rbb-8k_20200331.htm

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

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

Date of Report (Date of earliest event reported): April 20, 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. 

2


Item 2.02 Results of Operations and Financial Condition.

On April 20, 2020, RBB Bancorp issued a press release setting forth the financial results for the quarter ended March 31, 2020, 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 April 20, 2020, RBB Bancorp announced that its Board of Directors declared a cash dividend of $0.06 per share of its common stock. The dividend is payable on May 13, 2020, to common shareholders of record as of April 30, 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 April 20, 2020, announcing the financial results of RBB Bancorp for the quarter ended March 31, 2020.

 

 

 

99.2

 

Press Release, dated April 20, 2020, announcing RBB Bancorp declared a quarterly cash dividend of $0.06 per share.

 

3


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

 

RBB BANCORP

(Registrant)

 

 

 

 

Date:  April 20, 2020

By:

 

/s/ David Morris

 

 

 

David Morris

 

 

 

Executive Vice President and

Chief Financial Officer

 

4

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 First Quarter Earnings for 2020

Conference Call and Webcast Scheduled for Tuesday, April 21, 2020 at

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

 

First Quarter 2020 Highlights

Net income of $6.7 million, or $0.33 diluted earnings per share

 

Completed the acquisition of Pacific Global Bank (“PGB”) on January 10, 2020 and the system conversion on March 15, 2020

Loans held for investment increased by $202.8 million, or 37.1% annualized growth, from the end of the prior quarter, including a $173.2 million contribution from PGB

Total deposits (excluding brokered deposits) increased by $220.9 million, or 8.32%, from the end of the prior quarter, including a $188.4 million contribution from PGB

Sold $100.5 million of mortgage loans for a net gain of $2.7 million

COVID-19 Update

The Company has fully implemented its Business Continuity Plan

All branches remain open, with routine banking services offered through online banking, drive-up windows and limited lobby access

Implemented a number of actions to support a healthy workforce

 

o

Flexible work practices such as work-from-home options, working in shifts and placing greater distances between employees  

 

o

Discontinued non-essential business travel and meetings

 

o

Utilizing online meeting platforms

Actively addressing client needs, including offering loan relief to all impacted clients

Enrolling clients in the SBA Paycheck Protection Program

 

o

As of April 17, 2020, have received approvals from the SBA for 117 loans in the total amount of $21.8 million

 

 

1


 

Los Angeles, CA, April 20, 2020RBB Bancorp (NASDAQ:RBB) and its subsidiaries, Royal Business Bank (“the Bank”) and RBB Asset Management Company (“RAM”), collectively referred to herein as “the Company,” announced financial results for the quarter ended March 31, 2020.

The Company reported net income of $6.7 million, or $0.33 diluted earnings per share, for the three months ended March 31, 2020, compared to net income of $10.7 million, or $0.52 diluted earnings per share, and $10.4 million, or $0.51 diluted earnings per share, for the three months ended December 31, 2019 and March 31, 2019, respectively.

“The onset of the COVID-19 pandemic has created unprecedented challenges in our country and the world,” said Mr. Alan Thian, Chairman, President and CEO of RBB Bancorp. “The physical and financial health of our customers, investors and employees are our paramount concerns. We are committed to helping our local businesses and the communities that we serve during these extremely challenging times. We expect to grant loan deferrals to our customers who need temporary relief, and we will partner with the Small Business Administration to offer loans to affected clients through the Payroll Protection Program.  However, we plan to continue to originate new loans across all of our business lines in a disciplined manner.”  

“Though the pandemic did impact our results in the form of lower organic loan growth and an increased provision for loan losses, our overall credit quality remained relatively stable, and our operating expenses were in line with our expectations,” added Mr. Thian. “I am generally pleased with of our first-quarter financial performance and the healthy underlying fundamentals of the company. We remain focused on maintaining adequate liquidity to help our existing customers manage through this public health crisis and we continue to evaluate opportunities to expand our franchise beyond our existing markets.”

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 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.

Key Performance Ratios

Net income of $6.7 million for the first quarter of 2020 produced an annualized return on average assets of 0.90%, an annualized return on average tangible common equity of 8.13%, and an annualized return on average equity of 6.60%.  This compares to 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% for the fourth quarter of 2019.  The efficiency ratio for the first quarter of 2020 was 57.65%, compared to 46.52% for the prior quarter.

Net Interest Income and Net Interest Margin

Net interest income, before provision for loan losses, was $23.6 million for the first quarter of 2020, compared to $23.1 million for the fourth quarter of 2019.  The $470,000 increase was primarily attributable to a $195.0 million increase in average earning assets, partially offset by a $182.3 million increase in average interest-bearing liabilities.  The increases in both categories were primarily due to the acquisition of PGB.  Net interest income was also adversely impacted by a 12 basis point decrease in the net interest margin.  Accretion of purchase discounts from prior acquisitions contributed $685,000 to net interest income in the first quarter of 2020, compared to $633,000 in the fourth quarter of 2019.

During the quarter, the Company obtained a 5-year FHLB $150 million advance to secure funding at an attractive interest rate.  The Company had no FHLB advances at December 31, 2019.

Compared to the first quarter of 2019, net interest income, before provision for loan losses, decreased $2.3 million from $25.9 million. The decrease was primarily attributable to a 49 basis point decrease in the net interest margin, and a $13.4 million increase in average interest-bearing liabilities, partially offset by a $98.3 million increase in average earning assets and an $80.4 million increase in average noninterest-bearing deposits. The increases in average earning assets and total deposits were primarily due to the PGB acquisition.

Net interest margin was 3.35% for the first quarter of 2020, a decrease from 3.47% in the fourth quarter of 2019. The decrease was primarily attributable to a 26 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 23 basis point decrease in the cost of interest bearing liabilities.  Loan discount accretion contributed 10 basis points to the net interest margin in the first quarter of 2020, consistent with the fourth quarter of 2019.

2


 

Noninterest Income

Noninterest income was $4.6 million for the first quarter of 2020, a decrease of $1.2 million from $5.8 million in the fourth quarter of 2019.  The decrease was driven by a decrease in gain on loan sales of $1.1 million.

The Company sold $31.5 million in FNMA direct and indirect mortgage loans, and $69.2 million in mortgage loans to private investors for a net gain of $1.4 million and $1.2 million, respectively during the first quarter of 2020, compared to $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.

The Company sold $1.2 million in SBA loans for a net gain of $89,000 during the first quarter of 2020, compared to $3.8 million in SBA loans sold for a net gain of $171,000 during the fourth quarter of 2019.  

Compared to the first quarter of 2019, noninterest income increased by $413,000 from $4.2 million. The increase was primarily attributable to an increase of $513,000 in gains on loan sales.

Noninterest Expense

Noninterest expense for the first quarter of 2020 was $16.3 million, compared to $13.5 million for the fourth quarter of 2019.  The $2.8 million increase was primarily attributable to a $1.7 million increase in salaries and benefits expenses, $645,000 increase in data processing expenses, $288,000 increase in legal and professional expenses, partially offset by a $252,000 decrease in travel expenses, $168,000 decrease in marketing and business promotion expenses, and a $162,000 decrease in OREO expenses. The increases in salaries and benefits, data processing expenses and legal and professional fees were primarily due to the acquisition of PGB.

RBB incurred $403,000 in merger and conversion expenses in the first quarter of 2020, of which $59,000 related to the First American International Corp. acquisition and $334,000 to the PGB acquisition, an increase of $172,000 from the prior quarter.

Noninterest expense increased from $15.3 million in the first quarter of 2019.  The $938,000 increase was primarily due to a $387,000 increase in salaries and employee benefits, a $332,000 increase in merger expenses, a $179,000 increase in legal and professional expenses, and a $152,000 increase in occupancy and equipment expenses.  These were partially offset by a $148,000 decrease in marketing and business promotion expenses and $121,000 decrease in insurance and regulatory expenses. The increases in salaries and benefits, data processing expenses, legal and professional fees and merger expenses was primarily due to the acquisition of PGB.

Income Taxes

The effective tax rate was 32.5%, including the impact of a deduction for stock options exercised in the amount of $28,000 for the first quarter of 2020, 28.0% with no stock options exercised for the fourth quarter of 2019, and 27.1% for the first quarter of 2019 including the tax impact of a deduction for stock options exercised in the amount of $92,000.  

Loan Portfolio

Loans held for investment, net of deferred fees and discounts, totaled $2.4 billion as of March 31, 2020, an increase of $202.8 million from December 31, 2019, and an increase of $279.4 million from March 31, 2019. The increase from the prior quarter was primarily due to the PGB acquisition. Single-family residential mortgages increased by $113.2 million on a net basis, driven by a combination of acquired loans, new production, partially offset by an approximately $13.1 million net transfer of loans to the available for sale category.  In addition commercial real estate loans increased by $61.3 million, construction and land development loans increased by  $24.1 million, SBA loans increased by $3.2 million and commercial and industrial loans increased by $1.0 million.  Approximately $33.4 million of the increase in commercial real estate and construction loans were attributable to the PGB acquisition.

During the first quarter of 2020, single-family residential mortgage production was $106.6 million (mortgage loans held for investment and held for sale), payoffs and paydowns were $39.3 million, and single-family residential mortgage loan sales were $100.5 million.  During the fourth quarter of 2019, production was $125.8 million, payoffs and paydowns were $46.2 million, and loan sales were $161.7 million.

Mortgage loans held for sale were $52.3 million as of March 31, 2020, a decrease of $55.9 million from $108.2 million at December 31, 2019 and a decrease of $323.1 million from $375.4 million as of March 31, 2019.  The Company originated approximately $32.4 million in mortgage loans for sale for the first quarter of 2020, compared with $38.1 million during the prior quarter.  

3


 

In the first quarter, SBA loan production was $6.2 million and total loan sales were $1.2 million.  In the prior quarter, SBA loan production was $4.7 million and total loan sales were $3.8 million.

The Company is expected to significantly increase its SBA lending during the second quarter of 2020 as many of its customers seek to participate in the SBA Paycheck Protection Program. As of April 17, 2020, the Company has processed approximately 117 PPP loans with the SBA in the total amount of approximately $21.8 million.

As of April 17, 2020, borrowers representing approximately 154 loans totaling $25.8 million, or 2% of the Company’s total non-single-family residential mortgage loan portfolio, have requested some form of payment deferral. It is too early in the stage of the pandemic-induced economic slowdown to determine the total amount of loans that will ultimately require payment deferrals. The following table is intended to summarize the Company’s overall loan exposure to major industries that are considered “at-risk” for business interruption due to the COVID-19 pandemic:

 

Industry / Property Type

 

Total Exposure

($ millions)

 

 

% of Total Loans

 

General Retail (excluding SBA)

 

$

183.4

 

 

 

7.8

%

Mixed Use Commercial

 

 

79.4

 

 

 

3.4

%

Hospitality (excluding SBA)

 

 

58.2

 

 

 

2.5

%

Service Stations (excluding SBA)

 

 

22.7

 

 

 

1.0

%

Restaurants (excluding SBA)

 

 

6.4

 

 

 

0.3

%

SBA Loans

 

 

78.2

 

 

 

3.3

%

Shared National Credits (excluding Airlines and Cruise Lines)

 

 

38.5

 

 

 

1.6

%

Airlines and Cruise Lines (SNC)

 

 

9.7

 

 

 

0.4

%

 

Deposits

Deposits were $2.4 billion at March 31, 2020, an increase of $187.0 million from December 31, 2019, and an increase of $251.6 million from March 31, 2019. The increase in total deposits from the prior quarter was primarily attributable to the PGB acquisition. Time deposits increased by $107.1 million, partially offset by a $34.0 million decrease in brokered CDs, noninterest-bearing deposits increased by $45.6 and interest-bearing non-maturity deposits increased by $34.4 million.  As of March 31, 2020, time deposits included $33.1 million in brokered CDs, as compared to $67.1 million as of December 31, 2019 and $182.8 million as of March 31, 2019. Excluding brokered deposits, total deposits increased by $220.9 million from December 31, 2019.

Asset Quality

Nonperforming assets totaled $20.8 million, or 0.66% of total assets at March 31, 2020, compared to $13.5 million, or 0.48%, of total assets at December 31, 2019. The increase in nonperforming assets was primarily due to the additions in non-accrual loans of two SBA loans totaling $3.6 million, five commercial and industrial loans totaling $1.4 million and four mortgage loans totaling $1.6 million, the addition of one mortgage past due 90 days and still accruing loan in the amount of $225,000 and the addition of a commercial and industrial TDR loan in the amount of $506,000. Five of these loan additions were the result of the PGB acquisition. 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 increased to $22.5 million at March 31, 2020, up from $5.3 million at December 31, 2019.  

In the first quarter of 2020, there were $631,000 in net charge-offs, down from $1.2 million in the prior quarter.

The Company recorded a provision for credit losses of $1.9 million for the first quarter of 2020, up from $659,000 in the prior quarter, primarily attributable to the higher loan balances, an increase in 30-89 day past due loans, non-performing loans and the expected impact of the COVID-19 pandemic.  

The allowance for loan losses totaled $20.1 million, or 0.84% of loans held for investment at March 31, 2020, compared with $18.8 million, or 0.86%, of total loans at December 31, 2019.

4


 

Properties

On March 31, 2020, we closed the Grand Street branch in New York City.  The lease for this branch expired in April 2020.  Branch operations and staff were transferred to the Bowery branch.

With the acquisition of PGB, three branches are located in the Chicago neighborhoods of Chinatown and Bridgeport

The Bank plans to open a new full service banking branch in Edison, New Jersey in the second half 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 $3.1 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, in Brooklyn, Queens, and Manhattan in New York, and three branches in the Chicago neighborhoods of Chinatown and Bridgeport.  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, seven 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 11:00 a.m. Pacific time/2:00 p.m. Eastern time tomorrow, April 21, 2020, to discuss the Company’s first quarter 2020 financial results.

To listen to the conference call, please dial 1-833-659-7620 or 1-430-775-1348, passcode 2075599. A replay of the call will be made available at 1-855-859-2056 or 1-404-537-3406, passcode 2075599, approximately one hour after the conclusion of the call and will remain available through April 28, 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.

5


 

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; expectations regarding the impact of the COVID-19 pandemic; 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 First American International Corp., 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, 2019, 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.

6


 

RBB BANCORP AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(Dollars in thousands)

 

 

 

March 31

 

 

December 31

 

 

September 30

 

 

June 30

 

 

March 31

 

 

 

2020

 

 

2019

 

 

2019

 

 

2019

 

 

2019

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and due from banks

 

$

285,667

 

 

$

114,763

 

 

$

136,076

 

 

$

185,643

 

 

$

250,079

 

Federal funds sold and other cash equivalents

 

 

75,300

 

 

 

67,000

 

 

 

47,000

 

 

 

20,000

 

 

 

 

Total cash and cash equivalents

 

 

360,967

 

 

 

181,763

 

 

 

183,076

 

 

 

205,643

 

 

 

250,079

 

Interest-bearing deposits in other financial

   institutions

 

 

600

 

 

 

600

 

 

 

949

 

 

 

1,196

 

 

 

1,196

 

Investment securities available for sale

 

 

126,294

 

 

 

126,069

 

 

 

72,923

 

 

 

71,629

 

 

 

58,537

 

Investment securities held to maturity

 

 

7,825

 

 

 

8,332

 

 

 

8,724

 

 

 

8,733

 

 

 

9,449

 

Mortgage loans held for sale

 

 

52,311

 

 

 

108,194

 

 

 

259,339

 

 

 

249,596

 

 

 

375,430

 

Loans held for investment

 

 

2,399,767

 

 

 

2,196,934

 

 

 

2,126,145

 

 

 

2,092,438

 

 

 

2,120,413

 

Allowance for loan losses

 

 

(20,130

)

 

 

(18,816

)

 

 

(19,386

)

 

 

(18,561

)

 

 

(18,236

)

Net loans held for investment

 

 

2,379,637

 

 

 

2,178,118

 

 

 

2,106,759

 

 

 

2,073,877

 

 

 

2,102,177

 

Premises and equipment, net

 

 

24,472

 

 

 

16,813

 

 

 

16,871

 

 

 

17,214

 

 

 

17,342

 

Federal Home Loan Bank (FHLB) stock

 

 

15,630

 

 

 

15,000

 

 

 

15,000

 

 

 

15,000

 

 

 

8,899

 

Net deferred tax assets

 

 

-

 

 

 

2,326

 

 

 

4,378

 

 

 

4,318

 

 

 

4,389

 

Cash surrender value of life insurance

 

 

34,544

 

 

 

34,353

 

 

 

34,158

 

 

 

33,963

 

 

 

33,769

 

Goodwill

 

 

70,074

 

 

 

58,563

 

 

 

58,383

 

 

 

58,383

 

 

 

58,383

 

Servicing assets

 

 

16,826

 

 

 

17,083

 

 

 

17,180

 

 

 

17,587

 

 

 

17,288

 

Core deposit intangibles

 

 

6,234

 

 

 

6,100

 

 

 

6,444

 

 

 

6,828

 

 

 

7,212

 

Accrued interest and other assets

 

 

33,523

 

 

 

35,221

 

 

 

36,118

 

 

 

37,989

 

 

 

33,968

 

Total assets

 

$

3,128,937

 

 

$

2,788,535

 

 

$

2,820,302

 

 

$

2,801,956

 

 

$

2,978,118

 

Liabilities and shareholders' equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing demand

 

$

504,324

 

 

$

458,763

 

 

$

446,141

 

 

$

435,629

 

 

$

418,953

 

Savings, NOW and money market accounts

 

 

571,870

 

 

 

537,490

 

 

 

493,965

 

 

 

462,448

 

 

 

480,959

 

Time deposits

 

 

1,359,786

 

 

 

1,252,685

 

 

 

1,311,817

 

 

 

1,337,257

 

 

 

1,284,428

 

Total deposits

 

 

2,435,980

 

 

 

2,248,938

 

 

 

2,251,923

 

 

 

2,235,334

 

 

 

2,184,340

 

Net deferred tax liabilities

 

 

312

 

 

 

 

 

 

 

 

 

 

 

 

 

FHLB advances

 

 

150,000

 

 

 

 

 

 

35,000

 

 

 

40,000

 

 

 

275,000

 

Long-term debt, net of debt issuance costs

 

 

104,135

 

 

 

104,049

 

 

 

103,964

 

 

 

103,878

 

 

 

103,793

 

Subordinated debentures

 

 

14,120

 

 

 

9,673

 

 

 

9,632

 

 

 

9,590

 

 

 

9,548

 

Accrued interest and other liabilities

 

 

16,397

 

 

 

18,185

 

 

 

20,942

 

 

 

19,334

 

 

 

20,634

 

Total liabilities

 

 

2,720,944

 

 

 

2,380,845

 

 

 

2,421,461

 

 

 

2,408,136

 

 

 

2,593,315

 

Shareholders' equity:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shareholder's equity

 

 

407,332

 

 

 

407,379

 

 

 

398,438

 

 

 

393,758

 

 

 

385,395

 

Non-controlling interest

 

 

72

 

 

 

72

 

 

 

72

 

 

 

72

 

 

 

72

 

Accumulated other comprehensive income

   (loss) - Net of tax

 

 

589

 

 

 

239

 

 

 

331

 

 

 

(10

)

 

 

(664

)

Total shareholders' equity

 

 

407,993

 

 

 

407,690

 

 

 

398,841

 

 

 

393,820

 

 

 

384,803

 

Total liabilities and stockholders’

   equity

 

$

3,128,937

 

 

$

2,788,535

 

 

$

2,820,302

 

 

$

2,801,956

 

 

$

2,978,118

 

 

7


 

RBB BANCORP AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

(Dollars in thousands, except per share amounts)

 

 

 

For the three months ended

 

 

 

March 31, 2020

 

 

December 31, 2019

 

 

March 31, 2019

 

Interest and dividend income:

 

 

 

 

 

 

 

 

 

 

 

 

Interest and fees on loans

 

$

32,276

 

 

$

32,178

 

 

$

35,839

 

Interest on interest-bearing deposits

 

 

451

 

 

 

373

 

 

 

468

 

Interest on investment securities

 

 

821

 

 

 

676

 

 

 

588

 

Dividend income on FHLB stock

 

 

2

 

 

 

264

 

 

 

198

 

Interest on federal funds sold and other

 

 

478

 

 

 

416

 

 

 

113

 

Total interest income

 

 

34,028

 

 

 

33,907

 

 

 

37,206

 

Interest expense:

 

 

 

 

 

 

 

 

 

 

 

 

Interest on savings deposits, NOW and money market accounts

 

 

1,243

 

 

 

1,237

 

 

 

1,294

 

Interest on time deposits

 

 

7,086

 

 

 

7,559

 

 

 

5,953

 

Interest on subordinated debentures and long term debt

 

 

1,956

 

 

 

1,915

 

 

 

1,747

 

Interest on other borrowed funds

 

 

150

 

 

 

73

 

 

 

2,300

 

Total interest expense

 

 

10,435

 

 

 

10,784

 

 

 

11,294

 

Net interest income

 

 

23,593

 

 

 

23,123

 

 

 

25,912

 

Provision for loan losses

 

 

1,945

 

 

 

659

 

 

 

550

 

Net interest income after provision for loan losses

 

 

21,648

 

 

 

22,464

 

 

 

25,362

 

Noninterest income:

 

 

 

 

 

 

 

 

 

 

 

 

Service charges, fees and other

 

 

1,079

 

 

 

1,096

 

 

 

820

 

Gain on sale of loans

 

 

2,711

 

 

 

3,762

 

 

 

2,198

 

Loan servicing fees, net of amortization

 

 

592

 

 

 

817

 

 

 

840

 

Recoveries on loans acquired in business combinations

 

 

42

 

 

 

70

 

 

 

6

 

Unrealized gain on equity investments

 

 

 

 

 

 

 

 

147

 

Increase in cash surrender value of life insurance

 

 

191

 

 

 

195

 

 

 

191

 

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

 

 

 

 

 

(117

)

 

 

 

 

 

 

4,615

 

 

 

5,823

 

 

 

4,202

 

Noninterest expense:

 

 

 

 

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

 

9,505

 

 

 

7,821

 

 

 

9,118

 

Occupancy and equipment expenses

 

 

2,404

 

 

 

2,390

 

 

 

2,252

 

Data processing

 

 

1,142

 

 

 

497

 

 

 

1,009

 

Legal and professional

 

 

604

 

 

 

316

 

 

 

425

 

Office expenses

 

 

323

 

 

 

292

 

 

 

336

 

Marketing and business promotion

 

 

214

 

 

 

382

 

 

 

362

 

Insurance and regulatory assessments

 

 

177

 

 

 

146

 

 

 

298

 

Core deposit premium

 

 

357

 

 

 

344

 

 

 

388

 

OREO expenses/(income)

 

 

14

 

 

 

176

 

 

 

81

 

Merger and conversion expenses

 

 

403

 

 

 

231

 

 

 

71

 

Other expenses

 

 

1,120

 

 

 

868

 

 

 

985

 

 

 

 

16,263

 

 

 

13,463

 

 

 

15,325

 

Income before income taxes

 

 

10,000

 

 

 

14,824

 

 

 

14,239

 

Income tax expense

 

 

3,252

 

 

 

4,149

 

 

 

3,859

 

Net income

 

$

6,748

 

 

$

10,675

 

 

$

10,380

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income per share

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.34

 

 

$

0.53

 

 

$

0.52

 

Diluted

 

$

0.33

 

 

$

0.52

 

 

$

0.51

 

Cash Dividends declared per common share

 

$

0.12

 

 

$

0.10

 

 

$

0.10

 

Weighted-average common shares outstanding

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

19,971,856

 

 

 

20,001,916

 

 

 

20,047,716

 

Diluted

 

 

20,266,328

 

 

 

20,389,099

 

 

 

20,436,741

 

 

 

 

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

 

 

March 31, 2020

 

December 31, 2019

 

March 31, 2019

 

 

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)

 

$

266,864

 

 

$

931

 

 

1.40%

 

$

172,431

 

 

$

1,053

 

 

2.42%

 

$

92,692

 

 

$

779

 

 

3.41%

Securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Available for sale

 

 

138,574

 

 

 

755

 

 

2.19%

 

 

94,400

 

 

 

605

 

 

2.54%

 

 

68,708

 

 

 

508

 

 

3.00%

Held to maturity (2)

 

 

8,016

 

 

 

74

 

 

3.71%

 

 

8,441

 

 

 

80

 

 

3.76%

 

 

9,629

 

 

 

89

 

 

3.75%

Mortgage loans held for sale

 

 

78,063

 

 

 

981

 

 

5.05%

 

 

244,706

 

 

 

2,969

 

 

4.81%

 

 

449,828

 

 

 

5,490

 

 

4.95%

Loans held for investment: (3)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Real estate

 

 

2,007,286

 

 

 

26,428

 

 

5.30%

 

 

1,793,647

 

 

 

24,182

 

 

5.35%

 

 

1,764,813

 

 

 

24,486

 

 

5.63%

Commercial

 

 

337,548

 

 

 

4,867

 

 

5.80%

 

 

327,765

 

 

 

5,027

 

 

6.08%

 

 

352,428

 

 

 

5,864

 

 

6.75%

Total loans

 

 

2,344,834

 

 

 

31,295

 

 

5.37%

 

 

2,121,412

 

 

 

29,209

 

 

5.46%

 

 

2,117,241

 

 

 

30,350

 

 

5.81%

Total earning assets

 

 

2,836,351

 

 

$

34,036

 

 

4.83%

 

 

2,641,390

 

 

$

33,916

 

 

5.09%

 

 

2,738,098

 

 

$

37,216

 

 

5.51%

Noninterest-earning assets

 

 

195,272

 

 

 

 

 

 

 

 

 

165,659

 

 

 

 

 

 

 

 

 

176,813

 

 

 

 

 

 

 

Total assets

 

$

3,031,623

 

 

 

 

 

 

 

 

$

2,807,049

 

 

 

 

 

 

 

 

$

2,914,911

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NOW and money market deposits

 

$

475,843

 

 

$

1,188

 

 

1.00%

 

$

416,380

 

 

$

1,190

 

 

1.13%

 

$

413,952

 

 

$

1,241

 

 

1.22%

Savings deposits

 

 

114,951

 

 

 

55

 

 

0.19%

 

 

96,813

 

 

 

48

 

 

0.20%

 

 

100,623

 

 

 

53

 

 

0.21%

Time deposits

 

 

1,358,639

 

 

 

7,086

 

 

2.10%

 

 

1,296,379

 

 

 

7,559

 

 

2.31%

 

 

1,139,214

 

 

 

5,953

 

 

2.12%

Total interest-bearing deposits

 

 

1,949,433

 

 

 

8,329

 

 

1.72%

 

 

1,809,572

 

 

 

8,797

 

 

1.93%

 

 

1,653,789

 

 

 

7,247

 

 

1.78%

FHLB advances

 

 

51,978

 

 

 

150

 

 

1.16%

 

 

14,348

 

 

 

71

 

 

1.96%

 

 

339,406

 

 

 

2,114

 

 

2.53%

Long-term debt

 

 

104,083

 

 

 

1,748

 

 

6.75%

 

 

103,997

 

 

 

1,748

 

 

6.67%

 

 

103,742

 

 

 

1,747

 

 

6.83%

Subordinated debentures

 

 

14,327

 

 

 

208

 

 

5.84%

 

 

9,648

 

 

 

167

 

 

6.87%

 

 

9,523

 

 

 

186

 

 

7.92%

Total interest-bearing liabilities

 

 

2,119,821

 

 

 

10,435

 

 

1.98%

 

 

1,937,565

 

 

 

10,784

 

 

2.21%

 

 

2,106,460

 

 

 

11,294

 

 

2.17%

Noninterest-bearing liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing deposits

 

 

485,555

 

 

 

 

 

 

 

 

 

445,891

 

 

 

 

 

 

 

 

 

405,190

 

 

 

 

 

 

 

Other noninterest-bearing liabilities

 

 

15,056

 

 

 

 

 

 

 

 

 

19,851

 

 

 

 

 

 

 

 

 

19,987

 

 

 

 

 

 

 

Total noninterest-bearing liabilities

 

 

500,611

 

 

 

 

 

 

 

 

 

465,742

 

 

 

 

 

 

 

 

 

425,177

 

 

 

 

 

 

 

Shareholders' equity

 

 

411,191

 

 

 

 

 

 

 

 

 

403,742

 

 

 

 

 

 

 

 

 

383,274

 

 

 

 

 

 

 

Total liabilities and shareholders' equity

 

$

3,031,623

 

 

 

 

 

 

 

 

$

2,807,049

 

 

 

 

 

 

 

 

$

2,914,911

 

 

 

 

 

 

 

Net interest income / interest rate spreads

 

 

 

 

 

$

23,601

 

 

2.85%

 

 

 

 

 

$

23,133

 

 

2.88%

 

 

 

 

 

$

25,922

 

 

3.34%

Net interest margin

 

 

 

 

 

 

 

 

 

3.35%

 

 

 

 

 

 

 

 

 

3.47%

 

 

 

 

 

 

 

 

 

3.84%

 

(1)

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

(2)

Interest income and average rates for tax-exempt loans and securities are presented on a tax-equivalent basis.

(3)

Average loan balances include nonaccrual loans and loans held for sale. Interest income on loans includes - amortization of deferred loan fees, net of deferred loan costs.

 

9


 

RBB BANCORP AND SUBSIDIARIES

SELECTED FINANCIAL HIGHLIGHTS

(Unaudited)

(Dollars in thousands, except per share amounts)

 

 

 

For the three months ended

 

 

 

March 31,

 

 

December 31,

 

 

March 31,

 

 

 

2020

 

 

2019

 

 

2019

 

Per share data (common stock)

 

 

 

 

 

 

 

 

 

 

 

 

Earnings

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.34

 

 

$

0.53

 

 

$

0.52

 

Diluted

 

$

0.33

 

 

$

0.52

 

 

$

0.51

 

Dividends declared

 

$

0.12

 

 

$

0.10

 

 

$

0.10

 

Basic, excluding merger and conversion expense

 

$

0.35

 

 

$

0.54

 

 

$

0.52

 

Diluted, excluding merger and conversion expense

 

$

0.35

 

 

$

0.53

 

 

$

0.51

 

Book value

 

$

20.67

 

 

$

20.35

 

 

$

19.17

 

Tangible book value

 

$

16.80

 

 

$

17.12

 

 

$

15.90

 

Weighted average shares outstanding

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

19,971,856

 

 

 

20,001,916

 

 

 

20,047,716

 

Diluted

 

 

20,266,328

 

 

 

20,389,099

 

 

 

20,436,741

 

Shares outstanding at period end

 

 

19,739,280

 

 

 

20,030,866

 

 

 

20,073,991

 

Performance ratios

 

 

 

 

 

 

 

 

 

 

 

 

Return on average assets, annualized

 

0.90%

 

 

 

1.51

%

 

 

1.44

%

Return on average shareholders' equity, annualized

 

6.60%

 

 

10.49%

 

 

 

10.98

%

Return on average tangible common equity, annualized

 

8.13%

 

 

12.50%

 

 

 

13.26

%

Noninterest income to average assets, annualized

 

0.61%

 

 

0.82%

 

 

 

0.58

%

Noninterest expense to average assets, annualized

 

2.16%

 

 

1.90%

 

 

 

2.13

%

Yield on average earning assets

 

4.83%

 

 

 

5.09

%

 

5.51%

 

Cost of average total deposits

 

1.38%

 

 

 

1.55

%

 

 

1.43

%

Cost of average interest-bearing deposits

 

1.72%

 

 

 

1.93

%

 

1.78%

 

Cost of average interest-bearing liabilities

 

1.98%

 

 

 

2.21

%

 

2.17%

 

Accretion on loans to average earning assets

 

0.10%

 

 

0.10%

 

 

 

0.16

%

Net interest spread

 

2.85%

 

 

 

2.88

%

 

3.34%

 

Net interest margin

 

3.35%

 

 

 

3.47

%

 

3.84%

 

Efficiency ratio

 

57.65%

 

 

46.52%

 

 

 

50.89

%

Common stock dividend payout ratio

 

35.29%

 

 

18.87%

 

 

 

19.69

%

 

 

10


 

RBB BANCORP AND SUBSIDIARIES

SELECTED FINANCIAL HIGHLIGHTS

(Unaudited)

(Dollars in thousands, except per share amounts)

 

 

 

As of

 

 

 

March 31,

 

 

December 31,

 

 

March 31,

 

 

 

2020

 

 

2019

 

 

2019

 

Loan to deposit ratio

 

98.51%

 

 

 

97.69

%

 

97.07%

 

Core deposits / total deposits

 

72.75%

 

 

70.46%

 

 

 

75.16

%

Net non-core funding dependence ratio

 

 

14.91

%

 

 

9.00

%

 

 

14.94

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Credit Quality Data:

 

 

 

 

 

 

 

 

 

 

 

 

Loans 30-89 days past due

 

$

22,488

 

 

$

5,277

 

 

$

5,665

 

Loans 30-89 days past due to total loans

 

0.94%

 

 

 

0.24

%

 

 

0.27

%

Loans 90 days past due and still accruing

 

$

225

 

 

$

 

 

$

 

Nonperforming loans

 

$

20,499

 

 

$

13,218

 

 

$

2,586

 

Nonperforming loans to total loans

 

0.85%

 

 

0.60%

 

 

 

0.12

%

Nonperforming assets

 

$

20,792

 

 

$

13,511

 

 

$

4,642

 

Nonperforming assets to total assets

 

0.66%

 

 

0.48%

 

 

 

0.16

%

Allowance for loan losses to total loans

 

0.84%

 

 

0.86%

 

 

0.86%

 

Allowance for loan losses to nonperforming loans

 

98.20%

 

 

142.35%

 

 

705.18%

 

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

 

0.11%

 

 

0.23%

 

 

 

-0.02

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Regulatory and other capital ratios—Company

 

 

 

 

 

 

 

 

 

 

 

 

Tangible common equity to tangible assets

 

 

10.87

%

 

 

12.59

%

 

 

10.96

%

Tier 1 leverage ratio

 

 

11.73

%

 

 

12.89

%

 

 

11.61

%

Tier 1 common capital to risk-weighted assets

 

 

15.43

%

 

 

17.16

%

 

 

16.29

%

Tier 1 capital to risk-weighted assets

 

 

16.09

%

 

 

17.65

%

 

 

16.77

%

Total capital to risk-weighted assets

 

 

21.90

%

 

 

23.82

%

 

 

22.98

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Regulatory capital ratios—Bank only

 

 

 

 

 

 

 

 

 

 

 

 

Tier 1 leverage ratio

 

 

14.44

%

 

 

15.23

%

 

 

13.43

%

Tier 1 common capital to risk-weighted assets

 

 

19.78

%

 

 

20.87

%

 

 

19.39

%

Tier 1 capital to risk-weighted assets

 

 

19.78

%

 

 

20.87

%

 

 

19.39

%

Total capital to risk-weighted assets

 

 

20.76

%

 

 

21.86

%

 

 

20.35

%

 

11


 

RBB BANCORP AND SUBSIDIARIES

SELECTED FINANCIAL HIGHLIGHTS

(Unaudited)

(Dollars in thousands, except per share amounts)

 

 

 

1st Quarter

 

 

4th Quarter

 

 

3rd Quarter

 

 

2nd Quarter

 

 

1st Quarter

 

Quarterly Consolidated Statements of Earnings

 

2020

 

 

2019

 

 

2019

 

 

2019

 

 

2019

 

Interest income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans, including fees

 

$

32,276

 

 

$

32,178

 

 

$

32,902

 

 

$

34,240

 

 

$

35,839

 

Investment securities and other

 

 

1,752

 

 

 

1,729

 

 

 

1,767

 

 

 

1,703

 

 

 

1,367

 

Total interest income

 

 

34,028

 

 

 

33,907

 

 

 

34,669

 

 

 

35,943

 

 

 

37,206

 

Interest expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

 

8,329

 

 

 

8,796

 

 

 

9,155

 

 

 

9,035

 

 

 

7,247

 

Interest on subordinated debentures and other

 

 

1,956

 

 

 

1,915

 

 

 

1,921

 

 

 

1,929

 

 

 

1,933

 

Other borrowings

 

 

150

 

 

 

73

 

 

 

81

 

 

 

662

 

 

 

2,114

 

Total interest expense

 

 

10,435

 

 

 

10,784

 

 

 

11,157

 

 

 

11,626

 

 

 

11,294

 

Net interest income before provision for loan losses

 

 

23,593

 

 

 

23,123

 

 

 

23,512

 

 

 

24,317

 

 

 

25,912

 

Provision for loan losses

 

 

1,945

 

 

 

659

 

 

 

824

 

 

 

357

 

 

 

550

 

Net interest income after provision for loan losses

 

 

21,648

 

 

 

22,464

 

 

 

22,688

 

 

 

23,960

 

 

 

25,362

 

Noninterest income

 

 

4,615

 

 

 

5,823

 

 

 

2,799

 

 

 

5,496

 

 

 

4,202

 

Noninterest expense

 

 

16,263

 

 

 

13,463

 

 

 

13,786

 

 

 

14,899

 

 

 

15,325

 

Earnings before income taxes

 

 

10,000

 

 

 

14,824

 

 

 

11,701

 

 

 

14,557

 

 

 

14,239

 

Income taxes

 

 

3,252

 

 

 

4,149

 

 

 

3,689

 

 

 

4,415

 

 

 

3,859

 

Net income

 

$

6,748

 

 

$

10,675

 

 

$

8,012

 

 

$

10,142

 

 

$

10,380

 

Net income per common share - basic

 

$

0.34

 

 

$

0.53

 

 

$

0.40

 

 

$

0.51

 

 

$

0.52

 

Net income per common share - diluted

 

$

0.33

 

 

$

0.52

 

 

$

0.39

 

 

$

0.50

 

 

$

0.51

 

Cash dividends declared per common share

 

$

0.12

 

 

$

0.10

 

 

$

0.10

 

 

$

0.10

 

 

$

0.10

 

Cash dividends declared on common shares

 

$

2,407

 

 

$

2,003

 

 

$

2,016

 

 

$

2,007

 

 

$

2,007

 

Yield on average assets, annualized

 

0.90%

 

 

1.51%

 

 

1.15%

 

 

1.43%

 

 

1.44%

 

Yield on average earning assets

 

4.83%

 

 

 

5.09

%

 

5.29%

 

 

5.37%

 

 

 

5.51

%

Cost of average deposits

 

1.38%

 

 

 

1.55

%

 

1.63%

 

 

1.62%

 

 

 

1.43

%

Cost of average interest-bearing deposits

 

1.72%

 

 

 

1.93

%

 

2.02%

 

 

1.99%

 

 

 

1.78

%

Cost of average interest-bearing liabilities

 

1.98%

 

 

 

2.21

%

 

2.30%

 

 

2.29%

 

 

 

2.17

%

Accretion on loans to average earning assets

 

0.10%

 

 

0.10%

 

 

 

0.10

%

 

 

0.11

%

 

 

0.16

%

Net interest margin

 

3.35%

 

 

 

3.47

%

 

3.59%

 

 

3.64%

 

 

 

3.84

%

 

 

 

12


RBB BANCORP AND SUBSIDIARIES

SELECTED FINANCIAL HIGHLIGHTS

(Unaudited)

(Dollars in thousands, except per share amounts)

 

Loan Portfolio Detail

 

As of

March 31, 2020

 

 

As of

December 31, 2019

 

 

As of

September 30, 2019

 

 

As of

June 30, 2019

 

 

As of

March 31, 2019

 

(dollars in thousands)

 

$

 

 

%

 

 

$

 

 

%

 

 

$

 

 

%

 

 

$

 

 

%

 

 

$

 

 

%

 

Loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial and industrial

 

$

275,602

 

 

 

11.5

 

 

$

274,586

 

 

 

12.5

 

 

$

276,478

 

 

 

13.0

 

 

$

283,920

 

 

 

13.6

 

 

$

269,556

 

 

 

12.7

 

SBA

 

 

77,566

 

 

 

3.2

 

 

 

74,985

 

 

 

3.4

 

 

 

70,978

 

 

 

3.3

 

 

 

79,475

 

 

 

3.8

 

 

 

82,571

 

 

 

3.9

 

Construction and land development

 

 

120,115

 

 

 

5.0

 

 

 

96,020

 

 

 

4.4

 

 

 

101,649

 

 

 

4.8

 

 

 

118,806

 

 

 

5.7

 

 

 

125,686

 

 

 

5.9

 

Commercial real estate (1)

 

 

854,580

 

 

 

35.6

 

 

 

793,268

 

 

 

36.1

 

 

 

787,927

 

 

 

37.1

 

 

 

756,452

 

 

 

36.2

 

 

 

756,313

 

 

 

35.7

 

Single-family residential mortgages

 

 

1,070,434

 

 

 

44.6

 

 

 

957,254

 

 

 

43.6

 

 

 

888,577

 

 

 

41.8

 

 

 

853,403

 

 

 

40.7

 

 

 

885,951

 

 

 

41.8

 

Other loans

 

 

1,470

 

 

 

0.1

 

 

 

821

 

 

 

0.0

 

 

 

536

 

 

 

0.0

 

 

 

382

 

 

 

0.0

 

 

 

336

 

 

 

0.0

 

Total loans (2)

 

$

2,399,767

 

 

 

100.0

 

 

$

2,196,934

 

 

 

100.0

 

 

$

2,126,145

 

 

 

100.0

 

 

$

2,092,438

 

 

 

100.0

 

 

$

2,120,413

 

 

 

100.0

 

Allowance for loan losses

 

 

(20,130

)

 

 

 

 

 

 

(18,816

)

 

 

 

 

 

 

(19,386

)

 

 

 

 

 

 

(18,561

)

 

 

 

 

 

 

(18,236

)

 

 

 

 

Total loans, net

 

$

2,379,637

 

 

 

 

 

 

$

2,178,118

 

 

 

 

 

 

$

2,106,759

 

 

 

 

 

 

$

2,073,877

 

 

 

 

 

 

$

2,102,177

 

 

 

 

 

 

(1)

Includes non-farm and non-residential loans, multi-family residential loans and non-owner occupied single family residential loans.

(2)

Net of discounts and deferred fees and costs.

 

  

 

Three Months Ended

 

Change in Allowance for Loan Losses

 

March 31,

 

(dollars in thousands)

 

2020

 

 

2019

 

Beginning balance

 

$

18,816

 

 

$

17,577

 

Additions to the allowance charged to expense

 

 

1,945

 

 

 

550

 

Net (charge-offs) recoveries on loans

 

 

(631

)

 

 

109

 

Ending balance

 

$

20,130

 

 

$

18,236

 

 

13


 

Tangible Book Value Reconciliations (non-GAAP)

The tangible book value per share is a non-GAAP disclosure. The Company uses certain non-GAAP financial measures to provide supplemental information regarding the Company’s performance. The following is a reconciliation of tangible book value to the Company shareholders’ equity computed in accordance with GAAP, as well as a calculation of tangible book value per share as of March 31, 2020 and 2019.

 

 

 

March 31,

 

(dollars in thousands, except per share data)

 

2020

 

 

2019

 

Tangible common equity:

 

 

 

 

 

 

 

 

Total shareholders' equity

 

$

407,993

 

 

$

384,803

 

Adjustments

 

 

 

 

 

 

 

 

Goodwill

 

 

(70,074

)

 

 

(58,383

)

Core deposit intangible

 

 

(6,234

)

 

 

(7,212

)

Tangible common equity

 

$

331,685

 

 

$

319,208

 

Tangible assets:

 

 

 

 

 

 

 

 

Total assets-GAAP

 

$

3,128,937

 

 

$

2,978,118

 

Adjustments

 

 

 

 

 

 

 

 

Goodwill

 

 

(70,074

)

 

 

(58,383

)

Core deposit intangible

 

 

(6,234

)

 

 

(7,212

)

Tangible assets

 

$

3,052,629

 

 

$

2,912,523

 

Common shares outstanding

 

 

19,739,280

 

 

 

20,073,991

 

Tangible common equity to tangible assets ratio

 

 

10.87

%

 

 

10.96

%

Book value per share

 

$

20.67

 

 

$

19.17

 

Tangible book value per share

 

$

16.80

 

 

$

15.90

 

 

14

rbb-ex992_99.htm

 

 

 Exhibit 99.2

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 Declares Quarterly Cash Dividend of $0.06 Per Share

Los Angeles, CA, April 20, 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 that its Board of Directors has declared a quarterly cash dividend of $0.06 per share. The dividend is payable on May 13, 2020 to common shareholders of record as of April 30, 2020.

Corporate Overview

RBB Bancorp is a community-based financial holding company headquartered in Los Angeles, California.  The Company has total assets of $3.1 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, in Brooklyn, Queens, and Manhattan in New York, and three branches in the Chicago neighborhoods of Chinatown and Bridgeport.  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, seven 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.