rbb-8k_20191231.htm

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

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

Date of Report (Date of earliest event reported): January 27, 2020 (January 23, 2020)

 

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 January 27, 2020, RBB Bancorp issued a press release setting forth the financial results for the quarter ended December 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.

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 January 23, 2020, RBB Bancorp announced that its Board of Directors declared a cash dividend of $0.12 per share of its common stock. The dividend is payable on February 18, 2020, to common shareholders of record as of February 7, 2020.  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 January 27, 2020, announcing the financial results of RBB Bancorp for the quarter ended December 31, 2019.

 

 

 

99.2

 

Press Release, dated January 23, 2020, 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:  January 27, 2020

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 Fourth Quarter and Full Year Earnings for 2019

Conference Call and Webcast Scheduled for Tuesday, January 28, 2020 at

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

Fourth Quarter 2019 Highlights

Record net income of $10.7 million, or $0.52 diluted earnings per share

Loans held for investment increased by $70.8 million from the end of the prior quarter

Total deposits (excluding brokered deposits) increased by $32.6 million from the end of the prior quarter

Sold $161.7 million of mortgage loans for a net gain of $3.6 million

Completed the acquisition of Pacific Global Bank on January 10, 2020

Los Angeles, CA, January 27, 2020 – RBB Bancorp (NASDAQ:RBB) and its subsidiaries, Royal Business Bank (“the Bank”) and RBB Asset Management Company (“RAM”), collectively referred to herein as “the Company,” announced financial results for the quarter ended December 31, 2019.

The Company reported net income of $10.7 million, or $0.52 diluted earnings per share, for the three months ended December 31, 2019, compared to net income of $8.0 million, or $0.39 diluted earnings per share, and $9.5 million, or $0.47 diluted earnings per share, for the three months ended September 30, 2019 and December 31, 2018, respectively.

“We are very pleased with our financial performance for the year, as we generated the highest level of net income in the history of the Company,” said Mr. Alan Thian, Chairman, President and CEO of RBB Bancorp. “Our strong results were driven by significant revenue growth, due to both record net interest and noninterest income, well-managed expenses and disciplined balance sheet management. We continued our positive momentum in the fourth quarter, growing our held for investment loan portfolio while also generating strong fee income from loan sales.  While our net interest margin was negatively impacted by temporary excess liquidity, our ongoing low credit costs and well-managed expenses enabled us to deliver increased profitability for the quarter.”  

On January 10, 2020 the Company completed the acquisition of PGB Holdings, Inc. and its wholly-owned subsidiary Pacific Global Bank based in Chicago, IL (“PGB”) in a cash transaction valued at approximately $32.9 million. Principally serving the Chinese-American communities in Chicago, Pacific Global Bank has three branches located in the Chicago neighborhoods of Chinatown and Bridgeport, offering consumer and business banking and loan products and services. The bank owns two of its three branches with an estimated fair market value of approximately $2 million in excess of book value. The transaction is expected to result in earnings per share accretion in the high single-digits in 2020.

1


 

Mr. Thian added, “We want to welcome Pacific Global Bank’s customers and employees to RBB Bancorp.  Pacific Global is an excellent cultural fit with RBB, as we have complementary business models, strong residential mortgage loan production platforms, and a focus on the Chinese-American market. We plan to supplement the lending products offered by PGB with our mortgage, SBA 7A, small C&I and construction lending products. We believe this expanded suite of product offerings will provide a superior banking experience for our customers, as well as allowing us to win a greater share of their banking business.”  

“We are excited to be entering the Chicago market and intend to open two new branches in metro Chicago in the next two years. We now have a strong presence in the largest Asian-American markets in three of the top major metro areas in the country, positioning RBB to continue our robust growth. Since we went public in 2017, we have more than doubled the size of RBB and built a strong business model centered around core community banking that we believe will produce attractive long-term returns for our shareholders,” Mr. Thian concluded.

Key Performance Ratios

Net income of $10.7 million for the fourth quarter of 2019 produced an annualized return on average assets of 1.51%, an annualized return on average tangible common equity of 12.50%, and an annualized return on average equity of 10.49%.  This compares to 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% for the third quarter of 2019.  The efficiency ratio for the fourth quarter of 2019 was 46.52%, compared to 52.40% for the prior quarter.

Net Interest Income and Net Interest Margin

Net interest income, before provision for loan losses, was $23.1 million for the fourth quarter of 2019, compared to $23.5 million for the third quarter of 2019.  The $389,000 decrease was primarily attributable to a $10.2 million increase in average interest-bearing liabilities, partially offset by a $40.6 million increase in average earning assets and a $21.0 million increase in average noninterest-bearing deposits.  Net interest income was also impacted by a 12 basis point decrease in the net interest margin.  Accretion of purchase discounts from prior acquisitions contributed $633,000 to net interest income in the fourth quarter of 2019, compared to $624,000 in the third quarter of 2019.

Compared to the fourth quarter of 2018, net interest income, before provision for loan losses, decreased $2.5 million from $25.6 million. The decrease was primarily attributable to a 41 basis point decrease in the net interest margin, partially offset by a $55.9 million decrease in average interest-bearing liabilities, a $22.4 million increase in average earning assets and a $22.8 million increase in average noninterest-bearing deposits.  FHLB advances were paid off during the quarter.  The increases in average earning assets and total deposits were primary due to the First American International Corp. (“FAIC”) acquisition in the fourth quarter of 2018.

Net interest margin was 3.47% for the fourth quarter of 2019, a decrease from 3.59% in the third quarter of 2019. The decrease was primarily attributable to a 20 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 partially offset by a 9 basis point decrease in the cost of interest bearing liabilities.  Loan discount accretion contributed 10 basis points to the net interest margin in the fourth quarter of 2019, consistent with the third quarter of 2019.

Noninterest Income

Noninterest income was $5.8 million for the fourth quarter of 2019, an increase of $3.0 million from $2.8 million in the third quarter of 2019.  The increase was driven by an increase in gain on loan sales of $2.9 million.

The Company sold $61.3 million in FNMA direct and indirect mortgage loans, and $100.3 million in mortgage loans to private investors for a net gain of $1.9 million and $1.7 million, respectively during the fourth quarter of 2019, compared to $5.8 million in total mortgage loan sales for a net gain of $182,000 during the third quarter of 2019.

The Company sold $3.8 million in SBA loans for a net gain of $171,000 during the fourth quarter of 2019, compared to $11.3 million in SBA loans sold for a net gain of $631,000 during the third quarter of 2019.  

Compared to the fourth quarter of 2018, noninterest income increased by $334,000 from $5.5 million. The increase was primarily attributable to an increase of $1.7 million in gains on loan sales partially offset by a $1.3 million decrease in recoveries on loans acquired in business combinations.

2


 

Noninterest Expense

Noninterest expense for the fourth quarter of 2019 was $13.5 million, compared to $13.8 million for the third quarter of 2019.  The $321,000 decrease was primarily attributable to a $477,000 decrease in data processing expenses, $118,000 decrease in legal and professional expenses, partially offset by a $177,000 increase in OREO expense, and a $134,000 increase in marketing and business promotion expenses.

RBB incurred $231,000 in merger expenses in the fourth quarter of 2019, of which $159,000 related to FAIC and $72,000 to PGB, an increase of $77,000 from the prior quarter.  For 2019, RBB incurred $471,000 in merger expenses, of which $367,000 related to FAIC and $104,000 to PGB.  The merger expense in 2019 decreased $1.2 million from $1.7 million in 2018.

Noninterest expense decreased from $15.5 million in the fourth quarter of 2018.  The $2.0 million decrease was primarily due to an $857,000 decrease in salaries and employee benefits, a $209,000 decrease in data processing expenses, a $159,000 decrease in insurance and regulatory assessments, and a $855,000 decrease in merger expense.  These were partially offset by a $476,000 increase in occupancy and equipment expense and $164,000 increase in OREO expense.    Following the FAIC acquisition in the fourth quarter of 2018, we implemented various cost savings initiatives and real estate consolidations, resulting in a reduction of certain operating expenses which were fully realized by the end of 2019.

Income Taxes

The effective tax rate was 28.0%, with no stock options exercised in the fourth quarter of 2019, 31.5% for the third quarter of 2019 including the tax impact for stock options exercised in the amount of $38,000, and 30.6% for the fourth quarter of 2018 including the tax impact of a deduction for stock options exercised in the amount of $401,000.  

Loan Portfolio

Loans held for investment, net of deferred fees and discounts, totaled $2.2 billion as of December 31, 2019, an increase of $70.8 million from September 30, 2019, and an increase of $54.9 million from December 31, 2018. The increase from September 30th to December 31st was driven by a $68.7 million increase in single-family residential mortgages, which includes a combination of strong production and approximately $95.8 million net transfer of loans from the available for sale category.  In addition commercial real estate loans increased by $5.3 million and SBA loans increased by $4.0 million.  These increases were partially offset by decreases of $5.6 million in construction loans and $1.9 million in C&I loans.

During the fourth quarter of 2019, single-family residential mortgage production was $125.8 million (mortgage loans held for investment and held for sale), payoffs and paydowns were $46.2 million, and single-family residential mortgage loan sales were $161.7 million.  Compared to the third quarter of 2019, production was $92.0 million, payoffs and paydowns were $48.3 million, and loan sales were $5.9 million.

Mortgage loans held for sale were $108.2 million as of December 31, 2019, a decrease of $151.1 million from $259.3 million at September 30, 2019 and a decrease of $326.3 million from $434.5 million as of December 31, 2018.  The Company originated approximately $38.1 million in mortgage loans for sale for the fourth quarter of 2019, compared with $46.1 million during the prior quarter.  

In the fourth quarter, SBA loan production was $4.7 million and total loan sales were $3.8 million.  In the third quarter, SBA loan production was $7.5 million and total loan sales were $11.3 million.

Deposits

Deposits were $2.2 billion at December 31, 2019, a decrease of $2.9 million from September 30, 2019, and an increase of $105.0 million from December 31, 2018. The decrease in total deposits from the end of the prior quarter was primarily attributable to a $59.1 million decrease in time deposits (including a $35.5 million decrease in brokered CDs), partially offset by a $12.7 million increase in noninterest-bearing deposits and a $43.5 million increase in interest-bearing non-maturity deposits.  As of December 31, 2019, time deposits included $67.1 million in brokered CDs, as compared to $102.6 million as of September 30, 2019 and $113.8 million as of December 31, 2018. Excluding brokered deposits, total deposits increased by $32.6 million from September 30, 2019.

Asset Quality

Nonperforming assets totaled $13.5 million, or 0.48% of total assets at December 31, 2019, compared to $10.9 million, or 0.39%, of total assets at September 30, 2019. The increase in nonperforming assets was primarily due to the additions of three SBA loans totaling $5.1 million, and a mortgage loan in the amount of $440,000, partially offset by a $1.0 million commercial real estate loan

3


 

payoff, and a $974,000 decrease in other real estate owned (OREO). Nonperforming assets consist of OREO, 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 $4.4 million at December 31, 2019, from $4.6 million at September 30, 2019.  

In the fourth quarter of 2019, there were $1.2 million in net charge-offs.

The Company recorded a provision for credit losses of $659,000 for the fourth quarter of 2019, which was primarily attributable to a $92,000 reserve for two non-accrual loans and normal loan growth.  

The allowance for credit losses totaled $18.8 million, or 0.86% of loans held for investment at December 31, 2019, compared with $19.4 million, or 0.91%, of total loans at September 30, 2019.

Properties

Our headquarters office is located at 1055 Wilshire Blvd., 12th floor, in Los Angeles, California. In 2019, we closed one non-banking office and one branch and opened one new branch in New York City.

The Bank plans to open a new full service banking branch in Edison, New Jersey in the third quarter of 2020. The branch will be located at 561 US-1, in the Wicks Shopping Plaza in Edison.  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, eight branches and one loan operation center in Brooklyn, Queens and Manhattan in New York, and three branches in Chicago, Illinois. 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 10:00 a.m. Pacific time/1:00 p.m. Eastern time on Tuesday, January 28, 2020, to discuss the Company’s fourth quarter 2019 financial results.

To listen to the conference call, please dial 1-833-659-7620 or 1-430-775-1348, passcode 9625188. A replay of the call will be made available at 1-855-859-2056 or 1-404-537-3406, passcode 9625188, approximately one hour after the conclusion of the call and will remain available through February 4, 2020.

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 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 recent acquisition of PGB Holdings, Inc. and its wholly-owned subsidiary, Pacific Global Bank, and 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, including ASU 2016-13 (Topic 326), “Measurement of Credit Losses on Financial Instruments”, commonly referenced as the Current Expected Credit Loss (“CECL”) model, which will change how we estimate credit losses and may increase the required level of our allowance for credit losses after adoption; 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)

 

 

 

December 31

 

 

September 30

 

 

June 30

 

 

March 31

 

 

December 31,

 

 

 

2019

 

 

2019

 

 

2019

 

 

2019

 

 

2018

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and due from banks

 

$

114,763

 

 

$

136,076

 

 

$

185,643

 

 

$

250,079

 

 

$

147,685

 

Federal funds sold and other cash equivalents

 

 

67,000

 

 

 

47,000

 

 

 

20,000

 

 

 

 

 

 

 

Total cash and cash equivalents

 

 

181,763

 

 

 

183,076

 

 

 

205,643

 

 

 

250,079

 

 

 

147,685

 

Interest-bearing deposits in other financial

   institutions

 

 

600

 

 

 

949

 

 

 

1,196

 

 

 

1,196

 

 

 

600

 

Investment securities available for sale

 

 

126,069

 

 

 

72,923

 

 

 

71,629

 

 

 

58,537

 

 

 

73,762

 

Investment securities held to maturity

 

 

8,332

 

 

 

8,724

 

 

 

8,733

 

 

 

9,449

 

 

 

9,961

 

Mortgage loans held for sale

 

 

108,194

 

 

 

259,339

 

 

 

249,596

 

 

 

375,430

 

 

 

434,522

 

Loans held for investment

 

 

2,196,934

 

 

 

2,126,145

 

 

 

2,092,438

 

 

 

2,120,413

 

 

 

2,142,015

 

Allowance for loan losses

 

 

(18,816

)

 

 

(19,386

)

 

 

(18,561

)

 

 

(18,236

)

 

 

(17,577

)

Net loans held for investment

 

 

2,178,118

 

 

 

2,106,759

 

 

 

2,073,877

 

 

 

2,102,177

 

 

 

2,124,438

 

Premises and equipment, net

 

 

16,813

 

 

 

16,871

 

 

 

17,214

 

 

 

17,342

 

 

 

17,307

 

Federal Home Loan Bank (FHLB) stock

 

 

15,000

 

 

 

15,000

 

 

 

15,000

 

 

 

8,899

 

 

 

9,707

 

Net deferred tax assets

 

 

2,734

 

 

 

4,378

 

 

 

4,318

 

 

 

4,389

 

 

 

4,642

 

Cash surrender value of life insurance

 

 

34,353

 

 

 

34,158

 

 

 

33,963

 

 

 

33,769

 

 

 

33,578

 

Goodwill

 

 

58,563

 

 

 

58,383

 

 

 

58,383

 

 

 

58,383

 

 

 

58,383

 

Servicing assets

 

 

17,083

 

 

 

17,180

 

 

 

17,587

 

 

 

17,288

 

 

 

17,370

 

Core deposit intangibles

 

 

6,100

 

 

 

6,444

 

 

 

6,828

 

 

 

7,212

 

 

 

7,601

 

Accrued interest and other assets

 

 

34,813

 

 

 

36,118

 

 

 

37,989

 

 

 

33,968

 

 

 

34,446

 

Total assets

 

$

2,788,535

 

 

$

2,820,302

 

 

$

2,801,956

 

 

$

2,978,118

 

 

$

2,974,002

 

Liabilities and shareholders' equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing demand

 

$

458,886

 

 

$

446,141

 

 

$

435,629

 

 

$

418,953

 

 

$

438,764

 

Savings, NOW and money market accounts

 

 

537,490

 

 

 

493,965

 

 

 

462,448

 

 

 

480,959

 

 

 

579,247

 

Time deposits

 

 

1,252,685

 

 

 

1,311,817

 

 

 

1,337,257

 

 

 

1,284,428

 

 

 

1,126,030

 

Total deposits

 

 

2,249,061

 

 

 

2,251,923

 

 

 

2,235,334

 

 

 

2,184,340

 

 

 

2,144,041

 

FHLB advances

 

 

 

 

 

35,000

 

 

 

40,000

 

 

 

275,000

 

 

 

319,500

 

Long-term debt, net of debt issuance costs

 

 

104,049

 

 

 

103,964

 

 

 

103,878

 

 

 

103,793

 

 

 

103,708

 

Subordinated debentures

 

 

9,673

 

 

 

9,632

 

 

 

9,590

 

 

 

9,548

 

 

 

9,506

 

Accrued interest and other liabilities

 

 

18,185

 

 

 

20,942

 

 

 

19,334

 

 

 

20,634

 

 

 

22,626

 

Total liabilities

 

 

2,380,968

 

 

 

2,421,461

 

 

 

2,408,136

 

 

 

2,593,315

 

 

 

2,599,381

 

Shareholders' equity:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shareholder's equity

 

 

407,256

 

 

 

398,438

 

 

 

393,758

 

 

 

385,395

 

 

 

375,887

 

Non-controlling interest

 

 

72

 

 

 

72

 

 

 

72

 

 

 

72

 

 

 

72

 

Accumulated other comprehensive income

   (loss) - Net of tax

 

 

239

 

 

 

331

 

 

 

(10

)

 

 

(664

)

 

 

(1,338

)

Total shareholders' equity

 

 

407,567

 

 

 

398,841

 

 

 

393,820

 

 

 

384,803

 

 

 

374,621

 

Total liabilities and stockholders’

   equity

 

$

2,788,535

 

 

$

2,820,302

 

 

$

2,801,956

 

 

$

2,978,118

 

 

$

2,974,002

 

 

6


 

RBB BANCORP AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

(Dollars in thousands, except per share amounts)

 

 

 

For the three months ended

 

 

 

December 31, 2019

 

 

September 30, 2019

 

 

December 31, 2018

 

Interest and dividend income:

 

 

 

 

 

 

 

 

 

 

 

 

Interest and fees on loans

 

$

32,178

 

 

$

32,902

 

 

$

33,828

 

Interest on interest-bearing deposits

 

 

373

 

 

 

429

 

 

 

357

 

Interest on investment securities

 

 

676

 

 

 

703

 

 

 

628

 

Dividend income on FHLB stock

 

 

264

 

 

 

238

 

 

 

266

 

Interest on federal funds sold and other

 

 

416

 

 

 

397

 

 

 

102

 

Total interest income

 

 

33,907

 

 

 

34,669

 

 

 

35,181

 

Interest expense:

 

 

 

 

 

 

 

 

 

 

 

 

Interest on savings deposits, NOW and money market accounts

 

 

1,237

 

 

 

1,117

 

 

 

1,562

 

Interest on time deposits

 

 

7,559

 

 

 

8,038

 

 

 

5,098

 

Interest on subordinated debentures and long term debt

 

 

1,915

 

 

 

1,921

 

 

 

1,325

 

Interest on other borrowed funds

 

 

73

 

 

 

81

 

 

 

1,614

 

Total interest expense

 

 

10,784

 

 

 

11,157

 

 

 

9,599

 

Net interest income

 

 

23,123

 

 

 

23,512

 

 

 

25,582

 

Provision for loan losses

 

 

659

 

 

 

824

 

 

 

1,890

 

Net interest income after provision for loan losses

 

 

22,464

 

 

 

22,688

 

 

 

23,692

 

Noninterest income:

 

 

 

 

 

 

 

 

 

 

 

 

Service charges, fees and other

 

 

1,096

 

 

 

934

 

 

 

1,127

 

Gain on sale of loans

 

 

3,762

 

 

 

813

 

 

 

2,101

 

Loan servicing fees, net of amortization

 

 

817

 

 

 

827

 

 

 

686

 

Recoveries on loans acquired in business combinations

 

 

70

 

 

 

12

 

 

 

1,371

 

Increase in cash surrender value of life insurance

 

 

195

 

 

 

195

 

 

 

199

 

Gain on sale of fixed assets

 

 

 

 

 

 

 

 

 

Gain on sale of securities

 

 

-

 

 

 

7

 

 

 

5

 

(Loss)/Gain on sale of other real estate owned

 

 

(117

)

 

 

11

 

 

 

 

 

 

 

5,823

 

 

 

2,799

 

 

 

5,489

 

Noninterest expense:

 

 

 

 

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

 

7,821

 

 

 

7,801

 

 

 

8,678

 

Occupancy and equipment expenses

 

 

2,390

 

 

 

2,434

 

 

 

1,914

 

Data processing

 

 

497

 

 

 

974

 

 

 

852

 

Legal and professional

 

 

317

 

 

 

435

 

 

 

655

 

Office expenses

 

 

292

 

 

 

335

 

 

 

329

 

Marketing and business promotion

 

 

382

 

 

 

248

 

 

 

358

 

Insurance and regulatory assessments

 

 

147

 

 

 

172

 

 

 

306

 

Core deposit premium

 

 

344

 

 

 

384

 

 

 

340

 

OREO expenses/(income)

 

 

176

 

 

 

(1

)

 

 

12

 

Merger expenses

 

 

231

 

 

 

154

 

 

 

1,086

 

Other expenses

 

 

868

 

 

 

850

 

 

 

973

 

 

 

 

13,465

 

 

 

13,786

 

 

 

15,503

 

Income before income taxes

 

 

14,822

 

 

 

11,701

 

 

 

13,678

 

Income tax expense

 

 

4,149

 

 

 

3,689

 

 

 

4,188

 

Net income

 

$

10,673

 

 

$

8,012

 

 

$

9,490

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income per share

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.53

 

 

$

0.40

 

 

$

0.48

 

Diluted

 

$

0.52

 

 

$

0.39

 

 

$

0.47

 

Cash Dividends declared per common share

 

$

0.10

 

 

$

0.10

 

 

$

 

Weighted-average common shares outstanding

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

20,001,916

 

 

 

20,067,847

 

 

 

19,442,080

 

Diluted

 

 

20,389,099

 

 

 

20,425,966

 

 

 

19,927,765

 

 

7


 

RBB BANCORP AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

(Dollars in thousands, except per share amounts)

 

 

 

For the twelve months ended

 

 

 

December 31, 2019

 

 

December 31, 2018

 

Interest and dividend income:

 

 

 

 

 

 

 

 

Interest and fees on loans

 

$

135,159

 

 

$

97,480

 

Interest on interest-earning deposits

 

 

1,785

 

 

 

1,002

 

Interest on investment securities

 

 

2,652

 

 

 

2,351

 

Dividend income on FHLB stock

 

 

1,079

 

 

 

650

 

Interest on federal funds sold and other

 

 

1,050

 

 

 

632

 

Total interest income

 

 

141,725

 

 

 

102,115

 

Interest expense:

 

 

 

 

 

 

 

 

Interest on savings deposits, NOW and money market accounts

 

 

4,886

 

 

 

4,408

 

Interest on time deposits

 

 

29,347

 

 

 

12,548

 

Interest on subordinated debentures and long term debt

 

 

7,698

 

 

 

4,083

 

Interest on other borrowed funds

 

 

2,930

 

 

 

2,606

 

Total interest expense

 

 

44,861

 

 

 

23,645

 

Net interest income

 

 

96,864

 

 

 

78,470

 

Provision for loan losses

 

 

2,390

 

 

 

4,469

 

Net interest income after provision for loans losses

 

 

94,474

 

 

 

74,001

 

Noninterest income:

 

 

 

 

 

 

 

 

Service charges, fees and other

 

 

4,072

 

 

 

2,679

 

Gain on sale of loans

 

 

9,893

 

 

 

7,126

 

Loan servicing fees, net of amortization

 

 

3,383

 

 

 

850

 

Recoveries on loans acquired in business combinations

 

 

143

 

 

 

1,385

 

Unrealized gain on equity investments

 

 

147

 

 

 

 

Increase in cash surrender value of life insurance

 

 

775

 

 

 

797

 

Gain on sale of securities

 

 

7

 

 

 

5

 

Gain on sale of fixed assets

 

 

6

 

 

 

 

Loss on sale of other real estate owned

 

 

(106

)

 

 

 

 

 

 

18,320

 

 

 

12,842

 

Noninterest expense:

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

 

32,909

 

 

 

23,254

 

Occupancy and equipment expenses

 

 

9,750

 

 

 

4,554

 

Data processing

 

 

3,699

 

 

 

2,323

 

Legal and professional

 

 

1,832

 

 

 

1,714

 

Office expenses

 

 

1,257

 

 

 

890

 

Marketing and business promotion

 

 

1,308

 

 

 

1,143

 

Insurance and regulatory assessments

 

 

900

 

 

 

951

 

Amortization of intangibles

 

 

1,501

 

 

 

575

 

OREO expenses

 

 

337

 

 

 

24

 

Merger expenses

 

 

471

 

 

 

1,658

 

Other expenses

 

 

3,509

 

 

 

3,551

 

 

 

 

57,473

 

 

 

40,637

 

Income before income taxes

 

 

55,321

 

 

 

46,206

 

Income tax expense

 

 

16,112

 

 

 

10,101

 

Net income

 

$

39,209

 

 

$

36,105

 

 

 

 

 

 

 

 

 

 

Net income per share

 

 

 

 

 

 

 

 

Basic

 

$

1.96

 

 

$

2.11

 

Diluted

 

$

1.92

 

 

$

2.01

 

Cash Dividends declared per common share

 

$

0.40

 

 

$

0.35

 

Weighted-average common shares outstanding

 

 

 

 

 

 

 

 

Basic

 

 

20,017,306

 

 

 

17,151,222

 

Diluted

 

 

20,393,424

 

 

 

17,967,653

 

 

 

8


RBB BANCORP AND SUBSIDIARIES

AVERAGE BALANCE SHEET AND NET INTEREST INCOME

(Unaudited)

(Dollars in thousands, except per share amounts)

 

 

 

For the three months ended

 

 

December 31, 2019

 

September 30, 2019

 

December 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)

 

$

172,431

 

 

$

1,053

 

 

2.42%

 

$

144,131

 

 

$

1,064

 

 

2.93%

 

$

65,842

 

 

$

725

 

 

4.37%

Securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Available for sale

 

 

94,400

 

 

 

605

 

 

2.54%

 

 

92,292

 

 

 

631

 

 

2.71%

 

 

77,899

 

 

 

546

 

 

2.78%

Held to maturity (2)

 

 

8,441

 

 

 

80

 

 

3.76%

 

 

8,730

 

 

 

81

 

 

3.68%

 

 

14,444

 

 

 

92

 

 

2.53%

Mortgage loans held for sale

 

 

244,706

 

 

 

2,969

 

 

4.81%

 

 

253,492

 

 

 

3,050

 

 

4.77%

 

 

435,888

 

 

 

5,100

 

 

4.64%

Loans held for investment: (3)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Real estate

 

 

1,793,647

 

 

 

24,182

 

 

5.35%

 

 

1,749,371

 

 

 

23,963

 

 

5.43%

 

 

1,650,917

 

 

 

22,637

 

 

5.44%

Commercial

 

 

327,765

 

 

 

5,027

 

 

6.08%

 

 

352,795

 

 

 

5,889

 

 

6.62%

 

 

374,016

 

 

 

6,092

 

 

6.46%

Total loans

 

 

2,121,412

 

 

 

29,209

 

 

5.46%

 

 

2,102,166

 

 

 

29,852

 

 

5.63%

 

 

2,024,933

 

 

 

28,729

 

 

5.63%

Total earning assets

 

 

2,641,390

 

 

$

33,916

 

 

5.09%

 

 

2,600,811

 

 

$

34,678

 

 

5.29%

 

 

2,619,006

 

 

$

35,192

 

 

5.33%

Noninterest-earning assets

 

 

165,659

 

 

 

 

 

 

 

 

 

169,691

 

 

 

 

 

 

 

 

 

167,180

 

 

 

 

 

 

 

Total assets

 

$

2,807,049

 

 

 

 

 

 

 

 

$

2,770,502