Recent Quotes View Full List My Watchlist Create Watchlist Indicators DJI Nasdaq Composite SPX Gold Crude Oil EL&P Market Index Markets Stocks ETFs Tools Overview News Currencies International Treasuries RBB Bancorp Reports Third Quarter Earnings for 2021 By: RBB Bancorp via Business Wire October 25, 2021 at 16:05 PM EDT Conference Call and Webcast Scheduled for Tuesday, October 26, 2021 at 11:00 a.m. Pacific Time/2:00 p.m. Eastern Time Third Quarter 2021 Highlights Reported record net income of $15.4 million, or $0.77 diluted earnings per share, increased $2.0 million, or 14.8%, from the prior quarter and increased $6.8 million, or 80.3%, from the third quarter of 2020 Loan growth of $137.1 million, or 20.0% annualized, from the end of the prior quarter Declared quarterly cash dividend of $0.13 per common share Entered into an agreement in July, received regulatory approval in September to buy the Honolulu, Hawaii branch office of Bank of the Orient, which is expected to close by mid-January 2022 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, 2021. The Company reported record net income of $15.4 million, or $0.77 diluted earnings per share, for the three months ended September 30, 2021, compared to net income of $13.4 million, or $0.67 diluted earnings per share, and $8.5 million, or $0.43 diluted earnings per share, for the three months ended June 30, 2021 and September 30, 2020, respectively. Third quarter results included the impact of a $1.8 million CDFI grant that increased diluted earnings per share by approximately $0.07. "Our differentiated business model continued to outperform in the third quarter as we reported record diluted earnings per share of $0.77 and 20% annualized loan growth,” said Alan Thian, President and CEO of RBB Bancorp. “In addition to our financial performance and growth, continued pricing discipline and focus on our cost of deposits has kept our net interest margin stable in the first 9 months of 2021 versus the same period in 2020. We are also pleased that our efforts to support the communities in which we operate were recognized by the US Treasury which awarded Royal Business Bank with a $1.8 million CDFI grant to facilitate a rapid response to the economic impacts of the COVID-19 pandemic in distressed and underserved communities.” "I am very pleased with Royal Business Bank’s record financial performance in the third quarter," said Dr. James Kao, Chairman of RBB Bancorp. “And I am very proud that RBB’s success in community development has been recognized with a CDFI grant and with the appointment of Alan to the Community Development Advisory Board.” Key Performance Ratios Net income of $15.4 million for the third quarter of 2021 produced an annualized return on average assets ("ROA") of 1.54%, an annualized return on average tangible common shareholders' equity ("ROTCE") of 16.17%, and an annualized return on average shareholders' equity ("ROE") of 13.52%. This compares to an annualized return on average assets of 1.39%, an annualized return on average tangible common shareholders' equity of 14.57%, and an annualized return on average shareholders' equity of 12.13% for the second quarter of 2021. Third quarter results included the impact of a $1.8 million CDFI grant that increased ROA by 0.03%, ROTCE by 0.35%, and ROE by 0.29%. The efficiency ratio for the third quarter of 2021 was 38.87%, compared to 42.89% for the prior quarter. Net Interest Income and Net Interest Margin Net interest income, before provision for loan losses, was $31.6 million for the third quarter of 2021, compared to $30.1 million for the second quarter of 2021. The $1.5 million increase was primarily attributable to higher interest income due to a $92.7 million increase in average earning assets, partially offset by an $11.3 million increase in average interest-bearing liabilities. Accretion of purchase discounts from prior acquisitions contributed $289,000 to net interest income in the third quarter of 2021, compared to $183,000 in the second quarter of 2021. Compared to the third quarter of 2020, net interest income, before provision for loan losses, increased $4.3 million from $27.3 million. The increase was primarily attributable to a $691.5 million increase in average earning assets, partially offset by a $262.0 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 3.38% for the third quarter of 2021, an increase of 5 basis points from 3.33% in the second quarter of 2021. The increase was primarily attributable to a $89.9 million increase in average non-interest bearing deposits, combined with an 8 basis point decrease in the cost of average interest-bearing liabilities, which was partially offset by a 2 basis point decrease in the yield on average earning assets. Loan discount accretion contributed 3 basis points to the net interest margin in the third quarter of 2021, compared to 2 basis points in the second quarter of 2021. Noninterest Income Noninterest income was $5.5 million for the third quarter of 2021, an increase of $1.4 million from $4.2 million in the second quarter of 2021. The increase was primarily driven by a $1.8 million grant under the US Treasury’s Rapid Response Program, partially offset by a $782,000 decrease in gain on sale of loans during the quarter. The Company sold $35.7 million fewer loans in the third quarter than in the prior quarter primarily due to selling fewer FNMA loans. The Company sold $36.6 million in FNMA qualified mortgage loans for a net gain of $1.3 million and sold no non-qualified mortgage loans during the third quarter of 2021. This compared to $58.9 million in FNMA qualified mortgage loans sold for a net gain of $1.4 million and $13.4 million in non-qualified mortgage loans to private investors for a gain of $389,000 during the second quarter of 2021. The Company sold $5.9 million in SBA loans during the third quarter of 2021 for a net gain of $553,000, compared to $5.9 million SBA loans sold for a net gain of $747,000 during the second quarter of 2021. Compared to the third quarter of 2020, noninterest income increased by $2.8 million from $2.7 million. The increase was primarily attributable to an increase of $1.8 million grant under the US Treasury’s Rapid Response Program and an increase of $1.0 million in gain on loan sales. Noninterest Expense Noninterest expense for the third quarter of 2021 was $14.4 million, compared to $14.7 million for the second quarter of 2021. The $260,000 decrease was primarily attributable to a reversal of impairment write-down on mortgage servicing assets of $416,000 and a $266,000 decrease in data processing expense, partially offset by a $210,000 increase in legal and professional expenses and a $93,000 increase in marketing and business promotion expense. Noninterest expense increased from $14.0 million in the third quarter of 2020. The $444,000 increase was primarily due to a $1.2 million increase in salaries and employee benefits and a $193,000 increase in marketing and business promotion expenses. These were partially offset by a $475,000 decrease in mortgage servicing assets impairment write-down, a $235,000 decrease in data processing expenses and a $171,000 decrease in occupancy and equipment expenses. Income Taxes The effective tax rate was 28.5% for the third quarter of 2021, 29.3% for the second quarter of 2021, and 29.8% for the third quarter of 2020. The Company recognized a tax benefit from stock option exercises of $534,000, $68,000 and zero for the third quarter of 2021, the second quarter of 2021, and the third quarter of 2020, respectively. CDFI Rapid Response Program In mid-June, 2021 the Bank was awarded a $1.8 million grant under the US Treasury’s Rapid Response Program to facilitate a rapid response to the economic impacts of the COVID-19 pandemic in distressed and underserved communities. The award was received in August 2021 after finalization of the contract between the Bank and the US Treasury which included various performance goals and measures that specify the use of the funds to provide affordable housing. The funds were disbursed for two loans that help provide affordable housing to underserved communities. Loan Portfolio Loans held for investment, net of deferred fees and discounts, totaled $2.84 billion as of September 30, 2021, an increase of $131.1 million from June 30, 2021, and an increase of $85.2 million from September 30, 2020. The increase from the prior quarter was primarily due to an increase in commercial real estate and construction & land development loans. Single-family residential mortgages decreased by $9.5 million net of payoffs, paydowns and loan sales. Commercial real estate loans increased by $103.2 million, construction and land development loans increased by $34.8 million, SBA loans decreased by $9.8 million (which included a $6.2 million decrease in PPP loans), commercial and industrial loans decreased by $693,000 and other loans increased by $13.2 million. During the third quarter of 2021, single-family residential mortgage production was $112.0 million, payoffs and paydowns were $79.0 million, and single-family residential mortgage loan sales were $36.6 million. During the second quarter of 2021, single-family residential mortgage production was $107.9 million, payoffs and paydowns were $121.0 million, and loan sales were $72.3 million. Mortgage loans held for sale were $15.2 million as of September 30, 2021, an increase of $5.9 million from $9.2 million at June 30, 2021 and a decrease of $8.7 million from $23.9 million as of September 30, 2020. The Company originated approximately $12.2 million in FNMA mortgage loans for sale for the third quarter of 2021, compared with $29.2 million during the prior quarter. In the third quarter of 2021, SBA loan production was $22.7 million and total SBA loan sales were $5.9 million. Deposits and Borrowings Deposits were $3.0 billion at September 30, 2021, a decrease of $102.1 million from June 30, 2021, and an increase of $356.1 million from September 30, 2020, including brokered deposits. The decrease in total deposits from the prior quarter was primarily attributable to a decrease in noninterest-bearing demand deposits and time deposits. During the third quarter of 2021, noninterest-bearing deposits decreased by $115.3 million, interest-bearing non-maturity deposits increased by $72.9 million, and time deposits decreased by $59.8 million. As of September 30, 2021, time deposits included $2.4 million in brokered CDs, as compared to $17.4 million as of June 30, 2021 and $17.4 million as of September 30, 2020. Asset Quality Nonperforming assets totaled $14.5 million, or 0.38% of total assets at September 30, 2021, compared to $19.5 million, or 0.50%, of total assets at June 30, 2021. Nonperforming assets consist of other real estate owned, loans modified under troubled debt restructurings (“TDR”), non-accrual loans, and loans past due 90 days or more and still accruing interest. In the third quarter of 2021, there were $317,000 in net charge-offs, compared to net charge-offs of $71,000 in the second quarter. The Company recorded a provision for credit losses of $1.2 million for the third quarter of 2021, an increase from $628,000 in the prior quarter, primarily attributable to loan growth. The allowance for loan losses totaled $32.2 million, or 1.13% of loans held for investment at September 30, 2021, compared with $31.4 million, or 1.16%, of total loans at June 30, 2021. As of September 30, 2021, borrowers representing 167 loans totaling $23.0 million, or 0.80% 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 Company does not have any shared national credits or loans, backed by airlines or cruise lines, on deferral as of September 30, 2021. As of October 15, 2021, the Company had one COVID-19 loan deferral in the amount of $241,000. Corporate Overview RBB Bancorp is a community-based financial holding company headquartered in Los Angeles, California. As of September 30, 2021, the company had total assets of $3.8 billion. Its wholly-owned subsidiary, the Bank is a full service commercial bank, which provides business banking services to the Chinese-American communities in Los Angeles County, Orange County, and Ventura County in California, in Las Vegas, Nevada, 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, October 26, 2021, to discuss the Company’s third quarter 2021 financial results. To listen to the conference call, please dial 1-877-876-9174 or 1-785-424-1669, passcode RBBQ321. A replay of the call will be made available at 1-888-269-5324 or 1-402-220-7325 (no passcode required) approximately one hour after the conclusion of the call and will remain available through November 2, 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) September 30, June 30, March 31, December 31, September 30, 2021 2021 2021 2020 2020 Assets Cash and due from banks $ 206,927 $ 493,653 $ 362,930 $ 137,654 $ 121,630 Federal funds sold and other cash equivalents 170,000 110,000 57,000 57,000 57,000 Total cash and cash equivalents 376,927 603,653 419,930 194,654 178,630 Interest-bearing deposits in other financial institutions 600 600 600 600 600 Investment securities available for sale 345,000 339,568 281,582 210,867 214,662 Investment securities held to maturity 6,258 6,664 6,668 7,174 7,569 Mortgage loans held for sale 15,188 9,246 37,675 49,963 23,886 Loans held for investment 2,840,354 2,709,206 2,715,205 2,706,766 2,755,153 Allowance for loan losses (32,231 ) (31,352 ) (30,795 ) (29,337 ) (26,634 ) Net loans held for investment 2,808,123 2,677,854 2,684,410 2,677,429 2,728,519 Premises and equipment, net 27,157 27,039 27,093 27,103 24,237 Federal Home Loan Bank (FHLB) stock 15,000 15,000 15,641 15,641 15,641 Cash surrender value of life insurance 55,656 55,325 35,308 35,121 34,930 Goodwill 69,243 69,243 69,243 69,243 69,243 Servicing assets 12,141 12,558 13,264 13,965 14,724 Core deposit intangibles 4,327 4,608 4,895 5,196 5,519 Right-of-use assets- operating leases 23,735 25,050 25,500 — — Accrued interest and other assets 42,452 44,230 42,490 43,116 41,416 Total assets $ 3,801,807 $ 3,890,638 $ 3,664,299 $ 3,350,072 $ 3,359,576 Liabilities and shareholders' equity Deposits: Noninterest-bearing demand $ 824,771 $ 940,041 $ 787,439 $ 617,206 $ 642,332 Savings, NOW and money market accounts 931,517 858,597 791,486 731,084 654,378 Time deposits 1,211,525 1,271,287 1,242,368 1,286,838 1,315,038 Total deposits 2,967,813 3,069,925 2,821,293 2,635,128 2,611,748 Reserve for unfunded commitments 1,304 1,216 1,320 1,383 1,129 FHLB advances 150,000 150,000 150,000 150,000 190,000 Long-term debt, net of debt issuance costs 172,862 172,718 172,581 104,391 104,305 Subordinated debentures 14,447 14,393 14,338 14,283 14,229 Lease liabilities - operating leases 24,524 25,798 26,199 — — Accrued interest and other liabilities 14,833 14,263 42,900 16,399 16,749 Total liabilities 3,345,783 3,448,313 3,228,631 2,921,584 2,938,160 Shareholders' equity: Shareholder's equity 456,490 442,086 435,746 427,287 420,329 Non-controlling interest 72 72 72 72 72 Accumulated other comprehensive (loss) income - Net of tax (538 ) 167 (150 ) 1,129 1,015 Total shareholders' equity 456,024 442,325 435,668 428,488 421,416 Total liabilities and shareholders’ equity $ 3,801,807 $ 3,890,638 $ 3,664,299 $ 3,350,072 $ 3,359,576 RBB BANCORP AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited) (Dollars in thousands, except per share amounts) For the Three Months Ended September 30, 2021 June 30, 2021 September 30, 2020 Interest and dividend income: Interest and fees on loans $ 35,601 $ 34,669 $ 34,153 Interest on interest-bearing deposits 219 125 61 Interest on investment securities 889 794 621 Dividend income on FHLB stock 225 225 190 Interest on federal funds sold and other 174 158 100 Total interest income 37,108 35,971 35,125 Interest expense: Interest on savings deposits, NOW and money market accounts 697 708 779 Interest on time deposits 2,048 2,410 4,746 Interest on subordinated debentures and long term debt 2,342 2,356 1,905 Interest on other borrowed funds 445 440 444 Total interest expense 5,532 5,914 7,874 Net interest income before provision for loan losses 31,576 30,057 27,251 Provision for loan losses 1,196 628 3,861 Net interest income after provision for loan losses 30,380 29,429 23,390 Noninterest income: Service charges, fees and other(1) 3,100 1,374 1,143 Gain on sale of loans 1,790 2,572 760 Loan servicing fees, net of amortization 62 118 546 Recoveries on loans acquired in business combinations 68 5 32 Unrealized (loss) on equity investments (5 ) (35 ) — Gain (loss) on derivatives 178 (80 ) — Increase in cash surrender value of life insurance 331 217 194 Gain on sale of securities — — 52 Total noninterest income 5,524 4,171 2,727 Noninterest expense: Salaries and employee benefits 8,772 8,742 7,599 Occupancy and equipment expenses 2,189 2,135 2,360 Data processing 965 1,231 1,200 Legal and professional 746 536 675 Office expenses 311 272 271 Marketing and business promotion 324 231 131 Insurance and regulatory assessments 384 354 363 Core deposit premium 281 287 357 OREO expenses 4 4 3 Merger expenses 40 17 62 Other expenses 404 871 957 Total noninterest expense 14,420 14,680 13,978 Income before income taxes 21,484 18,920 12,139 Income tax expense 6,120 5,540 3,619 Net income $ 15,364 $ 13,380 $ 8,520 Net income per share Basic $ 0.79 $ 0.69 $ 0.43 Diluted $ 0.77 $ 0.67 $ 0.43 Cash Dividends declared per common share $ 0.13 $ 0.13 $ 0.06 Weighted-average common shares outstanding Basic 19,343,262 19,432,204 19,717,568 Diluted 19,798,187 19,874,969 19,804,892 (1) Includes $1.8 million of the U.S. Treasury's CDFI rapid response program grant income. RBB BANCORP AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited) (Dollars in thousands, except per share amounts) For the Nine Months Ended September 30, 2021 September 30, 2020 Interest and dividend income: Interest and fees on loans $ 104,786 $ 99,062 Interest on interest-earning deposits 392 586 Interest on investment securities 2,310 2,329 Dividend income on FHLB stock 642 379 Interest on federal funds sold and other 489 900 Total interest income 108,619 103,256 Interest expense: Interest on savings deposits, NOW and money market accounts 2,103 2,804 Interest on time deposits 7,422 17,765 Interest on subordinated debentures and long term debt 6,656 5,776 Interest on other borrowed funds 1,320 1,033 Total interest expense 17,501 27,378 Net interest income 91,118 75,878 Provision for loan losses 3,324 8,815 Net interest income after provision for loans losses 87,794 67,063 Noninterest income: Service charges, fees and other (1) 5,884 3,287 Gain on sale of loans 8,203 3,552 Loan servicing fees, net of amortization 426 1,846 Recoveries on loans acquired in business combinations 78 79 Unrealized (loss) on equity investments (60 ) — Gain on derivatives 323 — Increase in cash surrender value of life insurance 735 576 Gain on sale of securities — 210 Total noninterest income 15,589 9,550 Noninterest expense: Salaries and employee benefits 26,756 25,207 Occupancy and equipment expenses 6,566 7,291 Data processing 3,636 3,224 Legal and professional 2,087 1,949 Office expenses 838 931 Marketing and business promotion 739 456 Insurance and regulatory assessments 1,086 774 Core deposit premium 869 1,071 OREO expenses 13 31 Merger expenses 99 741 Other expenses 2,203 3,385 Total noninterest expense 44,892 45,060 Income before income taxes 58,491 31,553 Income tax expense 17,291 9,772 Net income $ 41,200 $ 21,781 Net income per share Basic $ 2.11 $ 1.10 Diluted $ 2.07 $ 1.09 Cash Dividends declared per common share $ 0.38 $ 0.24 Weighted-average common shares outstanding Basic 19,416,608 19,799,617 Diluted 19,828,612 19,958,612 (1) Includes $1.8 million of the U.S. Treasury's CDFI rapid response program grant income. 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, 2021 June 30, 2021 September 30, 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) $ 628,020 $ 618 0.39 % $ 582,554 $ 508 0.35 % $ 179,521 $ 351 0.78 % Securities Available for sale 336,130 856 1.01 % 328,004 751 0.92 % 168,151 558 1.32 % Held to maturity (2) 6,262 56 3.55 % 6,667 60 3.61 % 7,604 71 3.71 % Mortgage loans held for sale 5,218 46 3.50 % 21,033 173 3.30 % 19,848 171 3.43 % Loans held for investment: (3) Real estate 2,361,405 30,911 5.19 % 2,292,145 29,794 5.21 % 2,266,752 29,616 5.20 % Commercial 374,125 4,644 4.92 % 388,049 4,702 4.86 % 377,789 4,366 4.60 % Total loans 2,735,530 35,555 5.16 % 2,680,194 34,496 5.16 % 2,644,541 33,982 5.11 % Total earning assets 3,711,160 $ 37,131 3.97 % 3,618,452 $ 35,988 3.99 % 3,019,665 $ 35,133 4.63 % Noninterest-earning assets 242,742 230,049 204,638 Total assets $ 3,953,902 $ 3,848,501 $ 3,224,303 Interest-bearing liabilities NOW $ 71,454 $ 48 0.27 % $ 66,777 $ 45 0.27 % $ 59,451 $ 50 0.33 % Money Market 660,806 615 0.37 % 640,026 628 0.39 % 454,820 698 0.61 % Saving deposits 139,555 34 0.10 % 140,418 35 0.10 % 126,635 31 0.10 % Time deposits, less than $250,000 644,013 977 0.60 % 657,494 1,163 0.71 % 699,765 2,539 1.44 % Time deposits, $250,000 and over 604,394 1,071 0.70 % 604,429 1,247 0.83 % 584,586 2,207 1.50 % Total interest-bearing deposits 2,120,222 2,745 0.51 % 2,109,144 3,118 0.59 % 1,925,257 5,525 1.14 % FHLB advances 150,000 445 1.18 % 150,000 440 1.18 % 151,739 444 1.16 % Long-term debt 172,767 2,194 5.04 % 172,622 2,206 5.13 % 104,252 1,748 6.67 % Subordinated debentures 14,411 148 4.07 % 14,357 150 4.19 % 14,195 157 4.40 % Total interest-bearing liabilities 2,457,400 5,532 0.89 % 2,446,123 5,914 0.97 % 2,195,443 7,874 1.43 % Noninterest-bearing liabilities Noninterest-bearing deposits 1,003,304 913,442 595,264 Other noninterest-bearing liabilities 42,419 46,549 13,270 Total noninterest-bearing liabilities 1,045,723 959,991 608,534 Shareholders' equity 450,779 442,387 420,326 Total liabilities and shareholders' equity $ 3,953,902 $ 3,848,501 $ 3,224,303 Net interest income / interest rate spreads $ 31,599 3.08 % $ 30,074 3.02 % $ 27,259 3.20 % Net interest margin 3.38 % 3.33 % 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, 2021 September 30, 2020 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) $ 476,781 $ 1,523 0.43 % $ 220,195 $ 1,865 1.13 % Securities Available for sale 301,653 2,180 0.97 % 159,373 2,136 1.79 % Held to maturity (2) 6,640 182 3.66 % 7,760 218 3.75 % Mortgage loans held for sale 26,579 630 3.17 % 40,936 1,454 4.74 % Loans held for investment: (3) Real estate 2,320,524 90,226 5.20 % 2,141,022 84,261 5.26 % Commercial 382,168 13,930 4.87 % 359,907 13,347 4.95 % Total loans 2,702,692 104,156 5.15 % 2,500,929 97,608 5.21 % Total earning assets 3,514,345 $ 108,671 4.13 % 2,929,193 $ 103,281 4.71 % Noninterest-earning assets 233,652 208,000 Total assets $ 3,747,997 $ 3,137,193 Interest-bearing liabilities NOW $ 67,633 $ 136 0.27 % $ 53,633 $ 153 0.38 % Money Market 627,024 1,866 0.40 % 430,524 2,534 0.79 % Saving deposits 137,072 101 0.10 % 121,836 117 0.13 % Time deposits, less than $250,000 654,776 3,635 0.74 % 720,810 9,408 1.74 % Time deposits, $250,000 and over 600,973 3,787 0.84 % 598,137 8,357 1.87 % Total interest-bearing deposits 2,087,478 9,525 0.61 % 1,924,940 20,569 1.43 % FHLB advances 150,000 1,320 1.18 % 118,029 1,033 1.17 % Long-term debt 152,600 6,209 5.44 % 104,168 5,243 6.72 % Subordinated debentures 14,357 447 4.16 % 14,221 533 5.01 % Total interest-bearing liabilities 2,404,435 $ 17,501 0.97 % 2,161,358 $ 27,378 1.69 % Noninterest-bearing liabilities Noninterest-bearing deposits 858,087 546,419 Other noninterest-bearing liabilities 43,038 14,606 Total noninterest-bearing liabilities 901,125 561,025 Shareholders' equity 442,437 414,810 Total liabilities and shareholders' equity $ 3,747,997 $ 3,137,193 Net interest income / interest rate spreads $ 91,170 3.16 % $ 75,903 3.02 % Net interest margin 3.47 % 3.46 % 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, 2021 2021 2020 Per share data (common stock) Earnings Basic $ 0.79 $ 0.69 $ 0.43 Diluted $ 0.77 $ 0.67 $ 0.43 Dividends declared $ 0.13 $ 0.13 $ 0.06 Book value $ 23.37 $ 22.86 $ 21.35 Tangible book value $ 19.60 $ 19.04 $ 17.56 Weighted average shares outstanding Basic 19,343,262 19,432,204 19,717,568 Diluted 19,798,187 19,874,969 19,804,892 Shares outstanding at period end 19,516,393 19,349,802 19,739,280 Performance ratios Return on average assets, annualized 1.54 % 1.39 % 1.05 % Return on average shareholders' equity, annualized 13.52 % 12.13 % 8.06 % Return on average tangible common equity, annualized 16.17 % 14.57 % 9.81 % Noninterest income to average assets, annualized 0.55 % 0.43 % 0.34 % Noninterest expense to average assets, annualized 1.45 % 1.53 % 1.72 % Yield on average earning assets 3.97 % 3.99 % 4.63 % Cost of average total deposits 0.35 % 0.41 % 0.87 % Cost of average interest-bearing deposits 0.51 % 0.59 % 1.14 % Cost of average interest-bearing liabilities 0.89 % 0.97 % 1.43 % Accretion on loans to average earning assets 0.03 % 0.02 % 0.08 % Net interest spread 3.08 % 3.02 % 3.20 % Net interest margin 3.38 % 3.33 % 3.59 % Efficiency ratio 38.87 % 42.89 % 46.63 % Common stock dividend payout ratio 16.46 % 18.84 % 13.95 % RBB BANCORP AND SUBSIDIARIES SELECTED FINANCIAL HIGHLIGHTS (Unaudited) (Dollars in thousands, except per share amounts) For the nine months ended September 30, 2021 2020 Per share data (common stock) Earnings Basic $ 2.11 $ 1.10 Diluted $ 2.07 $ 1.09 Dividends declared $ 0.38 $ 0.24 Book value $ 23.37 $ 21.35 Tangible book value $ 19.60 $ 17.56 Weighted average shares outstanding Basic 19,416,608 19,799,617 Diluted 19,828,612 19,958,612 Shares outstanding at period end 19,516,393 19,739,280 Performance ratios Return on average assets, annualized 1.47 % 0.93 % Return on average shareholders' equity, annualized 12.45 % 7.01 % Return on average tangible common equity, annualized 14.95 % 8.59 % Noninterest income to average assets, annualized 0.56 % 0.41 % Noninterest expense to average assets, annualized 1.60 % 1.92 % Yield on average earning assets 4.13 % 4.71 % Cost of average deposits 0.43 % 1.11 % Cost of average interest-bearing deposits 0.61 % 1.43 % Cost of average interest-bearing liabilities 0.97 % 1.69 % Accretion on loans to average earning assets 0.04 % 0.10 % Net interest spread 3.16 % 3.02 % Net interest margin 3.47 % 3.46 % Efficiency ratio 42.07 % 52.75 % Common stock dividend payout ratio 18.01 % 21.82 % RBB BANCORP AND SUBSIDIARIES SELECTED FINANCIAL HIGHLIGHTS (Unaudited) (Dollars in thousands, except per share amounts) As of September 30, June 30, September 30, 2021 2021 2020 Loan to deposit ratio 95.71 % 88.25 % 105.49 % Core deposits / total deposits 79.87 % 80.04 % 99.34 % Net non-core funding dependence ratio 9.27 % 0.87 % 9.69 % Credit Quality Data: Loans 30-89 days past due $ 7,258 $ 5,449 $ 21,735 Loans 30-89 days past due to total loans 0.26 % 0.20 % 0.79 % Nonperforming loans $ 14,248 $ 19,243 $ 17,975 Nonperforming loans to total loans 0.50 % 0.71 % 0.65 % Nonperforming assets $ 14,541 $ 19,536 $ 18,268 Nonperforming assets to total assets 0.38 % 0.50 % 0.54 % Allowance for loan losses to total loans 1.13 % 1.16 % 0.97 % Allowance for loan losses to nonperforming loans 226.21 % 162.93 % 148.17 % Net charge-offs to average loans (for the quarter-to-date period) 0.05 % 0.01 % 0.01 % Regulatory and other capital ratios—Company Tangible common equity to tangible assets 10.26 % 9.65 % 10.55 % Tier 1 leverage ratio 10.31 % 10.20 % 11.47 % Tier 1 common capital to risk-weighted assets 14.82 % 14.76 % 14.11 % Tier 1 capital to risk-weighted assets 15.38 % 15.33 % 14.69 % Total capital to risk-weighted assets 23.30 % 23.48 % 20.05 % Regulatory capital ratios—Bank only Tier 1 leverage ratio 12.48 % 12.34 % 14.16 % Tier 1 common capital to risk-weighted assets 18.64 % 18.58 % 18.13 % Tier 1 capital to risk-weighted assets 18.64 % 18.58 % 18.13 % Total capital to risk-weighted assets 19.89 % 19.83 % 19.26 % 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 2021 2021 2021 2020 2020 Interest income Loans, including fees $ 35,601 $ 34,669 $ 34,516 $ 34,832 $ 34,153 Investment securities and other 1,507 1,302 1,024 1,032 972 Total interest income 37,108 35,971 35,540 35,864 35,125 Interest expense Deposits 2,745 3,118 3,662 4,636 5,525 Interest on subordinated debentures and other 2,342 2,356 1,958 1,901 1,905 Other borrowings 445 440 435 450 444 Total interest expense 5,532 5,914 6,055 6,987 7,874 Net interest income before provision for loan losses 31,576 30,057 29,485 28,877 27,251 Provision for loan losses 1,196 628 1,500 3,008 3,861 Net interest income after provision for loan losses 30,380 29,429 27,985 25,869 23,390 Noninterest income 5,524 4,171 5,894 4,490 2,727 Noninterest expense 14,420 14,680 15,792 14,453 13,978 Earnings before income taxes 21,484 18,920 18,087 15,906 12,139 Income taxes 6,120 5,540 5,631 4,759 3,619 Net income $ 15,364 $ 13,380 $ 12,456 $ 11,147 $ 8,520 Net income per common share - basic $ 0.79 $ 0.69 $ 0.64 $ 0.57 $ 0.43 Net income per common share - diluted $ 0.77 $ 0.67 $ 0.63 $ 0.56 $ 0.43 Cash dividends declared per common share $ 0.13 $ 0.13 $ 0.12 $ 0.09 $ 0.06 Cash dividends declared on common shares $ 2,516 $ 2,540 $ 2,347 $ 1,777 $ 1,184 Yield on average assets, annualized 1.54 % 1.39 % 1.47 % 1.33 % 1.05 % Yield on average earning assets 3.97 % 3.99 % 4.49 % 4.55 % 4.63 % Cost of average deposits 0.35 % 0.41 % 0.55 % 0.71 % 0.87 % Cost of average interest-bearing deposits 0.51 % 0.59 % 0.73 % 0.93 % 1.14 % Cost of average interest-bearing liabilities 0.89 % 0.97 % 1.06 % 1.23 % 1.43 % Accretion on loans to average earning assets 0.03 % 0.02 % 0.06 % 0.03 % 0.08 % Net interest margin 3.38 % 3.33 % 3.73 % 3.67 % 3.59 % 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 September 30, 2021 As of June 30, 2021 As of March 31, 2021 As of December 30, 2020 As of September 30, 2020 (dollars in thousands) $ % $ % $ % $ % $ % Loans: Commercial and industrial $ 276,387 9.7 % $ 277,080 10.2 % $ 286,016 10.5 % $ 290,139 10.7 % $ 317,891 11.5 % SBA 88,784 3.1 % 98,572 3.6 % 111,330 4.1 % 97,821 3.6 % 111,193 4.0 % Construction and land development 271,764 9.6 % 236,965 8.7 % 209,727 7.7 % 186,723 6.9 % 183,569 6.7 % Commercial real estate (1) 1,205,630 42.4 % 1,102,467 40.7 % 1,063,104 39.2 % 1,003,637 37.1 % 975,187 35.4 % Single-family residential mortgages 974,780 34.3 % 984,311 36.3 % 1,041,260 38.3 % 1,124,357 41.5 % 1,163,982 42.2 % Other loans 23,009 0.9 % 9,811 0.5 % 3,768 0.2 % 4,089 0.2 % 3,331 0.2 % Total loans (2) $ 2,840,354 100.0 % $ 2,709,206 100.0 % $ 2,715,205 100.0 % $ 2,706,766 100.0 % $ 2,755,153 100.0 % Allowance for loan losses (32,231 ) (31,352 ) (30,795 ) (29,337 ) (26,634 ) Total loans, net $ 2,808,123 $ 2,677,854 $ 2,684,410 $ 2,677,429 $ 2,728,519 (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) 2021 2020 2021 2020 Beginning balance $ 31,352 $ 22,820 $ 29,337 $ 18,816 Additions to the allowance charged to expense 1,196 3,861 3,324 8,815 Net charge-offs on loans (317 ) (47 ) (430 ) (997 ) Ending balance $ 32,231 $ 26,634 $ 32,231 $ 26,634 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, 2021 and 2020 and June 30, 2021. (dollars in thousands, except per share data) September 30, 2021 June 30, 2021 September 30, 2020 Tangible common equity: Total shareholders' equity $ 456,024 $ 442,325 $ 421,416 Adjustments Goodwill (69,243 ) (69,243 ) (69,243 ) Core deposit intangible (4,327 ) (4,608 ) (5,519 ) Tangible common equity $ 382,454 $ 368,474 $ 346,654 Tangible assets: Total assets-GAAP $ 3,801,807 $ 3,890,638 $ 3,359,576 Adjustments Goodwill (69,243 ) (69,243 ) (69,243 ) Core deposit intangible (4,327 ) (4,608 ) (5,519 ) Tangible assets $ 3,728,237 $ 3,816,787 $ 3,284,814 Common shares outstanding $ 19,516,393 19,349,802 19,739,280 Tangible common equity to tangible assets ratio 10.26 % 9.65 % 10.55 % Book value per share $ 23.37 $ 22.86 $ 21.35 Tangible book value per share $ 19.60 $ 19.04 $ 17.56 View source version on businesswire.com: https://www.businesswire.com/news/home/20211025005738/en/Contacts Yee Phong (Alan) Thian President and CEO (626) 307-7559 David Morris Executive Vice President and CFO (714) 670-2488 Data & News supplied by www.cloudquote.io Stock quotes supplied by Barchart Quotes delayed at least 20 minutes. 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RBB Bancorp Reports Third Quarter Earnings for 2021 By: RBB Bancorp via Business Wire October 25, 2021 at 16:05 PM EDT Conference Call and Webcast Scheduled for Tuesday, October 26, 2021 at 11:00 a.m. Pacific Time/2:00 p.m. Eastern Time Third Quarter 2021 Highlights Reported record net income of $15.4 million, or $0.77 diluted earnings per share, increased $2.0 million, or 14.8%, from the prior quarter and increased $6.8 million, or 80.3%, from the third quarter of 2020 Loan growth of $137.1 million, or 20.0% annualized, from the end of the prior quarter Declared quarterly cash dividend of $0.13 per common share Entered into an agreement in July, received regulatory approval in September to buy the Honolulu, Hawaii branch office of Bank of the Orient, which is expected to close by mid-January 2022 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, 2021. The Company reported record net income of $15.4 million, or $0.77 diluted earnings per share, for the three months ended September 30, 2021, compared to net income of $13.4 million, or $0.67 diluted earnings per share, and $8.5 million, or $0.43 diluted earnings per share, for the three months ended June 30, 2021 and September 30, 2020, respectively. Third quarter results included the impact of a $1.8 million CDFI grant that increased diluted earnings per share by approximately $0.07. "Our differentiated business model continued to outperform in the third quarter as we reported record diluted earnings per share of $0.77 and 20% annualized loan growth,” said Alan Thian, President and CEO of RBB Bancorp. “In addition to our financial performance and growth, continued pricing discipline and focus on our cost of deposits has kept our net interest margin stable in the first 9 months of 2021 versus the same period in 2020. We are also pleased that our efforts to support the communities in which we operate were recognized by the US Treasury which awarded Royal Business Bank with a $1.8 million CDFI grant to facilitate a rapid response to the economic impacts of the COVID-19 pandemic in distressed and underserved communities.” "I am very pleased with Royal Business Bank’s record financial performance in the third quarter," said Dr. James Kao, Chairman of RBB Bancorp. “And I am very proud that RBB’s success in community development has been recognized with a CDFI grant and with the appointment of Alan to the Community Development Advisory Board.” Key Performance Ratios Net income of $15.4 million for the third quarter of 2021 produced an annualized return on average assets ("ROA") of 1.54%, an annualized return on average tangible common shareholders' equity ("ROTCE") of 16.17%, and an annualized return on average shareholders' equity ("ROE") of 13.52%. This compares to an annualized return on average assets of 1.39%, an annualized return on average tangible common shareholders' equity of 14.57%, and an annualized return on average shareholders' equity of 12.13% for the second quarter of 2021. Third quarter results included the impact of a $1.8 million CDFI grant that increased ROA by 0.03%, ROTCE by 0.35%, and ROE by 0.29%. The efficiency ratio for the third quarter of 2021 was 38.87%, compared to 42.89% for the prior quarter. Net Interest Income and Net Interest Margin Net interest income, before provision for loan losses, was $31.6 million for the third quarter of 2021, compared to $30.1 million for the second quarter of 2021. The $1.5 million increase was primarily attributable to higher interest income due to a $92.7 million increase in average earning assets, partially offset by an $11.3 million increase in average interest-bearing liabilities. Accretion of purchase discounts from prior acquisitions contributed $289,000 to net interest income in the third quarter of 2021, compared to $183,000 in the second quarter of 2021. Compared to the third quarter of 2020, net interest income, before provision for loan losses, increased $4.3 million from $27.3 million. The increase was primarily attributable to a $691.5 million increase in average earning assets, partially offset by a $262.0 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 3.38% for the third quarter of 2021, an increase of 5 basis points from 3.33% in the second quarter of 2021. The increase was primarily attributable to a $89.9 million increase in average non-interest bearing deposits, combined with an 8 basis point decrease in the cost of average interest-bearing liabilities, which was partially offset by a 2 basis point decrease in the yield on average earning assets. Loan discount accretion contributed 3 basis points to the net interest margin in the third quarter of 2021, compared to 2 basis points in the second quarter of 2021. Noninterest Income Noninterest income was $5.5 million for the third quarter of 2021, an increase of $1.4 million from $4.2 million in the second quarter of 2021. The increase was primarily driven by a $1.8 million grant under the US Treasury’s Rapid Response Program, partially offset by a $782,000 decrease in gain on sale of loans during the quarter. The Company sold $35.7 million fewer loans in the third quarter than in the prior quarter primarily due to selling fewer FNMA loans. The Company sold $36.6 million in FNMA qualified mortgage loans for a net gain of $1.3 million and sold no non-qualified mortgage loans during the third quarter of 2021. This compared to $58.9 million in FNMA qualified mortgage loans sold for a net gain of $1.4 million and $13.4 million in non-qualified mortgage loans to private investors for a gain of $389,000 during the second quarter of 2021. The Company sold $5.9 million in SBA loans during the third quarter of 2021 for a net gain of $553,000, compared to $5.9 million SBA loans sold for a net gain of $747,000 during the second quarter of 2021. Compared to the third quarter of 2020, noninterest income increased by $2.8 million from $2.7 million. The increase was primarily attributable to an increase of $1.8 million grant under the US Treasury’s Rapid Response Program and an increase of $1.0 million in gain on loan sales. Noninterest Expense Noninterest expense for the third quarter of 2021 was $14.4 million, compared to $14.7 million for the second quarter of 2021. The $260,000 decrease was primarily attributable to a reversal of impairment write-down on mortgage servicing assets of $416,000 and a $266,000 decrease in data processing expense, partially offset by a $210,000 increase in legal and professional expenses and a $93,000 increase in marketing and business promotion expense. Noninterest expense increased from $14.0 million in the third quarter of 2020. The $444,000 increase was primarily due to a $1.2 million increase in salaries and employee benefits and a $193,000 increase in marketing and business promotion expenses. These were partially offset by a $475,000 decrease in mortgage servicing assets impairment write-down, a $235,000 decrease in data processing expenses and a $171,000 decrease in occupancy and equipment expenses. Income Taxes The effective tax rate was 28.5% for the third quarter of 2021, 29.3% for the second quarter of 2021, and 29.8% for the third quarter of 2020. The Company recognized a tax benefit from stock option exercises of $534,000, $68,000 and zero for the third quarter of 2021, the second quarter of 2021, and the third quarter of 2020, respectively. CDFI Rapid Response Program In mid-June, 2021 the Bank was awarded a $1.8 million grant under the US Treasury’s Rapid Response Program to facilitate a rapid response to the economic impacts of the COVID-19 pandemic in distressed and underserved communities. The award was received in August 2021 after finalization of the contract between the Bank and the US Treasury which included various performance goals and measures that specify the use of the funds to provide affordable housing. The funds were disbursed for two loans that help provide affordable housing to underserved communities. Loan Portfolio Loans held for investment, net of deferred fees and discounts, totaled $2.84 billion as of September 30, 2021, an increase of $131.1 million from June 30, 2021, and an increase of $85.2 million from September 30, 2020. The increase from the prior quarter was primarily due to an increase in commercial real estate and construction & land development loans. Single-family residential mortgages decreased by $9.5 million net of payoffs, paydowns and loan sales. Commercial real estate loans increased by $103.2 million, construction and land development loans increased by $34.8 million, SBA loans decreased by $9.8 million (which included a $6.2 million decrease in PPP loans), commercial and industrial loans decreased by $693,000 and other loans increased by $13.2 million. During the third quarter of 2021, single-family residential mortgage production was $112.0 million, payoffs and paydowns were $79.0 million, and single-family residential mortgage loan sales were $36.6 million. During the second quarter of 2021, single-family residential mortgage production was $107.9 million, payoffs and paydowns were $121.0 million, and loan sales were $72.3 million. Mortgage loans held for sale were $15.2 million as of September 30, 2021, an increase of $5.9 million from $9.2 million at June 30, 2021 and a decrease of $8.7 million from $23.9 million as of September 30, 2020. The Company originated approximately $12.2 million in FNMA mortgage loans for sale for the third quarter of 2021, compared with $29.2 million during the prior quarter. In the third quarter of 2021, SBA loan production was $22.7 million and total SBA loan sales were $5.9 million. Deposits and Borrowings Deposits were $3.0 billion at September 30, 2021, a decrease of $102.1 million from June 30, 2021, and an increase of $356.1 million from September 30, 2020, including brokered deposits. The decrease in total deposits from the prior quarter was primarily attributable to a decrease in noninterest-bearing demand deposits and time deposits. During the third quarter of 2021, noninterest-bearing deposits decreased by $115.3 million, interest-bearing non-maturity deposits increased by $72.9 million, and time deposits decreased by $59.8 million. As of September 30, 2021, time deposits included $2.4 million in brokered CDs, as compared to $17.4 million as of June 30, 2021 and $17.4 million as of September 30, 2020. Asset Quality Nonperforming assets totaled $14.5 million, or 0.38% of total assets at September 30, 2021, compared to $19.5 million, or 0.50%, of total assets at June 30, 2021. Nonperforming assets consist of other real estate owned, loans modified under troubled debt restructurings (“TDR”), non-accrual loans, and loans past due 90 days or more and still accruing interest. In the third quarter of 2021, there were $317,000 in net charge-offs, compared to net charge-offs of $71,000 in the second quarter. The Company recorded a provision for credit losses of $1.2 million for the third quarter of 2021, an increase from $628,000 in the prior quarter, primarily attributable to loan growth. The allowance for loan losses totaled $32.2 million, or 1.13% of loans held for investment at September 30, 2021, compared with $31.4 million, or 1.16%, of total loans at June 30, 2021. As of September 30, 2021, borrowers representing 167 loans totaling $23.0 million, or 0.80% 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 Company does not have any shared national credits or loans, backed by airlines or cruise lines, on deferral as of September 30, 2021. As of October 15, 2021, the Company had one COVID-19 loan deferral in the amount of $241,000. Corporate Overview RBB Bancorp is a community-based financial holding company headquartered in Los Angeles, California. As of September 30, 2021, the company had total assets of $3.8 billion. Its wholly-owned subsidiary, the Bank is a full service commercial bank, which provides business banking services to the Chinese-American communities in Los Angeles County, Orange County, and Ventura County in California, in Las Vegas, Nevada, 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, October 26, 2021, to discuss the Company’s third quarter 2021 financial results. To listen to the conference call, please dial 1-877-876-9174 or 1-785-424-1669, passcode RBBQ321. A replay of the call will be made available at 1-888-269-5324 or 1-402-220-7325 (no passcode required) approximately one hour after the conclusion of the call and will remain available through November 2, 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) September 30, June 30, March 31, December 31, September 30, 2021 2021 2021 2020 2020 Assets Cash and due from banks $ 206,927 $ 493,653 $ 362,930 $ 137,654 $ 121,630 Federal funds sold and other cash equivalents 170,000 110,000 57,000 57,000 57,000 Total cash and cash equivalents 376,927 603,653 419,930 194,654 178,630 Interest-bearing deposits in other financial institutions 600 600 600 600 600 Investment securities available for sale 345,000 339,568 281,582 210,867 214,662 Investment securities held to maturity 6,258 6,664 6,668 7,174 7,569 Mortgage loans held for sale 15,188 9,246 37,675 49,963 23,886 Loans held for investment 2,840,354 2,709,206 2,715,205 2,706,766 2,755,153 Allowance for loan losses (32,231 ) (31,352 ) (30,795 ) (29,337 ) (26,634 ) Net loans held for investment 2,808,123 2,677,854 2,684,410 2,677,429 2,728,519 Premises and equipment, net 27,157 27,039 27,093 27,103 24,237 Federal Home Loan Bank (FHLB) stock 15,000 15,000 15,641 15,641 15,641 Cash surrender value of life insurance 55,656 55,325 35,308 35,121 34,930 Goodwill 69,243 69,243 69,243 69,243 69,243 Servicing assets 12,141 12,558 13,264 13,965 14,724 Core deposit intangibles 4,327 4,608 4,895 5,196 5,519 Right-of-use assets- operating leases 23,735 25,050 25,500 — — Accrued interest and other assets 42,452 44,230 42,490 43,116 41,416 Total assets $ 3,801,807 $ 3,890,638 $ 3,664,299 $ 3,350,072 $ 3,359,576 Liabilities and shareholders' equity Deposits: Noninterest-bearing demand $ 824,771 $ 940,041 $ 787,439 $ 617,206 $ 642,332 Savings, NOW and money market accounts 931,517 858,597 791,486 731,084 654,378 Time deposits 1,211,525 1,271,287 1,242,368 1,286,838 1,315,038 Total deposits 2,967,813 3,069,925 2,821,293 2,635,128 2,611,748 Reserve for unfunded commitments 1,304 1,216 1,320 1,383 1,129 FHLB advances 150,000 150,000 150,000 150,000 190,000 Long-term debt, net of debt issuance costs 172,862 172,718 172,581 104,391 104,305 Subordinated debentures 14,447 14,393 14,338 14,283 14,229 Lease liabilities - operating leases 24,524 25,798 26,199 — — Accrued interest and other liabilities 14,833 14,263 42,900 16,399 16,749 Total liabilities 3,345,783 3,448,313 3,228,631 2,921,584 2,938,160 Shareholders' equity: Shareholder's equity 456,490 442,086 435,746 427,287 420,329 Non-controlling interest 72 72 72 72 72 Accumulated other comprehensive (loss) income - Net of tax (538 ) 167 (150 ) 1,129 1,015 Total shareholders' equity 456,024 442,325 435,668 428,488 421,416 Total liabilities and shareholders’ equity $ 3,801,807 $ 3,890,638 $ 3,664,299 $ 3,350,072 $ 3,359,576 RBB BANCORP AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited) (Dollars in thousands, except per share amounts) For the Three Months Ended September 30, 2021 June 30, 2021 September 30, 2020 Interest and dividend income: Interest and fees on loans $ 35,601 $ 34,669 $ 34,153 Interest on interest-bearing deposits 219 125 61 Interest on investment securities 889 794 621 Dividend income on FHLB stock 225 225 190 Interest on federal funds sold and other 174 158 100 Total interest income 37,108 35,971 35,125 Interest expense: Interest on savings deposits, NOW and money market accounts 697 708 779 Interest on time deposits 2,048 2,410 4,746 Interest on subordinated debentures and long term debt 2,342 2,356 1,905 Interest on other borrowed funds 445 440 444 Total interest expense 5,532 5,914 7,874 Net interest income before provision for loan losses 31,576 30,057 27,251 Provision for loan losses 1,196 628 3,861 Net interest income after provision for loan losses 30,380 29,429 23,390 Noninterest income: Service charges, fees and other(1) 3,100 1,374 1,143 Gain on sale of loans 1,790 2,572 760 Loan servicing fees, net of amortization 62 118 546 Recoveries on loans acquired in business combinations 68 5 32 Unrealized (loss) on equity investments (5 ) (35 ) — Gain (loss) on derivatives 178 (80 ) — Increase in cash surrender value of life insurance 331 217 194 Gain on sale of securities — — 52 Total noninterest income 5,524 4,171 2,727 Noninterest expense: Salaries and employee benefits 8,772 8,742 7,599 Occupancy and equipment expenses 2,189 2,135 2,360 Data processing 965 1,231 1,200 Legal and professional 746 536 675 Office expenses 311 272 271 Marketing and business promotion 324 231 131 Insurance and regulatory assessments 384 354 363 Core deposit premium 281 287 357 OREO expenses 4 4 3 Merger expenses 40 17 62 Other expenses 404 871 957 Total noninterest expense 14,420 14,680 13,978 Income before income taxes 21,484 18,920 12,139 Income tax expense 6,120 5,540 3,619 Net income $ 15,364 $ 13,380 $ 8,520 Net income per share Basic $ 0.79 $ 0.69 $ 0.43 Diluted $ 0.77 $ 0.67 $ 0.43 Cash Dividends declared per common share $ 0.13 $ 0.13 $ 0.06 Weighted-average common shares outstanding Basic 19,343,262 19,432,204 19,717,568 Diluted 19,798,187 19,874,969 19,804,892 (1) Includes $1.8 million of the U.S. Treasury's CDFI rapid response program grant income. RBB BANCORP AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited) (Dollars in thousands, except per share amounts) For the Nine Months Ended September 30, 2021 September 30, 2020 Interest and dividend income: Interest and fees on loans $ 104,786 $ 99,062 Interest on interest-earning deposits 392 586 Interest on investment securities 2,310 2,329 Dividend income on FHLB stock 642 379 Interest on federal funds sold and other 489 900 Total interest income 108,619 103,256 Interest expense: Interest on savings deposits, NOW and money market accounts 2,103 2,804 Interest on time deposits 7,422 17,765 Interest on subordinated debentures and long term debt 6,656 5,776 Interest on other borrowed funds 1,320 1,033 Total interest expense 17,501 27,378 Net interest income 91,118 75,878 Provision for loan losses 3,324 8,815 Net interest income after provision for loans losses 87,794 67,063 Noninterest income: Service charges, fees and other (1) 5,884 3,287 Gain on sale of loans 8,203 3,552 Loan servicing fees, net of amortization 426 1,846 Recoveries on loans acquired in business combinations 78 79 Unrealized (loss) on equity investments (60 ) — Gain on derivatives 323 — Increase in cash surrender value of life insurance 735 576 Gain on sale of securities — 210 Total noninterest income 15,589 9,550 Noninterest expense: Salaries and employee benefits 26,756 25,207 Occupancy and equipment expenses 6,566 7,291 Data processing 3,636 3,224 Legal and professional 2,087 1,949 Office expenses 838 931 Marketing and business promotion 739 456 Insurance and regulatory assessments 1,086 774 Core deposit premium 869 1,071 OREO expenses 13 31 Merger expenses 99 741 Other expenses 2,203 3,385 Total noninterest expense 44,892 45,060 Income before income taxes 58,491 31,553 Income tax expense 17,291 9,772 Net income $ 41,200 $ 21,781 Net income per share Basic $ 2.11 $ 1.10 Diluted $ 2.07 $ 1.09 Cash Dividends declared per common share $ 0.38 $ 0.24 Weighted-average common shares outstanding Basic 19,416,608 19,799,617 Diluted 19,828,612 19,958,612 (1) Includes $1.8 million of the U.S. Treasury's CDFI rapid response program grant income. 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, 2021 June 30, 2021 September 30, 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) $ 628,020 $ 618 0.39 % $ 582,554 $ 508 0.35 % $ 179,521 $ 351 0.78 % Securities Available for sale 336,130 856 1.01 % 328,004 751 0.92 % 168,151 558 1.32 % Held to maturity (2) 6,262 56 3.55 % 6,667 60 3.61 % 7,604 71 3.71 % Mortgage loans held for sale 5,218 46 3.50 % 21,033 173 3.30 % 19,848 171 3.43 % Loans held for investment: (3) Real estate 2,361,405 30,911 5.19 % 2,292,145 29,794 5.21 % 2,266,752 29,616 5.20 % Commercial 374,125 4,644 4.92 % 388,049 4,702 4.86 % 377,789 4,366 4.60 % Total loans 2,735,530 35,555 5.16 % 2,680,194 34,496 5.16 % 2,644,541 33,982 5.11 % Total earning assets 3,711,160 $ 37,131 3.97 % 3,618,452 $ 35,988 3.99 % 3,019,665 $ 35,133 4.63 % Noninterest-earning assets 242,742 230,049 204,638 Total assets $ 3,953,902 $ 3,848,501 $ 3,224,303 Interest-bearing liabilities NOW $ 71,454 $ 48 0.27 % $ 66,777 $ 45 0.27 % $ 59,451 $ 50 0.33 % Money Market 660,806 615 0.37 % 640,026 628 0.39 % 454,820 698 0.61 % Saving deposits 139,555 34 0.10 % 140,418 35 0.10 % 126,635 31 0.10 % Time deposits, less than $250,000 644,013 977 0.60 % 657,494 1,163 0.71 % 699,765 2,539 1.44 % Time deposits, $250,000 and over 604,394 1,071 0.70 % 604,429 1,247 0.83 % 584,586 2,207 1.50 % Total interest-bearing deposits 2,120,222 2,745 0.51 % 2,109,144 3,118 0.59 % 1,925,257 5,525 1.14 % FHLB advances 150,000 445 1.18 % 150,000 440 1.18 % 151,739 444 1.16 % Long-term debt 172,767 2,194 5.04 % 172,622 2,206 5.13 % 104,252 1,748 6.67 % Subordinated debentures 14,411 148 4.07 % 14,357 150 4.19 % 14,195 157 4.40 % Total interest-bearing liabilities 2,457,400 5,532 0.89 % 2,446,123 5,914 0.97 % 2,195,443 7,874 1.43 % Noninterest-bearing liabilities Noninterest-bearing deposits 1,003,304 913,442 595,264 Other noninterest-bearing liabilities 42,419 46,549 13,270 Total noninterest-bearing liabilities 1,045,723 959,991 608,534 Shareholders' equity 450,779 442,387 420,326 Total liabilities and shareholders' equity $ 3,953,902 $ 3,848,501 $ 3,224,303 Net interest income / interest rate spreads $ 31,599 3.08 % $ 30,074 3.02 % $ 27,259 3.20 % Net interest margin 3.38 % 3.33 % 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, 2021 September 30, 2020 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) $ 476,781 $ 1,523 0.43 % $ 220,195 $ 1,865 1.13 % Securities Available for sale 301,653 2,180 0.97 % 159,373 2,136 1.79 % Held to maturity (2) 6,640 182 3.66 % 7,760 218 3.75 % Mortgage loans held for sale 26,579 630 3.17 % 40,936 1,454 4.74 % Loans held for investment: (3) Real estate 2,320,524 90,226 5.20 % 2,141,022 84,261 5.26 % Commercial 382,168 13,930 4.87 % 359,907 13,347 4.95 % Total loans 2,702,692 104,156 5.15 % 2,500,929 97,608 5.21 % Total earning assets 3,514,345 $ 108,671 4.13 % 2,929,193 $ 103,281 4.71 % Noninterest-earning assets 233,652 208,000 Total assets $ 3,747,997 $ 3,137,193 Interest-bearing liabilities NOW $ 67,633 $ 136 0.27 % $ 53,633 $ 153 0.38 % Money Market 627,024 1,866 0.40 % 430,524 2,534 0.79 % Saving deposits 137,072 101 0.10 % 121,836 117 0.13 % Time deposits, less than $250,000 654,776 3,635 0.74 % 720,810 9,408 1.74 % Time deposits, $250,000 and over 600,973 3,787 0.84 % 598,137 8,357 1.87 % Total interest-bearing deposits 2,087,478 9,525 0.61 % 1,924,940 20,569 1.43 % FHLB advances 150,000 1,320 1.18 % 118,029 1,033 1.17 % Long-term debt 152,600 6,209 5.44 % 104,168 5,243 6.72 % Subordinated debentures 14,357 447 4.16 % 14,221 533 5.01 % Total interest-bearing liabilities 2,404,435 $ 17,501 0.97 % 2,161,358 $ 27,378 1.69 % Noninterest-bearing liabilities Noninterest-bearing deposits 858,087 546,419 Other noninterest-bearing liabilities 43,038 14,606 Total noninterest-bearing liabilities 901,125 561,025 Shareholders' equity 442,437 414,810 Total liabilities and shareholders' equity $ 3,747,997 $ 3,137,193 Net interest income / interest rate spreads $ 91,170 3.16 % $ 75,903 3.02 % Net interest margin 3.47 % 3.46 % 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, 2021 2021 2020 Per share data (common stock) Earnings Basic $ 0.79 $ 0.69 $ 0.43 Diluted $ 0.77 $ 0.67 $ 0.43 Dividends declared $ 0.13 $ 0.13 $ 0.06 Book value $ 23.37 $ 22.86 $ 21.35 Tangible book value $ 19.60 $ 19.04 $ 17.56 Weighted average shares outstanding Basic 19,343,262 19,432,204 19,717,568 Diluted 19,798,187 19,874,969 19,804,892 Shares outstanding at period end 19,516,393 19,349,802 19,739,280 Performance ratios Return on average assets, annualized 1.54 % 1.39 % 1.05 % Return on average shareholders' equity, annualized 13.52 % 12.13 % 8.06 % Return on average tangible common equity, annualized 16.17 % 14.57 % 9.81 % Noninterest income to average assets, annualized 0.55 % 0.43 % 0.34 % Noninterest expense to average assets, annualized 1.45 % 1.53 % 1.72 % Yield on average earning assets 3.97 % 3.99 % 4.63 % Cost of average total deposits 0.35 % 0.41 % 0.87 % Cost of average interest-bearing deposits 0.51 % 0.59 % 1.14 % Cost of average interest-bearing liabilities 0.89 % 0.97 % 1.43 % Accretion on loans to average earning assets 0.03 % 0.02 % 0.08 % Net interest spread 3.08 % 3.02 % 3.20 % Net interest margin 3.38 % 3.33 % 3.59 % Efficiency ratio 38.87 % 42.89 % 46.63 % Common stock dividend payout ratio 16.46 % 18.84 % 13.95 % RBB BANCORP AND SUBSIDIARIES SELECTED FINANCIAL HIGHLIGHTS (Unaudited) (Dollars in thousands, except per share amounts) For the nine months ended September 30, 2021 2020 Per share data (common stock) Earnings Basic $ 2.11 $ 1.10 Diluted $ 2.07 $ 1.09 Dividends declared $ 0.38 $ 0.24 Book value $ 23.37 $ 21.35 Tangible book value $ 19.60 $ 17.56 Weighted average shares outstanding Basic 19,416,608 19,799,617 Diluted 19,828,612 19,958,612 Shares outstanding at period end 19,516,393 19,739,280 Performance ratios Return on average assets, annualized 1.47 % 0.93 % Return on average shareholders' equity, annualized 12.45 % 7.01 % Return on average tangible common equity, annualized 14.95 % 8.59 % Noninterest income to average assets, annualized 0.56 % 0.41 % Noninterest expense to average assets, annualized 1.60 % 1.92 % Yield on average earning assets 4.13 % 4.71 % Cost of average deposits 0.43 % 1.11 % Cost of average interest-bearing deposits 0.61 % 1.43 % Cost of average interest-bearing liabilities 0.97 % 1.69 % Accretion on loans to average earning assets 0.04 % 0.10 % Net interest spread 3.16 % 3.02 % Net interest margin 3.47 % 3.46 % Efficiency ratio 42.07 % 52.75 % Common stock dividend payout ratio 18.01 % 21.82 % RBB BANCORP AND SUBSIDIARIES SELECTED FINANCIAL HIGHLIGHTS (Unaudited) (Dollars in thousands, except per share amounts) As of September 30, June 30, September 30, 2021 2021 2020 Loan to deposit ratio 95.71 % 88.25 % 105.49 % Core deposits / total deposits 79.87 % 80.04 % 99.34 % Net non-core funding dependence ratio 9.27 % 0.87 % 9.69 % Credit Quality Data: Loans 30-89 days past due $ 7,258 $ 5,449 $ 21,735 Loans 30-89 days past due to total loans 0.26 % 0.20 % 0.79 % Nonperforming loans $ 14,248 $ 19,243 $ 17,975 Nonperforming loans to total loans 0.50 % 0.71 % 0.65 % Nonperforming assets $ 14,541 $ 19,536 $ 18,268 Nonperforming assets to total assets 0.38 % 0.50 % 0.54 % Allowance for loan losses to total loans 1.13 % 1.16 % 0.97 % Allowance for loan losses to nonperforming loans 226.21 % 162.93 % 148.17 % Net charge-offs to average loans (for the quarter-to-date period) 0.05 % 0.01 % 0.01 % Regulatory and other capital ratios—Company Tangible common equity to tangible assets 10.26 % 9.65 % 10.55 % Tier 1 leverage ratio 10.31 % 10.20 % 11.47 % Tier 1 common capital to risk-weighted assets 14.82 % 14.76 % 14.11 % Tier 1 capital to risk-weighted assets 15.38 % 15.33 % 14.69 % Total capital to risk-weighted assets 23.30 % 23.48 % 20.05 % Regulatory capital ratios—Bank only Tier 1 leverage ratio 12.48 % 12.34 % 14.16 % Tier 1 common capital to risk-weighted assets 18.64 % 18.58 % 18.13 % Tier 1 capital to risk-weighted assets 18.64 % 18.58 % 18.13 % Total capital to risk-weighted assets 19.89 % 19.83 % 19.26 % 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 2021 2021 2021 2020 2020 Interest income Loans, including fees $ 35,601 $ 34,669 $ 34,516 $ 34,832 $ 34,153 Investment securities and other 1,507 1,302 1,024 1,032 972 Total interest income 37,108 35,971 35,540 35,864 35,125 Interest expense Deposits 2,745 3,118 3,662 4,636 5,525 Interest on subordinated debentures and other 2,342 2,356 1,958 1,901 1,905 Other borrowings 445 440 435 450 444 Total interest expense 5,532 5,914 6,055 6,987 7,874 Net interest income before provision for loan losses 31,576 30,057 29,485 28,877 27,251 Provision for loan losses 1,196 628 1,500 3,008 3,861 Net interest income after provision for loan losses 30,380 29,429 27,985 25,869 23,390 Noninterest income 5,524 4,171 5,894 4,490 2,727 Noninterest expense 14,420 14,680 15,792 14,453 13,978 Earnings before income taxes 21,484 18,920 18,087 15,906 12,139 Income taxes 6,120 5,540 5,631 4,759 3,619 Net income $ 15,364 $ 13,380 $ 12,456 $ 11,147 $ 8,520 Net income per common share - basic $ 0.79 $ 0.69 $ 0.64 $ 0.57 $ 0.43 Net income per common share - diluted $ 0.77 $ 0.67 $ 0.63 $ 0.56 $ 0.43 Cash dividends declared per common share $ 0.13 $ 0.13 $ 0.12 $ 0.09 $ 0.06 Cash dividends declared on common shares $ 2,516 $ 2,540 $ 2,347 $ 1,777 $ 1,184 Yield on average assets, annualized 1.54 % 1.39 % 1.47 % 1.33 % 1.05 % Yield on average earning assets 3.97 % 3.99 % 4.49 % 4.55 % 4.63 % Cost of average deposits 0.35 % 0.41 % 0.55 % 0.71 % 0.87 % Cost of average interest-bearing deposits 0.51 % 0.59 % 0.73 % 0.93 % 1.14 % Cost of average interest-bearing liabilities 0.89 % 0.97 % 1.06 % 1.23 % 1.43 % Accretion on loans to average earning assets 0.03 % 0.02 % 0.06 % 0.03 % 0.08 % Net interest margin 3.38 % 3.33 % 3.73 % 3.67 % 3.59 % 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 September 30, 2021 As of June 30, 2021 As of March 31, 2021 As of December 30, 2020 As of September 30, 2020 (dollars in thousands) $ % $ % $ % $ % $ % Loans: Commercial and industrial $ 276,387 9.7 % $ 277,080 10.2 % $ 286,016 10.5 % $ 290,139 10.7 % $ 317,891 11.5 % SBA 88,784 3.1 % 98,572 3.6 % 111,330 4.1 % 97,821 3.6 % 111,193 4.0 % Construction and land development 271,764 9.6 % 236,965 8.7 % 209,727 7.7 % 186,723 6.9 % 183,569 6.7 % Commercial real estate (1) 1,205,630 42.4 % 1,102,467 40.7 % 1,063,104 39.2 % 1,003,637 37.1 % 975,187 35.4 % Single-family residential mortgages 974,780 34.3 % 984,311 36.3 % 1,041,260 38.3 % 1,124,357 41.5 % 1,163,982 42.2 % Other loans 23,009 0.9 % 9,811 0.5 % 3,768 0.2 % 4,089 0.2 % 3,331 0.2 % Total loans (2) $ 2,840,354 100.0 % $ 2,709,206 100.0 % $ 2,715,205 100.0 % $ 2,706,766 100.0 % $ 2,755,153 100.0 % Allowance for loan losses (32,231 ) (31,352 ) (30,795 ) (29,337 ) (26,634 ) Total loans, net $ 2,808,123 $ 2,677,854 $ 2,684,410 $ 2,677,429 $ 2,728,519 (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) 2021 2020 2021 2020 Beginning balance $ 31,352 $ 22,820 $ 29,337 $ 18,816 Additions to the allowance charged to expense 1,196 3,861 3,324 8,815 Net charge-offs on loans (317 ) (47 ) (430 ) (997 ) Ending balance $ 32,231 $ 26,634 $ 32,231 $ 26,634 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, 2021 and 2020 and June 30, 2021. (dollars in thousands, except per share data) September 30, 2021 June 30, 2021 September 30, 2020 Tangible common equity: Total shareholders' equity $ 456,024 $ 442,325 $ 421,416 Adjustments Goodwill (69,243 ) (69,243 ) (69,243 ) Core deposit intangible (4,327 ) (4,608 ) (5,519 ) Tangible common equity $ 382,454 $ 368,474 $ 346,654 Tangible assets: Total assets-GAAP $ 3,801,807 $ 3,890,638 $ 3,359,576 Adjustments Goodwill (69,243 ) (69,243 ) (69,243 ) Core deposit intangible (4,327 ) (4,608 ) (5,519 ) Tangible assets $ 3,728,237 $ 3,816,787 $ 3,284,814 Common shares outstanding $ 19,516,393 19,349,802 19,739,280 Tangible common equity to tangible assets ratio 10.26 % 9.65 % 10.55 % Book value per share $ 23.37 $ 22.86 $ 21.35 Tangible book value per share $ 19.60 $ 19.04 $ 17.56 View source version on businesswire.com: https://www.businesswire.com/news/home/20211025005738/en/Contacts Yee Phong (Alan) Thian President and CEO (626) 307-7559 David Morris Executive Vice President and CFO (714) 670-2488
Conference Call and Webcast Scheduled for Tuesday, October 26, 2021 at 11:00 a.m. Pacific Time/2:00 p.m. Eastern Time Third Quarter 2021 Highlights Reported record net income of $15.4 million, or $0.77 diluted earnings per share, increased $2.0 million, or 14.8%, from the prior quarter and increased $6.8 million, or 80.3%, from the third quarter of 2020 Loan growth of $137.1 million, or 20.0% annualized, from the end of the prior quarter Declared quarterly cash dividend of $0.13 per common share Entered into an agreement in July, received regulatory approval in September to buy the Honolulu, Hawaii branch office of Bank of the Orient, which is expected to close by mid-January 2022
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, 2021. The Company reported record net income of $15.4 million, or $0.77 diluted earnings per share, for the three months ended September 30, 2021, compared to net income of $13.4 million, or $0.67 diluted earnings per share, and $8.5 million, or $0.43 diluted earnings per share, for the three months ended June 30, 2021 and September 30, 2020, respectively. Third quarter results included the impact of a $1.8 million CDFI grant that increased diluted earnings per share by approximately $0.07. "Our differentiated business model continued to outperform in the third quarter as we reported record diluted earnings per share of $0.77 and 20% annualized loan growth,” said Alan Thian, President and CEO of RBB Bancorp. “In addition to our financial performance and growth, continued pricing discipline and focus on our cost of deposits has kept our net interest margin stable in the first 9 months of 2021 versus the same period in 2020. We are also pleased that our efforts to support the communities in which we operate were recognized by the US Treasury which awarded Royal Business Bank with a $1.8 million CDFI grant to facilitate a rapid response to the economic impacts of the COVID-19 pandemic in distressed and underserved communities.” "I am very pleased with Royal Business Bank’s record financial performance in the third quarter," said Dr. James Kao, Chairman of RBB Bancorp. “And I am very proud that RBB’s success in community development has been recognized with a CDFI grant and with the appointment of Alan to the Community Development Advisory Board.” Key Performance Ratios Net income of $15.4 million for the third quarter of 2021 produced an annualized return on average assets ("ROA") of 1.54%, an annualized return on average tangible common shareholders' equity ("ROTCE") of 16.17%, and an annualized return on average shareholders' equity ("ROE") of 13.52%. This compares to an annualized return on average assets of 1.39%, an annualized return on average tangible common shareholders' equity of 14.57%, and an annualized return on average shareholders' equity of 12.13% for the second quarter of 2021. Third quarter results included the impact of a $1.8 million CDFI grant that increased ROA by 0.03%, ROTCE by 0.35%, and ROE by 0.29%. The efficiency ratio for the third quarter of 2021 was 38.87%, compared to 42.89% for the prior quarter. Net Interest Income and Net Interest Margin Net interest income, before provision for loan losses, was $31.6 million for the third quarter of 2021, compared to $30.1 million for the second quarter of 2021. The $1.5 million increase was primarily attributable to higher interest income due to a $92.7 million increase in average earning assets, partially offset by an $11.3 million increase in average interest-bearing liabilities. Accretion of purchase discounts from prior acquisitions contributed $289,000 to net interest income in the third quarter of 2021, compared to $183,000 in the second quarter of 2021. Compared to the third quarter of 2020, net interest income, before provision for loan losses, increased $4.3 million from $27.3 million. The increase was primarily attributable to a $691.5 million increase in average earning assets, partially offset by a $262.0 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 3.38% for the third quarter of 2021, an increase of 5 basis points from 3.33% in the second quarter of 2021. The increase was primarily attributable to a $89.9 million increase in average non-interest bearing deposits, combined with an 8 basis point decrease in the cost of average interest-bearing liabilities, which was partially offset by a 2 basis point decrease in the yield on average earning assets. Loan discount accretion contributed 3 basis points to the net interest margin in the third quarter of 2021, compared to 2 basis points in the second quarter of 2021. Noninterest Income Noninterest income was $5.5 million for the third quarter of 2021, an increase of $1.4 million from $4.2 million in the second quarter of 2021. The increase was primarily driven by a $1.8 million grant under the US Treasury’s Rapid Response Program, partially offset by a $782,000 decrease in gain on sale of loans during the quarter. The Company sold $35.7 million fewer loans in the third quarter than in the prior quarter primarily due to selling fewer FNMA loans. The Company sold $36.6 million in FNMA qualified mortgage loans for a net gain of $1.3 million and sold no non-qualified mortgage loans during the third quarter of 2021. This compared to $58.9 million in FNMA qualified mortgage loans sold for a net gain of $1.4 million and $13.4 million in non-qualified mortgage loans to private investors for a gain of $389,000 during the second quarter of 2021. The Company sold $5.9 million in SBA loans during the third quarter of 2021 for a net gain of $553,000, compared to $5.9 million SBA loans sold for a net gain of $747,000 during the second quarter of 2021. Compared to the third quarter of 2020, noninterest income increased by $2.8 million from $2.7 million. The increase was primarily attributable to an increase of $1.8 million grant under the US Treasury’s Rapid Response Program and an increase of $1.0 million in gain on loan sales. Noninterest Expense Noninterest expense for the third quarter of 2021 was $14.4 million, compared to $14.7 million for the second quarter of 2021. The $260,000 decrease was primarily attributable to a reversal of impairment write-down on mortgage servicing assets of $416,000 and a $266,000 decrease in data processing expense, partially offset by a $210,000 increase in legal and professional expenses and a $93,000 increase in marketing and business promotion expense. Noninterest expense increased from $14.0 million in the third quarter of 2020. The $444,000 increase was primarily due to a $1.2 million increase in salaries and employee benefits and a $193,000 increase in marketing and business promotion expenses. These were partially offset by a $475,000 decrease in mortgage servicing assets impairment write-down, a $235,000 decrease in data processing expenses and a $171,000 decrease in occupancy and equipment expenses. Income Taxes The effective tax rate was 28.5% for the third quarter of 2021, 29.3% for the second quarter of 2021, and 29.8% for the third quarter of 2020. The Company recognized a tax benefit from stock option exercises of $534,000, $68,000 and zero for the third quarter of 2021, the second quarter of 2021, and the third quarter of 2020, respectively. CDFI Rapid Response Program In mid-June, 2021 the Bank was awarded a $1.8 million grant under the US Treasury’s Rapid Response Program to facilitate a rapid response to the economic impacts of the COVID-19 pandemic in distressed and underserved communities. The award was received in August 2021 after finalization of the contract between the Bank and the US Treasury which included various performance goals and measures that specify the use of the funds to provide affordable housing. The funds were disbursed for two loans that help provide affordable housing to underserved communities. Loan Portfolio Loans held for investment, net of deferred fees and discounts, totaled $2.84 billion as of September 30, 2021, an increase of $131.1 million from June 30, 2021, and an increase of $85.2 million from September 30, 2020. The increase from the prior quarter was primarily due to an increase in commercial real estate and construction & land development loans. Single-family residential mortgages decreased by $9.5 million net of payoffs, paydowns and loan sales. Commercial real estate loans increased by $103.2 million, construction and land development loans increased by $34.8 million, SBA loans decreased by $9.8 million (which included a $6.2 million decrease in PPP loans), commercial and industrial loans decreased by $693,000 and other loans increased by $13.2 million. During the third quarter of 2021, single-family residential mortgage production was $112.0 million, payoffs and paydowns were $79.0 million, and single-family residential mortgage loan sales were $36.6 million. During the second quarter of 2021, single-family residential mortgage production was $107.9 million, payoffs and paydowns were $121.0 million, and loan sales were $72.3 million. Mortgage loans held for sale were $15.2 million as of September 30, 2021, an increase of $5.9 million from $9.2 million at June 30, 2021 and a decrease of $8.7 million from $23.9 million as of September 30, 2020. The Company originated approximately $12.2 million in FNMA mortgage loans for sale for the third quarter of 2021, compared with $29.2 million during the prior quarter. In the third quarter of 2021, SBA loan production was $22.7 million and total SBA loan sales were $5.9 million. Deposits and Borrowings Deposits were $3.0 billion at September 30, 2021, a decrease of $102.1 million from June 30, 2021, and an increase of $356.1 million from September 30, 2020, including brokered deposits. The decrease in total deposits from the prior quarter was primarily attributable to a decrease in noninterest-bearing demand deposits and time deposits. During the third quarter of 2021, noninterest-bearing deposits decreased by $115.3 million, interest-bearing non-maturity deposits increased by $72.9 million, and time deposits decreased by $59.8 million. As of September 30, 2021, time deposits included $2.4 million in brokered CDs, as compared to $17.4 million as of June 30, 2021 and $17.4 million as of September 30, 2020. Asset Quality Nonperforming assets totaled $14.5 million, or 0.38% of total assets at September 30, 2021, compared to $19.5 million, or 0.50%, of total assets at June 30, 2021. Nonperforming assets consist of other real estate owned, loans modified under troubled debt restructurings (“TDR”), non-accrual loans, and loans past due 90 days or more and still accruing interest. In the third quarter of 2021, there were $317,000 in net charge-offs, compared to net charge-offs of $71,000 in the second quarter. The Company recorded a provision for credit losses of $1.2 million for the third quarter of 2021, an increase from $628,000 in the prior quarter, primarily attributable to loan growth. The allowance for loan losses totaled $32.2 million, or 1.13% of loans held for investment at September 30, 2021, compared with $31.4 million, or 1.16%, of total loans at June 30, 2021. As of September 30, 2021, borrowers representing 167 loans totaling $23.0 million, or 0.80% 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 Company does not have any shared national credits or loans, backed by airlines or cruise lines, on deferral as of September 30, 2021. As of October 15, 2021, the Company had one COVID-19 loan deferral in the amount of $241,000. Corporate Overview RBB Bancorp is a community-based financial holding company headquartered in Los Angeles, California. As of September 30, 2021, the company had total assets of $3.8 billion. Its wholly-owned subsidiary, the Bank is a full service commercial bank, which provides business banking services to the Chinese-American communities in Los Angeles County, Orange County, and Ventura County in California, in Las Vegas, Nevada, 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, October 26, 2021, to discuss the Company’s third quarter 2021 financial results. To listen to the conference call, please dial 1-877-876-9174 or 1-785-424-1669, passcode RBBQ321. A replay of the call will be made available at 1-888-269-5324 or 1-402-220-7325 (no passcode required) approximately one hour after the conclusion of the call and will remain available through November 2, 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) September 30, June 30, March 31, December 31, September 30, 2021 2021 2021 2020 2020 Assets Cash and due from banks $ 206,927 $ 493,653 $ 362,930 $ 137,654 $ 121,630 Federal funds sold and other cash equivalents 170,000 110,000 57,000 57,000 57,000 Total cash and cash equivalents 376,927 603,653 419,930 194,654 178,630 Interest-bearing deposits in other financial institutions 600 600 600 600 600 Investment securities available for sale 345,000 339,568 281,582 210,867 214,662 Investment securities held to maturity 6,258 6,664 6,668 7,174 7,569 Mortgage loans held for sale 15,188 9,246 37,675 49,963 23,886 Loans held for investment 2,840,354 2,709,206 2,715,205 2,706,766 2,755,153 Allowance for loan losses (32,231 ) (31,352 ) (30,795 ) (29,337 ) (26,634 ) Net loans held for investment 2,808,123 2,677,854 2,684,410 2,677,429 2,728,519 Premises and equipment, net 27,157 27,039 27,093 27,103 24,237 Federal Home Loan Bank (FHLB) stock 15,000 15,000 15,641 15,641 15,641 Cash surrender value of life insurance 55,656 55,325 35,308 35,121 34,930 Goodwill 69,243 69,243 69,243 69,243 69,243 Servicing assets 12,141 12,558 13,264 13,965 14,724 Core deposit intangibles 4,327 4,608 4,895 5,196 5,519 Right-of-use assets- operating leases 23,735 25,050 25,500 — — Accrued interest and other assets 42,452 44,230 42,490 43,116 41,416 Total assets $ 3,801,807 $ 3,890,638 $ 3,664,299 $ 3,350,072 $ 3,359,576 Liabilities and shareholders' equity Deposits: Noninterest-bearing demand $ 824,771 $ 940,041 $ 787,439 $ 617,206 $ 642,332 Savings, NOW and money market accounts 931,517 858,597 791,486 731,084 654,378 Time deposits 1,211,525 1,271,287 1,242,368 1,286,838 1,315,038 Total deposits 2,967,813 3,069,925 2,821,293 2,635,128 2,611,748 Reserve for unfunded commitments 1,304 1,216 1,320 1,383 1,129 FHLB advances 150,000 150,000 150,000 150,000 190,000 Long-term debt, net of debt issuance costs 172,862 172,718 172,581 104,391 104,305 Subordinated debentures 14,447 14,393 14,338 14,283 14,229 Lease liabilities - operating leases 24,524 25,798 26,199 — — Accrued interest and other liabilities 14,833 14,263 42,900 16,399 16,749 Total liabilities 3,345,783 3,448,313 3,228,631 2,921,584 2,938,160 Shareholders' equity: Shareholder's equity 456,490 442,086 435,746 427,287 420,329 Non-controlling interest 72 72 72 72 72 Accumulated other comprehensive (loss) income - Net of tax (538 ) 167 (150 ) 1,129 1,015 Total shareholders' equity 456,024 442,325 435,668 428,488 421,416 Total liabilities and shareholders’ equity $ 3,801,807 $ 3,890,638 $ 3,664,299 $ 3,350,072 $ 3,359,576 RBB BANCORP AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited) (Dollars in thousands, except per share amounts) For the Three Months Ended September 30, 2021 June 30, 2021 September 30, 2020 Interest and dividend income: Interest and fees on loans $ 35,601 $ 34,669 $ 34,153 Interest on interest-bearing deposits 219 125 61 Interest on investment securities 889 794 621 Dividend income on FHLB stock 225 225 190 Interest on federal funds sold and other 174 158 100 Total interest income 37,108 35,971 35,125 Interest expense: Interest on savings deposits, NOW and money market accounts 697 708 779 Interest on time deposits 2,048 2,410 4,746 Interest on subordinated debentures and long term debt 2,342 2,356 1,905 Interest on other borrowed funds 445 440 444 Total interest expense 5,532 5,914 7,874 Net interest income before provision for loan losses 31,576 30,057 27,251 Provision for loan losses 1,196 628 3,861 Net interest income after provision for loan losses 30,380 29,429 23,390 Noninterest income: Service charges, fees and other(1) 3,100 1,374 1,143 Gain on sale of loans 1,790 2,572 760 Loan servicing fees, net of amortization 62 118 546 Recoveries on loans acquired in business combinations 68 5 32 Unrealized (loss) on equity investments (5 ) (35 ) — Gain (loss) on derivatives 178 (80 ) — Increase in cash surrender value of life insurance 331 217 194 Gain on sale of securities — — 52 Total noninterest income 5,524 4,171 2,727 Noninterest expense: Salaries and employee benefits 8,772 8,742 7,599 Occupancy and equipment expenses 2,189 2,135 2,360 Data processing 965 1,231 1,200 Legal and professional 746 536 675 Office expenses 311 272 271 Marketing and business promotion 324 231 131 Insurance and regulatory assessments 384 354 363 Core deposit premium 281 287 357 OREO expenses 4 4 3 Merger expenses 40 17 62 Other expenses 404 871 957 Total noninterest expense 14,420 14,680 13,978 Income before income taxes 21,484 18,920 12,139 Income tax expense 6,120 5,540 3,619 Net income $ 15,364 $ 13,380 $ 8,520 Net income per share Basic $ 0.79 $ 0.69 $ 0.43 Diluted $ 0.77 $ 0.67 $ 0.43 Cash Dividends declared per common share $ 0.13 $ 0.13 $ 0.06 Weighted-average common shares outstanding Basic 19,343,262 19,432,204 19,717,568 Diluted 19,798,187 19,874,969 19,804,892 (1) Includes $1.8 million of the U.S. Treasury's CDFI rapid response program grant income. RBB BANCORP AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited) (Dollars in thousands, except per share amounts) For the Nine Months Ended September 30, 2021 September 30, 2020 Interest and dividend income: Interest and fees on loans $ 104,786 $ 99,062 Interest on interest-earning deposits 392 586 Interest on investment securities 2,310 2,329 Dividend income on FHLB stock 642 379 Interest on federal funds sold and other 489 900 Total interest income 108,619 103,256 Interest expense: Interest on savings deposits, NOW and money market accounts 2,103 2,804 Interest on time deposits 7,422 17,765 Interest on subordinated debentures and long term debt 6,656 5,776 Interest on other borrowed funds 1,320 1,033 Total interest expense 17,501 27,378 Net interest income 91,118 75,878 Provision for loan losses 3,324 8,815 Net interest income after provision for loans losses 87,794 67,063 Noninterest income: Service charges, fees and other (1) 5,884 3,287 Gain on sale of loans 8,203 3,552 Loan servicing fees, net of amortization 426 1,846 Recoveries on loans acquired in business combinations 78 79 Unrealized (loss) on equity investments (60 ) — Gain on derivatives 323 — Increase in cash surrender value of life insurance 735 576 Gain on sale of securities — 210 Total noninterest income 15,589 9,550 Noninterest expense: Salaries and employee benefits 26,756 25,207 Occupancy and equipment expenses 6,566 7,291 Data processing 3,636 3,224 Legal and professional 2,087 1,949 Office expenses 838 931 Marketing and business promotion 739 456 Insurance and regulatory assessments 1,086 774 Core deposit premium 869 1,071 OREO expenses 13 31 Merger expenses 99 741 Other expenses 2,203 3,385 Total noninterest expense 44,892 45,060 Income before income taxes 58,491 31,553 Income tax expense 17,291 9,772 Net income $ 41,200 $ 21,781 Net income per share Basic $ 2.11 $ 1.10 Diluted $ 2.07 $ 1.09 Cash Dividends declared per common share $ 0.38 $ 0.24 Weighted-average common shares outstanding Basic 19,416,608 19,799,617 Diluted 19,828,612 19,958,612 (1) Includes $1.8 million of the U.S. Treasury's CDFI rapid response program grant income. 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, 2021 June 30, 2021 September 30, 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) $ 628,020 $ 618 0.39 % $ 582,554 $ 508 0.35 % $ 179,521 $ 351 0.78 % Securities Available for sale 336,130 856 1.01 % 328,004 751 0.92 % 168,151 558 1.32 % Held to maturity (2) 6,262 56 3.55 % 6,667 60 3.61 % 7,604 71 3.71 % Mortgage loans held for sale 5,218 46 3.50 % 21,033 173 3.30 % 19,848 171 3.43 % Loans held for investment: (3) Real estate 2,361,405 30,911 5.19 % 2,292,145 29,794 5.21 % 2,266,752 29,616 5.20 % Commercial 374,125 4,644 4.92 % 388,049 4,702 4.86 % 377,789 4,366 4.60 % Total loans 2,735,530 35,555 5.16 % 2,680,194 34,496 5.16 % 2,644,541 33,982 5.11 % Total earning assets 3,711,160 $ 37,131 3.97 % 3,618,452 $ 35,988 3.99 % 3,019,665 $ 35,133 4.63 % Noninterest-earning assets 242,742 230,049 204,638 Total assets $ 3,953,902 $ 3,848,501 $ 3,224,303 Interest-bearing liabilities NOW $ 71,454 $ 48 0.27 % $ 66,777 $ 45 0.27 % $ 59,451 $ 50 0.33 % Money Market 660,806 615 0.37 % 640,026 628 0.39 % 454,820 698 0.61 % Saving deposits 139,555 34 0.10 % 140,418 35 0.10 % 126,635 31 0.10 % Time deposits, less than $250,000 644,013 977 0.60 % 657,494 1,163 0.71 % 699,765 2,539 1.44 % Time deposits, $250,000 and over 604,394 1,071 0.70 % 604,429 1,247 0.83 % 584,586 2,207 1.50 % Total interest-bearing deposits 2,120,222 2,745 0.51 % 2,109,144 3,118 0.59 % 1,925,257 5,525 1.14 % FHLB advances 150,000 445 1.18 % 150,000 440 1.18 % 151,739 444 1.16 % Long-term debt 172,767 2,194 5.04 % 172,622 2,206 5.13 % 104,252 1,748 6.67 % Subordinated debentures 14,411 148 4.07 % 14,357 150 4.19 % 14,195 157 4.40 % Total interest-bearing liabilities 2,457,400 5,532 0.89 % 2,446,123 5,914 0.97 % 2,195,443 7,874 1.43 % Noninterest-bearing liabilities Noninterest-bearing deposits 1,003,304 913,442 595,264 Other noninterest-bearing liabilities 42,419 46,549 13,270 Total noninterest-bearing liabilities 1,045,723 959,991 608,534 Shareholders' equity 450,779 442,387 420,326 Total liabilities and shareholders' equity $ 3,953,902 $ 3,848,501 $ 3,224,303 Net interest income / interest rate spreads $ 31,599 3.08 % $ 30,074 3.02 % $ 27,259 3.20 % Net interest margin 3.38 % 3.33 % 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, 2021 September 30, 2020 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) $ 476,781 $ 1,523 0.43 % $ 220,195 $ 1,865 1.13 % Securities Available for sale 301,653 2,180 0.97 % 159,373 2,136 1.79 % Held to maturity (2) 6,640 182 3.66 % 7,760 218 3.75 % Mortgage loans held for sale 26,579 630 3.17 % 40,936 1,454 4.74 % Loans held for investment: (3) Real estate 2,320,524 90,226 5.20 % 2,141,022 84,261 5.26 % Commercial 382,168 13,930 4.87 % 359,907 13,347 4.95 % Total loans 2,702,692 104,156 5.15 % 2,500,929 97,608 5.21 % Total earning assets 3,514,345 $ 108,671 4.13 % 2,929,193 $ 103,281 4.71 % Noninterest-earning assets 233,652 208,000 Total assets $ 3,747,997 $ 3,137,193 Interest-bearing liabilities NOW $ 67,633 $ 136 0.27 % $ 53,633 $ 153 0.38 % Money Market 627,024 1,866 0.40 % 430,524 2,534 0.79 % Saving deposits 137,072 101 0.10 % 121,836 117 0.13 % Time deposits, less than $250,000 654,776 3,635 0.74 % 720,810 9,408 1.74 % Time deposits, $250,000 and over 600,973 3,787 0.84 % 598,137 8,357 1.87 % Total interest-bearing deposits 2,087,478 9,525 0.61 % 1,924,940 20,569 1.43 % FHLB advances 150,000 1,320 1.18 % 118,029 1,033 1.17 % Long-term debt 152,600 6,209 5.44 % 104,168 5,243 6.72 % Subordinated debentures 14,357 447 4.16 % 14,221 533 5.01 % Total interest-bearing liabilities 2,404,435 $ 17,501 0.97 % 2,161,358 $ 27,378 1.69 % Noninterest-bearing liabilities Noninterest-bearing deposits 858,087 546,419 Other noninterest-bearing liabilities 43,038 14,606 Total noninterest-bearing liabilities 901,125 561,025 Shareholders' equity 442,437 414,810 Total liabilities and shareholders' equity $ 3,747,997 $ 3,137,193 Net interest income / interest rate spreads $ 91,170 3.16 % $ 75,903 3.02 % Net interest margin 3.47 % 3.46 % 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, 2021 2021 2020 Per share data (common stock) Earnings Basic $ 0.79 $ 0.69 $ 0.43 Diluted $ 0.77 $ 0.67 $ 0.43 Dividends declared $ 0.13 $ 0.13 $ 0.06 Book value $ 23.37 $ 22.86 $ 21.35 Tangible book value $ 19.60 $ 19.04 $ 17.56 Weighted average shares outstanding Basic 19,343,262 19,432,204 19,717,568 Diluted 19,798,187 19,874,969 19,804,892 Shares outstanding at period end 19,516,393 19,349,802 19,739,280 Performance ratios Return on average assets, annualized 1.54 % 1.39 % 1.05 % Return on average shareholders' equity, annualized 13.52 % 12.13 % 8.06 % Return on average tangible common equity, annualized 16.17 % 14.57 % 9.81 % Noninterest income to average assets, annualized 0.55 % 0.43 % 0.34 % Noninterest expense to average assets, annualized 1.45 % 1.53 % 1.72 % Yield on average earning assets 3.97 % 3.99 % 4.63 % Cost of average total deposits 0.35 % 0.41 % 0.87 % Cost of average interest-bearing deposits 0.51 % 0.59 % 1.14 % Cost of average interest-bearing liabilities 0.89 % 0.97 % 1.43 % Accretion on loans to average earning assets 0.03 % 0.02 % 0.08 % Net interest spread 3.08 % 3.02 % 3.20 % Net interest margin 3.38 % 3.33 % 3.59 % Efficiency ratio 38.87 % 42.89 % 46.63 % Common stock dividend payout ratio 16.46 % 18.84 % 13.95 % RBB BANCORP AND SUBSIDIARIES SELECTED FINANCIAL HIGHLIGHTS (Unaudited) (Dollars in thousands, except per share amounts) For the nine months ended September 30, 2021 2020 Per share data (common stock) Earnings Basic $ 2.11 $ 1.10 Diluted $ 2.07 $ 1.09 Dividends declared $ 0.38 $ 0.24 Book value $ 23.37 $ 21.35 Tangible book value $ 19.60 $ 17.56 Weighted average shares outstanding Basic 19,416,608 19,799,617 Diluted 19,828,612 19,958,612 Shares outstanding at period end 19,516,393 19,739,280 Performance ratios Return on average assets, annualized 1.47 % 0.93 % Return on average shareholders' equity, annualized 12.45 % 7.01 % Return on average tangible common equity, annualized 14.95 % 8.59 % Noninterest income to average assets, annualized 0.56 % 0.41 % Noninterest expense to average assets, annualized 1.60 % 1.92 % Yield on average earning assets 4.13 % 4.71 % Cost of average deposits 0.43 % 1.11 % Cost of average interest-bearing deposits 0.61 % 1.43 % Cost of average interest-bearing liabilities 0.97 % 1.69 % Accretion on loans to average earning assets 0.04 % 0.10 % Net interest spread 3.16 % 3.02 % Net interest margin 3.47 % 3.46 % Efficiency ratio 42.07 % 52.75 % Common stock dividend payout ratio 18.01 % 21.82 % RBB BANCORP AND SUBSIDIARIES SELECTED FINANCIAL HIGHLIGHTS (Unaudited) (Dollars in thousands, except per share amounts) As of September 30, June 30, September 30, 2021 2021 2020 Loan to deposit ratio 95.71 % 88.25 % 105.49 % Core deposits / total deposits 79.87 % 80.04 % 99.34 % Net non-core funding dependence ratio 9.27 % 0.87 % 9.69 % Credit Quality Data: Loans 30-89 days past due $ 7,258 $ 5,449 $ 21,735 Loans 30-89 days past due to total loans 0.26 % 0.20 % 0.79 % Nonperforming loans $ 14,248 $ 19,243 $ 17,975 Nonperforming loans to total loans 0.50 % 0.71 % 0.65 % Nonperforming assets $ 14,541 $ 19,536 $ 18,268 Nonperforming assets to total assets 0.38 % 0.50 % 0.54 % Allowance for loan losses to total loans 1.13 % 1.16 % 0.97 % Allowance for loan losses to nonperforming loans 226.21 % 162.93 % 148.17 % Net charge-offs to average loans (for the quarter-to-date period) 0.05 % 0.01 % 0.01 % Regulatory and other capital ratios—Company Tangible common equity to tangible assets 10.26 % 9.65 % 10.55 % Tier 1 leverage ratio 10.31 % 10.20 % 11.47 % Tier 1 common capital to risk-weighted assets 14.82 % 14.76 % 14.11 % Tier 1 capital to risk-weighted assets 15.38 % 15.33 % 14.69 % Total capital to risk-weighted assets 23.30 % 23.48 % 20.05 % Regulatory capital ratios—Bank only Tier 1 leverage ratio 12.48 % 12.34 % 14.16 % Tier 1 common capital to risk-weighted assets 18.64 % 18.58 % 18.13 % Tier 1 capital to risk-weighted assets 18.64 % 18.58 % 18.13 % Total capital to risk-weighted assets 19.89 % 19.83 % 19.26 % 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 2021 2021 2021 2020 2020 Interest income Loans, including fees $ 35,601 $ 34,669 $ 34,516 $ 34,832 $ 34,153 Investment securities and other 1,507 1,302 1,024 1,032 972 Total interest income 37,108 35,971 35,540 35,864 35,125 Interest expense Deposits 2,745 3,118 3,662 4,636 5,525 Interest on subordinated debentures and other 2,342 2,356 1,958 1,901 1,905 Other borrowings 445 440 435 450 444 Total interest expense 5,532 5,914 6,055 6,987 7,874 Net interest income before provision for loan losses 31,576 30,057 29,485 28,877 27,251 Provision for loan losses 1,196 628 1,500 3,008 3,861 Net interest income after provision for loan losses 30,380 29,429 27,985 25,869 23,390 Noninterest income 5,524 4,171 5,894 4,490 2,727 Noninterest expense 14,420 14,680 15,792 14,453 13,978 Earnings before income taxes 21,484 18,920 18,087 15,906 12,139 Income taxes 6,120 5,540 5,631 4,759 3,619 Net income $ 15,364 $ 13,380 $ 12,456 $ 11,147 $ 8,520 Net income per common share - basic $ 0.79 $ 0.69 $ 0.64 $ 0.57 $ 0.43 Net income per common share - diluted $ 0.77 $ 0.67 $ 0.63 $ 0.56 $ 0.43 Cash dividends declared per common share $ 0.13 $ 0.13 $ 0.12 $ 0.09 $ 0.06 Cash dividends declared on common shares $ 2,516 $ 2,540 $ 2,347 $ 1,777 $ 1,184 Yield on average assets, annualized 1.54 % 1.39 % 1.47 % 1.33 % 1.05 % Yield on average earning assets 3.97 % 3.99 % 4.49 % 4.55 % 4.63 % Cost of average deposits 0.35 % 0.41 % 0.55 % 0.71 % 0.87 % Cost of average interest-bearing deposits 0.51 % 0.59 % 0.73 % 0.93 % 1.14 % Cost of average interest-bearing liabilities 0.89 % 0.97 % 1.06 % 1.23 % 1.43 % Accretion on loans to average earning assets 0.03 % 0.02 % 0.06 % 0.03 % 0.08 % Net interest margin 3.38 % 3.33 % 3.73 % 3.67 % 3.59 % 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 September 30, 2021 As of June 30, 2021 As of March 31, 2021 As of December 30, 2020 As of September 30, 2020 (dollars in thousands) $ % $ % $ % $ % $ % Loans: Commercial and industrial $ 276,387 9.7 % $ 277,080 10.2 % $ 286,016 10.5 % $ 290,139 10.7 % $ 317,891 11.5 % SBA 88,784 3.1 % 98,572 3.6 % 111,330 4.1 % 97,821 3.6 % 111,193 4.0 % Construction and land development 271,764 9.6 % 236,965 8.7 % 209,727 7.7 % 186,723 6.9 % 183,569 6.7 % Commercial real estate (1) 1,205,630 42.4 % 1,102,467 40.7 % 1,063,104 39.2 % 1,003,637 37.1 % 975,187 35.4 % Single-family residential mortgages 974,780 34.3 % 984,311 36.3 % 1,041,260 38.3 % 1,124,357 41.5 % 1,163,982 42.2 % Other loans 23,009 0.9 % 9,811 0.5 % 3,768 0.2 % 4,089 0.2 % 3,331 0.2 % Total loans (2) $ 2,840,354 100.0 % $ 2,709,206 100.0 % $ 2,715,205 100.0 % $ 2,706,766 100.0 % $ 2,755,153 100.0 % Allowance for loan losses (32,231 ) (31,352 ) (30,795 ) (29,337 ) (26,634 ) Total loans, net $ 2,808,123 $ 2,677,854 $ 2,684,410 $ 2,677,429 $ 2,728,519 (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) 2021 2020 2021 2020 Beginning balance $ 31,352 $ 22,820 $ 29,337 $ 18,816 Additions to the allowance charged to expense 1,196 3,861 3,324 8,815 Net charge-offs on loans (317 ) (47 ) (430 ) (997 ) Ending balance $ 32,231 $ 26,634 $ 32,231 $ 26,634 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, 2021 and 2020 and June 30, 2021. (dollars in thousands, except per share data) September 30, 2021 June 30, 2021 September 30, 2020 Tangible common equity: Total shareholders' equity $ 456,024 $ 442,325 $ 421,416 Adjustments Goodwill (69,243 ) (69,243 ) (69,243 ) Core deposit intangible (4,327 ) (4,608 ) (5,519 ) Tangible common equity $ 382,454 $ 368,474 $ 346,654 Tangible assets: Total assets-GAAP $ 3,801,807 $ 3,890,638 $ 3,359,576 Adjustments Goodwill (69,243 ) (69,243 ) (69,243 ) Core deposit intangible (4,327 ) (4,608 ) (5,519 ) Tangible assets $ 3,728,237 $ 3,816,787 $ 3,284,814 Common shares outstanding $ 19,516,393 19,349,802 19,739,280 Tangible common equity to tangible assets ratio 10.26 % 9.65 % 10.55 % Book value per share $ 23.37 $ 22.86 $ 21.35 Tangible book value per share $ 19.60 $ 19.04 $ 17.56 View source version on businesswire.com: https://www.businesswire.com/news/home/20211025005738/en/
Yee Phong (Alan) Thian President and CEO (626) 307-7559 David Morris Executive Vice President and CFO (714) 670-2488