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 Second Quarter Earnings for 2021 By: RBB Bancorp via Business Wire July 26, 2021 at 16:05 PM EDT Conference Call and Webcast Scheduled for Tuesday, July 27, 2021 at 11:00 a.m. Pacific Time/2:00 p.m. Eastern Time Second Quarter 2021 Highlights Reported record net income of $13.4 million, or $0.67 diluted earnings per share, increased $924,000, or 7.4%, from the prior quarter and increased $6.9 million, or 105.4%, from the second quarter of 2020 Total deposits increased by $248.6 million, or 35.3% annualized growth, from the end of the prior quarter Loan growth (ex-mortgage) of $51.0 million, or 12.2% annualized, from the end of the prior quarter Declared quarterly cash dividend of $0.13 per common share 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 June 30, 2021. The Company reported record net income of $13.4 million, or $0.67 diluted earnings per share, for the three months ended June 30, 2021, compared to net income of $12.5 million, or $0.63 diluted earnings per share, and $6.5 million, or $0.33 diluted earnings per share, for the three months ended March 31, 2021 and June 30, 2020, respectively. “We are pleased to report diluted earnings per share of $0.67, for the second quarter,” said Alan Thian, President and CEO of Royal Business Bank. “Continued focus on our deposit franchise reduced the cost of our interest-bearing deposits and delivered strong growth in non-interest bearing deposits which now comprise 30.6% of total deposits. While our net interest margin declined due to excess liquidity, our disciplined loan origination efforts kept our loan balance and yields stable. Our acquisition of the Hawaiian branch of the Bank of the Orient expands our presence in a vibrant Asian-American community and positions us for profitable growth.” "Royal Business Bank’s excellent second quarter results demonstrate the continued strength of our differentiated business model and commitment to enhancing long-term shareholder value," said Dr. James Kao, Chairman of RBB Bancorp. “We remain well-positioned to pursue additional organic and strategic growth opportunities." Key Performance Ratios Net income of $13.4 million for the second quarter of 2021 produced 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%. This compares to an annualized return on average assets of 1.47%, an annualized return on average tangible common shareholders' equity of 14.05%, and an annualized return on average shareholders' equity of 11.64% for the first quarter of 2021. The efficiency ratio for the second quarter of 2021 was 42.89%, compared to 44.64% for the prior quarter. The change in the efficiency ratio was primarily due to a decrease in non-interest income. Net Interest Income and Net Interest Margin Net interest income, before provision for loan losses, was $30.1 million for the second quarter of 2021, compared to $29.5 million for the first quarter of 2021. The $572,000 increase was primarily attributable to higher interest income due to a $410.6 million increase in average earning assets and an improvement in deposit costs related to a $259.8 million increase in average noninterest-bearing deposits, partially offset by a $138.0 million increase in average interest-bearing liabilities. Accretion of purchase discounts from prior acquisitions contributed $183,000 to net interest income in the second quarter of 2021, compared to $481,000 in the first quarter of 2021. Compared to the second quarter of 2020, net interest income, before provision for loan losses, increased $5.0 million from $25.0 million. The increase was primarily attributable to a $670.6 million increase in average earning assets and a $355.5 million increase in average noninterest-bearing deposits, partially offset by a $277.7 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 3.33% for the second quarter of 2021, a decrease of 40 basis points from 3.73% in the first quarter of 2021. The decrease was primarily attributable to an increase in liquidity combined with a 50 basis point decrease in the yield on average earning assets and a 40 basis point decrease in the yield on federal funds sold, cash equivalents & other which was partially offset by a 19 basis point decrease in the cost of borrowings (FHLB advances, long-term debt and subordinated debentures). Loan discount accretion contributed 2 basis points to the net interest margin in the second quarter of 2021, compared to 6 basis points in the first quarter of 2021. The majority of the decrease in net interest margin was due to the increase in liquidity. Noninterest Income Noninterest income was $4.2 million for the second quarter of 2021, a decrease of $1.7 million from $5.9 million in the first quarter of 2021. The decrease was driven by a decrease in loans sold during the quarter. The Company sold $55.4 million fewer loans in the second quarter than in the prior quarter primarily due to selling fewer FNMA loans. The Company sold $58.9 million in FNMA qualified mortgage loans for a net gain of $1.4 million and sold $13.4 million in non-qualified mortgage loans to private investors for a gain of $389,000 during the second quarter of 2021. This compared to $80.3 million in FNMA qualified mortgage loans for a net gain of $2.2 million and $49.8 million in non-qualified mortgage loans to private investors for a gain of $1.2 million during the first quarter of 2021. The Company sold $5.9 million in SBA loans during the second quarter of 2021 for a net gain of $747,000, compared to $3.5 million SBA loans sold for a net gain of $355,000 during the first quarter of 2021. Compared to the second quarter of 2020, noninterest income increased by $2.0 million from $2.2 million. The increase was primarily attributable to an increase of $2.5 million in gain on loan sales partially offset by a decrease of $590,000 in loan servicing fees. Noninterest Expense Noninterest expense for the second quarter of 2021 was $14.7 million, compared to $15.8 million for the first quarter of 2021. The $1.1 million decrease was primarily attributable to a $500,000 decrease in salaries and employee benefits, a $269,000 decrease in legal and professional fees and $209,000 decrease in data processing expenses. Noninterest expense decreased from $14.8 million in the second quarter of 2020. The $139,000 decrease was primarily due to a $366,000 decrease in MSR impairment write-down expense and a $392,000 decrease in occupancy and equipment expenses. These were partially offset by a $639,000 increase in salaries and employee benefits expense. Income Taxes The effective tax rate was 29.28% for the second quarter of 2021, 31.1% for the first quarter of 2021, and 30.8% for the second quarter of 2020. CDFI Rapid Response Program In 2016, RBB became a community development financial institution (CDFI). 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 has not yet been received pending finalization of the contract between the Bank and the US Treasury which will include various performance goals and measures that specify the use of the funds. Loan Portfolio Loans held for investment, net of deferred fees and discounts, totaled $2.7 billion as of June 30, 2021, a decrease of $6.0 million from March 31, 2021, and an increase of $114.6 million from June 30, 2020 from $2.6 billion. The decrease from the prior quarter was primarily due to a decrease in mortgage loan originations. Single-family residential mortgages decreased by $56.9 million net of payoffs, paydowns and loan sales. Commercial real estate loans increased by $39.4 million, construction and land development loans increased by $27.2 million, SBA loans decreased by $12.8 million (which included a $13.7 million decrease in PPP loans), commercial and industrial loans decreased by $8.9 million and other loans increased by $6.0 million. During the second quarter of 2021, single-family residential mortgage production was $107.9 million, payoffs and paydowns were $121.0 million, and single-family residential mortgage loan sales were $72.3 million. During the first quarter of 2021, single-family residential mortgage production was $114.5 million, payoffs and paydowns were $81.9 million, and loan sales were $130.1 million. Mortgage loans held for sale were $9.2 million as of June 30, 2021, a decrease of $28.4 million from $37.7 million at March 31, 2021 and a decrease of $6.2 million from $15.5 million as of June 30, 2020. The Company originated approximately $29.2 million in FNMA mortgage loans for sale for the second quarter of 2021, compared with $55.3 million during the prior quarter. In the second quarter of 2021, SBA loan production was $21.3 million and total SBA loan sales were $5.9 million. Deposits and Borrowings Deposits were $3.1 billion at June 30, 2021, an increase of $248.6 million from March 31, 2021, and an increase of $633.4 million from June 30, 2020, including brokered deposits. The increase in total deposits from the prior quarter was primarily attributable to organic deposit growth. During the second quarter of 2021, noninterest-bearing deposits increased by $152.6 million, interest-bearing non-maturity deposits increased by $67.1 million, and time deposits decreased by $28.9 million. As of June 30, 2021, time deposits included $17.4 million in brokered CDs, as compared to $17.4 million as of March 31, 2021 and $2.4 million as of June 30, 2020. Asset Quality Nonperforming assets totaled $19.5 million, or 0.50% of total assets at June 30, 2021, compared to $20.2 million, or 0.55%, of total assets at March 31, 2021. Nonperforming assets consist of OREO, loans modified under troubled debt restructurings (“TDR”), non-accrual loans, and loans past due 90 days or more and still accruing interest. In the second quarter of 2021, there were $71,000 in net charge-offs, compared to net charge-offs of $42,000 in the prior quarter. The Company recorded a provision for credit losses of $628,000 for the second quarter of 2021, a decrease from $872,000 in the prior quarter, primarily attributable to reduced loan growth. The allowance for loan losses totaled $31.4 million, or 1.16% of loans held for investment at June 30, 2021, compared with $30.8 million, or 1.13%, of total loans at March 31, 2021. As of June 30, 2021, borrowers representing 191 loans totaling $29.2 million, or 1.07% 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 June 30, 2021. The following table provides details regarding the Company's COVID-19 loan deferral activity through July 15, 2021. As of June 30, 2020 As of April 15, 2021 As of July 15, 2021 Loans Deferred Loans Deferred Loans Deferred Number Principal Amount ($000) Number Principal Amount ($000) Number Principal Amount ($000) General retail (excluding SBA) 34 $ 94,251 1 $ 438 — $ — Mixed use commercial 38 58,841 4 2,602 — — Hospitality (excluding SBA) 5 25,343 1 6,394 — — Restaurants (excluding SBA) 11 4,186 — — — — Multifamily 6 9,086 1 688 — — Commercial, office and other — — — — — — SFR mortgage loans - Western region 183 118,484 9 5,135 4 3,101 SFR mortgage loans - Eastern region 203 85,935 5 2,467 — — SFR mortgage loans - Chicago metropolitan 84 14,824 — — — — Total 564 $ 410,950 21 $ 17,724 4 $ 3,101 Corporate Overview RBB Bancorp is a community-based financial holding company headquartered in Los Angeles, California. As of June 30, 2021, the company had total assets of $3.9 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, July 27, 2021, to discuss the Company’s second quarter 2021 financial results. To listen to the conference call, please dial 1-833-519-1355 or 1-918-922-6505, passcode 5654379. A replay of the call will be made available at 1-800-585-8367 or 1-404-537-3406, passcode 5654379, approximately one hour after the conclusion of the call and will remain available through August 3, 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) June 30, March 31, December 31, September 30, June 30, 2021 2021 2020 2020 2020 Assets Cash and due from banks $ 493,653 $ 362,930 $ 137,654 $ 121,630 $ 94,844 Federal funds sold and other cash equivalents 110,000 57,000 57,000 57,000 57,000 Total cash and cash equivalents 603,653 419,930 194,654 178,630 151,844 Interest-bearing deposits in other financial institutions 600 600 600 600 600 Investment securities available for sale 339,568 281,582 210,867 214,662 185,756 Investment securities held to maturity 6,664 6,668 7,174 7,569 7,615 Mortgage loans held for sale 9,246 37,675 49,963 23,886 15,479 Loans held for investment 2,709,206 2,715,205 2,706,766 2,755,153 2,594,620 Allowance for loan losses (31,352 ) (30,795 ) (29,337 ) (26,634 ) (22,820 ) Net loans held for investment 2,677,854 2,684,410 2,677,429 2,728,519 2,571,800 Premises and equipment, net 27,039 27,093 27,103 24,237 23,965 Federal Home Loan Bank (FHLB) stock 15,000 15,641 15,641 15,641 15,641 Cash surrender value of life insurance 55,325 35,308 35,121 34,930 34,736 Goodwill 69,243 69,243 69,243 69,243 69,209 Servicing assets 12,558 13,264 13,965 14,724 15,595 Core deposit intangibles 4,608 4,895 5,196 5,519 5,876 Right-of-use assets- operating leases 25,050 25,500 — — — Accrued interest and other assets 44,230 42,490 43,116 41,416 38,065 Total assets $ 3,890,638 $ 3,664,299 $ 3,350,072 $ 3,359,576 $ 3,136,181 Liabilities and shareholders' equity Deposits: Noninterest-bearing demand $ 940,041 $ 787,439 $ 617,206 $ 642,332 $ 574,553 Savings, NOW and money market accounts 858,597 791,486 731,084 654,378 601,941 Time deposits 1,271,287 1,242,368 1,286,838 1,315,038 1,260,026 Total deposits 3,069,925 2,821,293 2,635,128 2,611,748 2,436,520 Reserve for unfunded commitments 1,216 1,320 1,383 1,129 1,030 FHLB advances 150,000 150,000 150,000 190,000 150,000 Long-term debt, net of debt issuance costs 172,718 172,581 104,391 104,305 104,220 Subordinated debentures 14,393 14,338 14,283 14,229 14,174 Lease liabilities - operating leases 25,798 26,199 — — — Accrued interest and other liabilities 14,263 42,900 16,399 16,749 16,212 Total liabilities 3,448,313 3,228,631 2,921,584 2,938,160 2,722,156 Shareholders' equity: Shareholder's equity 442,086 435,746 427,287 420,329 412,827 Non-controlling interest 72 72 72 72 72 Accumulated other comprehensive (loss) income - Net of tax 167 (150 ) 1,129 1,015 1,126 Total shareholders' equity 442,325 435,668 428,488 421,416 414,025 Total liabilities and shareholders’ equity $ 3,890,638 $ 3,664,299 $ 3,350,072 $ 3,359,576 $ 3,136,181 RBB BANCORP AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited) (Dollars in thousands, except per share amounts) For the Three Months Ended June 30, 2021 March 31, 2021 June 30, 2020 Interest and dividend income: Interest and fees on loans $ 34,669 $ 34,516 $ 32,633 Interest on interest-bearing deposits 125 48 74 Interest on investment securities 794 627 887 Dividend income on FHLB stock 225 192 187 Interest on federal funds sold and other 158 157 322 Total interest income 35,971 35,540 34,103 Interest expense: Interest on savings deposits, NOW and money market accounts 708 698 782 Interest on time deposits 2,410 2,964 5,933 Interest on subordinated debentures and long term debt 2,356 1,958 1,915 Interest on other borrowed funds 440 435 439 Total interest expense 5,914 6,055 9,069 Net interest income before provision for loan losses 30,057 29,485 25,034 Provision for loan losses 628 1,500 3,009 Net interest income after provision for loan losses 29,429 27,985 22,025 Noninterest income: Service charges, fees and other 1,374 1,410 1,065 Gain on sale of loans 2,572 3,841 81 Loan servicing fees, net of amortization 118 246 708 Recoveries on loans acquired in business combinations 5 5 5 Unrealized (loss) on equity investments (35 ) (20 ) — (Loss) gain on derivatives (80 ) 225 — Increase in cash surrender value of life insurance 217 187 191 Gain on sale of securities — — 158 Total noninterest income 4,171 5,894 2,208 Noninterest expense: Salaries and employee benefits 8,742 9,242 8,103 Occupancy and equipment expenses 2,135 2,242 2,527 Data processing 1,231 1,440 882 Legal and professional 536 805 670 Office expenses 272 255 337 Marketing and business promotion 231 184 111 Insurance and regulatory assessments 354 348 234 Core deposit premium 287 301 357 OREO expenses 4 5 14 Merger expenses 17 42 276 Other expenses 871 928 1,308 Total noninterest expense 14,680 15,792 14,819 Income before income taxes 18,920 18,087 9,414 Income tax expense 5,540 5,631 2,901 Net income $ 13,380 $ 12,456 $ 6,513 Net income per share Basic $ 0.69 $ 0.64 $ 0.33 Diluted $ 0.67 $ 0.63 $ 0.33 Cash Dividends declared per common share $ 0.13 $ 0.12 $ 0.06 Weighted-average common shares outstanding Basic 19,432,204 19,475,814 19,710,330 Diluted 19,874,969 19,812,841 19,806,304 RBB BANCORP AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited) (Dollars in thousands, except per share amounts) For the Six Months Ended June 30, 2021 June 30, 2020 Interest and dividend income: Interest and fees on loans $ 69,185 $ 64,909 Interest on interest-earning deposits 173 525 Interest on investment securities 1,421 1,708 Dividend income on FHLB stock 417 189 Interest on federal funds sold and other 315 800 Total interest income 71,511 68,131 Interest expense: Interest on savings deposits, NOW and money market accounts 1,406 2,025 Interest on time deposits 5,374 13,019 Interest on subordinated debentures and long term debt 4,314 3,871 Interest on other borrowed funds 875 589 Total interest expense 11,969 19,504 Net interest income 59,542 48,627 Provision for loan losses 2,128 4,954 Net interest income after provision for loans losses 57,414 43,673 Noninterest income: Service charges, fees and other 2,784 2,144 Gain on sale of loans 6,413 2,792 Loan servicing fees, net of amortization 364 1,300 Recoveries on loans acquired in business combinations 10 47 Unrealized (loss) on equity investments (55 ) — Gain on derivatives 145 — Increase in cash surrender value of life insurance 404 382 Gain on sale of securities — 158 Total noninterest income 10,065 6,823 Noninterest expense: Salaries and employee benefits 17,984 17,608 Occupancy and equipment expenses 4,377 4,931 Data processing 2,671 2,024 Legal and professional 1,341 1,274 Office expenses 527 660 Marketing and business promotion 415 325 Insurance and regulatory assessments 702 411 Core deposit premium 588 714 OREO expenses 9 28 Merger expenses 59 679 Other expenses 1,799 2,428 Total noninterest expense 30,472 31,082 Income before income taxes 37,007 19,414 Income tax expense 11,171 6,153 Net income $ 25,836 $ 13,261 Net income per share Basic $ 1.32 $ 0.67 Diluted $ 1.30 $ 0.66 Cash Dividends declared per common share $ 0.25 $ 0.12 Weighted-average common shares outstanding Basic 19,453,889 19,841,093 Diluted 19,844,077 20,036,316 RBB BANCORP AND SUBSIDIARIES AVERAGE BALANCE SHEET AND NET INTEREST INCOME (Unaudited) (Dollars in thousands, except per share amounts) For the three months ended June 30, 2021 March 31, 2021 June 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) $ 582,554 $ 508 0.35 % $ 215,230 $ 397 0.75 % $ 231,943 $ 583 1.01 % Securities Available for sale 328,004 751 0.92 % 239,768 571 0.97 % 171,298 823 1.93 % Held to maturity (2) 6,667 60 3.61 % 7,000 64 3.71 % 7,661 72 3.78 % Mortgage loans held for sale 21,033 173 3.30 % 54,021 411 3.09 % 25,130 303 4.85 % Loans held for investment: (3) Real estate 2,292,145 29,794 5.21 % 2,307,431 29,521 5.19 % 2,147,646 28,216 5.28 % Commercial 388,049 4,702 4.86 % 384,442 4,584 4.84 % 364,189 4,114 4.54 % Total loans 2,680,194 34,496 5.16 % 2,691,873 34,105 5.14 % 2,511,835 32,330 5.18 % Total earning assets 3,618,452 $ 35,988 3.99 % 3,207,892 $ 35,548 4.49 % 2,947,867 $ 34,111 4.65 % Noninterest-earning assets 230,049 228,002 206,833 Total assets $ 3,848,501 $ 3,435,894 $ 3,154,700 Interest-bearing liabilities NOW $ 66,777 $ 45 0.27 % $ 64,592 $ 44 0.28 % $ 57,547 $ 60 0.42 % Money Market 640,026 628 0.39 % 579,347 623 0.44 % 404,480 691 0.69 % Saving deposits 140,418 35 0.10 % 131,151 31 0.10 % 123,868 31 0.10 % Time deposits, less than $250,000 657,494 1,163 0.71 % 663,029 1,496 0.92 % 725,142 3,143 1.74 % Time deposits, $250,000 and over 604,429 1,247 0.83 % 593,981 1,468 1.00 % 589,090 2,790 1.90 % Total interest-bearing deposits 2,109,144 3,118 0.59 % 2,032,100 3,662 0.73 % 1,900,127 6,715 1.42 % FHLB advances 150,000 440 1.18 % 150,000 435 1.18 % 150,000 439 1.18 % Long-term debt 172,622 2,206 5.13 % 111,739 1,808 6.56 % 104,168 1,747 6.75 % Subordinated debentures 14,357 150 4.19 % 14,302 150 4.25 % 14,141 168 4.78 % Total interest-bearing liabilities 2,446,123 5,914 0.97 % 2,308,141 6,055 1.06 % 2,168,436 9,069 1.68 % Noninterest-bearing liabilities Noninterest-bearing deposits 913,442 653,674 557,903 Other noninterest-bearing liabilities 46,549 40,118 15,509 Total noninterest-bearing liabilities 959,991 693,792 573,412 Shareholders' equity 442,387 433,960 412,852 Total liabilities and shareholders' equity $ 3,848,501 $ 3,435,894 $ 3,154,700 Net interest income / interest rate spreads $ 30,074 3.02 % $ 29,493 3.43 % $ 25,042 2.97 % Net interest margin 3.33 % 3.73 % 3.42 % (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 six months ended June 30, 2021 June 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) $ 399,907 $ 905 0.46 % $ 240,755 $ 1,514 1.26 % Securities Available for sale 284,129 1,323 0.94 % 154,936 1,578 2.05 % Held to maturity (2) 6,832 126 3.72 % 7,839 147 3.77 % Mortgage loans held for sale 37,436 584 3.15 % 51,595 1,284 5.00 % Loans held for investment: (3) Real estate 2,299,746 59,315 5.20 % 2,077,467 54,644 5.29 % Commercial 386,256 9,286 4.85 % 350,869 8,981 5.15 % Total loans 2,686,002 68,601 5.15 % 2,428,336 63,625 5.27 % Total earning assets 3,414,306 $ 71,539 4.23 % 2,883,461 $ 68,148 4.75 % Noninterest-earning assets 229,032 209,699 Total assets $ 3,643,338 $ 3,093,160 Interest-bearing liabilities NOW $ 65,690 $ 88 0.27 % $ 50,692 $ 102 0.40 % Money Market 609,854 1,251 0.41 % 418,243 1,837 0.88 % Saving deposits 135,810 67 0.10 % 119,410 86 0.14 % Time deposits, less than $250,000 660,246 2,659 0.81 % 731,448 6,869 1.89 % Time deposits, $250,000 and over 599,234 2,716 0.91 % 604,987 6,150 2.04 % Total interest-bearing deposits 2,070,834 6,781 0.66 % 1,924,780 15,044 1.57 % FHLB advances 150,000 875 1.18 % 100,989 589 1.17 % Long-term debt 142,349 4,015 5.69 % 104,125 3,495 6.75 % Subordinated debentures 14,330 298 4.19 % 14,234 376 5.31 % Total interest-bearing liabilities 2,377,513 $ 11,969 1.02 % 2,144,128 $ 19,504 1.83 % Noninterest-bearing liabilities Noninterest-bearing deposits 784,276 521,729 Other noninterest-bearing liabilities 43,352 15,282 Total noninterest-bearing liabilities 827,628 537,011 Shareholders' equity 438,197 412,021 Total liabilities and shareholders' equity $ 3,643,338 $ 3,093,160 Net interest income / interest rate spreads $ 59,570 3.21 % $ 48,644 2.92 % Net interest margin 3.52 % 3.39 % RBB BANCORP AND SUBSIDIARIES SELECTED FINANCIAL HIGHLIGHTS (Unaudited) (Dollars in thousands, except per share amounts) For the Three Months Ended June 30, March 31, June 30, 2021 2021 2020 Per share data (common stock) Earnings Basic $ 0.69 $ 0.64 $ 0.33 Diluted $ 0.67 $ 0.63 $ 0.33 Dividends declared $ 0.13 $ 0.12 $ 0.06 Book value $ 22.86 $ 22.31 $ 20.97 Tangible book value $ 19.04 $ 18.51 $ 17.17 Weighted average shares outstanding Basic 19,432,204 19,475,814 19,710,330 Diluted 19,874,969 19,812,841 19,806,304 Shares outstanding at period end 19,349,802 19,528,249 19,739,280 Performance ratios Return on average assets, annualized 1.39 % 1.47 % 0.83 % Return on average shareholders' equity, annualized 12.13 % 11.64 % 6.34 % Return on average tangible common equity, annualized 14.57 % 14.05 % 7.77 % Noninterest income to average assets, annualized 0.43 % 0.70 % 0.28 % Noninterest expense to average assets, annualized 1.53 % 1.86 % 1.89 % Yield on average earning assets 3.99 % 4.49 % 4.65 % Cost of average total deposits 0.41 % 0.55 % 1.10 % Cost of average interest-bearing deposits 0.59 % 0.73 % 1.42 % Cost of average interest-bearing liabilities 0.97 % 1.06 % 1.68 % Accretion on loans to average earning assets 0.02 % 0.06 % 0.14 % Net interest spread 3.02 % 3.43 % 2.97 % Net interest margin 3.33 % 3.73 % 3.42 % Efficiency ratio 42.89 % 44.64 % 54.40 % Common stock dividend payout ratio 18.84 % 18.75 % 18.18 % RBB BANCORP AND SUBSIDIARIES SELECTED FINANCIAL HIGHLIGHTS (Unaudited) (Dollars in thousands, except per share amounts) For the six months ended June 30, 2021 2020 Per share data (common stock) Earnings Basic $ 1.32 $ 0.67 Diluted $ 1.30 $ 0.66 Dividends declared $ 0.25 $ 0.12 Book value $ 22.86 $ 20.97 Tangible book value $ 19.04 $ 17.17 Weighted average shares outstanding Basic 19,453,889 19,841,093 Diluted 19,844,077 20,036,316 Shares outstanding at period end 19,349,802 19,739,280 Performance ratios Return on average assets, annualized 1.43 % 0.86 % Return on average shareholders' equity, annualized 11.89 % 6.47 % Return on average tangible common equity, annualized 14.31 % 7.95 % Noninterest income to average assets, annualized 0.56 % 0.44 % Noninterest expense to average assets, annualized 1.69 % 2.02 % Yield on average earning assets 4.23 % 4.75 % Cost of average deposits 0.48 % 1.24 % Cost of average interest-bearing deposits 0.66 % 1.57 % Cost of average interest-bearing liabilities 1.02 % 1.83 % Accretion on loans to average earning assets 0.04 % 0.13 % Net interest spread 3.21 % 2.92 % Net interest margin 3.52 % 3.39 % Efficiency ratio 43.78 % 56.05 % Common stock dividend payout ratio 18.94 % 26.87 % RBB BANCORP AND SUBSIDIARIES SELECTED FINANCIAL HIGHLIGHTS (Unaudited) (Dollars in thousands, except per share amounts) As of June 30, March 31, June 30, 2021 2021 2020 Loan to deposit ratio 88.25 % 96.24 % 106.49 % Core deposits / total deposits 80.04 % 78.97 % 76.84 % Net non-core funding dependence ratio 0.87 % 4.27 % 9.87 % Credit Quality Data: Loans 30-89 days past due $ 5,449 $ 10,653 $ 23,872 Loans 30-89 days past due to total loans 0.20 % 0.39 % 0.92 % Nonperforming loans $ 19,243 $ 19,911 $ 17,217 Nonperforming loans to total loans 0.71 % 0.73 % 0.66 % Nonperforming assets $ 19,536 $ 20,204 $ 17,510 Nonperforming assets to total assets 0.50 % 0.55 % 0.56 % Allowance for loan losses to total loans 1.16 % 1.13 % 0.88 % Allowance for loan losses to nonperforming loans 162.93 % 154.66 % 132.54 % Net charge-offs to average loans (for the quarter-to-date period) 0.01 % 0.01 % 0.05 % Regulatory and other capital ratios—Company Tangible common equity to tangible assets 9.65 % 10.07 % 11.07 % Tier 1 leverage ratio 10.20 % 11.30 % 11.48 % Tier 1 common capital to risk-weighted assets 14.76 % 14.53 % 14.87 % Tier 1 capital to risk-weighted assets 15.33 % 15.11 % 15.49 % Total capital to risk-weighted assets 23.48 % 23.27 % 21.10 % Regulatory capital ratios—Bank only Tier 1 leverage ratio 12.34 % 13.44 % 14.14 % Tier 1 common capital to risk-weighted assets 18.58 % 17.96 % 19.09 % Tier 1 capital to risk-weighted assets 18.58 % 17.96 % 19.09 % Total capital to risk-weighted assets 19.83 % 19.21 % 20.13 % RBB BANCORP AND SUBSIDIARIES SELECTED FINANCIAL HIGHLIGHTS (Unaudited) (Dollars in thousands, except per share amounts) 2nd Quarter 1st Quarter 4th Quarter 3rd Quarter 2nd Quarter Quarterly Consolidated Statements of Earnings 2021 2021 2020 2020 2020 Interest income Loans, including fees $ 34,669 $ 34,516 $ 34,832 $ 34,153 $ 32,633 Investment securities and other 1,302 1,024 1,032 972 1,470 Total interest income 35,971 35,540 35,864 35,125 34,103 Interest expense Deposits 3,118 3,662 4,636 5,525 6,715 Interest on subordinated debentures and other 2,356 1,958 1,901 1,905 1,915 Other borrowings 440 435 450 444 439 Total interest expense 5,914 6,055 6,987 7,874 9,069 Net interest income before provision for loan losses 30,057 29,485 28,877 27,251 25,034 Provision for loan losses 628 1,500 3,008 3,861 3,009 Net interest income after provision for loan losses 29,429 27,985 25,869 23,390 22,025 Noninterest income 4,171 5,894 4,490 2,727 2,208 Noninterest expense 14,680 15,792 14,453 13,978 14,819 Earnings before income taxes 18,920 18,087 15,906 12,139 9,414 Income taxes 5,540 5,631 4,759 3,619 2,901 Net income $ 13,380 $ 12,456 $ 11,147 $ 8,520 $ 6,513 Net income per common share - basic $ 0.69 $ 0.64 $ 0.57 $ 0.43 $ 0.33 Net income per common share - diluted $ 0.67 $ 0.63 $ 0.56 $ 0.43 $ 0.33 Cash dividends declared per common share $ 0.13 $ 0.12 $ 0.09 $ 0.06 $ 0.06 Cash dividends declared on common shares $ 2,540 $ 2,347 $ 1,777 $ 1,184 $ 1,184 Yield on average assets, annualized 1.39 % 1.47 % 1.33 % 1.05 % 0.83 % Yield on average earning assets 3.99 % 4.49 % 4.55 % 4.63 % 4.65 % Cost of average deposits 0.41 % 0.55 % 0.71 % 0.87 % 1.10 % Cost of average interest-bearing deposits 0.59 % 0.73 % 0.93 % 1.14 % 1.42 % Cost of average interest-bearing liabilities 0.97 % 1.06 % 1.23 % 1.43 % 1.68 % Accretion on loans to average earning assets 0.02 % 0.06 % 0.03 % 0.08 % 0.16 % Net interest margin 3.33 % 3.73 % 3.67 % 3.59 % 3.42 % 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 June 30, 2021 As of March 31, 2021 As of December 31, 2020 As of September 30, 2020 As of June 30, 2020 (dollars in thousands) $ % $ % $ % $ % $ % Loans: Commercial and industrial $ 277,080 10.2 % $ 286,016 10.5 % $ 290,139 10.7 % $ 317,891 11.5 % $ 267,481 10.3 % SBA 98,572 3.6 % 111,330 4.1 % 97,821 3.6 % 111,193 4.0 % 104,069 4.0 % Construction and land development 236,965 8.7 % 209,727 7.7 % 186,723 6.9 % 183,569 6.7 % 145,754 5.6 % Commercial real estate (1) 1,102,467 40.7 % 1,063,104 39.2 % 1,003,637 37.1 % 975,187 35.4 % 900,302 34.7 % Single-family residential mortgages 984,311 36.3 % 1,041,260 38.3 % 1,124,357 41.5 % 1,163,982 42.2 % 1,174,927 45.3 % Other loans 9,811 0.5 % 3,768 0.2 % 4,089 0.2 % 3,331 0.2 % 2,087 0.1 % Total loans (2) $ 2,709,206 100.0 % $ 2,715,205 100.0 % $ 2,706,766 100.0 % $ 2,755,153 100.0 % $ 2,594,620 100.0 % Allowance for loan losses (31,352 ) (30,795 ) (29,337 ) (26,634 ) (22,820 ) Total loans, net $ 2,677,854 $ 2,684,410 $ 2,677,429 $ 2,728,519 $ 2,571,800 (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 Six Months Ended Change in Allowance for Loan Losses June 30, June 30, (dollars in thousands) 2021 2020 2021 2020 Beginning balance $ 30,795 $ 20,130 $ 29,337 $ 18,816 Additions to the allowance charged to expense 628 3,009 2,128 4,954 Net charge-offs on loans (71 ) (319 ) (113 ) (950 ) Ending balance $ 31,352 $ 22,820 $ 31,352 $ 22,820 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 June 30, 2021 and 2020 and March 31, 2021. (dollars in thousands, except per share data) June 30, 2021 March 31, 2021 June 30, 2020 Tangible common equity: Total shareholders' equity $ 442,325 $ 435,668 $ 414,025 Adjustments Goodwill (69,243 ) (69,243 ) (69,209 ) Core deposit intangible (4,608 ) (4,895 ) (5,876 ) Tangible common equity $ 368,474 $ 361,530 $ 338,940 Tangible assets: Total assets-GAAP $ 3,890,638 $ 3,664,299 $ 3,136,181 Adjustments Goodwill (69,243 ) (69,243 ) (69,209 ) Core deposit intangible (4,608 ) (4,895 ) (5,876 ) Tangible assets $ 3,816,787 $ 3,590,161 $ 3,061,096 Common shares outstanding $ 19,349,802 19,528,249 19,739,280 Tangible common equity to tangible assets ratio 9.65 % 10.07 % 11.07 % Book value per share $ 22.86 $ 22.31 $ 20.97 Tangible book value per share $ 19.04 $ 18.51 $ 17.17 View source version on businesswire.com: https://www.businesswire.com/news/home/20210726005742/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 Second Quarter Earnings for 2021 By: RBB Bancorp via Business Wire July 26, 2021 at 16:05 PM EDT Conference Call and Webcast Scheduled for Tuesday, July 27, 2021 at 11:00 a.m. Pacific Time/2:00 p.m. Eastern Time Second Quarter 2021 Highlights Reported record net income of $13.4 million, or $0.67 diluted earnings per share, increased $924,000, or 7.4%, from the prior quarter and increased $6.9 million, or 105.4%, from the second quarter of 2020 Total deposits increased by $248.6 million, or 35.3% annualized growth, from the end of the prior quarter Loan growth (ex-mortgage) of $51.0 million, or 12.2% annualized, from the end of the prior quarter Declared quarterly cash dividend of $0.13 per common share 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 June 30, 2021. The Company reported record net income of $13.4 million, or $0.67 diluted earnings per share, for the three months ended June 30, 2021, compared to net income of $12.5 million, or $0.63 diluted earnings per share, and $6.5 million, or $0.33 diluted earnings per share, for the three months ended March 31, 2021 and June 30, 2020, respectively. “We are pleased to report diluted earnings per share of $0.67, for the second quarter,” said Alan Thian, President and CEO of Royal Business Bank. “Continued focus on our deposit franchise reduced the cost of our interest-bearing deposits and delivered strong growth in non-interest bearing deposits which now comprise 30.6% of total deposits. While our net interest margin declined due to excess liquidity, our disciplined loan origination efforts kept our loan balance and yields stable. Our acquisition of the Hawaiian branch of the Bank of the Orient expands our presence in a vibrant Asian-American community and positions us for profitable growth.” "Royal Business Bank’s excellent second quarter results demonstrate the continued strength of our differentiated business model and commitment to enhancing long-term shareholder value," said Dr. James Kao, Chairman of RBB Bancorp. “We remain well-positioned to pursue additional organic and strategic growth opportunities." Key Performance Ratios Net income of $13.4 million for the second quarter of 2021 produced 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%. This compares to an annualized return on average assets of 1.47%, an annualized return on average tangible common shareholders' equity of 14.05%, and an annualized return on average shareholders' equity of 11.64% for the first quarter of 2021. The efficiency ratio for the second quarter of 2021 was 42.89%, compared to 44.64% for the prior quarter. The change in the efficiency ratio was primarily due to a decrease in non-interest income. Net Interest Income and Net Interest Margin Net interest income, before provision for loan losses, was $30.1 million for the second quarter of 2021, compared to $29.5 million for the first quarter of 2021. The $572,000 increase was primarily attributable to higher interest income due to a $410.6 million increase in average earning assets and an improvement in deposit costs related to a $259.8 million increase in average noninterest-bearing deposits, partially offset by a $138.0 million increase in average interest-bearing liabilities. Accretion of purchase discounts from prior acquisitions contributed $183,000 to net interest income in the second quarter of 2021, compared to $481,000 in the first quarter of 2021. Compared to the second quarter of 2020, net interest income, before provision for loan losses, increased $5.0 million from $25.0 million. The increase was primarily attributable to a $670.6 million increase in average earning assets and a $355.5 million increase in average noninterest-bearing deposits, partially offset by a $277.7 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 3.33% for the second quarter of 2021, a decrease of 40 basis points from 3.73% in the first quarter of 2021. The decrease was primarily attributable to an increase in liquidity combined with a 50 basis point decrease in the yield on average earning assets and a 40 basis point decrease in the yield on federal funds sold, cash equivalents & other which was partially offset by a 19 basis point decrease in the cost of borrowings (FHLB advances, long-term debt and subordinated debentures). Loan discount accretion contributed 2 basis points to the net interest margin in the second quarter of 2021, compared to 6 basis points in the first quarter of 2021. The majority of the decrease in net interest margin was due to the increase in liquidity. Noninterest Income Noninterest income was $4.2 million for the second quarter of 2021, a decrease of $1.7 million from $5.9 million in the first quarter of 2021. The decrease was driven by a decrease in loans sold during the quarter. The Company sold $55.4 million fewer loans in the second quarter than in the prior quarter primarily due to selling fewer FNMA loans. The Company sold $58.9 million in FNMA qualified mortgage loans for a net gain of $1.4 million and sold $13.4 million in non-qualified mortgage loans to private investors for a gain of $389,000 during the second quarter of 2021. This compared to $80.3 million in FNMA qualified mortgage loans for a net gain of $2.2 million and $49.8 million in non-qualified mortgage loans to private investors for a gain of $1.2 million during the first quarter of 2021. The Company sold $5.9 million in SBA loans during the second quarter of 2021 for a net gain of $747,000, compared to $3.5 million SBA loans sold for a net gain of $355,000 during the first quarter of 2021. Compared to the second quarter of 2020, noninterest income increased by $2.0 million from $2.2 million. The increase was primarily attributable to an increase of $2.5 million in gain on loan sales partially offset by a decrease of $590,000 in loan servicing fees. Noninterest Expense Noninterest expense for the second quarter of 2021 was $14.7 million, compared to $15.8 million for the first quarter of 2021. The $1.1 million decrease was primarily attributable to a $500,000 decrease in salaries and employee benefits, a $269,000 decrease in legal and professional fees and $209,000 decrease in data processing expenses. Noninterest expense decreased from $14.8 million in the second quarter of 2020. The $139,000 decrease was primarily due to a $366,000 decrease in MSR impairment write-down expense and a $392,000 decrease in occupancy and equipment expenses. These were partially offset by a $639,000 increase in salaries and employee benefits expense. Income Taxes The effective tax rate was 29.28% for the second quarter of 2021, 31.1% for the first quarter of 2021, and 30.8% for the second quarter of 2020. CDFI Rapid Response Program In 2016, RBB became a community development financial institution (CDFI). 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 has not yet been received pending finalization of the contract between the Bank and the US Treasury which will include various performance goals and measures that specify the use of the funds. Loan Portfolio Loans held for investment, net of deferred fees and discounts, totaled $2.7 billion as of June 30, 2021, a decrease of $6.0 million from March 31, 2021, and an increase of $114.6 million from June 30, 2020 from $2.6 billion. The decrease from the prior quarter was primarily due to a decrease in mortgage loan originations. Single-family residential mortgages decreased by $56.9 million net of payoffs, paydowns and loan sales. Commercial real estate loans increased by $39.4 million, construction and land development loans increased by $27.2 million, SBA loans decreased by $12.8 million (which included a $13.7 million decrease in PPP loans), commercial and industrial loans decreased by $8.9 million and other loans increased by $6.0 million. During the second quarter of 2021, single-family residential mortgage production was $107.9 million, payoffs and paydowns were $121.0 million, and single-family residential mortgage loan sales were $72.3 million. During the first quarter of 2021, single-family residential mortgage production was $114.5 million, payoffs and paydowns were $81.9 million, and loan sales were $130.1 million. Mortgage loans held for sale were $9.2 million as of June 30, 2021, a decrease of $28.4 million from $37.7 million at March 31, 2021 and a decrease of $6.2 million from $15.5 million as of June 30, 2020. The Company originated approximately $29.2 million in FNMA mortgage loans for sale for the second quarter of 2021, compared with $55.3 million during the prior quarter. In the second quarter of 2021, SBA loan production was $21.3 million and total SBA loan sales were $5.9 million. Deposits and Borrowings Deposits were $3.1 billion at June 30, 2021, an increase of $248.6 million from March 31, 2021, and an increase of $633.4 million from June 30, 2020, including brokered deposits. The increase in total deposits from the prior quarter was primarily attributable to organic deposit growth. During the second quarter of 2021, noninterest-bearing deposits increased by $152.6 million, interest-bearing non-maturity deposits increased by $67.1 million, and time deposits decreased by $28.9 million. As of June 30, 2021, time deposits included $17.4 million in brokered CDs, as compared to $17.4 million as of March 31, 2021 and $2.4 million as of June 30, 2020. Asset Quality Nonperforming assets totaled $19.5 million, or 0.50% of total assets at June 30, 2021, compared to $20.2 million, or 0.55%, of total assets at March 31, 2021. Nonperforming assets consist of OREO, loans modified under troubled debt restructurings (“TDR”), non-accrual loans, and loans past due 90 days or more and still accruing interest. In the second quarter of 2021, there were $71,000 in net charge-offs, compared to net charge-offs of $42,000 in the prior quarter. The Company recorded a provision for credit losses of $628,000 for the second quarter of 2021, a decrease from $872,000 in the prior quarter, primarily attributable to reduced loan growth. The allowance for loan losses totaled $31.4 million, or 1.16% of loans held for investment at June 30, 2021, compared with $30.8 million, or 1.13%, of total loans at March 31, 2021. As of June 30, 2021, borrowers representing 191 loans totaling $29.2 million, or 1.07% 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 June 30, 2021. The following table provides details regarding the Company's COVID-19 loan deferral activity through July 15, 2021. As of June 30, 2020 As of April 15, 2021 As of July 15, 2021 Loans Deferred Loans Deferred Loans Deferred Number Principal Amount ($000) Number Principal Amount ($000) Number Principal Amount ($000) General retail (excluding SBA) 34 $ 94,251 1 $ 438 — $ — Mixed use commercial 38 58,841 4 2,602 — — Hospitality (excluding SBA) 5 25,343 1 6,394 — — Restaurants (excluding SBA) 11 4,186 — — — — Multifamily 6 9,086 1 688 — — Commercial, office and other — — — — — — SFR mortgage loans - Western region 183 118,484 9 5,135 4 3,101 SFR mortgage loans - Eastern region 203 85,935 5 2,467 — — SFR mortgage loans - Chicago metropolitan 84 14,824 — — — — Total 564 $ 410,950 21 $ 17,724 4 $ 3,101 Corporate Overview RBB Bancorp is a community-based financial holding company headquartered in Los Angeles, California. As of June 30, 2021, the company had total assets of $3.9 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, July 27, 2021, to discuss the Company’s second quarter 2021 financial results. To listen to the conference call, please dial 1-833-519-1355 or 1-918-922-6505, passcode 5654379. A replay of the call will be made available at 1-800-585-8367 or 1-404-537-3406, passcode 5654379, approximately one hour after the conclusion of the call and will remain available through August 3, 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) June 30, March 31, December 31, September 30, June 30, 2021 2021 2020 2020 2020 Assets Cash and due from banks $ 493,653 $ 362,930 $ 137,654 $ 121,630 $ 94,844 Federal funds sold and other cash equivalents 110,000 57,000 57,000 57,000 57,000 Total cash and cash equivalents 603,653 419,930 194,654 178,630 151,844 Interest-bearing deposits in other financial institutions 600 600 600 600 600 Investment securities available for sale 339,568 281,582 210,867 214,662 185,756 Investment securities held to maturity 6,664 6,668 7,174 7,569 7,615 Mortgage loans held for sale 9,246 37,675 49,963 23,886 15,479 Loans held for investment 2,709,206 2,715,205 2,706,766 2,755,153 2,594,620 Allowance for loan losses (31,352 ) (30,795 ) (29,337 ) (26,634 ) (22,820 ) Net loans held for investment 2,677,854 2,684,410 2,677,429 2,728,519 2,571,800 Premises and equipment, net 27,039 27,093 27,103 24,237 23,965 Federal Home Loan Bank (FHLB) stock 15,000 15,641 15,641 15,641 15,641 Cash surrender value of life insurance 55,325 35,308 35,121 34,930 34,736 Goodwill 69,243 69,243 69,243 69,243 69,209 Servicing assets 12,558 13,264 13,965 14,724 15,595 Core deposit intangibles 4,608 4,895 5,196 5,519 5,876 Right-of-use assets- operating leases 25,050 25,500 — — — Accrued interest and other assets 44,230 42,490 43,116 41,416 38,065 Total assets $ 3,890,638 $ 3,664,299 $ 3,350,072 $ 3,359,576 $ 3,136,181 Liabilities and shareholders' equity Deposits: Noninterest-bearing demand $ 940,041 $ 787,439 $ 617,206 $ 642,332 $ 574,553 Savings, NOW and money market accounts 858,597 791,486 731,084 654,378 601,941 Time deposits 1,271,287 1,242,368 1,286,838 1,315,038 1,260,026 Total deposits 3,069,925 2,821,293 2,635,128 2,611,748 2,436,520 Reserve for unfunded commitments 1,216 1,320 1,383 1,129 1,030 FHLB advances 150,000 150,000 150,000 190,000 150,000 Long-term debt, net of debt issuance costs 172,718 172,581 104,391 104,305 104,220 Subordinated debentures 14,393 14,338 14,283 14,229 14,174 Lease liabilities - operating leases 25,798 26,199 — — — Accrued interest and other liabilities 14,263 42,900 16,399 16,749 16,212 Total liabilities 3,448,313 3,228,631 2,921,584 2,938,160 2,722,156 Shareholders' equity: Shareholder's equity 442,086 435,746 427,287 420,329 412,827 Non-controlling interest 72 72 72 72 72 Accumulated other comprehensive (loss) income - Net of tax 167 (150 ) 1,129 1,015 1,126 Total shareholders' equity 442,325 435,668 428,488 421,416 414,025 Total liabilities and shareholders’ equity $ 3,890,638 $ 3,664,299 $ 3,350,072 $ 3,359,576 $ 3,136,181 RBB BANCORP AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited) (Dollars in thousands, except per share amounts) For the Three Months Ended June 30, 2021 March 31, 2021 June 30, 2020 Interest and dividend income: Interest and fees on loans $ 34,669 $ 34,516 $ 32,633 Interest on interest-bearing deposits 125 48 74 Interest on investment securities 794 627 887 Dividend income on FHLB stock 225 192 187 Interest on federal funds sold and other 158 157 322 Total interest income 35,971 35,540 34,103 Interest expense: Interest on savings deposits, NOW and money market accounts 708 698 782 Interest on time deposits 2,410 2,964 5,933 Interest on subordinated debentures and long term debt 2,356 1,958 1,915 Interest on other borrowed funds 440 435 439 Total interest expense 5,914 6,055 9,069 Net interest income before provision for loan losses 30,057 29,485 25,034 Provision for loan losses 628 1,500 3,009 Net interest income after provision for loan losses 29,429 27,985 22,025 Noninterest income: Service charges, fees and other 1,374 1,410 1,065 Gain on sale of loans 2,572 3,841 81 Loan servicing fees, net of amortization 118 246 708 Recoveries on loans acquired in business combinations 5 5 5 Unrealized (loss) on equity investments (35 ) (20 ) — (Loss) gain on derivatives (80 ) 225 — Increase in cash surrender value of life insurance 217 187 191 Gain on sale of securities — — 158 Total noninterest income 4,171 5,894 2,208 Noninterest expense: Salaries and employee benefits 8,742 9,242 8,103 Occupancy and equipment expenses 2,135 2,242 2,527 Data processing 1,231 1,440 882 Legal and professional 536 805 670 Office expenses 272 255 337 Marketing and business promotion 231 184 111 Insurance and regulatory assessments 354 348 234 Core deposit premium 287 301 357 OREO expenses 4 5 14 Merger expenses 17 42 276 Other expenses 871 928 1,308 Total noninterest expense 14,680 15,792 14,819 Income before income taxes 18,920 18,087 9,414 Income tax expense 5,540 5,631 2,901 Net income $ 13,380 $ 12,456 $ 6,513 Net income per share Basic $ 0.69 $ 0.64 $ 0.33 Diluted $ 0.67 $ 0.63 $ 0.33 Cash Dividends declared per common share $ 0.13 $ 0.12 $ 0.06 Weighted-average common shares outstanding Basic 19,432,204 19,475,814 19,710,330 Diluted 19,874,969 19,812,841 19,806,304 RBB BANCORP AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited) (Dollars in thousands, except per share amounts) For the Six Months Ended June 30, 2021 June 30, 2020 Interest and dividend income: Interest and fees on loans $ 69,185 $ 64,909 Interest on interest-earning deposits 173 525 Interest on investment securities 1,421 1,708 Dividend income on FHLB stock 417 189 Interest on federal funds sold and other 315 800 Total interest income 71,511 68,131 Interest expense: Interest on savings deposits, NOW and money market accounts 1,406 2,025 Interest on time deposits 5,374 13,019 Interest on subordinated debentures and long term debt 4,314 3,871 Interest on other borrowed funds 875 589 Total interest expense 11,969 19,504 Net interest income 59,542 48,627 Provision for loan losses 2,128 4,954 Net interest income after provision for loans losses 57,414 43,673 Noninterest income: Service charges, fees and other 2,784 2,144 Gain on sale of loans 6,413 2,792 Loan servicing fees, net of amortization 364 1,300 Recoveries on loans acquired in business combinations 10 47 Unrealized (loss) on equity investments (55 ) — Gain on derivatives 145 — Increase in cash surrender value of life insurance 404 382 Gain on sale of securities — 158 Total noninterest income 10,065 6,823 Noninterest expense: Salaries and employee benefits 17,984 17,608 Occupancy and equipment expenses 4,377 4,931 Data processing 2,671 2,024 Legal and professional 1,341 1,274 Office expenses 527 660 Marketing and business promotion 415 325 Insurance and regulatory assessments 702 411 Core deposit premium 588 714 OREO expenses 9 28 Merger expenses 59 679 Other expenses 1,799 2,428 Total noninterest expense 30,472 31,082 Income before income taxes 37,007 19,414 Income tax expense 11,171 6,153 Net income $ 25,836 $ 13,261 Net income per share Basic $ 1.32 $ 0.67 Diluted $ 1.30 $ 0.66 Cash Dividends declared per common share $ 0.25 $ 0.12 Weighted-average common shares outstanding Basic 19,453,889 19,841,093 Diluted 19,844,077 20,036,316 RBB BANCORP AND SUBSIDIARIES AVERAGE BALANCE SHEET AND NET INTEREST INCOME (Unaudited) (Dollars in thousands, except per share amounts) For the three months ended June 30, 2021 March 31, 2021 June 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) $ 582,554 $ 508 0.35 % $ 215,230 $ 397 0.75 % $ 231,943 $ 583 1.01 % Securities Available for sale 328,004 751 0.92 % 239,768 571 0.97 % 171,298 823 1.93 % Held to maturity (2) 6,667 60 3.61 % 7,000 64 3.71 % 7,661 72 3.78 % Mortgage loans held for sale 21,033 173 3.30 % 54,021 411 3.09 % 25,130 303 4.85 % Loans held for investment: (3) Real estate 2,292,145 29,794 5.21 % 2,307,431 29,521 5.19 % 2,147,646 28,216 5.28 % Commercial 388,049 4,702 4.86 % 384,442 4,584 4.84 % 364,189 4,114 4.54 % Total loans 2,680,194 34,496 5.16 % 2,691,873 34,105 5.14 % 2,511,835 32,330 5.18 % Total earning assets 3,618,452 $ 35,988 3.99 % 3,207,892 $ 35,548 4.49 % 2,947,867 $ 34,111 4.65 % Noninterest-earning assets 230,049 228,002 206,833 Total assets $ 3,848,501 $ 3,435,894 $ 3,154,700 Interest-bearing liabilities NOW $ 66,777 $ 45 0.27 % $ 64,592 $ 44 0.28 % $ 57,547 $ 60 0.42 % Money Market 640,026 628 0.39 % 579,347 623 0.44 % 404,480 691 0.69 % Saving deposits 140,418 35 0.10 % 131,151 31 0.10 % 123,868 31 0.10 % Time deposits, less than $250,000 657,494 1,163 0.71 % 663,029 1,496 0.92 % 725,142 3,143 1.74 % Time deposits, $250,000 and over 604,429 1,247 0.83 % 593,981 1,468 1.00 % 589,090 2,790 1.90 % Total interest-bearing deposits 2,109,144 3,118 0.59 % 2,032,100 3,662 0.73 % 1,900,127 6,715 1.42 % FHLB advances 150,000 440 1.18 % 150,000 435 1.18 % 150,000 439 1.18 % Long-term debt 172,622 2,206 5.13 % 111,739 1,808 6.56 % 104,168 1,747 6.75 % Subordinated debentures 14,357 150 4.19 % 14,302 150 4.25 % 14,141 168 4.78 % Total interest-bearing liabilities 2,446,123 5,914 0.97 % 2,308,141 6,055 1.06 % 2,168,436 9,069 1.68 % Noninterest-bearing liabilities Noninterest-bearing deposits 913,442 653,674 557,903 Other noninterest-bearing liabilities 46,549 40,118 15,509 Total noninterest-bearing liabilities 959,991 693,792 573,412 Shareholders' equity 442,387 433,960 412,852 Total liabilities and shareholders' equity $ 3,848,501 $ 3,435,894 $ 3,154,700 Net interest income / interest rate spreads $ 30,074 3.02 % $ 29,493 3.43 % $ 25,042 2.97 % Net interest margin 3.33 % 3.73 % 3.42 % (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 six months ended June 30, 2021 June 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) $ 399,907 $ 905 0.46 % $ 240,755 $ 1,514 1.26 % Securities Available for sale 284,129 1,323 0.94 % 154,936 1,578 2.05 % Held to maturity (2) 6,832 126 3.72 % 7,839 147 3.77 % Mortgage loans held for sale 37,436 584 3.15 % 51,595 1,284 5.00 % Loans held for investment: (3) Real estate 2,299,746 59,315 5.20 % 2,077,467 54,644 5.29 % Commercial 386,256 9,286 4.85 % 350,869 8,981 5.15 % Total loans 2,686,002 68,601 5.15 % 2,428,336 63,625 5.27 % Total earning assets 3,414,306 $ 71,539 4.23 % 2,883,461 $ 68,148 4.75 % Noninterest-earning assets 229,032 209,699 Total assets $ 3,643,338 $ 3,093,160 Interest-bearing liabilities NOW $ 65,690 $ 88 0.27 % $ 50,692 $ 102 0.40 % Money Market 609,854 1,251 0.41 % 418,243 1,837 0.88 % Saving deposits 135,810 67 0.10 % 119,410 86 0.14 % Time deposits, less than $250,000 660,246 2,659 0.81 % 731,448 6,869 1.89 % Time deposits, $250,000 and over 599,234 2,716 0.91 % 604,987 6,150 2.04 % Total interest-bearing deposits 2,070,834 6,781 0.66 % 1,924,780 15,044 1.57 % FHLB advances 150,000 875 1.18 % 100,989 589 1.17 % Long-term debt 142,349 4,015 5.69 % 104,125 3,495 6.75 % Subordinated debentures 14,330 298 4.19 % 14,234 376 5.31 % Total interest-bearing liabilities 2,377,513 $ 11,969 1.02 % 2,144,128 $ 19,504 1.83 % Noninterest-bearing liabilities Noninterest-bearing deposits 784,276 521,729 Other noninterest-bearing liabilities 43,352 15,282 Total noninterest-bearing liabilities 827,628 537,011 Shareholders' equity 438,197 412,021 Total liabilities and shareholders' equity $ 3,643,338 $ 3,093,160 Net interest income / interest rate spreads $ 59,570 3.21 % $ 48,644 2.92 % Net interest margin 3.52 % 3.39 % RBB BANCORP AND SUBSIDIARIES SELECTED FINANCIAL HIGHLIGHTS (Unaudited) (Dollars in thousands, except per share amounts) For the Three Months Ended June 30, March 31, June 30, 2021 2021 2020 Per share data (common stock) Earnings Basic $ 0.69 $ 0.64 $ 0.33 Diluted $ 0.67 $ 0.63 $ 0.33 Dividends declared $ 0.13 $ 0.12 $ 0.06 Book value $ 22.86 $ 22.31 $ 20.97 Tangible book value $ 19.04 $ 18.51 $ 17.17 Weighted average shares outstanding Basic 19,432,204 19,475,814 19,710,330 Diluted 19,874,969 19,812,841 19,806,304 Shares outstanding at period end 19,349,802 19,528,249 19,739,280 Performance ratios Return on average assets, annualized 1.39 % 1.47 % 0.83 % Return on average shareholders' equity, annualized 12.13 % 11.64 % 6.34 % Return on average tangible common equity, annualized 14.57 % 14.05 % 7.77 % Noninterest income to average assets, annualized 0.43 % 0.70 % 0.28 % Noninterest expense to average assets, annualized 1.53 % 1.86 % 1.89 % Yield on average earning assets 3.99 % 4.49 % 4.65 % Cost of average total deposits 0.41 % 0.55 % 1.10 % Cost of average interest-bearing deposits 0.59 % 0.73 % 1.42 % Cost of average interest-bearing liabilities 0.97 % 1.06 % 1.68 % Accretion on loans to average earning assets 0.02 % 0.06 % 0.14 % Net interest spread 3.02 % 3.43 % 2.97 % Net interest margin 3.33 % 3.73 % 3.42 % Efficiency ratio 42.89 % 44.64 % 54.40 % Common stock dividend payout ratio 18.84 % 18.75 % 18.18 % RBB BANCORP AND SUBSIDIARIES SELECTED FINANCIAL HIGHLIGHTS (Unaudited) (Dollars in thousands, except per share amounts) For the six months ended June 30, 2021 2020 Per share data (common stock) Earnings Basic $ 1.32 $ 0.67 Diluted $ 1.30 $ 0.66 Dividends declared $ 0.25 $ 0.12 Book value $ 22.86 $ 20.97 Tangible book value $ 19.04 $ 17.17 Weighted average shares outstanding Basic 19,453,889 19,841,093 Diluted 19,844,077 20,036,316 Shares outstanding at period end 19,349,802 19,739,280 Performance ratios Return on average assets, annualized 1.43 % 0.86 % Return on average shareholders' equity, annualized 11.89 % 6.47 % Return on average tangible common equity, annualized 14.31 % 7.95 % Noninterest income to average assets, annualized 0.56 % 0.44 % Noninterest expense to average assets, annualized 1.69 % 2.02 % Yield on average earning assets 4.23 % 4.75 % Cost of average deposits 0.48 % 1.24 % Cost of average interest-bearing deposits 0.66 % 1.57 % Cost of average interest-bearing liabilities 1.02 % 1.83 % Accretion on loans to average earning assets 0.04 % 0.13 % Net interest spread 3.21 % 2.92 % Net interest margin 3.52 % 3.39 % Efficiency ratio 43.78 % 56.05 % Common stock dividend payout ratio 18.94 % 26.87 % RBB BANCORP AND SUBSIDIARIES SELECTED FINANCIAL HIGHLIGHTS (Unaudited) (Dollars in thousands, except per share amounts) As of June 30, March 31, June 30, 2021 2021 2020 Loan to deposit ratio 88.25 % 96.24 % 106.49 % Core deposits / total deposits 80.04 % 78.97 % 76.84 % Net non-core funding dependence ratio 0.87 % 4.27 % 9.87 % Credit Quality Data: Loans 30-89 days past due $ 5,449 $ 10,653 $ 23,872 Loans 30-89 days past due to total loans 0.20 % 0.39 % 0.92 % Nonperforming loans $ 19,243 $ 19,911 $ 17,217 Nonperforming loans to total loans 0.71 % 0.73 % 0.66 % Nonperforming assets $ 19,536 $ 20,204 $ 17,510 Nonperforming assets to total assets 0.50 % 0.55 % 0.56 % Allowance for loan losses to total loans 1.16 % 1.13 % 0.88 % Allowance for loan losses to nonperforming loans 162.93 % 154.66 % 132.54 % Net charge-offs to average loans (for the quarter-to-date period) 0.01 % 0.01 % 0.05 % Regulatory and other capital ratios—Company Tangible common equity to tangible assets 9.65 % 10.07 % 11.07 % Tier 1 leverage ratio 10.20 % 11.30 % 11.48 % Tier 1 common capital to risk-weighted assets 14.76 % 14.53 % 14.87 % Tier 1 capital to risk-weighted assets 15.33 % 15.11 % 15.49 % Total capital to risk-weighted assets 23.48 % 23.27 % 21.10 % Regulatory capital ratios—Bank only Tier 1 leverage ratio 12.34 % 13.44 % 14.14 % Tier 1 common capital to risk-weighted assets 18.58 % 17.96 % 19.09 % Tier 1 capital to risk-weighted assets 18.58 % 17.96 % 19.09 % Total capital to risk-weighted assets 19.83 % 19.21 % 20.13 % RBB BANCORP AND SUBSIDIARIES SELECTED FINANCIAL HIGHLIGHTS (Unaudited) (Dollars in thousands, except per share amounts) 2nd Quarter 1st Quarter 4th Quarter 3rd Quarter 2nd Quarter Quarterly Consolidated Statements of Earnings 2021 2021 2020 2020 2020 Interest income Loans, including fees $ 34,669 $ 34,516 $ 34,832 $ 34,153 $ 32,633 Investment securities and other 1,302 1,024 1,032 972 1,470 Total interest income 35,971 35,540 35,864 35,125 34,103 Interest expense Deposits 3,118 3,662 4,636 5,525 6,715 Interest on subordinated debentures and other 2,356 1,958 1,901 1,905 1,915 Other borrowings 440 435 450 444 439 Total interest expense 5,914 6,055 6,987 7,874 9,069 Net interest income before provision for loan losses 30,057 29,485 28,877 27,251 25,034 Provision for loan losses 628 1,500 3,008 3,861 3,009 Net interest income after provision for loan losses 29,429 27,985 25,869 23,390 22,025 Noninterest income 4,171 5,894 4,490 2,727 2,208 Noninterest expense 14,680 15,792 14,453 13,978 14,819 Earnings before income taxes 18,920 18,087 15,906 12,139 9,414 Income taxes 5,540 5,631 4,759 3,619 2,901 Net income $ 13,380 $ 12,456 $ 11,147 $ 8,520 $ 6,513 Net income per common share - basic $ 0.69 $ 0.64 $ 0.57 $ 0.43 $ 0.33 Net income per common share - diluted $ 0.67 $ 0.63 $ 0.56 $ 0.43 $ 0.33 Cash dividends declared per common share $ 0.13 $ 0.12 $ 0.09 $ 0.06 $ 0.06 Cash dividends declared on common shares $ 2,540 $ 2,347 $ 1,777 $ 1,184 $ 1,184 Yield on average assets, annualized 1.39 % 1.47 % 1.33 % 1.05 % 0.83 % Yield on average earning assets 3.99 % 4.49 % 4.55 % 4.63 % 4.65 % Cost of average deposits 0.41 % 0.55 % 0.71 % 0.87 % 1.10 % Cost of average interest-bearing deposits 0.59 % 0.73 % 0.93 % 1.14 % 1.42 % Cost of average interest-bearing liabilities 0.97 % 1.06 % 1.23 % 1.43 % 1.68 % Accretion on loans to average earning assets 0.02 % 0.06 % 0.03 % 0.08 % 0.16 % Net interest margin 3.33 % 3.73 % 3.67 % 3.59 % 3.42 % 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 June 30, 2021 As of March 31, 2021 As of December 31, 2020 As of September 30, 2020 As of June 30, 2020 (dollars in thousands) $ % $ % $ % $ % $ % Loans: Commercial and industrial $ 277,080 10.2 % $ 286,016 10.5 % $ 290,139 10.7 % $ 317,891 11.5 % $ 267,481 10.3 % SBA 98,572 3.6 % 111,330 4.1 % 97,821 3.6 % 111,193 4.0 % 104,069 4.0 % Construction and land development 236,965 8.7 % 209,727 7.7 % 186,723 6.9 % 183,569 6.7 % 145,754 5.6 % Commercial real estate (1) 1,102,467 40.7 % 1,063,104 39.2 % 1,003,637 37.1 % 975,187 35.4 % 900,302 34.7 % Single-family residential mortgages 984,311 36.3 % 1,041,260 38.3 % 1,124,357 41.5 % 1,163,982 42.2 % 1,174,927 45.3 % Other loans 9,811 0.5 % 3,768 0.2 % 4,089 0.2 % 3,331 0.2 % 2,087 0.1 % Total loans (2) $ 2,709,206 100.0 % $ 2,715,205 100.0 % $ 2,706,766 100.0 % $ 2,755,153 100.0 % $ 2,594,620 100.0 % Allowance for loan losses (31,352 ) (30,795 ) (29,337 ) (26,634 ) (22,820 ) Total loans, net $ 2,677,854 $ 2,684,410 $ 2,677,429 $ 2,728,519 $ 2,571,800 (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 Six Months Ended Change in Allowance for Loan Losses June 30, June 30, (dollars in thousands) 2021 2020 2021 2020 Beginning balance $ 30,795 $ 20,130 $ 29,337 $ 18,816 Additions to the allowance charged to expense 628 3,009 2,128 4,954 Net charge-offs on loans (71 ) (319 ) (113 ) (950 ) Ending balance $ 31,352 $ 22,820 $ 31,352 $ 22,820 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 June 30, 2021 and 2020 and March 31, 2021. (dollars in thousands, except per share data) June 30, 2021 March 31, 2021 June 30, 2020 Tangible common equity: Total shareholders' equity $ 442,325 $ 435,668 $ 414,025 Adjustments Goodwill (69,243 ) (69,243 ) (69,209 ) Core deposit intangible (4,608 ) (4,895 ) (5,876 ) Tangible common equity $ 368,474 $ 361,530 $ 338,940 Tangible assets: Total assets-GAAP $ 3,890,638 $ 3,664,299 $ 3,136,181 Adjustments Goodwill (69,243 ) (69,243 ) (69,209 ) Core deposit intangible (4,608 ) (4,895 ) (5,876 ) Tangible assets $ 3,816,787 $ 3,590,161 $ 3,061,096 Common shares outstanding $ 19,349,802 19,528,249 19,739,280 Tangible common equity to tangible assets ratio 9.65 % 10.07 % 11.07 % Book value per share $ 22.86 $ 22.31 $ 20.97 Tangible book value per share $ 19.04 $ 18.51 $ 17.17 View source version on businesswire.com: https://www.businesswire.com/news/home/20210726005742/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, July 27, 2021 at 11:00 a.m. Pacific Time/2:00 p.m. Eastern Time Second Quarter 2021 Highlights Reported record net income of $13.4 million, or $0.67 diluted earnings per share, increased $924,000, or 7.4%, from the prior quarter and increased $6.9 million, or 105.4%, from the second quarter of 2020 Total deposits increased by $248.6 million, or 35.3% annualized growth, from the end of the prior quarter Loan growth (ex-mortgage) of $51.0 million, or 12.2% annualized, from the end of the prior quarter Declared quarterly cash dividend of $0.13 per common share
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 June 30, 2021. The Company reported record net income of $13.4 million, or $0.67 diluted earnings per share, for the three months ended June 30, 2021, compared to net income of $12.5 million, or $0.63 diluted earnings per share, and $6.5 million, or $0.33 diluted earnings per share, for the three months ended March 31, 2021 and June 30, 2020, respectively. “We are pleased to report diluted earnings per share of $0.67, for the second quarter,” said Alan Thian, President and CEO of Royal Business Bank. “Continued focus on our deposit franchise reduced the cost of our interest-bearing deposits and delivered strong growth in non-interest bearing deposits which now comprise 30.6% of total deposits. While our net interest margin declined due to excess liquidity, our disciplined loan origination efforts kept our loan balance and yields stable. Our acquisition of the Hawaiian branch of the Bank of the Orient expands our presence in a vibrant Asian-American community and positions us for profitable growth.” "Royal Business Bank’s excellent second quarter results demonstrate the continued strength of our differentiated business model and commitment to enhancing long-term shareholder value," said Dr. James Kao, Chairman of RBB Bancorp. “We remain well-positioned to pursue additional organic and strategic growth opportunities." Key Performance Ratios Net income of $13.4 million for the second quarter of 2021 produced 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%. This compares to an annualized return on average assets of 1.47%, an annualized return on average tangible common shareholders' equity of 14.05%, and an annualized return on average shareholders' equity of 11.64% for the first quarter of 2021. The efficiency ratio for the second quarter of 2021 was 42.89%, compared to 44.64% for the prior quarter. The change in the efficiency ratio was primarily due to a decrease in non-interest income. Net Interest Income and Net Interest Margin Net interest income, before provision for loan losses, was $30.1 million for the second quarter of 2021, compared to $29.5 million for the first quarter of 2021. The $572,000 increase was primarily attributable to higher interest income due to a $410.6 million increase in average earning assets and an improvement in deposit costs related to a $259.8 million increase in average noninterest-bearing deposits, partially offset by a $138.0 million increase in average interest-bearing liabilities. Accretion of purchase discounts from prior acquisitions contributed $183,000 to net interest income in the second quarter of 2021, compared to $481,000 in the first quarter of 2021. Compared to the second quarter of 2020, net interest income, before provision for loan losses, increased $5.0 million from $25.0 million. The increase was primarily attributable to a $670.6 million increase in average earning assets and a $355.5 million increase in average noninterest-bearing deposits, partially offset by a $277.7 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 3.33% for the second quarter of 2021, a decrease of 40 basis points from 3.73% in the first quarter of 2021. The decrease was primarily attributable to an increase in liquidity combined with a 50 basis point decrease in the yield on average earning assets and a 40 basis point decrease in the yield on federal funds sold, cash equivalents & other which was partially offset by a 19 basis point decrease in the cost of borrowings (FHLB advances, long-term debt and subordinated debentures). Loan discount accretion contributed 2 basis points to the net interest margin in the second quarter of 2021, compared to 6 basis points in the first quarter of 2021. The majority of the decrease in net interest margin was due to the increase in liquidity. Noninterest Income Noninterest income was $4.2 million for the second quarter of 2021, a decrease of $1.7 million from $5.9 million in the first quarter of 2021. The decrease was driven by a decrease in loans sold during the quarter. The Company sold $55.4 million fewer loans in the second quarter than in the prior quarter primarily due to selling fewer FNMA loans. The Company sold $58.9 million in FNMA qualified mortgage loans for a net gain of $1.4 million and sold $13.4 million in non-qualified mortgage loans to private investors for a gain of $389,000 during the second quarter of 2021. This compared to $80.3 million in FNMA qualified mortgage loans for a net gain of $2.2 million and $49.8 million in non-qualified mortgage loans to private investors for a gain of $1.2 million during the first quarter of 2021. The Company sold $5.9 million in SBA loans during the second quarter of 2021 for a net gain of $747,000, compared to $3.5 million SBA loans sold for a net gain of $355,000 during the first quarter of 2021. Compared to the second quarter of 2020, noninterest income increased by $2.0 million from $2.2 million. The increase was primarily attributable to an increase of $2.5 million in gain on loan sales partially offset by a decrease of $590,000 in loan servicing fees. Noninterest Expense Noninterest expense for the second quarter of 2021 was $14.7 million, compared to $15.8 million for the first quarter of 2021. The $1.1 million decrease was primarily attributable to a $500,000 decrease in salaries and employee benefits, a $269,000 decrease in legal and professional fees and $209,000 decrease in data processing expenses. Noninterest expense decreased from $14.8 million in the second quarter of 2020. The $139,000 decrease was primarily due to a $366,000 decrease in MSR impairment write-down expense and a $392,000 decrease in occupancy and equipment expenses. These were partially offset by a $639,000 increase in salaries and employee benefits expense. Income Taxes The effective tax rate was 29.28% for the second quarter of 2021, 31.1% for the first quarter of 2021, and 30.8% for the second quarter of 2020. CDFI Rapid Response Program In 2016, RBB became a community development financial institution (CDFI). 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 has not yet been received pending finalization of the contract between the Bank and the US Treasury which will include various performance goals and measures that specify the use of the funds. Loan Portfolio Loans held for investment, net of deferred fees and discounts, totaled $2.7 billion as of June 30, 2021, a decrease of $6.0 million from March 31, 2021, and an increase of $114.6 million from June 30, 2020 from $2.6 billion. The decrease from the prior quarter was primarily due to a decrease in mortgage loan originations. Single-family residential mortgages decreased by $56.9 million net of payoffs, paydowns and loan sales. Commercial real estate loans increased by $39.4 million, construction and land development loans increased by $27.2 million, SBA loans decreased by $12.8 million (which included a $13.7 million decrease in PPP loans), commercial and industrial loans decreased by $8.9 million and other loans increased by $6.0 million. During the second quarter of 2021, single-family residential mortgage production was $107.9 million, payoffs and paydowns were $121.0 million, and single-family residential mortgage loan sales were $72.3 million. During the first quarter of 2021, single-family residential mortgage production was $114.5 million, payoffs and paydowns were $81.9 million, and loan sales were $130.1 million. Mortgage loans held for sale were $9.2 million as of June 30, 2021, a decrease of $28.4 million from $37.7 million at March 31, 2021 and a decrease of $6.2 million from $15.5 million as of June 30, 2020. The Company originated approximately $29.2 million in FNMA mortgage loans for sale for the second quarter of 2021, compared with $55.3 million during the prior quarter. In the second quarter of 2021, SBA loan production was $21.3 million and total SBA loan sales were $5.9 million. Deposits and Borrowings Deposits were $3.1 billion at June 30, 2021, an increase of $248.6 million from March 31, 2021, and an increase of $633.4 million from June 30, 2020, including brokered deposits. The increase in total deposits from the prior quarter was primarily attributable to organic deposit growth. During the second quarter of 2021, noninterest-bearing deposits increased by $152.6 million, interest-bearing non-maturity deposits increased by $67.1 million, and time deposits decreased by $28.9 million. As of June 30, 2021, time deposits included $17.4 million in brokered CDs, as compared to $17.4 million as of March 31, 2021 and $2.4 million as of June 30, 2020. Asset Quality Nonperforming assets totaled $19.5 million, or 0.50% of total assets at June 30, 2021, compared to $20.2 million, or 0.55%, of total assets at March 31, 2021. Nonperforming assets consist of OREO, loans modified under troubled debt restructurings (“TDR”), non-accrual loans, and loans past due 90 days or more and still accruing interest. In the second quarter of 2021, there were $71,000 in net charge-offs, compared to net charge-offs of $42,000 in the prior quarter. The Company recorded a provision for credit losses of $628,000 for the second quarter of 2021, a decrease from $872,000 in the prior quarter, primarily attributable to reduced loan growth. The allowance for loan losses totaled $31.4 million, or 1.16% of loans held for investment at June 30, 2021, compared with $30.8 million, or 1.13%, of total loans at March 31, 2021. As of June 30, 2021, borrowers representing 191 loans totaling $29.2 million, or 1.07% 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 June 30, 2021. The following table provides details regarding the Company's COVID-19 loan deferral activity through July 15, 2021. As of June 30, 2020 As of April 15, 2021 As of July 15, 2021 Loans Deferred Loans Deferred Loans Deferred Number Principal Amount ($000) Number Principal Amount ($000) Number Principal Amount ($000) General retail (excluding SBA) 34 $ 94,251 1 $ 438 — $ — Mixed use commercial 38 58,841 4 2,602 — — Hospitality (excluding SBA) 5 25,343 1 6,394 — — Restaurants (excluding SBA) 11 4,186 — — — — Multifamily 6 9,086 1 688 — — Commercial, office and other — — — — — — SFR mortgage loans - Western region 183 118,484 9 5,135 4 3,101 SFR mortgage loans - Eastern region 203 85,935 5 2,467 — — SFR mortgage loans - Chicago metropolitan 84 14,824 — — — — Total 564 $ 410,950 21 $ 17,724 4 $ 3,101 Corporate Overview RBB Bancorp is a community-based financial holding company headquartered in Los Angeles, California. As of June 30, 2021, the company had total assets of $3.9 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, July 27, 2021, to discuss the Company’s second quarter 2021 financial results. To listen to the conference call, please dial 1-833-519-1355 or 1-918-922-6505, passcode 5654379. A replay of the call will be made available at 1-800-585-8367 or 1-404-537-3406, passcode 5654379, approximately one hour after the conclusion of the call and will remain available through August 3, 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) June 30, March 31, December 31, September 30, June 30, 2021 2021 2020 2020 2020 Assets Cash and due from banks $ 493,653 $ 362,930 $ 137,654 $ 121,630 $ 94,844 Federal funds sold and other cash equivalents 110,000 57,000 57,000 57,000 57,000 Total cash and cash equivalents 603,653 419,930 194,654 178,630 151,844 Interest-bearing deposits in other financial institutions 600 600 600 600 600 Investment securities available for sale 339,568 281,582 210,867 214,662 185,756 Investment securities held to maturity 6,664 6,668 7,174 7,569 7,615 Mortgage loans held for sale 9,246 37,675 49,963 23,886 15,479 Loans held for investment 2,709,206 2,715,205 2,706,766 2,755,153 2,594,620 Allowance for loan losses (31,352 ) (30,795 ) (29,337 ) (26,634 ) (22,820 ) Net loans held for investment 2,677,854 2,684,410 2,677,429 2,728,519 2,571,800 Premises and equipment, net 27,039 27,093 27,103 24,237 23,965 Federal Home Loan Bank (FHLB) stock 15,000 15,641 15,641 15,641 15,641 Cash surrender value of life insurance 55,325 35,308 35,121 34,930 34,736 Goodwill 69,243 69,243 69,243 69,243 69,209 Servicing assets 12,558 13,264 13,965 14,724 15,595 Core deposit intangibles 4,608 4,895 5,196 5,519 5,876 Right-of-use assets- operating leases 25,050 25,500 — — — Accrued interest and other assets 44,230 42,490 43,116 41,416 38,065 Total assets $ 3,890,638 $ 3,664,299 $ 3,350,072 $ 3,359,576 $ 3,136,181 Liabilities and shareholders' equity Deposits: Noninterest-bearing demand $ 940,041 $ 787,439 $ 617,206 $ 642,332 $ 574,553 Savings, NOW and money market accounts 858,597 791,486 731,084 654,378 601,941 Time deposits 1,271,287 1,242,368 1,286,838 1,315,038 1,260,026 Total deposits 3,069,925 2,821,293 2,635,128 2,611,748 2,436,520 Reserve for unfunded commitments 1,216 1,320 1,383 1,129 1,030 FHLB advances 150,000 150,000 150,000 190,000 150,000 Long-term debt, net of debt issuance costs 172,718 172,581 104,391 104,305 104,220 Subordinated debentures 14,393 14,338 14,283 14,229 14,174 Lease liabilities - operating leases 25,798 26,199 — — — Accrued interest and other liabilities 14,263 42,900 16,399 16,749 16,212 Total liabilities 3,448,313 3,228,631 2,921,584 2,938,160 2,722,156 Shareholders' equity: Shareholder's equity 442,086 435,746 427,287 420,329 412,827 Non-controlling interest 72 72 72 72 72 Accumulated other comprehensive (loss) income - Net of tax 167 (150 ) 1,129 1,015 1,126 Total shareholders' equity 442,325 435,668 428,488 421,416 414,025 Total liabilities and shareholders’ equity $ 3,890,638 $ 3,664,299 $ 3,350,072 $ 3,359,576 $ 3,136,181 RBB BANCORP AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited) (Dollars in thousands, except per share amounts) For the Three Months Ended June 30, 2021 March 31, 2021 June 30, 2020 Interest and dividend income: Interest and fees on loans $ 34,669 $ 34,516 $ 32,633 Interest on interest-bearing deposits 125 48 74 Interest on investment securities 794 627 887 Dividend income on FHLB stock 225 192 187 Interest on federal funds sold and other 158 157 322 Total interest income 35,971 35,540 34,103 Interest expense: Interest on savings deposits, NOW and money market accounts 708 698 782 Interest on time deposits 2,410 2,964 5,933 Interest on subordinated debentures and long term debt 2,356 1,958 1,915 Interest on other borrowed funds 440 435 439 Total interest expense 5,914 6,055 9,069 Net interest income before provision for loan losses 30,057 29,485 25,034 Provision for loan losses 628 1,500 3,009 Net interest income after provision for loan losses 29,429 27,985 22,025 Noninterest income: Service charges, fees and other 1,374 1,410 1,065 Gain on sale of loans 2,572 3,841 81 Loan servicing fees, net of amortization 118 246 708 Recoveries on loans acquired in business combinations 5 5 5 Unrealized (loss) on equity investments (35 ) (20 ) — (Loss) gain on derivatives (80 ) 225 — Increase in cash surrender value of life insurance 217 187 191 Gain on sale of securities — — 158 Total noninterest income 4,171 5,894 2,208 Noninterest expense: Salaries and employee benefits 8,742 9,242 8,103 Occupancy and equipment expenses 2,135 2,242 2,527 Data processing 1,231 1,440 882 Legal and professional 536 805 670 Office expenses 272 255 337 Marketing and business promotion 231 184 111 Insurance and regulatory assessments 354 348 234 Core deposit premium 287 301 357 OREO expenses 4 5 14 Merger expenses 17 42 276 Other expenses 871 928 1,308 Total noninterest expense 14,680 15,792 14,819 Income before income taxes 18,920 18,087 9,414 Income tax expense 5,540 5,631 2,901 Net income $ 13,380 $ 12,456 $ 6,513 Net income per share Basic $ 0.69 $ 0.64 $ 0.33 Diluted $ 0.67 $ 0.63 $ 0.33 Cash Dividends declared per common share $ 0.13 $ 0.12 $ 0.06 Weighted-average common shares outstanding Basic 19,432,204 19,475,814 19,710,330 Diluted 19,874,969 19,812,841 19,806,304 RBB BANCORP AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited) (Dollars in thousands, except per share amounts) For the Six Months Ended June 30, 2021 June 30, 2020 Interest and dividend income: Interest and fees on loans $ 69,185 $ 64,909 Interest on interest-earning deposits 173 525 Interest on investment securities 1,421 1,708 Dividend income on FHLB stock 417 189 Interest on federal funds sold and other 315 800 Total interest income 71,511 68,131 Interest expense: Interest on savings deposits, NOW and money market accounts 1,406 2,025 Interest on time deposits 5,374 13,019 Interest on subordinated debentures and long term debt 4,314 3,871 Interest on other borrowed funds 875 589 Total interest expense 11,969 19,504 Net interest income 59,542 48,627 Provision for loan losses 2,128 4,954 Net interest income after provision for loans losses 57,414 43,673 Noninterest income: Service charges, fees and other 2,784 2,144 Gain on sale of loans 6,413 2,792 Loan servicing fees, net of amortization 364 1,300 Recoveries on loans acquired in business combinations 10 47 Unrealized (loss) on equity investments (55 ) — Gain on derivatives 145 — Increase in cash surrender value of life insurance 404 382 Gain on sale of securities — 158 Total noninterest income 10,065 6,823 Noninterest expense: Salaries and employee benefits 17,984 17,608 Occupancy and equipment expenses 4,377 4,931 Data processing 2,671 2,024 Legal and professional 1,341 1,274 Office expenses 527 660 Marketing and business promotion 415 325 Insurance and regulatory assessments 702 411 Core deposit premium 588 714 OREO expenses 9 28 Merger expenses 59 679 Other expenses 1,799 2,428 Total noninterest expense 30,472 31,082 Income before income taxes 37,007 19,414 Income tax expense 11,171 6,153 Net income $ 25,836 $ 13,261 Net income per share Basic $ 1.32 $ 0.67 Diluted $ 1.30 $ 0.66 Cash Dividends declared per common share $ 0.25 $ 0.12 Weighted-average common shares outstanding Basic 19,453,889 19,841,093 Diluted 19,844,077 20,036,316 RBB BANCORP AND SUBSIDIARIES AVERAGE BALANCE SHEET AND NET INTEREST INCOME (Unaudited) (Dollars in thousands, except per share amounts) For the three months ended June 30, 2021 March 31, 2021 June 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) $ 582,554 $ 508 0.35 % $ 215,230 $ 397 0.75 % $ 231,943 $ 583 1.01 % Securities Available for sale 328,004 751 0.92 % 239,768 571 0.97 % 171,298 823 1.93 % Held to maturity (2) 6,667 60 3.61 % 7,000 64 3.71 % 7,661 72 3.78 % Mortgage loans held for sale 21,033 173 3.30 % 54,021 411 3.09 % 25,130 303 4.85 % Loans held for investment: (3) Real estate 2,292,145 29,794 5.21 % 2,307,431 29,521 5.19 % 2,147,646 28,216 5.28 % Commercial 388,049 4,702 4.86 % 384,442 4,584 4.84 % 364,189 4,114 4.54 % Total loans 2,680,194 34,496 5.16 % 2,691,873 34,105 5.14 % 2,511,835 32,330 5.18 % Total earning assets 3,618,452 $ 35,988 3.99 % 3,207,892 $ 35,548 4.49 % 2,947,867 $ 34,111 4.65 % Noninterest-earning assets 230,049 228,002 206,833 Total assets $ 3,848,501 $ 3,435,894 $ 3,154,700 Interest-bearing liabilities NOW $ 66,777 $ 45 0.27 % $ 64,592 $ 44 0.28 % $ 57,547 $ 60 0.42 % Money Market 640,026 628 0.39 % 579,347 623 0.44 % 404,480 691 0.69 % Saving deposits 140,418 35 0.10 % 131,151 31 0.10 % 123,868 31 0.10 % Time deposits, less than $250,000 657,494 1,163 0.71 % 663,029 1,496 0.92 % 725,142 3,143 1.74 % Time deposits, $250,000 and over 604,429 1,247 0.83 % 593,981 1,468 1.00 % 589,090 2,790 1.90 % Total interest-bearing deposits 2,109,144 3,118 0.59 % 2,032,100 3,662 0.73 % 1,900,127 6,715 1.42 % FHLB advances 150,000 440 1.18 % 150,000 435 1.18 % 150,000 439 1.18 % Long-term debt 172,622 2,206 5.13 % 111,739 1,808 6.56 % 104,168 1,747 6.75 % Subordinated debentures 14,357 150 4.19 % 14,302 150 4.25 % 14,141 168 4.78 % Total interest-bearing liabilities 2,446,123 5,914 0.97 % 2,308,141 6,055 1.06 % 2,168,436 9,069 1.68 % Noninterest-bearing liabilities Noninterest-bearing deposits 913,442 653,674 557,903 Other noninterest-bearing liabilities 46,549 40,118 15,509 Total noninterest-bearing liabilities 959,991 693,792 573,412 Shareholders' equity 442,387 433,960 412,852 Total liabilities and shareholders' equity $ 3,848,501 $ 3,435,894 $ 3,154,700 Net interest income / interest rate spreads $ 30,074 3.02 % $ 29,493 3.43 % $ 25,042 2.97 % Net interest margin 3.33 % 3.73 % 3.42 % (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 six months ended June 30, 2021 June 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) $ 399,907 $ 905 0.46 % $ 240,755 $ 1,514 1.26 % Securities Available for sale 284,129 1,323 0.94 % 154,936 1,578 2.05 % Held to maturity (2) 6,832 126 3.72 % 7,839 147 3.77 % Mortgage loans held for sale 37,436 584 3.15 % 51,595 1,284 5.00 % Loans held for investment: (3) Real estate 2,299,746 59,315 5.20 % 2,077,467 54,644 5.29 % Commercial 386,256 9,286 4.85 % 350,869 8,981 5.15 % Total loans 2,686,002 68,601 5.15 % 2,428,336 63,625 5.27 % Total earning assets 3,414,306 $ 71,539 4.23 % 2,883,461 $ 68,148 4.75 % Noninterest-earning assets 229,032 209,699 Total assets $ 3,643,338 $ 3,093,160 Interest-bearing liabilities NOW $ 65,690 $ 88 0.27 % $ 50,692 $ 102 0.40 % Money Market 609,854 1,251 0.41 % 418,243 1,837 0.88 % Saving deposits 135,810 67 0.10 % 119,410 86 0.14 % Time deposits, less than $250,000 660,246 2,659 0.81 % 731,448 6,869 1.89 % Time deposits, $250,000 and over 599,234 2,716 0.91 % 604,987 6,150 2.04 % Total interest-bearing deposits 2,070,834 6,781 0.66 % 1,924,780 15,044 1.57 % FHLB advances 150,000 875 1.18 % 100,989 589 1.17 % Long-term debt 142,349 4,015 5.69 % 104,125 3,495 6.75 % Subordinated debentures 14,330 298 4.19 % 14,234 376 5.31 % Total interest-bearing liabilities 2,377,513 $ 11,969 1.02 % 2,144,128 $ 19,504 1.83 % Noninterest-bearing liabilities Noninterest-bearing deposits 784,276 521,729 Other noninterest-bearing liabilities 43,352 15,282 Total noninterest-bearing liabilities 827,628 537,011 Shareholders' equity 438,197 412,021 Total liabilities and shareholders' equity $ 3,643,338 $ 3,093,160 Net interest income / interest rate spreads $ 59,570 3.21 % $ 48,644 2.92 % Net interest margin 3.52 % 3.39 % RBB BANCORP AND SUBSIDIARIES SELECTED FINANCIAL HIGHLIGHTS (Unaudited) (Dollars in thousands, except per share amounts) For the Three Months Ended June 30, March 31, June 30, 2021 2021 2020 Per share data (common stock) Earnings Basic $ 0.69 $ 0.64 $ 0.33 Diluted $ 0.67 $ 0.63 $ 0.33 Dividends declared $ 0.13 $ 0.12 $ 0.06 Book value $ 22.86 $ 22.31 $ 20.97 Tangible book value $ 19.04 $ 18.51 $ 17.17 Weighted average shares outstanding Basic 19,432,204 19,475,814 19,710,330 Diluted 19,874,969 19,812,841 19,806,304 Shares outstanding at period end 19,349,802 19,528,249 19,739,280 Performance ratios Return on average assets, annualized 1.39 % 1.47 % 0.83 % Return on average shareholders' equity, annualized 12.13 % 11.64 % 6.34 % Return on average tangible common equity, annualized 14.57 % 14.05 % 7.77 % Noninterest income to average assets, annualized 0.43 % 0.70 % 0.28 % Noninterest expense to average assets, annualized 1.53 % 1.86 % 1.89 % Yield on average earning assets 3.99 % 4.49 % 4.65 % Cost of average total deposits 0.41 % 0.55 % 1.10 % Cost of average interest-bearing deposits 0.59 % 0.73 % 1.42 % Cost of average interest-bearing liabilities 0.97 % 1.06 % 1.68 % Accretion on loans to average earning assets 0.02 % 0.06 % 0.14 % Net interest spread 3.02 % 3.43 % 2.97 % Net interest margin 3.33 % 3.73 % 3.42 % Efficiency ratio 42.89 % 44.64 % 54.40 % Common stock dividend payout ratio 18.84 % 18.75 % 18.18 % RBB BANCORP AND SUBSIDIARIES SELECTED FINANCIAL HIGHLIGHTS (Unaudited) (Dollars in thousands, except per share amounts) For the six months ended June 30, 2021 2020 Per share data (common stock) Earnings Basic $ 1.32 $ 0.67 Diluted $ 1.30 $ 0.66 Dividends declared $ 0.25 $ 0.12 Book value $ 22.86 $ 20.97 Tangible book value $ 19.04 $ 17.17 Weighted average shares outstanding Basic 19,453,889 19,841,093 Diluted 19,844,077 20,036,316 Shares outstanding at period end 19,349,802 19,739,280 Performance ratios Return on average assets, annualized 1.43 % 0.86 % Return on average shareholders' equity, annualized 11.89 % 6.47 % Return on average tangible common equity, annualized 14.31 % 7.95 % Noninterest income to average assets, annualized 0.56 % 0.44 % Noninterest expense to average assets, annualized 1.69 % 2.02 % Yield on average earning assets 4.23 % 4.75 % Cost of average deposits 0.48 % 1.24 % Cost of average interest-bearing deposits 0.66 % 1.57 % Cost of average interest-bearing liabilities 1.02 % 1.83 % Accretion on loans to average earning assets 0.04 % 0.13 % Net interest spread 3.21 % 2.92 % Net interest margin 3.52 % 3.39 % Efficiency ratio 43.78 % 56.05 % Common stock dividend payout ratio 18.94 % 26.87 % RBB BANCORP AND SUBSIDIARIES SELECTED FINANCIAL HIGHLIGHTS (Unaudited) (Dollars in thousands, except per share amounts) As of June 30, March 31, June 30, 2021 2021 2020 Loan to deposit ratio 88.25 % 96.24 % 106.49 % Core deposits / total deposits 80.04 % 78.97 % 76.84 % Net non-core funding dependence ratio 0.87 % 4.27 % 9.87 % Credit Quality Data: Loans 30-89 days past due $ 5,449 $ 10,653 $ 23,872 Loans 30-89 days past due to total loans 0.20 % 0.39 % 0.92 % Nonperforming loans $ 19,243 $ 19,911 $ 17,217 Nonperforming loans to total loans 0.71 % 0.73 % 0.66 % Nonperforming assets $ 19,536 $ 20,204 $ 17,510 Nonperforming assets to total assets 0.50 % 0.55 % 0.56 % Allowance for loan losses to total loans 1.16 % 1.13 % 0.88 % Allowance for loan losses to nonperforming loans 162.93 % 154.66 % 132.54 % Net charge-offs to average loans (for the quarter-to-date period) 0.01 % 0.01 % 0.05 % Regulatory and other capital ratios—Company Tangible common equity to tangible assets 9.65 % 10.07 % 11.07 % Tier 1 leverage ratio 10.20 % 11.30 % 11.48 % Tier 1 common capital to risk-weighted assets 14.76 % 14.53 % 14.87 % Tier 1 capital to risk-weighted assets 15.33 % 15.11 % 15.49 % Total capital to risk-weighted assets 23.48 % 23.27 % 21.10 % Regulatory capital ratios—Bank only Tier 1 leverage ratio 12.34 % 13.44 % 14.14 % Tier 1 common capital to risk-weighted assets 18.58 % 17.96 % 19.09 % Tier 1 capital to risk-weighted assets 18.58 % 17.96 % 19.09 % Total capital to risk-weighted assets 19.83 % 19.21 % 20.13 % RBB BANCORP AND SUBSIDIARIES SELECTED FINANCIAL HIGHLIGHTS (Unaudited) (Dollars in thousands, except per share amounts) 2nd Quarter 1st Quarter 4th Quarter 3rd Quarter 2nd Quarter Quarterly Consolidated Statements of Earnings 2021 2021 2020 2020 2020 Interest income Loans, including fees $ 34,669 $ 34,516 $ 34,832 $ 34,153 $ 32,633 Investment securities and other 1,302 1,024 1,032 972 1,470 Total interest income 35,971 35,540 35,864 35,125 34,103 Interest expense Deposits 3,118 3,662 4,636 5,525 6,715 Interest on subordinated debentures and other 2,356 1,958 1,901 1,905 1,915 Other borrowings 440 435 450 444 439 Total interest expense 5,914 6,055 6,987 7,874 9,069 Net interest income before provision for loan losses 30,057 29,485 28,877 27,251 25,034 Provision for loan losses 628 1,500 3,008 3,861 3,009 Net interest income after provision for loan losses 29,429 27,985 25,869 23,390 22,025 Noninterest income 4,171 5,894 4,490 2,727 2,208 Noninterest expense 14,680 15,792 14,453 13,978 14,819 Earnings before income taxes 18,920 18,087 15,906 12,139 9,414 Income taxes 5,540 5,631 4,759 3,619 2,901 Net income $ 13,380 $ 12,456 $ 11,147 $ 8,520 $ 6,513 Net income per common share - basic $ 0.69 $ 0.64 $ 0.57 $ 0.43 $ 0.33 Net income per common share - diluted $ 0.67 $ 0.63 $ 0.56 $ 0.43 $ 0.33 Cash dividends declared per common share $ 0.13 $ 0.12 $ 0.09 $ 0.06 $ 0.06 Cash dividends declared on common shares $ 2,540 $ 2,347 $ 1,777 $ 1,184 $ 1,184 Yield on average assets, annualized 1.39 % 1.47 % 1.33 % 1.05 % 0.83 % Yield on average earning assets 3.99 % 4.49 % 4.55 % 4.63 % 4.65 % Cost of average deposits 0.41 % 0.55 % 0.71 % 0.87 % 1.10 % Cost of average interest-bearing deposits 0.59 % 0.73 % 0.93 % 1.14 % 1.42 % Cost of average interest-bearing liabilities 0.97 % 1.06 % 1.23 % 1.43 % 1.68 % Accretion on loans to average earning assets 0.02 % 0.06 % 0.03 % 0.08 % 0.16 % Net interest margin 3.33 % 3.73 % 3.67 % 3.59 % 3.42 % 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 June 30, 2021 As of March 31, 2021 As of December 31, 2020 As of September 30, 2020 As of June 30, 2020 (dollars in thousands) $ % $ % $ % $ % $ % Loans: Commercial and industrial $ 277,080 10.2 % $ 286,016 10.5 % $ 290,139 10.7 % $ 317,891 11.5 % $ 267,481 10.3 % SBA 98,572 3.6 % 111,330 4.1 % 97,821 3.6 % 111,193 4.0 % 104,069 4.0 % Construction and land development 236,965 8.7 % 209,727 7.7 % 186,723 6.9 % 183,569 6.7 % 145,754 5.6 % Commercial real estate (1) 1,102,467 40.7 % 1,063,104 39.2 % 1,003,637 37.1 % 975,187 35.4 % 900,302 34.7 % Single-family residential mortgages 984,311 36.3 % 1,041,260 38.3 % 1,124,357 41.5 % 1,163,982 42.2 % 1,174,927 45.3 % Other loans 9,811 0.5 % 3,768 0.2 % 4,089 0.2 % 3,331 0.2 % 2,087 0.1 % Total loans (2) $ 2,709,206 100.0 % $ 2,715,205 100.0 % $ 2,706,766 100.0 % $ 2,755,153 100.0 % $ 2,594,620 100.0 % Allowance for loan losses (31,352 ) (30,795 ) (29,337 ) (26,634 ) (22,820 ) Total loans, net $ 2,677,854 $ 2,684,410 $ 2,677,429 $ 2,728,519 $ 2,571,800 (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 Six Months Ended Change in Allowance for Loan Losses June 30, June 30, (dollars in thousands) 2021 2020 2021 2020 Beginning balance $ 30,795 $ 20,130 $ 29,337 $ 18,816 Additions to the allowance charged to expense 628 3,009 2,128 4,954 Net charge-offs on loans (71 ) (319 ) (113 ) (950 ) Ending balance $ 31,352 $ 22,820 $ 31,352 $ 22,820 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 June 30, 2021 and 2020 and March 31, 2021. (dollars in thousands, except per share data) June 30, 2021 March 31, 2021 June 30, 2020 Tangible common equity: Total shareholders' equity $ 442,325 $ 435,668 $ 414,025 Adjustments Goodwill (69,243 ) (69,243 ) (69,209 ) Core deposit intangible (4,608 ) (4,895 ) (5,876 ) Tangible common equity $ 368,474 $ 361,530 $ 338,940 Tangible assets: Total assets-GAAP $ 3,890,638 $ 3,664,299 $ 3,136,181 Adjustments Goodwill (69,243 ) (69,243 ) (69,209 ) Core deposit intangible (4,608 ) (4,895 ) (5,876 ) Tangible assets $ 3,816,787 $ 3,590,161 $ 3,061,096 Common shares outstanding $ 19,349,802 19,528,249 19,739,280 Tangible common equity to tangible assets ratio 9.65 % 10.07 % 11.07 % Book value per share $ 22.86 $ 22.31 $ 20.97 Tangible book value per share $ 19.04 $ 18.51 $ 17.17 View source version on businesswire.com: https://www.businesswire.com/news/home/20210726005742/en/
Yee Phong (Alan) Thian President and CEO (626) 307-7559 David Morris Executive Vice President and CFO (714) 670-2488