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(State or Other Jurisdiction
of Incorporation)
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(Commission
File Number)
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(IRS Employer
Identification No.)
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(Address of Principal Executive Offices)
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(Zip Code)
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Title of each class
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Trading
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Exhibits.
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99.1
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99.2
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| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
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RBB BANCORP
(Registrant)
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Date: October 26, 2020
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By:
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/s/ David Morris
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David Morris
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Executive Vice President and
Chief Financial Officer
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Exhibit 99.1
Press Release
For Immediate Release
|
Contacts: Yee Phong (Alan) Thian |
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|
Chairman, President and CEO |
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(626) 307-7559 |
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David Morris |
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Executive Vice President and CFO |
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(714) 670-2488 |
RBB Bancorp Reports Third Quarter Earnings for 2020
Conference Call and Webcast Scheduled for Tuesday, October 27, 2020 at
11:00 a.m. Pacific Time/2:00 p.m. Eastern Time
Third Quarter 2020 Highlights
|
● |
Net income of $8.5 million, or $0.43 diluted earnings per share |
|
● |
Loans held for investment increased by $160.5 million, or 24.6% annualized growth, from the end of the prior quarter |
|
● |
Total deposits (excluding brokered deposits) increased by $160.2 million, or 26.2% annualized growth, from the end of the prior quarter |
|
● |
Nonperforming assets to total assets of 0.54%, improving 2 basis points from the prior quarter |
| ● | Loans modified under the CARES Act decreased by 76% from the end of the prior quarter and now represent 4% of loans outstanding |
| ● | Net interest margin of 3.59% increased by 17 basis points from the prior quarter and was flat from the third quarter of 2019 |
| ● | Announced resumption of our stock repurchase program |
Los Angeles, CA, October 26, 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 September 30, 2020.
The Company reported net income of $8.5 million, or $0.43 diluted earnings per share, for the three months ended September 30, 2020, compared to net income of $6.5 million, or $0.33 diluted earnings per share, and $8.0 million, or $0.39 diluted earnings per share, for the three months ended June 30, 2020 and September 30, 2019, respectively.
“Our performance in the third quarter demonstrated the strength of our growing franchise as we generated strong earnings, increasing net interest margin, and asset and deposit growth,” said Mr. Alan Thian, Chairman, President and CEO of RBB Bancorp. “Effective management of our loan exposure in prior quarters – which resulted in lower concentrations of CRE and C&I loans relative to our peers – created an opportunity to selectively originate attractive loans in markets in which our competitors were forced to pull back. Strong deposit growth was accompanied by declines in corresponding costs as we benefited from ongoing efforts to improve our deposit franchise and a declining rate environment. Our asset quality remains solid and we remain well capitalized with ample access to liquidity. Loans modified under the CARES Act outstanding decreased 76% over the quarter to just 4% of loans outstanding.”
“Our board of directors approved the reinstatement of the stock repurchase program to the maximum of what the plan allows, which will further enhance shareholder value,” Mr. Thian concluded.
Key Performance Ratios
Net income of $8.5 million for the third quarter of 2020 produced an annualized return on average assets of 1.05%, an annualized return on average tangible common equity of 9.81%, and an annualized return on average equity of 8.06%. This compares to an annualized return on average assets of 0.83%, an annualized return on average tangible common equity of 7.77%, and an annualized return on average equity of 6.34% for the second quarter of 2020. The efficiency ratio for the third quarter of 2020 was 46.63%, compared to 54.40% for the prior quarter. The improvement in the efficiency ratio was primarily due to improved net interest income.
Net Interest Income and Net Interest Margin
Net interest income, before provision for loan losses, was $27.3 million for the third quarter of 2020, compared to $25.0 million for the second quarter of 2020. The $2.2 million increase was primarily attributable to a $71.8 million increase in average earning assets and a $37.4 million increase in average noninterest-bearing deposits, partially offset by a $27.0 million increase in average interest-bearing liabilities. Net interest income was also favorably impacted by a 17 basis point increase in the net interest margin. Accretion of purchase discounts from prior acquisitions contributed $634,000 to net interest income in the third quarter of 2020, compared to $818,000 in the second quarter of 2020.
Compared to the third quarter of 2019, net interest income, before provision for loan losses, increased $3.7 million from $23.5 million. The increase was primarily attributable to a $418.9 million increase in average earning assets and a $170.3 million increase in average noninterest-bearing deposits, partially offset by a $268.1 million increase in average interest-bearing liabilities. The net interest margin was unchanged at 3.59% between the third quarters of 2020 and 2019. The increases in average earning assets and total deposits were primarily due to the Pacific Global Bank (“PGB”) acquisition and increased loan and deposit originations.
Net interest margin was 3.59% for the third quarter of 2020, an increase from 3.42% in the second quarter of 2020. The increase was primarily attributable to a 51 basis point decrease in the cost of total deposits and a 48 basis point decrease in the cost of borrowings (FHLB advances, long-term debt and subordinated debentures), partially offset by a 2 basis point decrease in the yield on average earning assets. Loan discount accretion contributed 8 basis points to the net interest margin in the third quarter of 2020, compared to 14 basis points in the second quarter of 2020.
Noninterest Income
Noninterest income was $2.7 million for the third quarter of 2020, an increase of $519,000 from $2.2 million in the second quarter of 2020. The increase was driven by an increase in gain on loan sales of $679,000 as the Company sold $28.2 million more loans in the third quarter than in the prior quarter generally due to increased market activity following the initial impact of the COVID-19 pandemic. The Company expects gain on sale of loan income to return to prior levels in the fourth quarter.
The Company sold $17.7 million in FNMA qualified mortgage loans for a net gain of $537,000 and sold $11.8 million in non-qualified mortgage loans to private investors for a gain of $227,000 during the third quarter of 2020. This compared to $5.2 million in FNMA qualified mortgage loans for a net gain of $105,000 during the second quarter of 2020. The Company sold no SBA loans during the third quarter of 2020, compared to $1.4 million in SBA loans sold for a net gain of $70,000 during the second quarter of 2020.
Compared to the third quarter of 2019, noninterest income decreased by $73,000 from $2.8 million. The decrease was primarily attributable to a decrease of $281,000 in loan servicing fees.
Noninterest Expense
Noninterest expense for the third quarter of 2020 was $14.0 million, compared to $14.8 million for the second quarter of 2020. The $855,000 decrease was primarily attributable to a $424,000 decrease in salaries and employee benefits expenses, $214,000 decrease in merger expenses, $167,000 decrease in occupancy and equipment expenses, partially offset by a $318,000 increase in data processing expenses and a $128,000 increase in insurance and regulatory assessments. The decrease in salary and employee benefits was primarily attributable to severance paid in the second quarter for employees affected by restructuring related to the completion of the PGB acquisition.
Noninterest expense increased from $13.8 million in the third quarter of 2019. The $192,000 increase was primarily due to a $226,000 increase in data processing expense, a $240,000 increase in legal and professional expense, and a $190,000 increase in insurance and regulatory assessments. These were partially offset by a $122,000 decrease salaries and employee benefit expense, a $117,000 decrease in marketing and business promotion expense.
Income Taxes
The effective tax rate was 29.8% for the third quarter of 2020, 30.8% for the second quarter of 2020, and 31.5% for the third quarter of 2019. The slightly lower effective tax rate in the third quarter of 2020 was a result of affordable housing tax credits.
Loan Portfolio
Loans held for investment, net of deferred fees and discounts, totaled $2.8 billion as of September 30, 2020, an increase of $160.5 million from June 30, 2020, and an increase of $629.0 million from September 30, 2019. The increase from the prior quarter was primarily due to organic loan growth. Single-family residential mortgages decreased by $10.9 million, net of payoffs, paydowns and loan sales, and was driven by loan sales. Commercial real estate loans increased by $74.9 million, construction and land development loans increased by $37.8 million, SBA loans increased by $7.1 million, and commercial and industrial loans increased by $50.4 million.
During the third quarter of 2020, single-family residential mortgage production was $82.6 million (mortgage loans held for investment and held for sale), payoffs and paydowns were $45.7 million, and single-family residential mortgage loan sales were $29.5 million. During the second quarter of 2020, single-family residential mortgage production was $117.6 million, payoffs and paydowns were $36.0 million, and loan sales were $1.4 million.
Mortgage loans held for sale were $23.9 million as of September 30, 2020, an increase of $8.4 million from $15.5 million at June 30, 2020 and a decrease of $235.4 million from $259.3 million as of September 30, 2019. The Company originated approximately $28.7 million in mortgage loans for sale for the third quarter of 2020, compared with $19.0 million during the prior quarter. In the third quarter, SBA loan production was $7.2 million. In the prior quarter, SBA loan production was $33.1 million, which consisted exclusively of PPP loans and total loan sales were $1.4 million.
Deposits
Deposits were $2.6 billion at September 30, 2020, an increase of $160.2 million from June 30, 2020, and an increase of $445.0 million from September 30, 2019, excluding brokered deposits. The increase in total deposits from the prior quarter was primarily attributable to organic deposit growth. Noninterest-bearing deposits increased by $66.5 million and interest-bearing non-maturity deposits increased by $53.7 million. Time deposits increased by $55.0 million, including a $15.0 million increase in brokered CDs. As of September 30, 2020, time deposits included $17.4 million in brokered CDs, as compared to $2.4 million as of June 30, 2020 and $102.6 million as of September 30, 2019.
Asset Quality
Nonperforming assets totaled $18.3 million, or 0.54% of total assets at September 30, 2020, compared to $17.5 million, or 0.56%, of total assets at June 30, 2020. The decrease in nonperforming assets was primarily due to an increase in total assets. 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 by $2.2 million to $21.7 million at September 30, 2020 from $23.9 million at June 30, 2020.
In the third quarter of 2020, there were $47,000 in net charge-offs, down from $320,000 in the prior quarter.
The Company recorded a provision for credit losses of $3.9 million for the third quarter of 2020, an increase from $3.0 million in the prior quarter, primarily attributable to the higher loan balances and the impact of the COVID-19 pandemic.
The allowance for loan losses totaled $26.6 million, or 0.97% of loans held for investment at September 30, 2020, compared with $22.8 million, or 0.88%, of total loans at June 30, 2020.
The following table, as of September 30, 2020, 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 ($000) |
% of Total HFI Loans |
||||||
|
General retail (excluding SBA) |
$ | 235,153 | 8.5 | % | ||||
|
Mixed use commercial |
106,166 | 3.9 | % | |||||
| Commercial | 62,678 | 2.3 | % | |||||
|
Hospitality (excluding SBA) |
27,666 | 1.0 | % | |||||
|
Service stations (excluding SBA) |
13,825 | 0.5 | % | |||||
|
SBA loans |
111,193 | 4.0 | % | |||||
|
Shared National Credits (excluding airlines, cruise lines and hotels) |
35,998 | 1.3 | % | |||||
|
Airlines, cruise lines and hotels (SNC) |
11,825 | 0.4 | % | |||||
|
Restaurants (excluding SBA) |
5,520 | 0.2 | % | |||||
|
Total loans |
$ | 610,024 | 22.1 | % | ||||
In the above table, the general retail exposure now includes warehouse loans and the mixed use commercial exposure now includes residential mixed use loans.
As of September 30, 2020, borrowers representing 260 loans totaling $32.9 million, or 1.2% of the Company’s total loan portfolio, have funded under the SBA’s Paycheck Protection Program due to the COVID-19 pandemic.
Under the CARES Act SBA loan payments were made through September 30, 2020 by the SBA. We have contacted nearly all of our SBA borrowers and the following table details new deferments of SBA loans:
|
Requested SBA Loan Deferments |
||||||||||||||||||||||||
|
Number |
Principal Amount ($000) | Principal Amount Average LTV% | Guaranteed Amount ($000) | Unguaranteed Amount ($000) | Unguaranteed Amount to Total SBA Loans | |||||||||||||||||||
|
Hospitality |
9 | $ | 38,965 | 75 | % | $ | 29,224 | $ | 9,741 | 8.8 | % | |||||||||||||
|
General retail |
5 | 5,051 | 51 | % | 3,794 | 1,257 | 1.1 | % | ||||||||||||||||
|
Restaurant |
2 | 2,681 | 155 | % | 2,016 | 665 | 0.6 | % | ||||||||||||||||
|
Transportation |
3 | 1,042 | 30 | % | 782 | 261 | 0.2 | % | ||||||||||||||||
|
Fitness |
1 | 101 | 0 | % | 86 | 15 | 0.0 | % | ||||||||||||||||
|
Mixed use commercial |
1 | 45 | 0 | % | 33 | 11 | 0.0 | % | ||||||||||||||||
| 21 | $ | 47,885 | $ | 35,935 | $ | 11,950 | 10.7 | % | ||||||||||||||||
We have not been able to contact four borrowers listed in the above table to determine if they need a deferment under SBA guidelines. The unguaranteed balance of those four loans is $27,665. All four have not made their payments as of October 15, 2020. There are two loans with an unguaranteed balance of $54,766 that will not qualify for a SBA deferment due to delinquency or deferment issues prior to COVID-19. Those two loans are not listed above and the borrowers have not made their payments as of October 15, 2020.
The following table provides details regarding the Company's COVID-19 loan deferral activity through October 21, 2020.
|
As of June 30, 2020 |
As of October 23, 2020 |
|||||||||||||||||||||||||||
|
Deferred Loans |
Loans Resuming Payments |
Loans Deferred |
||||||||||||||||||||||||||
|
Number |
Principal Amount ($000) |
% of Total HFI Loans |
Number |
Principal Amount ($000) |
Number |
Principal Amount ($000) |
||||||||||||||||||||||
|
General retail (excluding SBA) |
34 | $ | 94,251 | 3.4 | % | 31 | $ | 67,411 | 3 | $ | 26,840 | |||||||||||||||||
|
Mixed use commercial |
38 | 58,841 | 2.1 | % | 34 | 48,294 | 4 | 10,547 | ||||||||||||||||||||
|
Hospitality (excluding SBA) |
5 | 25,343 | 0.9 | % | 3 | 12,414 | 2 | 12,929 | ||||||||||||||||||||
|
Restaurants (excluding SBA) |
11 | 4,186 | 0.2 | % | 10 | 4,186 | 1 | 12 | ||||||||||||||||||||
|
Multifamily |
6 | 9,086 | 0.3 | % | 6 | 9,086 | — | — | ||||||||||||||||||||
| Commercial, office and other (1) | 6 | 22,983 | 0.8 | % | 1 | 3,102 | 5 | 19,881 | ||||||||||||||||||||
|
SFR mortgage loans - Western region |
183 | 118,484 | 4.3 | % | 145 | 88,880 | 38 | 29,604 | ||||||||||||||||||||
|
SFR mortgage loans - Eastern region |
203 | 85,935 | 3.1 | % | 194 | 82,699 | 10 | 4,106 | ||||||||||||||||||||
|
SFR mortgage loans - Chicago metropolitan |
84 | 14,824 | 0.5 | % | 83 | 14,575 | 4 | 719 | ||||||||||||||||||||
|
Total |
570 | $ | 433,933 | 15.7 | % | 507 | $ | 330,647 | 67 | $ | 104,638 | |||||||||||||||||
(1) Loan with a principal amount of $17 million is on a principal deferment only.
The Company does not have any shared national credits or loans backed by service stations, airlines or cruise lines on deferral as of October 20, 2020.
Properties
On March 31, 2020, we closed the Grand Street branch in New York City as the lease for this branch expired in April 2020. Branch operations and staff were transferred to the Bowery branch.
The Bank plans to open a new full service banking branch in Edison, New Jersey in November of 2020. The branch will be located at 561 US-1, in the Wicks Shopping Plaza in Edison. The Bank purchased a property located at 2057 86th Street, Brooklyn, New York, in the Bensonhurst neighborhood, to house a full-service branch. We expect this branch to open in 2021. The Bank has leased a location on Canal Street in Manhattan to move our Bowery Street branch.
Corporate Overview
RBB Bancorp is a community-based financial holding company headquartered in Los Angeles, California. The Company has total assets of $3.4 billion. Its wholly-owned subsidiary, Royal Business 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 nine branches in Los Angeles County, two branches in Ventura County, one branch in Irvine, California, one branch in Las Vegas, Nevada, six 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, October 27, 2020, to discuss the Company’s third quarter 2020 financial results.
To listen to the conference call, please dial 1-833-519-1355 or 1-918-922-6505, passcode 8574857. A replay of the call will be made available at 1-800-585-8367 or 1-404-537-3406, passcode 8574857, approximately one hour after the conclusion of the call and will remain available through November 3, 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.
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 DFPI (formerly 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.
RBB BANCORP AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited, except for December 31, 2019)
(Dollars in thousands)
|
September 30 |
June 30 |
March 31 |
December 31 |
September 30 |
||||||||||||||||
|
2020 |
2020 |
2020 |
2019 |
2019 |
||||||||||||||||
|
Assets |
||||||||||||||||||||
|
Cash and due from banks |
$ | 121,630 | $ | 94,844 | $ | 285,667 | $ | 114,763 | $ | 136,076 | ||||||||||
|
Federal funds sold and other cash equivalents |
57,000 | 57,000 | 75,300 | 67,000 | 47,000 | |||||||||||||||
|
Total cash and cash equivalents |
178,630 | 151,844 | 360,967 | 181,763 | 183,076 | |||||||||||||||
|
Interest-bearing deposits in other financial institutions |
600 | 600 | 600 | 600 | 949 | |||||||||||||||
|
Investment securities available for sale |
214,662 | 185,756 | 126,294 | 126,069 | 72,923 | |||||||||||||||
|
Investment securities held to maturity |
7,569 | 7,615 | 7,825 | 8,332 | 8,724 | |||||||||||||||
|
Mortgage loans held for sale |
23,886 | 15,479 | 52,096 | 108,194 | 259,339 | |||||||||||||||
|
Loans held for investment |
2,755,153 | 2,594,620 | 2,399,982 | 2,196,934 | 2,126,145 | |||||||||||||||
|
Allowance for loan losses |
(26,634 | ) | (22,820 | ) | (20,130 | ) | (18,816 | ) | (19,386 | ) | ||||||||||
|
Net loans held for investment |
2,728,519 | 2,571,800 | 2,379,852 | 2,178,118 | 2,106,759 | |||||||||||||||
|
Premises and equipment, net |
24,237 | 23,965 | 24,472 | 16,813 | 16,871 | |||||||||||||||
|
Federal Home Loan Bank (FHLB) stock |
15,641 | 15,641 | 15,630 | 15,000 | 15,000 | |||||||||||||||
|
Net deferred tax assets |
1,080 | — | — | 2,326 | 4,378 | |||||||||||||||
|
Cash surrender value of life insurance |
34,930 | 34,736 | 34,544 | 34,353 | 34,158 | |||||||||||||||
|
Goodwill |
69,243 | 69,209 | 69,790 | 58,563 | 58,383 | |||||||||||||||
|
Servicing assets |
14,724 | 15,595 | 16,826 | 17,083 | 17,180 | |||||||||||||||
|
Core deposit intangibles |
5,519 | 5,876 | 6,234 | 6,100 | 6,444 | |||||||||||||||
|
Accrued interest and other assets |
40,336 | 38,065 | 33,523 | 35,221 | 36,118 | |||||||||||||||
|
Total assets |
$ | 3,359,576 | $ | 3,136,181 | $ | 3,128,653 | $ | 2,788,535 | $ | 2,820,302 | ||||||||||
|
Liabilities and shareholders' equity |
||||||||||||||||||||
|
Deposits: |
||||||||||||||||||||
|
Noninterest-bearing demand |
$ | 642,332 | $ | 574,553 | $ | 504,324 | $ | 458,763 | $ | 446,141 | ||||||||||
|
Savings, NOW and money market accounts |
654,378 | 601,941 | 571,870 | 537,490 | 493,965 | |||||||||||||||
|
Time deposits |
1,315,038 | 1,260,026 | 1,359,787 | 1,252,685 | 1,311,817 | |||||||||||||||
|
Total deposits |
2,611,748 | 2,436,520 | 2,435,981 | 2,248,938 | 2,251,923 | |||||||||||||||
|
Net deferred tax liabilities |
— | 656 | 312 | — | — | |||||||||||||||
|
FHLB advances |
190,000 | 150,000 | 150,000 | — | 35,000 | |||||||||||||||
|
Long-term debt, net of debt issuance costs |
104,305 | 104,220 | 104,135 | 104,049 | 103,964 | |||||||||||||||
|
Subordinated debentures |
14,229 | 14,174 | 14,120 | 9,673 | 9,632 | |||||||||||||||
|
Accrued interest and other liabilities |
17,878 | 16,586 | 16,112 | 18,185 | 20,942 | |||||||||||||||
|
Total liabilities |
2,938,160 | 2,722,156 | 2,720,660 | 2,380,845 | 2,421,461 | |||||||||||||||
|
Shareholders' equity: |
||||||||||||||||||||
|
Shareholder's equity |
420,329 | 412,827 | 407,332 | 407,379 | 398,438 | |||||||||||||||
|
Non-controlling interest |
72 | 72 | 72 | 72 | 72 | |||||||||||||||
|
Accumulated other comprehensive income (loss) - Net of tax |
1,015 | 1,126 | 589 | 239 | 331 | |||||||||||||||
|
Total shareholders' equity |
421,416 | 414,025 | 407,993 | 407,690 | 398,841 | |||||||||||||||
|
Total liabilities and stockholders’ equity |
$ | 3,359,576 | $ | 3,136,181 | $ | 3,128,653 | $ | 2,788,535 | $ | 2,820,302 | ||||||||||
RBB BANCORP AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(Dollars in thousands, except per share amounts)
|
For the three months ended |
||||||||||||
|
September 30, 2020 |
June 30, 2020 |
September 30, 2019 |
||||||||||
|
Interest and dividend income: |
||||||||||||
|
Interest and fees on loans |
$ | 34,153 | $ | 32,633 | $ | 32,902 | ||||||
|
Interest on interest-bearing deposits |
61 | 74 | 429 | |||||||||
|
Interest on investment securities |
621 | 887 | 703 | |||||||||
|
Dividend income on FHLB stock |
190 | 187 | 238 | |||||||||
|
Interest on federal funds sold and other |
100 | 322 | 397 | |||||||||
|
Total interest income |
35,125 | 34,103 | 34,669 | |||||||||
|
Interest expense: |
||||||||||||
|
Interest on savings deposits, NOW and money market accounts |
779 | 782 | 1,117 | |||||||||
|
Interest on time deposits |
4,746 | 5,933 | 8,038 | |||||||||
|
Interest on subordinated debentures and long term debt |
1,905 | 1,915 | 1,921 | |||||||||
|
Interest on other borrowed funds |
444 | 439 | 81 | |||||||||
|
Total interest expense |
7,874 | 9,069 | 11,157 | |||||||||
|
Net interest income before provision for loan losses |
27,251 | 25,034 | 23,512 | |||||||||
|
Provision for loan losses |
3,861 | 3,009 | 824 | |||||||||
|
Net interest income after provision for loan losses |
23,390 | 22,025 | 22,688 | |||||||||
|
Noninterest income: |
||||||||||||
|
Service charges, fees and other |
1,143 | 1,065 | 934 | |||||||||
|
Gain on sale of loans |
760 | 81 | 813 | |||||||||
|
Loan servicing fees, net of amortization |
546 | 708 | 827 | |||||||||
|
Recoveries on loans acquired in business combinations |
32 | 5 | 12 | |||||||||
|
Increase in cash surrender value of life insurance |
194 | 191 | 195 | |||||||||
|
Gain on sale of securities |
52 | 158 | 7 | |||||||||
|
Gain on sale of other real estate owned |
— | — | 11 | |||||||||
|
Total noninterest income |
2,727 | 2,208 | 2,799 | |||||||||
|
Noninterest expense: |
||||||||||||
|
Salaries and employee benefits |
7,599 | 8,103 | 7,801 | |||||||||
|
Occupancy and equipment expenses |
2,360 | 2,527 | 2,434 | |||||||||
|
Data processing |
1,200 | 882 | 974 | |||||||||
|
Legal and professional |
675 | 670 | 435 | |||||||||
|
Office expenses |
271 | 337 | 335 | |||||||||
|
Marketing and business promotion |
131 | 111 | 248 | |||||||||
|
Insurance and regulatory assessments |
363 | 234 | 172 | |||||||||
|
Core deposit premium |
357 | 357 | 384 | |||||||||
|
OREO expenses/(income) |
3 | 14 | (1 | ) | ||||||||
|
Merger and conversion expenses |
62 | 276 | 154 | |||||||||
|
Other expenses |
957 | 1,308 | 850 | |||||||||
|
Total noninterest expense |
13,978 | 14,819 | 13,786 | |||||||||
|
Income before income taxes |
12,139 | 9,414 | 11,701 | |||||||||
|
Income tax expense |
3,619 | 2,901 | 3,689 | |||||||||
|
Net income |
$ | 8,520 | $ | 6,513 | $ | 8,012 | ||||||
|
Net income per share |
||||||||||||
| Basic | $ | 0.43 | $ | 0.33 | $ | 0.40 | ||||||
| Diluted | $ | 0.43 | $ | 0.33 | $ | 0.39 | ||||||
|
Cash Dividends declared per common share |
$ | 0.06 | $ | 0.06 | $ | 0.10 | ||||||
|
Weighted-average common shares outstanding |
||||||||||||
|
Basic |
19,717,568 | 19,710,330 | 20,067,847 | |||||||||
|
Diluted |
19,804,892 | 19,806,304 | 20,425,966 | |||||||||
RBB BANCORP AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(Dollars in thousands, except per share amounts)
|
For the nine months ended |
||||||||
|
September 30, 2020 |
September 30, 2019 |
|||||||
|
Interest and dividend income: |
||||||||
|
Interest and fees on loans |
$ | 99,062 | $ | 102,981 | ||||
|
Interest on interest-earning deposits |
586 | 1,412 | ||||||
|
Interest on investment securities |
2,329 | 1,976 | ||||||
|
Dividend income on FHLB stock |
379 | 815 | ||||||
|
Interest on federal funds sold and other |
900 | 634 | ||||||
|
Total interest income |
103,256 | 107,818 | ||||||
|
Interest expense: |
||||||||
|
Interest on savings deposits, NOW and money market accounts |
2,804 | 3,649 | ||||||
|
Interest on time deposits |
17,765 | 21,788 | ||||||
|
Interest on subordinated debentures and long term debt |
5,776 | 5,783 | ||||||
|
Interest on other borrowed funds |
1,033 | 2,857 | ||||||
|
Total interest expense |
27,378 | 34,077 | ||||||
|
Net interest income |
75,878 | 73,741 | ||||||
|
Provision for loan losses |
8,815 | 1,731 | ||||||
|
Net interest income after provision for loans losses |
67,063 | 72,010 | ||||||
|
Noninterest income: |
||||||||
|
Service charges, fees and other |
3,287 | 2,976 | ||||||
|
Gain on sale of loans |
3,552 | 6,131 | ||||||
|
Loan servicing fees, net of amortization |
1,846 | 2,566 | ||||||
|
Recoveries on loans acquired in business combinations |
79 | 73 | ||||||
|
Unrealized gain on equity investments |
— | 147 | ||||||
|
Increase in cash surrender value of life insurance |
576 | 580 | ||||||
|
Gain on sale of securities |
210 | 7 | ||||||
|
Gain on sale of fixed assets |
— | 6 | ||||||
| Loss on sale of other real estate owned | — | 11 | ||||||
|
Total noninterest income |
9,550 | 12,497 | ||||||
|
Noninterest expense: |
||||||||
|
Salaries and employee benefits |
25,207 | 25,088 | ||||||
|
Occupancy and equipment expenses |
7,291 | 7,360 | ||||||
|
Data processing |
3,224 | 3,202 | ||||||
|
Legal and professional |
1,949 | 1,516 | ||||||
|
Office expenses |
931 | 965 | ||||||
|
Marketing and business promotion |
456 | 926 | ||||||
|
Insurance and regulatory assessments |
774 | 754 | ||||||
|
Amortization of intangibles |
1,071 | 1,157 | ||||||
|
OREO expenses |
31 | 161 | ||||||
|
Merger expenses |
741 | 240 | ||||||
|
Other expenses |
3,385 | 2,641 | ||||||
|
Total noninterest expense |
45,060 | 44,010 | ||||||
|
Income before income taxes |
31,553 | 40,497 | ||||||
|
Income tax expense |
9,772 | 11,963 | ||||||
|
Net income |
$ | 21,781 | $ | 28,534 | ||||
|
Net income per share |
||||||||
| Basic | $ | 1.10 | $ | 1.42 | ||||
| Diluted | $ | 1.09 | $ | 1.40 | ||||
|
Cash Dividends declared per common share |
$ | 0.24 | $ | 0.30 | ||||
|
Weighted-average common shares outstanding |
||||||||
| Basic | 19,799,617 | 20,063,479 | ||||||
| Diluted | 19,958,612 | 20,435,867 | ||||||
RBB BANCORP AND SUBSIDIARIES
AVERAGE BALANCE SHEET AND NET INTEREST INCOME
(Unaudited)
(Dollars in thousands, except per share amounts)
|
For the three months ended |
||||||||||||||||||||||||||||||||||||
|
September 30, 2020 |
June 30, 2020 |
September 30, 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) |
$ | 179,521 | $ | 351 | 0.78 | % | $ | 231,943 | $ | 583 | 1.01 | % | $ | 144,131 | $ | 1,064 | 2.93 | % | ||||||||||||||||||
|
Securities |
||||||||||||||||||||||||||||||||||||
|
Available for sale |
168,151 | 558 | 1.32 | % | 171,298 | 823 | 1.93 | % | 92,292 | 631 | 2.71 | % | ||||||||||||||||||||||||
|
Held to maturity (2) |
7,604 | 71 | 3.71 | % | 7,661 | 72 | 3.78 | % | 8,730 | 81 | 3.68 | % | ||||||||||||||||||||||||
|
Mortgage loans held for sale |
19,848 | 171 | 3.43 | % | 25,130 | 303 | 4.85 | % | 253,492 | 3,050 | 4.77 | % | ||||||||||||||||||||||||
|
Loans held for investment: (3) |
||||||||||||||||||||||||||||||||||||
|
Real estate |
2,266,752 | 29,616 | 5.20 | % | 2,147,646 | 28,216 | 5.28 | % | 1,749,371 | 23,963 | 5.43 | % | ||||||||||||||||||||||||
|
Commercial |
377,789 | 4,366 | 4.60 | % | 364,189 | 4,114 | 4.54 | % | 352,795 | 5,889 | 6.62 | % | ||||||||||||||||||||||||
|
Total loans |
2,644,541 | 33,982 | 5.11 | % | 2,511,835 | 32,330 | 5.18 | % | 2,102,166 | 29,852 | 5.63 | % | ||||||||||||||||||||||||
|
Total earning assets |
3,019,665 | $ | 35,133 | 4.63 | % | 2,947,867 | $ | 34,111 | 4.65 | % | 2,600,811 | $ | 34,678 | 5.29 | % | |||||||||||||||||||||
|
Noninterest-earning assets |
204,638 | 206,833 | 169,691 | |||||||||||||||||||||||||||||||||
|
Total assets |
$ | 3,224,303 | $ | 3,154,700 | $ | 2,770,502 | ||||||||||||||||||||||||||||||
|
Interest-bearing liabilities |
||||||||||||||||||||||||||||||||||||
|
NOW and money market deposits |
$ | 514,271 | $ | 748 | 0.58 | % | $ | 462,027 | $ | 751 | 0.65 | % | $ | 364,127 | $ | 1,070 | 1.17 | % | ||||||||||||||||||
|
Savings deposits |
126,635 | 31 | 0.10 | % | 123,868 | 31 | 0.10 | % | 95,725 | 47 | 0.19 | % | ||||||||||||||||||||||||
|
Time deposits |
1,284,351 | 4,746 | 1.47 | % | 1,314,232 | 5,933 | 1.82 | % | 1,340,751 | 8,038 | 2.38 | % | ||||||||||||||||||||||||
|
Total interest-bearing deposits |
1,925,257 | 5,525 | 1.14 | % | 1,900,127 | 6,715 | 1.42 | % | 1,800,603 | 9,155 | 2.02 | % | ||||||||||||||||||||||||
|
FHLB advances |
151,739 | 444 | 1.16 | % | 150,000 | 439 | 1.18 | % | 13,261 | 81 | 2.42 | % | ||||||||||||||||||||||||
|
Long-term debt |
104,252 | 1,748 | 6.67 | % | 104,168 | 1,747 | 6.75 | % | 103,912 | 1,748 | 6.67 | % | ||||||||||||||||||||||||
|
Subordinated debentures |
14,195 | 157 | 4.40 | % | 14,141 | 168 | 4.78 | % | 9,606 | 173 | 7.15 | % | ||||||||||||||||||||||||
|
Total interest-bearing liabilities |
2,195,443 | 7,874 | 1.43 | % | 2,168,436 | 9,069 | 1.68 | % | 1,927,382 | 11,157 | 2.30 | % | ||||||||||||||||||||||||
|
Noninterest-bearing liabilities |
||||||||||||||||||||||||||||||||||||
|
Noninterest-bearing deposits |
595,264 | 557,903 | 424,908 | |||||||||||||||||||||||||||||||||
|
Other noninterest-bearing liabilities |
13,270 | 15,509 | 20,490 | |||||||||||||||||||||||||||||||||
|
Total noninterest-bearing liabilities |
608,534 | 573,412 | 445,398 | |||||||||||||||||||||||||||||||||
|
Shareholders' equity |
420,326 | 412,852 | 397,722 | |||||||||||||||||||||||||||||||||
|
Total liabilities and shareholders' equity |
$ | 3,224,303 | $ | 3,154,700 | $ | 2,770,502 | ||||||||||||||||||||||||||||||
|
Net interest income / interest rate spreads |
$ | 27,259 | 3.20 | % | $ | 25,042 | 2.97 | % | $ | 23,521 | 2.99 | % | ||||||||||||||||||||||||
|
Net interest margin |
3.59 | % | 3.42 | % | 3.59 | % | ||||||||||||||||||||||||||||||
|
(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. |
RBB BANCORP AND SUBSIDIARIES
AVERAGE BALANCE SHEET AND NET INTEREST INCOME
(Unaudited)
(Dollars in thousands, except per share amounts)
|
For the nine months ended |
||||||||||||||||||||||||
|
September 30, 2020 |
September 30, 2019 |
|||||||||||||||||||||||
|
Average |
Interest |
Yield / |
Average |
Interest |
Yield / |
|||||||||||||||||||
|
(tax-equivalent basis, dollars in thousands) |
Balance |
& Fees |
Rate |
Balance |
& Fees |
Rate |
||||||||||||||||||
|
Earning assets: |
||||||||||||||||||||||||
|
Federal funds sold, cash equivalents & other (1) |
$ | 220,195 | $ | 1,865 | 1.13 | % | $ | 122,563 | $ | 2,861 | 3.12 | % | ||||||||||||
|
Securities |
||||||||||||||||||||||||
|
Available for sale |
159,373 | 2,136 | 1.79 | % | 82,868 | 1,749 | 2.82 | % | ||||||||||||||||
|
Held to maturity (2) |
7,760 | 218 | 3.75 | % | 9,159 | 255 | 3.72 | % | ||||||||||||||||
|
Mortgage loans held for sale |
40,936 | 1,454 | 4.74 | % | 352,110 | 12,785 | 4.85 | % | ||||||||||||||||
|
Loans held for investment: (3) |
||||||||||||||||||||||||
|
Real estate |
2,141,022 | 84,261 | 5.26 | % | 1,759,253 | 72,842 | 5.54 | % | ||||||||||||||||
|
Commercial |
359,907 | 13,347 | 4.95 | % | 350,823 | 17,354 | 6.61 | % | ||||||||||||||||
|
Total loans |
2,500,929 | 97,608 | 5.21 | % | 2,110,076 | 90,196 | 5.72 | % | ||||||||||||||||
|
Total earning assets |
2,929,193 | $ | 103,281 | 4.71 | % | 2,676,776 | $ | 107,846 | 5.39 | % | ||||||||||||||
|
Noninterest-earning assets |
208,000 | 167,887 | ||||||||||||||||||||||
|
Total assets |
$ | 3,137,193 | $ | 2,844,663 | ||||||||||||||||||||
|
Interest-bearing liabilities |
||||||||||||||||||||||||
|
NOW and money market deposits |
$ | 484,157 | $ | 2,687 | 0.74 | % | $ | 388,298 | $ | 3,500 | 1.21 | % | ||||||||||||
|
Savings deposits |
121,836 | 117 | 0.13 | % | 97,959 | 149 | 0.20 | % | ||||||||||||||||
|
Time deposits |
1,318,947 | 17,765 | 1.80 | % | 1,273,604 | 21,788 | 2.29 | % | ||||||||||||||||
|
Total interest-bearing deposits |
1,924,940 | 20,569 | 1.43 | % | 1,759,861 | 25,437 | 1.93 | % | ||||||||||||||||
|
FHLB advances |
118,029 | 1,033 | 1.17 | % | 148,101 | 2,857 | 2.58 | % | ||||||||||||||||
|
Long-term debt |
104,168 | 5,243 | 6.72 | % | 103,827 | 5,243 | 6.75 | % | ||||||||||||||||
|
Subordinated debentures |
14,221 | 533 | 5.01 | % | 9,565 | 540 | 7.55 | % | ||||||||||||||||
|
Total interest-bearing liabilities |
2,161,358 | $ | 27,378 | 1.69 | % | 2,021,354 | $ | 34,077 | 2.25 | % | ||||||||||||||
|
Noninterest-bearing liabilities |
||||||||||||||||||||||||
|
Noninterest-bearing deposits |
546,419 | 412,845 | ||||||||||||||||||||||
|
Other noninterest-bearing liabilities |
14,606 | 19,888 | ||||||||||||||||||||||
|
Total noninterest-bearing liabilities |
561,025 | 432,733 | ||||||||||||||||||||||
|
Shareholders' equity |
414,810 | 390,576 | ||||||||||||||||||||||
|
Total liabilities and shareholders' equity |
$ | 3,137,193 | $ | 2,844,663 | ||||||||||||||||||||
|
Net interest income / interest rate spreads |
$ | 75,903 | 3.02 | % | $ | 73,769 | 3.13 | % | ||||||||||||||||
|
Net interest margin |
3.46 | % | 3.68 | % | ||||||||||||||||||||
RBB BANCORP AND SUBSIDIARIES
SELECTED FINANCIAL HIGHLIGHTS
(Unaudited)
(Dollars in thousands, except per share amounts)
|
For the three months ended |
||||||||||||
|
September 30 |
June 30, |
September 30 |
||||||||||
|
2020 |
2020 |
2019 |
||||||||||
|
Per share data (common stock) |
||||||||||||
|
Earnings |
||||||||||||
| Basic | $ | 0.43 | $ | 0.33 | $ | 0.40 | ||||||
| Diluted | $ | 0.43 | $ | 0.33 | $ | 0.39 | ||||||
|
Dividends declared |
$ | 0.06 | $ | 0.06 | $ | 0.10 | ||||||
| Basic, excluding merger and conversion expense | $ | 0.43 | $ | 0.34 | $ | 0.40 | ||||||
| Diluted, excluding merger and conversion expense | $ | 0.43 | $ | 0.34 | $ | 0.40 | ||||||
|
Book value |
$ | 21.35 | $ | 20.97 | $ | 19.91 | ||||||
|
Tangible book value |
$ | 17.56 | $ | 17.17 | $ | 16.67 | ||||||
|
Weighted average shares outstanding |
||||||||||||
|
Basic |
19,717,568 | 19,710,330 | 20,067,847 | |||||||||
|
Diluted |
19,804,892 | 19,806,304 | 20,425,966 | |||||||||
|
Shares outstanding at period end |
19,739,280 | 19,739,280 | 20,030,866 | |||||||||
|
Performance ratios |
||||||||||||
|
Return on average assets, annualized |
1.05 | % | 0.83 | % | 1.15 | % | ||||||
|
Return on average shareholders' equity, annualized |
8.06 | % | 6.34 | % | 7.99 | % | ||||||
|
Return on average tangible common equity, annualized |
9.81 | % | 7.77 | % | 9.56 | % | ||||||
|
Noninterest income to average assets, annualized |
0.34 | % | 0.28 | % | 0.40 | % | ||||||
|
Noninterest expense to average assets, annualized |
1.72 | % | 1.89 | % | 1.97 | % | ||||||
|
Yield on average earning assets |
4.63 | % | 4.65 | % | 5.29 | % | ||||||
|
Cost of average total deposits |
0.87 | % | 1.10 | % | 1.63 | % | ||||||
|
Cost of average interest-bearing deposits |
1.14 | % | 1.42 | % | 2.02 | % | ||||||
|
Cost of average interest-bearing liabilities |
1.43 | % | 1.68 | % | 2.30 | % | ||||||
|
Accretion on loans to average earning assets |
0.08 | % | 0.14 | % | 0.10 | % | ||||||
|
Net interest spread |
3.20 | % | 2.97 | % | 2.99 | % | ||||||
|
Net interest margin |
3.59 | % | 3.42 | % | 3.59 | % | ||||||
|
Efficiency ratio |
46.63 | % | 54.40 | % | 52.40 | % | ||||||
| Common stock dividend payout ratio | 13.95 | % | 18.18 | % | 25.00 | % | ||||||
RBB BANCORP AND SUBSIDIARIES
SELECTED FINANCIAL HIGHLIGHTS
(Unaudited)
(Dollars in thousands, except per share amounts)
|
For the nine months ended September 30, |
||||||||
|
2020 |
2019 |
|||||||
|
Per share data (common stock) |
||||||||
|
Earnings |
||||||||
| Basic | $ | 1.10 | $ | 1.42 | ||||
| Diluted | $ | 1.09 | $ | 1.40 | ||||
| Basic, excluding merger expense | $ | 1.13 | $ | 1.44 | ||||
| Diluted, excluding merger expense | $ | 1.12 | $ | 1.41 | ||||
|
Dividends declared |
$ | 0.24 | $ | 0.30 | ||||
|
Book value |
$ | 21.35 | $ | 19.91 | ||||
|
Tangible book value |
$ | 17.56 | $ | 16.67 | ||||
|
Weighted average shares outstanding |
||||||||
|
Basic |
19,799,617 | 20,063,479 | ||||||
|
Diluted |
19,958,612 | 20,435,867 | ||||||
|
Shares outstanding at period end |
19,739,280 | 20,030,866 | ||||||
|
Performance ratios |
||||||||
|
Return on average assets, annualized |
0.93 | % | 1.34 | % | ||||
|
Return on average shareholders' equity, annualized |
7.01 | % | 9.77 | % | ||||
|
Return on average tangible common equity, annualized |
8.59 | % | 11.73 | % | ||||
|
Noninterest income to average assets, annualized |
0.41 | % | 0.59 | % | ||||
|
Noninterest expense to average assets, annualized |
1.92 | % | 2.07 | % | ||||
|
Yield on average earning assets |
4.71 | % | 5.39 | % | ||||
|
Cost of average deposits |
1.11 | % | 1.57 | % | ||||
|
Cost of average interest-bearing deposits |
1.43 | % | 1.93 | % | ||||
|
Cost of average interest-bearing liabilities |
1.69 | % | 2.25 | % | ||||
|
Accretion on loans to average earning assets |
0.10 | % | 0.12 | % | ||||
|
Net interest spread |
3.02 | % | 3.13 | % | ||||
|
Net interest margin |
3.46 | % | 3.68 | % | ||||
|
Efficiency ratio |
52.75 | % | 51.03 | % | ||||
|
Common stock dividend payout ratio |
21.82 | % | 21.13 | % | ||||
RBB BANCORP AND SUBSIDIARIES
SELECTED FINANCIAL HIGHLIGHTS
(Unaudited)
(Dollars in thousands, except per share amounts)
|
As of |
||||||||||||
|
September 30, |
June 30, |
September 30, |
||||||||||
|
2020 |
2020 |
2019 |
||||||||||
|
Loan to deposit ratio |
105.49 | % | 106.49 | % | 94.41 | % | ||||||
|
Core deposits / total deposits |
99.34 | % | 76.84 | % | 68.32 | % | ||||||
|
Net non-core funding dependence ratio |
14.47 | % | 13.39 | % | 25.41 | % | ||||||
|
Credit Quality Data: |
||||||||||||
|
Loans 30-89 days past due |
$ | 21,735 | $ | 23,872 | $ | 4,578 | ||||||
|
Loans 30-89 days past due to total loans |
0.79 | % | 0.92 | % | 0.22 | % | ||||||
|
Nonperforming loans |
$ | 17,975 | $ | 17,217 | $ | 9,628 | ||||||
|
Nonperforming loans to total loans |
0.65 | % | 0.66 | % | 0.39 | % | ||||||
|
Nonperforming assets |
$ | 18,268 | $ | 17,510 | $ | 10,895 | ||||||
|
Nonperforming assets to total assets |
0.54 | % | 0.56 | % | 0.39 | % | ||||||
|
Allowance for loan losses to total loans |
0.97 | % | 0.88 | % | 0.91 | % | ||||||
| Allowance for loan losses to nonperforming loans | 148.17 | % | 132.54 | % | 201.35 | % | ||||||
|
Net charge-offs to average loans (for the quarter-to-date period) |
0.01 | % | 0.05 | % | 0.00 | % | ||||||
|
Regulatory and other capital ratios—Company |
||||||||||||
|
Tangible common equity to tangible assets |
10.55 | % | 11.07 | % | 12.12 | % | ||||||
| Tier 1 leverage ratio | 11.47 | % | 11.48 | % | 12.74 | % | ||||||
| Tier 1 common capital to risk-weighted assets | 14.11 | % | 14.87 | % | 16.95 | % | ||||||
| Tier 1 capital to risk-weighted assets | 14.69 | % | 15.49 | % | 17.44 | % | ||||||
| Total capital to risk-weighted assets | 20.05 | % | 21.10 | % | 23.71 | % | ||||||
|
Regulatory capital ratios—Bank only |
||||||||||||
| Tier 1 leverage ratio | 14.16 | % | 14.14 | % | 14.98 | % | ||||||
| Tier 1 common capital to risk-weighted assets | 18.16 | % | 19.09 | % | 20.53 | % | ||||||
|
Tier 1 capital to risk-weighted assets |
18.16 | % | 19.09 | % | 20.53 | % | ||||||
| Total capital to risk-weighted assets | 19.29 | % | 20.13 | % | 21.54 | % | ||||||
RBB BANCORP AND SUBSIDIARIES
SELECTED FINANCIAL HIGHLIGHTS
(Unaudited)
(Dollars in thousands, except per share amounts)
|
3rd Quarter |
2nd Quarter |
1st Quarter |
4th Quarter |
3rd Quarter |
||||||||||||||||
|
Quarterly Consolidated Statements of Earnings |
2020 |
2020 |
2020 |
2019 |
2019 |
|||||||||||||||
|
Interest income |
||||||||||||||||||||
|
Loans, including fees |
$ | 34,153 | $ | 32,633 | $ | 32,276 | $ | 32,178 | $ | 32,902 | ||||||||||
|
Investment securities and other |
972 | 1,470 | 1,752 | 1,729 | 1,767 | |||||||||||||||
|
Total interest income |
35,125 | 34,103 | 34,028 | 33,907 | 34,669 | |||||||||||||||
|
Interest expense |
||||||||||||||||||||
|
Deposits |
5,525 | 6,715 | 8,329 | 8,796 | 9,155 | |||||||||||||||
|
Interest on subordinated debentures and other |
1,905 | 1,915 | 1,956 | 1,915 | 1,921 | |||||||||||||||
|
Other borrowings |
444 | 439 | 150 | 73 | 81 | |||||||||||||||
|
Total interest expense |
7,874 | 9,069 | 10,435 | 10,784 | 11,157 | |||||||||||||||
|
Net interest income before provision for loan losses |
27,251 | 25,034 | 23,593 | 23,123 | 23,512 | |||||||||||||||
|
Provision for loan losses |
3,861 | 3,009 | 1,945 | 659 | 824 | |||||||||||||||
|
Net interest income after provision for loan losses |
23,390 | 22,025 | 21,648 | 22,464 | 22,688 | |||||||||||||||
|
Noninterest income |
2,727 | 2,208 | 4,615 | 5,823 | 2,799 | |||||||||||||||
|
Noninterest expense |
13,978 | 14,819 | 16,263 | 13,463 | 13,786 | |||||||||||||||
|
Earnings before income taxes |
12,139 | 9,414 | 10,000 | 14,824 | 11,701 | |||||||||||||||
|
Income taxes |
3,619 | 2,901 | 3,252 | 4,149 | 3,689 | |||||||||||||||
|
Net income |
$ | 8,520 | $ | 6,513 | $ | 6,748 | $ | 10,675 | $ | 8,012 | ||||||||||
| Net income per common share - basic | $ | 0.43 | $ | 0.33 | $ | 0.34 | $ | 0.53 | $ | 0.40 | ||||||||||
| Net income per common share - diluted | $ | 0.43 | $ | 0.33 | $ | 0.33 | $ | 0.52 | $ | 0.39 | ||||||||||
|
Cash dividends declared per common share |
$ | 0.06 | $ | 0.06 | $ | 0.12 | $ | 0.10 | $ | 0.10 | ||||||||||
|
Cash dividends declared on common shares |
$ | 3,592 | $ | 1,184 | $ | 2,407 | $ | 2,003 | $ | 2,016 | ||||||||||
|
Yield on average assets, annualized |
1.05 | % | 0.83 | % | 0.90 | % | 1.51 | % | 1.15 | % | ||||||||||
|
Yield on average earning assets |
4.63 | % | 4.60 | % | 4.86 | % | 5.09 | % | 5.29 | % | ||||||||||
|
Cost of average deposits |
0.87 | % | 1.09 | % | 1.38 | % | 1.55 | % | 1.63 | % | ||||||||||
|
Cost of average interest-bearing deposits |
1.14 | % | 1.41 | % | 1.72 | % | 1.93 | % | 2.02 | % | ||||||||||
|
Cost of average interest-bearing liabilities |
1.43 | % | 1.66 | % | 1.98 | % | 2.21 | % | 2.30 | % | ||||||||||
|
Accretion on loans to average earning assets |
0.08 | % | 0.13 | % | 0.10 | % | 0.10 | % | 0.10 | % | ||||||||||
|
Net interest margin |
3.59 | % | 3.38 | % | 3.37 | % | 3.47 | % | 3.59 | % | ||||||||||
RBB BANCORP AND SUBSIDIARIES
SELECTED FINANCIAL HIGHLIGHTS
(Unaudited, except for December 31, 2019)
(Dollars in thousands, except per share amounts)
|
Loan Portfolio Detail |
As of September 30, 2020 |
As of June 30, 2020 |
As of March 31, 2020 |
As of December 31, 2019 |
As of September 30, 2019 |
|||||||||||||||||||||||||||||||||||
|
(dollars in thousands) |
$ |
% |
$ |
% |
$ |
% |
$ |
% |
$ |
% |
||||||||||||||||||||||||||||||
|
Loans: |
||||||||||||||||||||||||||||||||||||||||
| Commercial and industrial | $ | 317,891 | 11.5 | $ | 267,481 | 10.3 | $ | 275,602 | 11.5 | $ | 274,586 | 12.5 | $ | 276,478 | 13.0 | |||||||||||||||||||||||||
| SBA | 111,193 | 4.0 | 104,069 | 4.0 | 77,566 | 3.2 | 74,985 | 3.4 | 70,978 | 3.3 | ||||||||||||||||||||||||||||||
| Construction and land development | 183,569 | 6.7 | 145,754 | 5.6 | 120,115 | 5.0 | 96,020 | 4.4 | 101,649 | 4.8 | ||||||||||||||||||||||||||||||
| Commercial real estate (1) | 975,187 | 35.4 | 900,302 | 34.7 | 854,580 | 35.6 | 793,268 | 36.1 | 787,927 | 37.1 | ||||||||||||||||||||||||||||||
| Single-family residential mortgages | 1,163,982 | 42.2 | 1,174,927 | 45.3 | 1,070,649 | 44.6 | 957,254 | 43.6 | 888,577 | 41.8 | ||||||||||||||||||||||||||||||
| Other loans | 3,331 | 0.1 | 2,087 | 0.1 | 1,470 | 0.1 | 821 | 0.0 | 536 | 0.0 | ||||||||||||||||||||||||||||||
|
Total loans (2) |
$ | 2,755,153 | 99.9 | $ | 2,594,620 | 100.0 | $ | 2,399,982 | 100.0 | $ | 2,196,934 | 100.0 | $ | 2,126,145 | 100.0 | |||||||||||||||||||||||||
|
Allowance for loan losses |
(26,634 | ) | (22,820 | ) | (20,130 | ) | (18,816 | ) | (19,386 | ) | ||||||||||||||||||||||||||||||
|
Total loans, net |
$ | 2,728,519 | $ | 2,571,800 | $ | 2,379,852 | $ | 2,178,118 | $ | 2,106,759 | ||||||||||||||||||||||||||||||
|
(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 |
Nine Months Ended |
|||||||||||||||
|
Change in Allowance for Loan Losses |
September 30, |
September 30, |
||||||||||||||
|
(dollars in thousands) |
2020 |
2019 |
2020 |
2019 |
||||||||||||
|
Beginning balance |
$ | 22,820 | $ | 18,561 | $ | 18,816 | $ | 17,577 | ||||||||
|
Additions to the allowance charged to expense |
3,861 | 824 | 8,815 | 1,731 | ||||||||||||
|
Net (charge-offs) recoveries on loans |
(47 | ) | 1 | (997 | ) | 78 | ||||||||||
|
Ending balance |
$ | 26,634 | $ | 19,386 | $ | 26,634 | $ | 19,386 | ||||||||
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 September 30, 2020 and 2019.
|
September 30, |
||||||||
|
(dollars in thousands, except per share data) |
2020 |
2019 |
||||||
|
Tangible common equity: |
||||||||
|
Total shareholders' equity |
$ | 421,416 | $ | 398,841 | ||||
|
Adjustments |
||||||||
|
Goodwill |
(69,243 | ) | (58,383 | ) | ||||
|
Core deposit intangible |
(5,519 | ) | (6,444 | ) | ||||
|
Tangible common equity |
$ | 346,654 | $ | 334,014 | ||||
|
Tangible assets: |
||||||||
|
Total assets-GAAP |
$ | 3,359,576 | $ | 2,820,302 | ||||
|
Adjustments |
||||||||
|
Goodwill |
(69,243 | ) | (58,383 | ) | ||||
|
Core deposit intangible |
(5,519 | ) | (6,444 | ) | ||||
|
Tangible assets |
$ | 3,284,814 | $ | 2,755,475 | ||||
|
Common shares outstanding |
19,739,280 | 20,030,866 | ||||||
|
Tangible common equity to tangible assets ratio |
10.55 | % | 12.12 | % | ||||
|
Book value per share |
$ | 21.35 | $ | 19.91 | ||||
|
Tangible book value per share |
$ | 17.56 | $ | 16.67 | ||||
Earnings Per Share Excluding Merger and Conversion Expense (non-GAAP)
Earnings per share excluding merger and conversion expense 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 calculation of earnings per share with after-tax net income excluding tax-affected merger and conversion expense. This EPS calculation is presented for the quarters ended September 30, 2020, June 30, 2020 and September 30, 2019, plus for the nine-month periods ending September 30, 2020 and 2019.
|
For the three months ended |
For the nine months ended |
|||||||||||||||||||
| September 30, 2020 | June 30, 2020 | September 30, 2019 | September 30, 2020 | September 30, 2019 | ||||||||||||||||
|
Earnings Per Share Excluding Merger and Conversion Expense (non-GAAP) |
||||||||||||||||||||
|
Net income after tax |
$ | 8,520 | $ | 6,513 | $ | 8,012 | $ | 21,781 | $ | 28,534 | ||||||||||
|
Merger and conversion expense |
62 | 276 | 100 | 741 | 282 | |||||||||||||||
|
Tax on merger and conversion expense |
(18 | ) | (85 | ) | (32 | ) | (229 | ) | (83 | ) | ||||||||||
|
Net adjustment |
44 | 191 | 68 | 512 | 199 | |||||||||||||||
|
Adjusted net income after tax |
$ | 8,564 | $ | 6,704 | $ | 8,080 | $ | 22,293 | $ | 28,733 | ||||||||||
|
Weighted average shares outstanding |
||||||||||||||||||||
|
Basic |
19,717,568 | 19,710,330 | 20,067,847 | 19,799,617 | 20,063,479 | |||||||||||||||
|
Diluted |
19,804,892 | 19,806,304 | 20,425,966 | 19,958,612 | 20,435,867 | |||||||||||||||
|
Adjusted Earnings Per Share |
||||||||||||||||||||
| Basic, excluding merger and conversion expense | $ | 0.43 | $ | 0.34 | $ | 0.40 | $ | 1.13 | $ | 1.44 | ||||||||||
| Diluted, excluding merger and conversion expense | $ | 0.43 | $ | 0.34 | $ | 0.40 | $ | 1.12 | $ | 1.41 | ||||||||||
Efficiency Ratio (non-GAAP)
The efficiency ratio is a non-GAAP disclosure. The Company uses certain non-GAAP financial measures to provide supplemental information regarding the Company’s performance. The efficiency ratio is non-interest expense divided by net interest income plus non-interest income. The efficiency ratio is presented for the quarters ended September 30, 2020, June 30, 2020 and September 30, 2019, plus the nine-month periods ending September 30, 2020 and 2019.
|
For the three months ended |
For the nine months ended |
|||||||||||||||||||
| September 30, 2020 | June 30, 2020 | September 30, 2019 | September 30, 2020 | September 30, 2019 | ||||||||||||||||
|
Efficiency Ratio (non-GAAP) |
||||||||||||||||||||
|
Noninterest expense |
$ | 13,978 | $ | 14,819 | $ | 13,786 | $ | 45,060 | $ | 44,010 | ||||||||||
|
Net interest income |
27,251 | 25,034 | 23,512 | 75,878 | 73,741 | |||||||||||||||
|
Noninterest income |
2,727 | 2,208 | 2,799 | 9,550 | 12,497 | |||||||||||||||
|
Net interest income and non-interest income |
$ | 29,978 | $ | 27,242 | $ | 26,311 | $ | 85,428 | $ | 86,238 | ||||||||||
|
Efficiency ratio |
46.63 | % | 54.40 | % | 52.40 | % | 52.75 | % | 51.03 | % | ||||||||||
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 $0.09 Per Share
Los Angeles, CA, October 23, 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 $0.09 per share. The dividend is payable on November 16, 2020 to common shareholders of record as of November 2, 2020.
Corporate Overview
RBB Bancorp is a community-based financial holding company headquartered in Los Angeles, California. As of June 30, 2020, the company had 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 nine branches in Los Angeles County, two branches in Ventura County, one branch in Irvine, California, one branch in Las Vegas, Nevada, six 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.