.5 million for the third quarter of 2019, compared to $24.3 million for the second quarter of 2019.  The $805,000 decrease was primarily attributable to a $101.7 million decrease in average loans held for sale and an $8.8 million decrease in average total loans held for investment, partially offset by a $104.8 million decrease in average interest-bearing liabilities.  Net interest income was also impacted by a 5 basis point decrease in the net interest margin.  Accretion of purchase discounts from prior acquisitions contributed $624,000 to net interest income in the third quarter of 2019, compared to $753,000 in the second quarter of 2019.

Compared to the third quarter of 2018, net interest income, before provision for loan losses, increased $4.9 million from $18.6 million. The increase was primarily attributable to an $801.2 million increase in average earning assets, partially offset by a 52 basis point decrease in the net interest margin.

Net interest margin was 3.59% for the third quarter of 2019, a decrease from 3.64% in the second quarter of 2019. The decrease was primarily attributable to an 8 basis point decrease in the yield on average earning assets resulting from higher balances and lower yields on cash equivalents and short term securities and lower average loan yields combined with a 1 basis point increase in the cost of interest bearing liabilities.  Loan discount accretion contributed 10 basis points to the net interest margin in the third quarter of 2019, compared to 11 basis points in the second quarter of 2019.

Noninterest Income

Noninterest income was $2.8 million for the third quarter of 2019, a decrease of $2.7 million from $5.5 million in the second quarter of 2019.  The decrease was driven by a decrease in gain on loan sales of $2.3 million, and a decrease from a second quarter 2019 BEA award of $233,000.

The Company sold $5.8 million in FNMA direct mortgage loans for a net gain of $182,000 during the third quarter of 2019, compared to $175.0 million in total mortgage loan sales for a net gain of $2.5 million during the second quarter of 2019. As previously discussed, mortgage loan sales were essentially curtailed in the third quarter as the system conversion was being implemented at First American International Corp. (FAIC) and the loan pipeline was being replenished. The Company originated $46.1 million in mortgage loans for sale for the third quarter of 2019, compared with $28.3 million during the prior quarter.  

The Company sold $11.3 million in SBA loans for a net gain of $631,000 during the third quarter of 2019, compared to $10.0 million in SBA loans sold for a net gain of $616,000 during the second quarter of 2019.  

Compared to the third quarter of 2018, noninterest income increased by $694,000 from $2.1 million. The increase was primarily attributable to an increase of $294,000 in service charges and fees, and an increase of $690,000 in net loan servicing fees, mostly attributable to the FAIC merger, partially offset by a $312,000 decrease in gains on loan sales.

Noninterest Expense

Noninterest expense for the third quarter of 2019 was $13.8 million, compared to $14.9 million for the second quarter of 2019.  The $1.1 million decrease was primarily attributable to a $368,000 decrease in salaries and employee benefits expenses, a $240,000 decrease in occupancy and equipment expenses, a $245,000 decrease in data processing expenses, a $221,000 decrease in legal and professional expenses, a $112,000 decrease in insurance and regulatory assessments, and was partially offset by a $139,000 increase in merger expenses. The decrease in a number of these categories was due to realizing the benefits from the integration of the FAIC acquisition, where we are in the process of optimizing its operational footprint and where we have renegotiated and entered into new contracts with our core system vendor.

Compared to the third quarter of 2018, noninterest expense increased from $8.7 million.  The $5.1 million increase was primarily due to an increase in salaries and employee benefits of $2.9 million, occupancy and equipment expenses of $1.4 million, data processing expenses of $463,000, and core deposit premium amortization of $308,000.  The increase in salary expense and occupancy expense is attributable to additional staff for expansion and the FAIC acquisition, including the new branch in Flushing, NY and our new Irvine location in Orange County, CA.

2


 

Income Taxes

The effective tax rate was 31.5%, including the tax impact for stock options exercised in the amount of $38,000 for the third quarter of 2019, 30.3% for the second quarter including the tax impact for stock options exercised in the amount of $52,000, and 19.7% for the third quarter of 2018, which included the tax impact of a deduction for stock options exercised in the amount of $991,000.  

Loan Portfolio

Loans held for investment, net of deferred fees and discounts, totaled $2.1 billion as of September 30, 2019, an increase of $33.7 million from June 30, 2019, and an increase of $744.9 million from September 30, 2018. The increase from June 30 to September 30 was driven by a $35.2 million increase in single-family residential mortgages, and a $31.5 million increase in commercial real estate loans; this was partially offset by a $17.2 million decrease in construction loans and a combined $15.9 million decrease in C&I and SBA loans.

During the third quarter, single-family residential mortgage production was $92.0 million, payoffs and paydowns were $48.3 million, and loan sales were $5.9 million.  Compared to the second quarter, production was $50.5 million, payoffs and paydowns were $42.7 million, and loan sales were $175.0 million.

Mortgage loans held for sale were $259.3 million as of September 30, 2019, an increase of $9.7 million from $249.6 million at June 30, 2019 and a decrease of $119.6 million from $378.9 million as of September 30, 2018.  

In the third quarter, SBA loan production was $7.5 million, loan payoffs and paydowns were $11.8 million, and total loan sales were $11.3 million.  In the second quarter, SBA loan production was $5.0 million, loan payoffs and paydowns were $8.1 million, and total loan sales were $10.0 million.

Deposits

Deposits were $2.3 billion at September 30, 2019, an increase of $16.6 million from June 30, 2019, and an increase of $687.0 million from September 30, 2018. The increase in total deposits from the end of the prior quarter was primarily attributable to a $10.5 million increase in demand deposits, a $31.8 million increase in money market deposits and a $13.1 million increase in jumbo time deposits, partially offset by a decrease of $6.1 million in retail time deposits and a $32.4 million decrease in brokered time deposits.  Non-maturity deposits increased by $42.0 million in the quarter as our deposit gathering efforts have continued to gain traction. As of September 30, 2019, deposits included $102.6 million in brokered CDs, as compared to $135.0 million as of June 30, 2019 and $107.9 million as of September 30, 2018. Excluding brokered deposits, total deposits increased by $49.0 million, or 9.3% annualized growth from June 30, 2019.

Asset Quality

Nonperforming assets totaled $10.9 million, or 0.39% of total assets at September 30, 2019, compared to $8.4 million, or 0.30%, of total assets at June 30, 2019. The increase in nonperforming assets was primarily due to the additions of a $2.0 million SBA loan, an $891,000 commercial real estate loan, and a mortgage loan in the amount of $449,000. 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 $4.6 million at September 30, 2019, from $4.2 million at June 30, 2019.  

In the third quarter of 2019, there were no charge-offs and there were $1,000 in recoveries.

The Company recorded a provision for loan losses of $824,000 for the third quarter of 2019, which was primarily attributable to a $400,000 reserve for two non-accrual loans and normal loan growth.  

The allowance for loan losses totaled $19.4 million, or 0.91% of total loans held for investment at September 30, 2019, compared with $18.6 million, or 0.89%, of total loans at June 30, 2019.  

Properties

Our headquarters office is located at 1055 Wilshire Blvd., 12th floor, 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.

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 eight branches and one loan operation center 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, October 22, 2019, to discuss the Company’s third quarter 2019 financial results.

To listen to the conference call, please dial 1-833-659-7620 or 1-430-775-1348, passcode 7269799. A replay of the call will be made available at 1-855-859-2056 or 1-404-537-3406, passcode 7269799, approximately one hour after the conclusion of the call and will remain available through October 29, 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)

 

  

 

September 30

 

 

June 30

 

 

March 31

 

 

December 31,

 

 

September 30,

 

 

 

2019

 

 

2019

 

 

2019

 

 

2018

 

 

2018

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and due from banks

 

$

136,076

 

 

$

185,643

 

 

$

250,079

 

 

$

147,685

 

 

$

171,553

 

Federal funds sold and other cash equivalents

 

 

47,000

 

 

 

20,000

 

 

 

 

 

 

 

 

 

 

Total cash and cash equivalents

 

 

183,076

 

 

 

205,643

 

 

 

250,079

 

 

 

147,685

 

 

 

171,553

 

Interest-bearing deposits in other financial

   institutions

 

 

949

 

 

 

1,196

 

 

 

1,196

 

 

 

600

 

 

 

600

 

Investment securities available for sale

 

 

72,923

 

 

 

71,629

 

 

 

58,537

 

 

 

73,762

 

 

 

87,066

 

Investment securities held to maturity

 

 

8,724

 

 

 

8,733

 

 

 

9,449

 

 

 

9,961

 

 

 

9,974

 

Mortgage loans held for sale

 

 

259,339

 

 

 

249,596

 

 

 

375,430

 

 

 

434,522

 

 

 

378,943

 

Loans held for investment

 

 

2,126,145

 

 

 

2,092,438

 

 

 

2,120,413

 

 

 

2,142,015

 

 

 

1,381,218

 

Allowance for loan losses

 

 

(19,386

)

 

 

(18,561

)

 

 

(18,236

)

 

 

(17,577

)

 

 

(16,178

)

Net loans held for investment

 

 

2,106,759

 

 

 

2,073,877

 

 

 

2,102,177

 

 

 

2,124,438

 

 

 

1,365,040

 

Premises and equipment, net

 

 

16,871

 

 

 

17,214

 

 

 

17,342

 

 

 

17,307

 

 

 

8,119

 

Federal Home Loan Bank (FHLB) stock

 

 

15,000

 

 

 

15,000

 

 

 

8,899

 

 

 

9,707

 

 

 

7,738

 

Net deferred tax assets

 

 

4,378

 

 

 

4,318

 

 

 

4,389

 

 

 

4,642

 

 

 

7,320

 

Income tax receivable

 

 

898

 

 

 

3,001

 

 

 

-

 

 

 

656

 

 

 

1,845

 

Other real estate owned (OREO)

 

 

1,267

 

 

 

2,075

 

 

 

2,056

 

 

 

1,101

 

 

 

293

 

Cash surrender value of life insurance

 

 

34,158

 

 

 

33,963

 

 

 

33,769

 

 

 

33,578

 

 

 

33,380

 

Goodwill

 

 

58,383

 

 

 

58,383

 

 

 

58,383

 

 

 

58,383

 

 

 

29,940

 

Servicing assets

 

 

17,180

 

 

 

17,587

 

 

 

17,288

 

 

 

17,370

 

 

 

6,248

 

Core deposit intangibles

 

 

6,444

 

 

 

6,828

 

 

 

7,212

 

 

 

7,601

 

 

 

1,203

 

Accrued interest and other assets

 

 

33,953

 

 

 

32,913

 

 

 

31,912

 

 

 

32,689

 

 

 

27,577

 

Total assets

 

$

2,820,302

 

 

$

2,801,956

 

 

$

2,978,118

 

 

$

2,974,002

 

 

$

2,136,839

 

Liabilities and shareholders' equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing demand

 

$

446,141

 

 

$

435,629

 

 

$

418,953

 

 

$

438,764

 

 

$

287,274

 

Savings, NOW and money market accounts

 

 

493,965

 

 

 

462,448

 

 

 

480,959

 

 

 

579,247

 

 

 

462,737

 

Time deposits

 

 

1,311,817

 

 

 

1,337,257

 

 

 

1,284,428

 

 

 

1,126,030

 

 

 

814,953

 

Total deposits

 

 

2,251,923

 

 

 

2,235,334

 

 

 

2,184,340

 

 

 

2,144,041

 

 

 

1,564,964

 

Reserve for unfunded commitments

 

 

618

 

 

 

621

 

 

 

639

 

 

 

688

 

 

 

550

 

Income tax payable

 

 

 

 

 

1,610

 

 

 

3,009

 

 

 

 

 

 

 

FHLB advances

 

 

35,000

 

 

 

40,000

 

 

 

275,000

 

 

 

319,500

 

 

 

210,000

 

Long-term debt, net of debt issuance costs

 

 

103,964

 

 

 

103,878

 

 

 

103,793

 

 

 

103,708

 

 

 

49,637

 

Subordinated debentures

 

 

9,632

 

 

 

9,590

 

 

 

9,548

 

 

 

9,506

 

 

 

3,492

 

Accrued interest and other liabilities

 

 

20,324

 

 

 

17,103

 

 

 

16,986

 

 

 

21,938

 

 

 

13,198

 

Total liabilities

 

 

2,421,461

 

 

 

2,408,136

 

 

 

2,593,315

 

 

 

2,599,381

 

 

 

1,841,841

 

Shareholders' equity:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shareholder's equity

 

 

398,438

 

 

 

393,758

 

 

 

385,395

 

 

 

375,887

 

 

 

296,514

 

Non-controlling interest

 

 

72

 

 

 

72

 

 

 

72

 

 

 

72

 

 

 

 

Accumulated other comprehensive income (loss) - Net of tax

 

 

331

 

 

 

(10

)

 

 

(664

)

 

 

(1,338

)

 

 

(1,516

)

Total shareholders' equity

 

 

398,841

 

 

 

393,820

 

 

 

384,803

 

 

 

374,621

 

 

 

294,998

 

Total liabilities and stockholders’ equity

 

$

2,820,302

 

 

$

2,801,956

 

 

$

2,978,118

 

 

$

2,974,002

 

 

$

2,136,839

 

 

6


 

RBB BANCORP AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

(Dollars in thousands, except per share amounts)

 

 

 

For the three months ended

 

 

 

September 30, 2019

 

 

June 30, 2019

 

 

September 30, 2018

 

Interest and dividend income:

 

 

 

 

 

 

 

 

 

 

 

 

Interest and fees on loans

 

$

32,902

 

 

$

34,240

 

 

$

23,445

 

Interest on interest-bearing deposits

 

 

429

 

 

 

515

 

 

 

250

 

Interest on investment securities

 

 

703

 

 

 

685

 

 

 

560

 

Dividend income on FHLB stock

 

 

238

 

 

 

379

 

 

 

132

 

Interest on federal funds sold and other

 

 

397

 

 

 

124

 

 

 

86

 

Total interest income

 

 

34,669

 

 

 

35,943

 

 

 

24,473

 

Interest expense:

 

 

 

 

 

 

 

 

 

 

 

 

Interest on savings deposits, NOW and money market accounts

 

 

1,117

 

 

 

1,238

 

 

 

1,145

 

Interest on time deposits

 

 

8,038

 

 

 

7,797

 

 

 

2,994

 

Interest on subordinated debentures and long term debt

 

 

1,921

 

 

 

1,929

 

 

 

925

 

Interest on other borrowed funds

 

 

81

 

 

 

662

 

 

 

793

 

Total interest expense

 

 

11,157

 

 

 

11,626

 

 

 

5,857

 

Net interest income

 

 

23,512

 

 

 

24,317

 

 

 

18,616

 

Provision for loan losses

 

 

824

 

 

 

357

 

 

 

1,695

 

Net interest income after provision for loan losses

 

 

22,688

 

 

 

23,960

 

 

 

16,921

 

Noninterest income:

 

 

 

 

 

 

 

 

 

 

 

 

Service charges, fees and other

 

 

934

 

 

 

1,222

 

 

 

640

 

Gain on sale of loans

 

 

813

 

 

 

3,120

 

 

 

1,125

 

Loan servicing fees, net of amortization

 

 

827

 

 

 

899

 

 

 

137

 

Recoveries on loans acquired in business combinations

 

 

12

 

 

 

55

 

 

 

3

 

Increase in cash surrender value of life insurance

 

 

195

 

 

 

194

 

 

 

200

 

Gain on sale of fixed assets

 

 

 

 

 

6

 

 

 

 

Gain on sale of securities

 

 

7

 

 

 

 

 

 

 

   Gain on sale of other real estate owned

 

 

11

 

 

 

 

 

 

 

 

 

 

2,799

 

 

 

5,496

 

 

 

2,105

 

Noninterest expense:

 

 

 

 

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

 

7,801

 

 

 

8,169

 

 

 

4,916

 

Occupancy and equipment expenses

 

 

2,434

 

 

 

2,674

 

 

 

1,014

 

Data processing

 

 

974

 

 

 

1,219

 

 

 

511

 

Legal and professional

 

 

435

 

 

 

656

 

 

 

378

 

Office expenses

 

 

335

 

 

 

294

 

 

 

198

 

Marketing and business promotion

 

 

248

 

 

 

316

 

 

 

320

 

Insurance and regulatory assessments

 

 

172

 

 

 

284

 

 

 

223

 

Core deposit premium

 

 

384

 

 

 

385

 

 

 

76

 

OREO expenses/(income)

 

 

(1

)

 

 

81

 

 

 

5

 

Merger expenses

 

 

154

 

 

 

15

 

 

 

348

 

Other expenses

 

 

850

 

 

 

806

 

 

 

665

 

 

 

 

13,786

 

 

 

14,899

 

 

 

8,654

 

Income before income taxes

 

 

11,701

 

 

 

14,557

 

 

 

10,372

 

Income tax expense

 

 

3,689

 

 

 

4,415

 

 

 

2,041

 

Net income

 

$

8,012

 

 

$

10,142

 

 

$

8,331

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income per share

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.40

 

 

$

0.51

 

 

$

0.50

 

Diluted

 

$

0.39

 

 

$

0.50

 

 

$

0.48

 

Cash Dividends declared per common share

 

$

0.10

 

 

$

0.10

 

 

$

0.09

 

Weighted-average common shares outstanding

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

20,067,847

 

 

 

20,074,651

 

 

 

16,641,166

 

Diluted

 

 

20,425,966

 

 

 

20,445,013

 

 

 

17,425,300

 

 

7


 

RBB BANCORP AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

(Dollars in thousands, except per share amounts)

 

 

 

For the nine months ended

 

 

 

September 30, 2019

 

 

September 30, 2018

 

Interest and dividend income:

 

 

 

 

 

 

 

 

Interest and fees on loans

 

$

102,981

 

 

$

63,651

 

Interest on interest-earning deposits

 

 

1,412

 

 

 

645

 

Interest on investment securities

 

 

1,976

 

 

 

1,722

 

Dividend income on FHLB stock

 

 

815

 

 

 

385

 

Interest on federal funds sold and other

 

 

634

 

 

 

530

 

Total interest income

 

 

107,818

 

 

 

66,933

 

Interest expense:

 

 

 

 

 

 

 

 

Interest on savings deposits, NOW and money market accounts

 

 

3,649

 

 

 

2,845

 

Interest on time deposits

 

 

21,788

 

 

 

7,450

 

Interest on subordinated debentures and long term debt

 

 

5,783

 

 

 

2,758

 

Interest on other borrowed funds

 

 

2,857

 

 

 

992

 

Total interest expense

 

 

34,077

 

 

 

14,045

 

Net interest income

 

 

73,741

 

 

 

52,888

 

Provision for loan losses

 

 

1,731

 

 

 

2,579

 

Net interest income after provision for loans losses

 

 

72,010

 

 

 

50,309

 

Noninterest income:

 

 

 

 

 

 

 

 

Service charges, fees and other

 

 

2,976

 

 

 

1,551

 

Gain on sale of loans

 

 

6,131

 

 

 

5,025

 

Loan servicing fees, net of amortization

 

 

2,566

 

 

 

164

 

Recoveries on loans acquired in business combinations

 

 

73

 

 

 

14

 

Unrealized gain on equity investments

 

 

147

 

 

 

 

Increase in cash surrender value of life insurance

 

 

580

 

 

 

598

 

Gain on sale of fixed assets

 

 

6

 

 

 

 

Gain on sale of securities

 

 

7

 

 

 

 

Gain on sale of other real estate owned

 

 

11

 

 

 

 

 

 

 

12,497

 

 

 

7,352

 

Noninterest expense:

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

 

25,088

 

 

 

14,575

 

Occupancy and equipment expenses

 

 

7,360

 

 

 

2,640

 

Data processing

 

 

3,202

 

 

 

1,471

 

Legal and professional

 

 

1,516

 

 

 

1,058

 

Office expenses

 

 

965

 

 

 

561

 

Marketing and business promotion

 

 

926

 

 

 

785

 

Insurance and regulatory assessments

 

 

754

 

 

 

645

 

Amortization of intangibles

 

 

1,157

 

 

 

235

 

OREO expenses

 

 

161

 

 

 

12

 

Merger expenses

 

 

240

 

 

 

571

 

Other expenses

 

 

2,641

 

 

 

2,581

 

 

 

 

44,010

 

 

 

25,134

 

Income before income taxes

 

 

40,497

 

 

 

32,527

 

Income tax expense

 

 

11,963

 

 

 

5,913

 

Net income

 

$

28,534

 

 

$

26,614

 

 

 

 

 

 

 

 

 

 

Net income per share

 

 

 

 

 

 

 

 

Basic

 

$

1.42

 

 

$

1.62

 

Diluted

 

$

1.40

 

 

$

1.54

 

Cash Dividends declared per common share

 

$

0.30

 

 

$

0.26

 

Weighted-average common shares outstanding

 

 

 

 

 

 

 

 

Basic

 

 

20,063,479

 

 

 

16,379,211

 

Diluted

 

 

20,435,867

 

 

 

17,309,241

 

 

 

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

 

 

September 30, 2019

 

June 30, 2019

 

 

September 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)

 

$

144,131

 

 

$

1,064

 

 

2.93%

 

$

120,818

 

 

$

1,018

 

 

 

3.38

%

 

$

59,666

 

 

$

468

 

 

3.11%

Securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Available for sale

 

 

92,292

 

 

 

631

 

 

2.71%

 

 

87,347

 

 

 

610

 

 

 

2.80

%

 

 

67,254

 

 

 

478

 

 

2.82%

Held to maturity (2)

 

 

8,730

 

 

 

81

 

 

3.68%

 

 

9,127

 

 

 

84

 

 

 

3.69

%

 

 

9,982

 

 

 

92

 

 

3.67%

Mortgage loans held for sale

 

 

253,492

 

 

 

3,050

 

 

4.77%

 

 

355,168

 

 

 

4,245

 

 

 

4.79

%

 

 

335,226

 

 

 

3,941

 

 

4.66%

Loans held for investment: (3)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Real estate

 

 

1,749,371

 

 

 

23,963

 

 

5.43%

 

 

1,763,749

 

 

 

24,394

 

 

 

5.55

%

 

 

942,826

 

 

 

13,125

 

 

5.52%

Commercial

 

 

352,795

 

 

 

5,889

 

 

6.62%

 

 

347,236

 

 

 

5,601

 

 

 

6.47

%

 

 

384,693

 

 

 

6,379

 

 

6.58%

Total loans

 

 

2,102,166

 

 

 

29,852

 

 

5.63%

 

 

2,110,985

 

 

 

29,995

 

 

 

5.70

%

 

 

1,327,519

 

 

 

19,504

 

 

5.83%

Total earning assets