RBB Bancorp Reports First Quarter Earnings for 2021

Rhea-AI Summary

RBB Bancorp (NASDAQ:RBB) reported record net income of $12.5 million or $0.63 diluted EPS for Q1 2021, marking an increase from $11.1 million or $0.56 EPS in Q4 2020. The bank benefited from a growing economy with increases in net interest income to $29.5 million, up from $28.9 million in the previous quarter. Noninterest income rose to $5.9 million, driven by loan sales. Deposits reached $2.8 billion, exhibiting organic growth. However, noninterest expenses increased to $15.8 million from $14.5 million in Q4 2020.

Positive

• Record net income of $12.5 million, up from $11.1 million in Q4 2020.
• Increase in net interest income to $29.5 million, attributed to higher earning assets.
• Noninterest income rose to $5.9 million, driven by increased loan sales.
• Total deposits increased by $186.2 million, demonstrating organic growth.

Negative

• Noninterest expenses rose to $15.8 million from $14.5 million in Q4 2020.
• Efficiency ratio increased to 44.64% from 43.32% in the prior quarter.

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 March 31, 2021.

The Company reported record net income of $12.5 million, or $0.63 diluted earnings per share, for the three months ended March 31, 2021, compared to net income of $11.1 million, or $0.56 diluted earnings per share, and $6.7 million, or $0.33 diluted earnings per share, for the three months ended December 31, 2020 and March 31, 2020, respectively.

“Royal Business Bank started 2021 with excellent first quarter results as our differentiated business model benefited from a rapidly improving economy,” said Mr. Alan Thian, Chairman, President and CEO of RBB Bancorp. “We reported record net income, improving margins, stable credit quality and strong growth in noninterest-bearing deposits. We raised $120 million of subordinated debt which dramatically increases our ability to pursue profitable organic and strategic growth opportunities. We believe we are well-positioned to accelerate our profitable growth in 2021 by providing exceptional customer service to the individuals, businesses and communities we serve.”

Key Performance Ratios

Net income of $12.5 million for the first quarter of 2021 produced an annualized return on average assets of 1.47%, an annualized return on average tangible common shareholders' equity of 14.05%, and an annualized return on average shareholders' equity of 11.64%. This compares to an annualized return on average assets of 1.33%, an annualized return on average tangible common shareholders' equity of 12.58%, and an annualized return on average shareholders' equity of 10.38% for the fourth quarter of 2020. The efficiency ratio for the first quarter of 2021 was 44.64%, compared to 43.32% for the prior quarter. The change in the efficiency ratio was primarily due to a seasonal increase in non-interest expense.

Net Interest Income and Net Interest Margin

Net interest income, before provision for loan losses, was $29.5 million for the first quarter of 2021, compared to $28.9 million for the fourth quarter of 2020. The $608,000 increase was primarily attributable to higher interest income due to a $74.1 million increase in average earning assets and an improvement in the deposit costs related to a $36.9 million increase in average noninterest-bearing deposits, partially offset by a $39.1 million increase in average interest-bearing liabilities. Accretion of purchase discounts from prior acquisitions contributed $480,000 to net interest income in the first quarter of 2021, compared to $275,000 in the fourth quarter of 2020.

Compared to the first quarter of 2020, net interest income, before provision for loan losses, increased $5.9 million from $23.6 million. The increase was primarily attributable to a $388.8 million increase in average earning assets and a $168.1 million increase in average noninterest-bearing deposits, partially offset by a $188.3 million increase in average interest-bearing liabilities. The increases in average earning assets and total deposits were primarily due to increased loan and deposit originations.

Net interest margin was 3.73% for the first quarter of 2021, an increase of 6 basis points from 3.67% in the fourth quarter of 2020. The increase was primarily attributable to a 16 basis point decrease in the cost of total deposits partially offset by an 18 basis point increase in the cost of borrowings (FHLB advances, long-term debt and subordinated debentures) and a 6 basis point decrease in the yield on average earning assets. Loan discount accretion contributed 6 basis points to the net interest margin in the first quarter of 2021, compared to 3 basis points in the fourth quarter of 2020.

Noninterest Income

Noninterest income was $5.9 million for the first quarter of 2021, an increase of $1.4 million from $4.5 million in the fourth quarter of 2020. The increase was driven by an increase in gain on loan sales of $1.4 million as the Company sold $73.5 million more loans in the first quarter than in the prior quarter generally due to selling FNMA loans.

The Company sold $80.3 million in FNMA qualified mortgage loans for a net gain of $2.2 million and sold $49.8 million in non-qualified mortgage loans to private investors for a gain of $1.2 million during the first quarter of 2021. This compared to $24.7 million in FNMA qualified mortgage loans for a net gain of $645,000 and $24.3 million in non-qualified mortgage loans to private investors for a gain of $1.2 million during the fourth quarter of 2020. The Company sold $3.5 million in SBA loans during the first quarter of 2021 for a net gain of $355,000, compared to $11.3 million SBA loans sold for a net gain of $595,000 during the fourth quarter of 2020.

Compared to the first quarter of 2020, noninterest income increased by $1.3 million from $4.6 million. The increase was primarily attributable to an increase of $1.1 million in gain on loan sales and an increase of $225,000 in derivative income.

Noninterest Expense

Noninterest expense for the first quarter of 2021 was $15.8 million, compared to $14.5 million for the fourth quarter of 2020. The $1.3 million increase was primarily attributable to a $1.1 million increase from commission paid, payroll tax on bonuses, a $428,000 temporary increase in data processing expenses, partially offset by $158,000 decrease in occupancy and equipment expenses, and an $111,000 decrease in marketing and business promotion expenses.

Noninterest expense decreased from $16.3 million in the first quarter of 2020. The $471,000 decrease was primarily due to a $361,000 decrease in merger and conversion expenses, a $263,000 decrease in salaries and employee benefits expenses, and a $162,000 decrease in occupancy and equipment expenses. These were partially offset by a $298,000 increase in data processing expense.

Income Taxes

The effective tax rate was 31.13% for the first quarter of 2021, 29.92% for the fourth quarter of 2020, and 32.52% for the first quarter of 2020.

Loan Portfolio

Loans held for investment, net of deferred fees and discounts, totaled $2.7 billion as of March 31, 2021, an increase of $8.4 million from December 31, 2020, and an increase of $315.2 million from March 31, 2020. The increase from the prior quarter was primarily due to an increase in loan originations. Single-family residential mortgages decreased by $83.1 million net of payoffs, paydowns and loan sales. Commercial real estate loans increased by $59.5 million, construction and land development loans increased by $23.0 million, SBA loans increased by $13.5 million, commercial and industrial loans decreased by $4.1 million and other loans decreased by $321,000.

During the first quarter of 2021, single-family residential mortgage production was $114.5 million, payoffs and paydowns were $81.9 million, and single-family residential mortgage loan sales were $130.1 million. During the fourth quarter of 2020, single-family residential mortgage production was $110.3 million, payoffs and paydowns were $74.5 million, and loan sales were $49.0 million.

Mortgage loans held for sale were $37.7 million as of March 31, 2021, a decrease of $12.3 million from $50.0 million at December 31, 2020 and a decrease of $14.4 million from $52.1 million as of March 31, 2020. The Company originated approximately $55.3 million in mortgage loans for sale for the first quarter of 2021, compared with $50.0 million during the prior quarter.

In the first quarter of 2021, SBA loan production was $37.8 million and total SBA loan sales were $3.5 million.

Deposits and Borrowings

Deposits were $2.8 billion at March 31, 2021, an increase of $186.2 million from December 31, 2020, and an increase of $401.0 million from March 31, 2020, excluding brokered deposits. The increase in total deposits from the prior quarter was primarily attributable to organic deposit growth. During the first quarter of 2021, noninterest-bearing deposits increased by $170.2 million, interest-bearing non-maturity deposits increased by $60.4 million, and time deposits decreased by $44.5 million. As of March 31, 2021, time deposits included $17.4 million in brokered CDs, as compared to $17.4 million as of December 31, 2020 and $33.1 million as of March 31, 2020.

On March 31, 2021, the long-term subordinated-debt was reissued, and an additional $68.4 million was raised.

Asset Quality

Nonperforming assets totaled $20.2 million, or 0.55% of total assets at March 31, 2021, compared to $19.8 million, or 0.59%, of total assets at December 31, 2020. 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.

In the first quarter of 2021, there were $42,000 in net charge-offs, down from $305,000 in the prior quarter.

The Company recorded a provision for credit losses of $1.5 million for the first quarter of 2021, a decrease from $3.0 million in the prior quarter, primarily attributable to remaining COVID-19-related economic risk and loan growth.

The allowance for loan losses totaled $30.8 million, or 1.13% of loans held for investment at March 31, 2021, compared with $29.3 million, or 1.08%, of total loans at December 31, 2020.

As of March 31, 2021, borrowers representing 285 loans totaling $42.9 million, or 1.6% of the Company’s total loan portfolio, have funded under the SBA’s Paycheck Protection Program due to the COVID-19 pandemic. Presently none of our SBA customers are on a payment deferral plan due to the COVID-19 pandemic.

The following table provides details regarding the Company's COVID-19 loan deferral activity through April 15, 2021.

		As of June 30, 2020								As of October 23, 2020								As of January 15, 2021								As of April 15, 2021
		Loans Deferred								Loans Deferred								Loans Deferred								Loans Deferred
		Number				Principal Amount ($000)				Number				Principal Amount ($000)				Number				Principal Amount ($000)				Number				Principal Amount ($000)
General retail (excluding SBA)			34			$	94,251				3			$	26,840				2			$	3,174				1			$	438
Mixed use commercial			38				58,841				4				10,547				1				7,500				4				2,602
Hospitality (excluding SBA)			5				25,343				2				12,929				1				6,419				1				6,394		(1)
Restaurants (excluding SBA)			11				4,186				1				12				—				—				—				—
Multifamily			6				9,086				—				—				—				—				1				688
Commercial, office and other			—				—				5				19,881				5				18,742				—				—
SFR mortgage loans - Western region			183				118,484				38				29,604				14				8,770				9				5,135
SFR mortgage loans - Eastern region			203				85,935				10				4,106				11				4,925				5				2,467
SFR mortgage loans - Chicago metropolitan			84				14,824				4				719				1				249				—				—
Total			564			$	410,950				67			$	104,638				35			$	49,779				21			$	17,724

The Company does not have any shared national credits or loans, backed by airlines or cruise lines, on deferral as of March 31, 2021.

(1) Principal deferred only.

Corporate Overview

RBB Bancorp is a community-based financial holding company headquartered in Los Angeles, California. As of March 31, 2021, the company had total assets of $3.7 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, in Edison, New Jersey, and in the Chicago neighborhoods of Chinatown and Bridgeport, Illinois. 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 Orange County, California, one branch in Las Vegas, Nevada, two branches and one loan operation center in Brooklyn, three branches in Queens, one branch in Manhattan in New York, one branch in Edison, New Jersey and two 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 Ave., 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 27, 2021, to discuss the Company’s first quarter 2021 financial results.

To listen to the conference call, please dial 1-833-519-1355 (domestic) or 1-918-922-6505 (international), passcode 7982973. A replay of the call will be made available at 1-800-585-8367 or 1-404-537-3406, passcode 7982973, approximately one hour after the conclusion of the call and will remain available through May 4, 2021.

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-A for the year ended December 31, 2020, 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, 2020)
(Dollars in thousands)
		March 31,				December 31,				September 30,				June 30,				March 31,
		2021				2020				2020				2020				2020
Assets
Cash and due from banks		$	362,930			$	137,654			$	121,630			$	94,844			$	285,667
Federal funds sold and other cash equivalents			57,000				57,000				57,000				57,000				75,300
Total cash and cash equivalents			419,930				194,654				178,630				151,844				360,967
Interest-bearing deposits in other financial institutions			600				600				600				600				600
Investment securities available for sale			281,582				210,867				214,662				185,756				126,294
Investment securities held to maturity			6,668				7,174				7,569				7,615				7,825
Mortgage loans held for sale			37,675				49,963				23,886				15,479				52,096
Loans held for investment			2,715,205				2,706,766				2,755,153				2,594,620				2,399,982
Allowance for loan losses			(30,795	)			(29,337	)			(26,634	)			(22,820	)			(20,130	)
Net loans held for investment			2,684,410				2,677,429				2,728,519				2,571,800				2,379,852
Premises and equipment, net			27,093				27,103				24,237				23,965				24,472
Federal Home Loan Bank (FHLB) stock			15,641				15,641				15,641				15,641				15,630
Net deferred tax assets			3,427				2,547				1,080				—				—
Cash surrender value of life insurance			35,308				35,121				34,930				34,736				34,544
Goodwill			69,243				69,243				69,243				69,209				69,790
Servicing assets			13,264				13,965				14,724				15,595				16,826
Core deposit intangibles			4,895				5,196				5,519				5,876				6,234
Right-of-use assets- operating leases			25,500				—				—				—				—
Accrued interest and other assets			39,063				40,569				40,336				38,065				33,523
Total assets		$	3,664,299			$	3,350,072			$	3,359,576			$	3,136,181			$	3,128,653
Liabilities and shareholders' equity
Deposits:
Noninterest-bearing demand		$	787,439			$	617,206			$	642,332			$	574,553			$	504,324
Savings, NOW and money market accounts			791,486				731,084				654,378				601,941				571,870
Time deposits			1,242,368				1,286,838				1,315,038				1,260,026				1,359,787
Total deposits			2,821,293				2,635,128				2,611,748				2,436,520				2,435,981
Reserve for unfunded commitments			1,320				1,383				1,129				1,030				979
Net deferred tax liabilities			—				—				—				656				312
FHLB advances			150,000				150,000				190,000				150,000				150,000
Long-term debt, net of debt issuance costs			172,581				104,391				104,305				104,220				104,135
Subordinated debentures			14,338				14,283				14,229				14,174				14,120
Lease liabilities - operating leases			26,199				—				—				—				—
Accrued interest and other liabilities			42,900				16,399				16,749				15,556				15,133
Total liabilities			3,228,631				2,921,584				2,938,160				2,722,156				2,720,660
Shareholders' equity:
Shareholder's equity			435,746				427,287				420,329				412,827				407,332
Non-controlling interest			72				72				72				72				72
Accumulated other comprehensive (loss) income - Net of tax			(150	)			1,129				1,015				1,126				589
Total shareholders' equity			435,668				428,488				421,416				414,025				407,993
Total liabilities and shareholders’ equity		$	3,664,299			$	3,350,072			$	3,359,576			$	3,136,181			$	3,128,653

RBB BANCORP AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(Dollars in thousands, except per share amounts)
		For the three months ended
		March 31, 2021				December 31, 2020				March 31, 2020
Interest and dividend income:
Interest and fees on loans		$	34,516			$	34,832			$	32,276
Interest on interest-bearing deposits			48				55				451
Interest on investment securities			627				639				821
Dividend income on FHLB stock			192				193				2
Interest on federal funds sold and other			157				145				478
Total interest income			35,540				35,864				34,028
Interest expense:
Interest on savings deposits, NOW and money market accounts			698				736				1,243
Interest on time deposits			2,964				3,900				7,086
Interest on subordinated debentures and long term debt			1,958				1,901				1,956
Interest on other borrowed funds			435				450				150
Total interest expense			6,055				6,987				10,435
Net interest income before provision for loan losses			29,485				28,877				23,593
Provision for loan losses			1,500				3,008				1,945
Net interest income after provision for loan losses			27,985				25,869				21,648
Noninterest income:
Service charges, fees and other			1,410				1,565				1,079
Gain on sale of loans			3,841				2,445				2,711
Loan servicing fees, net of amortization			246				206				592
Recoveries on loans acquired in business combinations			5				5				42
Unrealized (loss) on equity investments			(20	)			—				—
Gain on derivatives			225				78				—
Increase in cash surrender value of life insurance			187				191				191
Total noninterest income			5,894				4,490				4,615
Noninterest expense:
Salaries and employee benefits			9,242				8,105				9,505
Occupancy and equipment expenses			2,242				2,400				2,404
Data processing			1,440				1,012				1,142
Legal and professional			805				794				604
Office expenses			255				295				323
Marketing and business promotion			184				295				214
Insurance and regulatory assessments			348				210				177
Core deposit premium			301				324				357
OREO expenses			5				4				14
Merger and conversion expenses			42				5				403
Other expenses			928				1,009				1,120
Total noninterest expense			15,792				14,453				16,263
Income before income taxes			18,087				15,906				10,000
Income tax expense			5,631				4,759				3,252
Net income		$	12,456			$	11,147			$	6,748
Net income per share
Basic		$	0.64			$	0.57			$	0.34
Diluted		$	0.63			$	0.56			$	0.33
Cash Dividends declared per common share		$	0.12			$	0.09			$	0.12
Weighted-average common shares outstanding
Basic			19,475,814				19,655,621				19,971,856
Diluted			19,812,841				19,812,401				20,266,328

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, 2021												December 31, 2020												March 31, 2020
		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)		$	215,230			$	397				0.75	%		$	188,430			$	393				0.83	%		$	249,568			$	931				1.50	%
Securities
Available for sale			239,768				571				0.97	%			222,762				579				1.03	%			138,574				755				2.19	%
Held to maturity (2)			7,000				64				3.71	%			7,383				68				3.66	%			8,016				74				3.71	%
Mortgage loans held for sale			54,021				411				3.09	%			41,265				325				3.13	%			78,063				981				5.05	%
Loans held for investment: (3)
Real estate			2,307,431				29,521				5.19	%			2,282,937				29,705				5.18	%			2,007,286				26,428				5.30	%
Commercial			384,442				4,584				4.84	%			390,980				4,802				4.89	%			337,548				4,867				5.80	%
Total loans			2,691,873				34,105				5.14	%			2,673,917				34,507				5.13	%			2,344,834				31,295				5.37	%
Total earning assets			3,207,892			$	35,548				4.49	%			3,133,757			$	35,872				4.55	%			2,819,055			$	34,036				4.86	%
Noninterest-earning assets			228,002												196,071												212,568
Total assets		$	3,435,894											$	3,329,828											$	3,031,623
Interest-bearing liabilities
NOW		$	64,592			$	44				0.28	%		$	62,232			$	48				0.31	%		$	43,838			$	42				0.39	%
Money Market			579,347				623				0.44	%			504,463				656				0.52	%			432,005				1,146				1.07	%
Saving deposits			131,151				31				0.10	%			128,727				32				0.10	%			114,951				55				0.19	%
Time deposits, less than $250,000			663,029				1,496				0.92	%			698,415				2,059				1.17	%			737,755				3,376				1.84	%
Time deposits, $250,000 and over			593,981				1,468				1.00	%			594,655				1,841				1.23	%			620,884				3,710				2.40	%
Total interest-bearing deposits			2,032,100				3,662				0.73	%			1,988,492				4,636				0.93	%			1,949,433				8,329				1.72	%
FHLB advances			150,001				435				1.18	%			161,957				450				1.11	%			51,978				150				1.18	%
Long-term debt			111,739				1,808				6.56	%			104,335				1,748				6.67	%			104,083				1,748				6.75	%
Subordinated debentures			14,302				150				4.25	%			14,248				153				4.27	%			14,327				208				5.84	%
Total interest-bearing liabilities			2,308,142				6,055				1.06	%			2,269,032				6,987				1.23	%			2,119,821				10,435				1.98	%
Noninterest-bearing liabilities
Noninterest-bearing deposits			653,674												616,803												485,555
Other noninterest-bearing liabilities			40,118												16,830												15,056
Total noninterest-bearing liabilities			693,792												633,633												500,611
Shareholders' equity			433,960												427,163												411,191
Total liabilities and shareholders' equity		$	3,435,894											$	3,329,828											$	3,031,623
Net interest income / interest rate spreads						$	29,493				3.43	%						$	28,885				3.32	%						$	23,601				2.88	%
Net interest margin											3.73	%											3.67	%											3.37	%

(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
SELECTED FINANCIAL HIGHLIGHTS
(Unaudited)
(Dollars in thousands, except per share amounts)
		For the three months ended
		March 31,				December 31,				March 31,
		2021				2020				2020
Per share data (common stock)
Earnings
Basic		$	0.64			$	0.57			$	0.34
Diluted		$	0.63			$	0.56			$	0.33
Dividends declared		$	0.12			$	0.09			$	0.12
Book value		$	22.31			$	21.90			$	20.67
Tangible book value		$	18.51			$	18.10			$	16.82
Weighted average shares outstanding
Basic			19,475,814				19,655,621				19,971,856
Diluted			19,812,841				19,812,401				20,266,328
Shares outstanding at period end			19,528,249				19,565,921				19,739,280
Performance ratios
Return on average assets, annualized			1.47	%			1.33	%			0.90	%
Return on average shareholders' equity, annualized			11.64	%			10.38	%			6.60	%
Return on average tangible common equity, annualized			14.05	%			12.58	%			8.13	%
Noninterest income to average assets, annualized			0.70	%			0.54	%			0.61	%
Noninterest expense to average assets, annualized			1.86	%			1.73	%			2.16	%
Yield on average earning assets			4.49	%			4.55	%			4.86	%
Cost of average total deposits			0.55	%			0.71	%			1.38	%
Cost of average interest-bearing deposits			0.73	%			0.93	%			1.72	%
Cost of average interest-bearing liabilities			1.06	%			1.23	%			1.98	%
Accretion on loans to average earning assets			0.06	%			0.03	%			0.10	%
Net interest spread			3.43	%			3.32	%			2.88	%
Net interest margin			3.73	%			3.67	%			3.37	%
Efficiency ratio			44.64	%			43.32	%			57.65	%
Common stock dividend payout ratio			18.75	%			15.79	%			35.29	%

RBB BANCORP AND SUBSIDIARIES
SELECTED FINANCIAL HIGHLIGHTS
(Unaudited)
(Dollars in thousands, except per share amounts)
		As of
		March 31,				December 31,				March 31,
		2021				2020				2020
Loan to deposit ratio			96.24	%			102.72	%			98.52	%
Core deposits / total deposits			78.97	%			77.31	%			74.11	%
Net non-core funding dependence ratio			4.27	%			9.11	%			6.62	%
Credit Quality Data:
Loans 30-89 days past due		$	10,653			$	8,939			$	22,488
Loans 30-89 days past due to total loans			0.39%				0.33%				0.94%
Loans 90 days past due and still accruing		$	—			$	—			$	225
Nonperforming loans		$	19,911			$	19,554			$	20,499
Nonperforming loans to total loans			0.73	%			0.72	%			0.85	%
Nonperforming assets		$	20,204			$	19,847			$	20,792
Nonperforming assets to total assets			0.55	%			0.59	%			0.66	%
Allowance for loan losses to total loans			1.13	%			1.08	%			0.84	%
Allowance for loan losses to nonperforming loans			154.66	%			150.03	%			98.20	%
Net charge-offs to average loans (for the quarter-to-date period)			0.01	%			0.05	%			0.11	%
Regulatory and other capital ratios—Company
Tangible common equity to tangible assets			10.07	%			10.81	%			10.87	%
Tier 1 leverage ratio			11.30	%			11.32	%			11.74	%
Tier 1 common capital to risk-weighted assets			14.53	%			14.62	%			15.45	%
Tier 1 capital to risk-weighted assets			15.11	%			15.21	%			16.10	%
Total capital to risk-weighted assets			23.27	%			20.77	%			21.91	%
Regulatory capital ratios—Bank only
Tier 1 leverage ratio			13.44	%			14.11	%			14.44	%
Tier 1 common capital to risk-weighted assets			17.96	%			18.94	%			19.79	%
Tier 1 capital to risk-weighted assets			17.96	%			18.94	%			19.79	%
Total capital to risk-weighted assets			19.21	%			20.19	%			20.77	%

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		2021				2020				2020				2020				2020
Interest income
Loans, including fees		$	34,516			$	34,832			$	34,153			$	32,633			$	32,276
Investment securities and other			1,024				1,032				972				1,470				1,752
Total interest income			35,540				35,864				35,125				34,103				34,028
Interest expense
Deposits			3,662				4,636				5,525				6,715				8,329
Interest on subordinated debentures and other			1,958				1,901				1,905				1,915				1,956
Other borrowings			435				450				444				439				150
Total interest expense			6,055				6,987				7,874				9,069				10,435
Net interest income before provision for loan losses			29,485				28,877				27,251				25,034				23,593
Provision for loan losses			1,500				3,008				3,861				3,009				1,945
Net interest income after provision for loan losses			27,985				25,869				23,390				22,025				21,648
Noninterest income			5,894				4,490				2,727				2,208				4,615
Noninterest expense			15,792				14,453				13,978				14,819				16,263
Earnings before income taxes			18,087				15,906				12,139				9,414				10,000
Income taxes			5,631				4,759				3,619				2,901				3,252
Net income		$	12,456			$	11,147			$	8,520			$	6,513			$	6,748
Net income per common share - basic		$	0.64			$	0.57			$	0.43			$	0.33			$	0.34
Net income per common share - diluted		$	0.63			$	0.56			$	0.43			$	0.33			$	0.33
Cash dividends declared per common share		$	0.12			$	0.09			$	0.06			$	0.06			$	0.12
Cash dividends declared on common shares		$	2,347			$	1,777			$	1,184			$	1,184			$	2,407
Yield on average assets, annualized			1.47	%			1.33	%			1.05	%			0.83	%			0.90	%
Yield on average earning assets			4.49	%			4.55	%			4.63	%			4.60	%			4.86	%
Cost of average deposits			0.55	%			0.71	%			0.87	%			1.09	%			1.38	%
Cost of average interest-bearing deposits			0.73	%			0.93	%			1.14	%			1.42	%			1.72	%
Cost of average interest-bearing liabilities			1.06	%			1.23	%			1.43	%			1.68	%			1.98	%
Accretion on loans to average earning assets			0.06	%			0.03	%			0.08	%			0.16	%			0.10	%
Net interest margin			3.73	%			3.67	%			3.59	%			3.42	%			3.37	%

RBB BANCORP AND SUBSIDIARIES
SELECTED FINANCIAL HIGHLIGHTS
(Unaudited, except for December 31, 2020)
(Dollars in thousands, except per share amounts)
Loan Portfolio Detail		As of March 31, 2021								As of December 31, 2020								As of September 30, 2020								As of June 30, 2020								As of March 31, 2020
(dollars in thousands)		$				%				$				%				$				%				$				%				$				%
Loans:
Commercial and industrial		$	286,016				10.5	%		$	290,139				10.7	%		$	317,891				11.5	%		$	267,481				10.3	%		$	275,602				11.5	%
SBA			111,330				4.1	%			97,821				3.6	%			111,193				4.0	%			104,069				4.0	%			77,566				3.2	%
Construction and land development			209,727				7.7	%			186,723				6.9	%			183,569				6.7	%			145,754				5.6	%			120,115				5.0	%
Commercial real estate (1)			1,063,104				39.2	%			1,003,637				37.1	%			975,187				35.4	%			900,302				34.7	%			854,580				35.6	%
Single-family residential mortgages			1,041,260				38.3	%			1,124,357				41.5	%			1,163,982				42.2	%			1,174,927				45.3	%			1,070,649				44.6	%
Other loans			3,768				0.2	%			4,089				0.2	%			3,331				0.2	%			2,087				0.1	%			1,470				0.1	%
Total loans (2)		$	2,715,205				100.0	%		$	2,706,766				100.0	%		$	2,755,153				100.0	%		$	2,594,620				100.0	%		$	2,399,982				100.0	%
Allowance for loan losses			(30,795	)							(29,337	)							(26,634	)							(22,820	)							(20,130	)
Total loans, net		$	2,684,410							$	2,677,429							$	2,728,519							$	2,571,800							$	2,379,852

(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)		2021				2020
Beginning balance		$	29,337			$	18,816
Additions to the allowance charged to expense			1,500				1,945
Net charge-offs on loans			(42	)			(631	)
Ending balance		$	30,795			$	20,130

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, 2021 and 2020 and December 31, 2020.

(dollars in thousands, except per share data)		March 31, 2021				December 31, 2020				March 31, 2020
Tangible common equity:
Total shareholders' equity		$	435,668			$	428,488			$	407,993
Adjustments
Goodwill			(69,243	)			(69,243	)			(69,790	)
Core deposit intangible			(4,895	)			(5,196	)			(6,234	)
Tangible common equity		$	361,530			$	354,049			$	331,969
Tangible assets:
Total assets-GAAP		$	3,664,299			$	3,350,072			$	3,128,653
Adjustments
Goodwill			(69,243	)			(69,243	)			(69,790	)
Core deposit intangible			(4,895	)			(5,196	)			(6,234	)
Tangible assets		$	3,590,161			$	3,275,633			$	3,052,629
Common shares outstanding		$	19,528,249				19,565,921				19,739,280
Tangible common equity to tangible assets ratio			10.07	%			10.81	%			10.87	%
Book value per share		$	22.31			$	21.90			$	20.67
Tangible book value per share		$	18.51			$	18.10			$	16.82

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20210426005832/en/

FAQ

What were RBB Bancorp's earnings for Q1 2021?

RBB Bancorp reported net income of $12.5 million for Q1 2021.

How did RBB's net interest income change in Q1 2021?

Net interest income increased to $29.5 million in Q1 2021.

What is RBB Bancorp's stock symbol?

The stock symbol for RBB Bancorp is RBB.

How much did RBB raise in subordinated debt?

RBB raised $120 million in subordinated debt in Q1 2021.

What was the efficiency ratio for RBB Bancorp in Q1 2021?

The efficiency ratio for Q1 2021 was 44.64%.