RBB Bancorp Reports Second Quarter Earnings for 2019

LOS ANGELES, July 22, 2019 /PRNewswire/ -- RBB Bancorp 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, 2019.

The Company reported net income of $10.1 million, or $0.50 diluted earnings per share, for the three months ended June 30, 2019, compared to net income of $10.4 million, or $0.51 diluted earnings per share, and $9.4 million, or 0.54 diluted earnings per share, for the three months ended March 31, 2019 and June 30, 2018, respectively.

"We are pleased with our operating performance for the second quarter," said Mr. Alan Thian, Chairman, President and CEO. "We made significant progress on our balance sheet initiatives, selling $175.0 million in residential mortgage loans during the quarter and reducing our reliance on wholesale funding by $235.0 million. Our focus on increasing core deposits helped drive our deposit growth and we continued to experience low credit costs and well-managed expenses.  These factors all contributed to another solid quarter of net income.

"Our integration of First American International Corp. is nearly complete. We have optimized its operational footprint, with the closing of two non-banking offices and one branch and the opening of one new branch. We have also renegotiated and entered into new contracts with our core system vendor.  We are making good progress on introducing our business deposit and commercial lending products to the First American branch network and anticipate future growth from that franchise.  Our last project is to implement a common residential mortgage origination platform for both regions.

"With our balance sheet repositioning nearly complete and given our loan pipeline, we are looking forward to resuming growth at a more normalized rate. In addition to organic growth opportunities, we plan to continue to expand our franchise through a combination of acquisitions and de novo branch openings," concluded Mr. Thian.

Key Performance Ratios

Net income of $10.1 million for the second quarter of 2019 produced an annualized return on average assets of 1.43%, an annualized return on average tangible common equity of 12.51%, and an annualized return on average equity of 10.42%.  This compares to an annualized return on average assets of 1.44%, an annualized return on average tangible common equity of 13.26%, and an annualized return on average equity of 10.98% for the first quarter of 2019.  The efficiency ratio for the second quarter of 2019 was 50.0%, compared to 50.9% for the prior quarter. Normalizing for the 1,035,000 shares issued for options in 2018 and the 3,011,787 shares issued as a result of the First American International Corp. acquisition, diluted earnings per share would have been $0.52 for the quarter ended June 30, 2019 and $0.48 for the quarter ended June 30, 2018.

Net Interest Income and Net Interest Margin

Net interest income, before provision for loan losses, was $24.3 million for the second quarter of 2019, compared to $25.9 million for the first quarter of 2019.  The $1.6 million decrease was primarily attributable to a $94.7 million decrease in average loans held for sale and a $6.3 million decrease in average total loans held for investment, partially offset by a $74.3 million decrease in average interest-bearing liabilities.  Net interest income was also impacted by a 20 basis point decrease in the net interest margin.  Accretion of purchase discounts contributed $753,000 to net interest income in the second quarter of 2019, compared to $1.1 million in the first quarter of 2019.

Compared to the second quarter of 2018, net interest income, before provision for loan losses, increased from $17.8 million. The increase was primarily attributable to a $1.0 billion increase in average earning assets, partially offset by a 73 basis point decrease in the net interest margin.

Net interest margin was 3.64% for the second quarter of 2019, a decrease from 3.84% in the first quarter of 2019. The decrease was primarily attributable to a 12 basis point increase in the cost of interest bearing liabilities, and a 14 basis point decrease in the yield on average earning assets resulting from lower average loan yields.  Loan discount accretion contributed 11 basis points to the net interest margin in the second quarter of 2019, compared to 16 basis points in the first quarter of 2019.

Noninterest Income

Noninterest income was $5.5 million for the second quarter of 2019, an increase of $1.3 million from $4.2 million in the first quarter of 2019.  The increase was driven by an increase in gain on loan sales of $922,000, higher service charges and fees of $402,000, higher net loan servicing fees of $59,000, and an increase in recoveries on loans acquired in business combinations of $49,000. These were partially offset by a decrease in unrealized gain on equity investments of $147,000.

The Company sold $175.0 million in mortgage loans for a net gain of $2.5 million during the second quarter of 2019, compared to $129.8 million in mortgage loan sales for a net gain of $1.9 million during the first quarter. The Company originated $28.3 million in mortgage loans for sale for the second quarter of 2019, compared with $49.0 million during the prior quarter.

The Company sold $10.0 million in SBA loans for a net gain of $616,000 during the second quarter of 2019, compared to $3.7 million in SBA loans sold for a net gain of $125,000 during the first quarter of 2019. 

The Company sold $1.6 million in commercial real estate loans for a net gain of $24,000 in the second quarter of 2019.  In the prior quarter, $8.8 million loans were sold for a gain of $154,000

Compared to the second quarter of 2018, noninterest income increased by $2.7 million from $2.8 million. The increase was primarily attributable to an increase of $1.0 million in gain on sale of loans and a $776,000 increase in service charges and fees, and an increase of $841,000 in net loan servicing fees, mostly attributable to the First American International Bank merger.

Noninterest Expense

Noninterest expense for the second quarter of 2019 was $14.9 million, compared to $15.3 million for the first quarter of 2019.  The $426,000 decrease was primarily attributable to a $949,000 decrease in salaries and employee benefits expenses and a $235,000 decrease in merger and other expenses, partially offset by a $422,000 increase in occupancy and equipment expenses, of which $225,000 was for prior period New York City property taxes, a $231,000 increase in legal and professional expenses and a $210,000 increase in data processing expenses, of which $82,000 was for duplicative services which were not yet converted.

Compared to the second quarter of 2018, noninterest expense increased from $8.2 million to $14.9 million. The $6.7 million increase was primarily due to an increase in salaries and employee benefits of $3.5 million, occupancy and equipment expenses of $1.8 million, data processing expenses of $732,000, and amortization of intangibles of $308,000.  The increase in salary expense is attributable to additional staff for expansion and the First American acquisition.  The increase in occupancy expense is mainly due to the First American International Corp. acquisition, including the new branch in Flushing, NY and our new Irvine location in Orange County, CA.

Income Taxes

The effective tax rate was 30.3%, including the tax impact for stock options exercised in the amount of $52,000 for the second quarter of 2019, 27.1%, including the impact of a deduction for stock options exercised in the amount of $92,000, for the first quarter, and 19.5% for the second quarter of 2018, which included the impact of a deduction for stock options exercised in the amount of $1.2 million

Loan Portfolio

Loans held for investment, net of deferred fees and discounts, totaled $2.1 billion as of June 30, 2019, a decrease of $28.0 million from March 31, 2019, and an increase of $808.4 million from June 30, 2018.  The slight decline in loans held for investment from the end of the first quarter was primarily due to loans sold that were previously classified as loans held for investment of $107.7 million, partially offset by an increase in loan production.

Mortgage loans held for sale were $249.6 million as of June 30, 2019, a decrease of $125.8 million from $375.4 million at March 31, 2019. 

Deposits

Deposits were $2.2 billion at June 30, 2019, an increase of $51.0 million from March 31, 2019, and an increase of $810.9 million from June 30, 2018. The increase in total deposits from the end of the prior quarter was primarily attributable to a $91.3 million increase in retail time deposits, partially offset by a decrease of $47.9 million in brokered time deposits.  We continue to experience customers moving funds to time deposits from savings, NOW and money market accounts, given the current expectations for lower interest rates. Non-maturity deposits decreased by $1.8 million in the quarter. As of June 30, 2019, deposits included $135.0 million in brokered CDs.

In the second quarter, noninterest-bearing deposits increased $16.7 million to $435.6 million as of June 30, 2019. The increase was due to a partial return of deposits that were withdrawn in the first quarter due to customer concern over uncertain international trade issues. Compared to June 30, 2018, noninterest-bearing deposits increased $129.3 million from $306.4 million

Asset Quality

Nonperforming assets totaled $8.6 million, or 0.31% of total assets at June 30, 2019, compared to $4.6 million, or 0.16%, of total assets at March 31, 2019. The increase in nonperforming assets was primarily due to the addition of a $2.9 million SBA loan. Nonperforming assets consist of Other Real Estate Owned, loans modified under troubled debt restructurings (TDR), non-accrual loans, and loans past due 90 days or more and still accruing interest. 

Loans held-for-investment 30 to 89 days past due decreased to $3.4 million at June 30, 2019, from $5.2 million at March 31, 2019. 

In the second quarter of 2019, there was one charge-off of $32,000 attributed to a commercial and industrial loan.  There were $109,000 in net recoveries in the first quarter.

The Company recorded a provision for loan losses of $357,000 for the second quarter of 2019, which was primarily attributable to a change in the loan mix during the quarter. 

The allowance for loan losses totaled $18.6 million, or 0.89% of total loans held for investment at June 30, 2019, compared with $18.2 million, or 0.86%, of total loans at March 31, 2019. 

Properties

Our headquarters office is located at 1055 Wilshire Blvd. in Los Angeles, California. In 2019, we have closed one non-banking office and one branch and opened one new branch in New York City, with one additional non-banking office vacant but still paying rent.

Corporate Overview

RBB Bancorp is a community-based financial holding company headquartered in Los Angeles, California.  The Company has total assets of $2.8 billion. Its wholly-owned subsidiary, the Bank is a full service commercial bank, which provides business banking services to the Chinese-American communities in Los Angeles County, Orange County and Ventura County in California, in Las Vegas, Nevada, and in Brooklyn, Queens, and Manhattan in New York.  Bank services include remote deposit, E-banking, mobile banking, commercial and investor real estate loans, business loans and lines of credit, commercial and industrial loans, SBA 7A and 504 loans, 1-4 single family residential loans, automobile lending, trade finance, a full range of depository account products and wealth management services.  The Bank has ten branches in Los Angeles County, two branches in Ventura County, one branch in Irvine, California, one branch in Las Vegas, Nevada, and nine branches and two loan offices in Brooklyn, Queens and Manhattan in New York. The Company's administrative and lending center is located at 1055 Wilshire Blvd., Los Angeles, California 90017, and its finance and operations center is located at 7025 Orangethorpe Avenue, Buena Park, California 90621. The Company's website address is www.royalbusinessbankusa.com.

Conference Call

Management will hold a conference call at 11:00 a.m. Pacific time/2:00 p.m. Eastern time on Tuesday, July 23, 2019, to discuss the Company's second quarter 2019 financial results.

To listen to the conference call, please dial 1-833-659-7620 or 1-430-775-1348, passcode 4677186. A replay of the call will be made available at 1-855-859-2056 or 1-404-537-3406, passcode 4677186, approximately one hour after the conclusion of the call and will remain available through July 30, 2019.

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 within the meaning of the Private Securities Litigation Reform Act of 1995, including 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; the costs or effects of acquisitions or dispositions we may make, including our recently completed acquisition of FAIC, 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; changes in our organization, management, compensation and benefit plans, and our ability to retain or expand our workforce, management team and/or our board of directors; the costs and effects of legal, compliance and regulatory actions, changes and developments, including the initiation and resolution of legal proceedings (such as securities, consumer or employee class action litigation), regulatory or other governmental inquiries or investigations, and/or the results of regulatory examinations or reviews; our ongoing relations with our various federal and state regulators, including the SEC, FDIC, FRB and California DBO; our success at managing the risks involved in the foregoing items and all other factors set forth in the Company's public reports, including its Annual Report as filed under Form 10-K for the year ended December 31, 2018, 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)

(Dollars in thousands)







June 30





March 31





December 31,





September 30,





June 30,





2019





2019





2018





2018





2018

Assets







































Cash and due from banks



$

185,643





$

250,079





$

147,685





$

171,553





$

72,788

Federal funds sold and other cash equivalents





20,000

























Total cash and cash equivalents





205,643







250,079







147,685







171,553







72,788

Interest-bearing deposits in other financial institutions





1,196







1,196







600







600







600

Investment securities available for sale





71,629







58,537







73,762







87,066







61,299

Investment securities held to maturity





8,733







9,449







9,961







9,974







9,986

Mortgage loans held for sale





249,596







375,430







434,522







378,943







281,755

Loans held for investment





2,092,438







2,120,413







2,142,015







1,381,218







1,284,082

Allowance for loan losses





(18,561)







(18,236)







(17,577)







(16,178)







(14,657)

Net loans held for investment





2,073,877







2,102,177







2,124,438







1,365,040







1,269,425

Premises and equipment, net





17,214







17,342







17,307







8,119







7,502

Federal Home Loan Bank (FHLB) stock





15,000







8,899







9,707







7,738







7,738

Net deferred tax assets





4,318







4,389







4,642







7,320







7,089

Income tax receivable





3,001













656







1,845







2,170

Other real estate owned (OREO)





2,075







2,056







1,101







293







293

Cash surrender value of life insurance





33,963







33,769







33,578







33,380







33,180

Goodwill





58,383







58,383







58,383







29,940







29,940

Servicing assets





17,587







17,288







17,370







6,248







6,134

Core deposit intangibles





6,828







7,212







7,601







1,203







1,280

Accrued interest and other assets





32,913







31,912







32,689







27,577







25,693

Total assets



$

2,801,956





$

2,978,118





$

2,974,002





$

2,136,839





$

1,816,872

Liabilities and shareholders' equity







































Deposits:







































Noninterest-bearing demand



$

435,629





$

418,953





$

438,764





$

287,274





$

306,362

Savings, NOW and money market accounts





462,448







480,959







579,247







462,737







424,261

Time deposits





1,337,257







1,284,428







1,126,030







814,953







693,783

Total deposits





2,235,334







2,184,340







2,144,041







1,564,964







1,424,406

Reserve for unfunded commitments





621







639







688







550







483

Income tax payable





1,610







3,009



















FHLB advances





40,000







275,000







319,500







210,000







40,000

Long-term debt, net of debt issuance costs





103,878







103,793







103,708







49,637







49,601

Subordinated debentures





9,590







9,548







9,506







3,492







3,470

Accrued interest and other liabilities





17,103







16,986







21,938







13,198







12,710

Total liabilities





2,408,136







2,593,315







2,599,381







1,841,841







1,530,670

Shareholders' equity:







































Shareholder's equity





393,758







385,395







375,887







296,514







287,509

Non-controlling interest





72







72







72













Accumulated other comprehensive income (loss) - Net of tax





(10)







(664)







(1,338)







(1,516)







(1,307)

Total shareholders' equity





393,820







384,803







374,621







294,998







286,202

Total liabilities and stockholders' equity



$

2,801,956





$

2,978,118





$

2,974,002





$

2,136,839





$

1,816,872

 

RBB BANCORP AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

(Dollars in thousands, except per share amounts) 







For the three months ended





June 30, 2019





March 31, 2019





June 30, 2018

Interest and dividend income:























Interest and fees on loans



$

34,240





$

35,839





$

21,132

Interest on interest-bearing deposits





515







468







209

Interest on investment securities





685







588







603

Dividend income on FHLB stock





379







198







134

Interest on federal funds sold and other





124







113







206

Total interest income





35,943







37,206







22,284

Interest expense:























Interest on savings deposits, NOW and money market accounts





1,238







1,294







998

Interest on time deposits





7,797







5,953







2,410

Interest on subordinated debentures and long term debt





1,929







1,933







920

Interest on other borrowed funds





662







2,114







129

Total interest expense





11,626







11,294







4,457

Net interest income





24,317







25,912







17,827

Provision for loan losses





357







550







700

Net interest income after provision for loan losses





23,960







25,362







17,127

Noninterest income:























Service charges, fees and other





1,222







820







446

Gain on sale of loans





3,120







2,198







2,085

Loan servicing fees, net of amortization





899







840







58

Recoveries on loans acquired in business combinations





55







6







5

Unrealized gain on equity investments











147







Increase in cash surrender value of life insurance





194







191







199

Gain on sale of fixed assets





6



















5,496







4,202







2,793

Noninterest expense:























Salaries and employee benefits





8,169







9,118







4,709

Occupancy and equipment expenses





2,674







2,252







834

Data processing





1,219







1,009







487

Legal and professional





656







425







423

Office expenses





294







336







192

Marketing and business promotion





316







362







262

Insurance and regulatory assessments





284







298







213

Amortization of intangibles





385







388







77

OREO expenses





81







81







Merger expenses





15







71







183

Other expenses





806







985







811







14,899







15,325







8,191

Income before income taxes





14,557







14,239







11,729

Income tax expense





4,415







3,859







2,292

Net income



$

10,142





$

10,380





$

9,437

























Net income per share























Basic



$

0.51





$

0.52





$

0.58

Diluted



$

0.50





$

0.51





$

0.54

Cash Dividends declared per common share



$

0.10





$

0.10





$

0.09

Weighted-average common shares outstanding























Basic





20,074,651







20,047,716







16,407,439

Diluted





20,445,013







20,436,741







17,322,800

 

RBB BANCORP AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

(Dollars in thousands, except per share amounts) 







For the six months ended





June 30, 2019





June 30, 2018

Interest and dividend income:















Interest and fees on loans



$

70,079





$

40,206

Interest on interest-earning deposits





983







395

Interest on investment securities





1,273







1,163

Dividend income on FHLB stock





577







253

Interest on federal funds sold and other





237







443

 Total interest income





73,149







42,460

Interest expense:















Interest on savings deposits, NOW and money market accounts





2,532







1,700

Interest on time deposits





13,750







4,456

Interest on subordinated debentures and long term debt





3,862







1,833

Interest on other borrowed funds





2,776







200

Total interest expense





22,920







8,189

Net interest income





50,229







34,271

Provision for loan losses





907







884

Net interest income after provision for loans losses





49,322







33,387

Noninterest income:















Service charges, fees and other





2,042







912

Gain on sale of loans





5,318







3,900

Loan servicing fees, net of amortization





1,739







27

Recoveries on loans acquired in business combinations





61







11

Unrealized gain on equity investments





147







Increase in cash surrender value of life insurance





385







398

Gain on sale of fixed assets





6













9,698







5,248

Noninterest expense:















Salaries and employee benefits





17,287







9,660

Occupancy and equipment expenses





4,926







1,626

Data processing





2,228







960

Legal and professional





1,081







680

Office expenses





630







363

Marketing and business promotion





678







465

Insurance and regulatory assessments





582







422

Amortization of intangibles





773







158

OREO expenses





162







7

Merger expenses





86







223

Other expenses





1,791







1,916







30,224







16,480

Income before income taxes





28,796







22,155

Income tax expense





8,274







3,872

Net income



$

20,522





$

18,283

















Net income per share















Basic



$

1.02





$

1.13

Diluted



$

1.00





$

1.06

Cash Dividends declared per common share



$

0.20





$

0.17

Weighted-average common shares outstanding















Basic





20,061,258







16,246,063

Diluted





20,440,900







17,248,125

 

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, 2019



March 31, 2019





June 30, 2018







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)



$

120,818





$

1,018





3.38

%



$

92,692





$

779





3.41

%



$

79,065





$

549







2.78

%

Securities (2)





































































Available for sale





87,347







610





2.80

%





68,708







508





3.00

%





74,836







519







2.78

%

Held to maturity





9,127







84





3.69

%





9,629







89





3.75

%





9,992







92







3.68

%

Mortgage loans held for sale





355,168







4,245





4.79

%





449,828







5,490





4.95

%





209,423







2,428







4.65

%

Loans held for investment: (3)





































































Real estate





1,763,749







24,394





5.55

%





1,764,813







24,486





5.63

%





885,630







12,635







5.72

%

Commercial (4)





347,236







5,601





6.47

%





352,428







5,864





6.75

%





377,077







6,069







6.46

%

Total loans





2,110,985







29,995





5.70

%





2,117,241







30,350





5.81

%





1,262,707







18,704







5.94

%

Total earning assets





2,683,445





$

35,952





5.37

%





2,738,098





$

37,216





5.51

%





1,636,023





$

22,292







5.47

%

Noninterest-earning assets





166,719





















176,813





















100,442



















Total assets



$

2,850,164



















$

2,914,911



















$

1,736,465

























































































Interest-bearing liabilities





































































NOW and money market deposits



$

387,363





$

1,188





1.23

%



$

413,952





$

1,241





1.22

%



$

387,116





$

968







1.00

%

Savings deposits





97,584







50





0.21

%





100,623







53





0.21

%





29,499







30







0.40

%

Time deposits





1,338,631







7,797





2.34

%





1,139,214







5,953





2.12

%





666,493







2,410







1.45

%

Total interest-bearing deposits





1,823,578







9,035





1.99

%





1,653,789







7,247





1.78

%





1,083,108







3,408







1.26

%

FHLB short-term advances





95,220







662





2.79

%





339,406







2,114





2.53

%





34,011







129







1.52

%

Long-term debt





103,826







1,748





6.75

%





103,742







1,747





6.83

%





49,583







849







6.87

%

Subordinated debentures





9,564







181





7.59

%





9,523







186





7.92

%





3,459







71







8.26

%

Total interest-bearing liabilities





2,032,188







11,626





2.29

%





2,106,460







11,294





2.17

%





1,170,161







4,457







1.53

%

Noninterest-bearing liabilities





































































Noninterest-bearing deposits





408,219





















405,190





















271,920



















Other noninterest-bearing liabilities





19,183





















19,987





















12,930



















Total noninterest-bearing liabilities





427,402





















425,177





















284,850



















Shareholders' equity





390,574





















383,274





















281,454



















Total liabilities and shareholders' equity



$

2,850,164



















$

2,914,911



















$

1,736,465



















Net interest income / interest rate spreads











$

24,326





3.08

%











$

25,922





3.34

%











$

17,835







3.94

%

Net interest margin



















3.64

%



















3.84

%





















4.37

%













(1)

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

(2)

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

(3)

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

(4)

Includes purchased receivables, which are short term loans made to investment grade companies and are used for cash - management purposes by the Company.

 

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,







2019



2018







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)



$

111,601





$

1,798





3.25

%



$

85,509





$

1,092







2.58

%

Securities (2)















































Available for sale





78,079







1,118





2.89

%





72,453







996







2.77

%

Held to maturity





9,377







173





3.72

%





9,997







184







3.71

%

Mortgage loans held for sale





402,237







9,735





4.88

%





184,315







4,266







4.67

%

Loans held for investment: (3)















































Real estate





1,764,278







48,879





5.59

%





865,589







23,732







5.53

%

Commercial (4)





349,818







11,465





6.61

%





380,740







12,208







6.47

%

Total loans





2,114,097







60,344





5.76

%





1,246,329







35,940







5.82

%

Total earning assets





2,715,391





$

73,168





5.43

%





1,598,603





$

42,478







5.36

%

Noninterest-earning assets





166,967





















95,754



















Total assets



$

2,882,358



















$

1,694,357



































































Interest-bearing liabilities















































NOW and money market deposits



$

400,584





$

2,430





1.22

%



$

365,909





$

1,636







0.90

%

Savings deposits





99,095







102





0.21

%





30,709







65







0.43

%

Time deposits





1,239,474







13,750





2.24

%





653,837







4,456







1.37

%

Total interest-bearing deposits





1,739,153







16,282





1.89

%





1,050,455







6,157







1.18

%

FHLB short-term advances





216,638







2,776





2.58

%





32,565







200







1.24

%

Long-term debt





103,784







3,495





6.79

%





49,567







1,698







6.91

%

Subordinated debentures





9,544







367





7.75

%





3,449







135







7.92

%

Total interest-bearing liabilities





2,069,119





$

22,920





2.23

%





1,136,036





$

8,190







1.45

%

Noninterest-bearing liabilities















































Noninterest-bearing deposits





406,713





















269,957



















Other noninterest-bearing liabilities





19,582





















12,114



















Total noninterest-bearing liabilities





426,295





















282,071



















Shareholders' equity





386,944





















276,250



















Total liabilities and shareholders' equity



$

2,882,358



















$

1,694,357



















Net interest income / interest rate spreads











$

50,248





3.20

%











$

34,288







3.91

%

Net interest margin



















3.73

%





















4.33

%













(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.

(4)

Includes purchased receivables, which are short term loans made to investment grade companies and are used for cash - management purposes by the Company.

 

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,







2019





2019





2018



Per share data (common stock)

























Earnings

























Basic



$

0.51





$

0.52





$

0.58



Diluted



$

0.50





$

0.51





$

0.54



Dividends declared



$

0.10





$

0.10





$

0.09



Basic, excluding merger expense



$

0.51





$

0.52





$

0.58



Diluted, excluding merger expense



$

0.50





$

0.51





$

0.55



Book value



$

19.61





$

19.17





$

17.30



Tangible book value



$

16.37





$

15.90





$

15.41



Weighted average shares outstanding

























Basic





20,074,651







20,047,716







16,407,439



Diluted





20,445,013







20,436,741







17,322,800



Shares outstanding at period end





20,077,524







20,073,991







16,544,627



Performance ratios

























Return on average assets, annualized



1.43

%





1.44

%





2.18

%

Return on average shareholders' equity, annualized



10.42

%





10.98

%





13.45

%

Return on average tangible common equity, annualized



12.51

%





13.26

%





15.13

%

Noninterest income to average assets, annualized



0.77

%





0.58

%





0.65

%

Noninterest expense to average assets, annualized



2.10

%





2.13

%





1.89

%

Yield on average earning assets



5.37

%





5.51

%





5.47

%

Cost of average deposits



1.62

%





1.43

%





1.01

%

Cost of average interest-bearing deposits



1.99

%





1.78

%





1.26

%

Cost of average interest-bearing liabilities



2.29

%





2.17

%





1.53

%

Accretion on loans to average earning assets



0.11

%





0.16

%





0.23

%

Net interest spread



3.08

%





3.34

%





3.94

%

Net interest margin



3.64

%





3.84

%





4.37

%

Efficiency ratio



49.97

%





50.89

%





39.72

%

Common stock dividend payout ratio



19.61

%





19.69

%





16.67

%

 

RBB BANCORP AND SUBSIDIARIES

SELECTED FINANCIAL HIGHLIGHTS

(Unaudited)

(Dollars in thousands, except per share amounts)







For the six months ended June 30,







2019





2018



Per share data (common stock)

















Earnings

















Basic



$

1.02





$

1.13



Diluted



$

1.00





$

1.06



Basic, excluding merger expense



$

1.03





$

1.14



Diluted, excluding merger expense



$

1.01





$

1.07



Dividends declared



$

0.20





$

0.17



Book value



$

19.61





$

17.30



Tangible book value



$

16.37





$

15.41



Weighted average shares outstanding

















Basic





20,061,258







16,246,063



Diluted





20,440,900







17,248,125



Shares outstanding at period end





20,077,524







16,544,627



Performance ratios

















Return on average assets, annualized



1.44

%





2.18

%

Return on average shareholders' equity, annualized



10.70

%





13.35

%

Return on average tangible common equity, annualized



12.88

%





15.05

%

Noninterest income to average assets, annualized



0.68

%





0.62

%

Noninterest expense to average assets, annualized



2.11

%





1.96

%

Yield on average earning assets



5.43

%





5.36

%

Cost of average deposits



1.53

%





0.94

%

Cost of average interest-bearing deposits



1.89

%





1.18

%

Cost of average interest-bearing liabilities



2.23

%





1.45

%

Accretion on loans to average earning assets



0.13

%





0.11

%

Net interest spread



3.20

%





3.90

%

Net interest margin



3.73

%





4.33

%

Efficiency ratio



50.43

%





41.70

%

Common stock dividend payout ratio



19.61

%





16.01

%

 

RBB BANCORP AND SUBSIDIARIES

SELECTED FINANCIAL HIGHLIGHTS

(Unaudited)

(Dollars in thousands, except per share amounts)







As of







June 30,





March 31,





June 30,







2019





2019





2018



Loan to deposit ratio



93.61

%



97.07

%



90.15

%

Core deposits / total deposits



67.22

%



66.79

%





82.43

%

Net non-core funding dependence ratio





18.46

%





22.81

%





17.43

%



























Credit Quality Data:

























Loans 30-89 days past due



$

4,230





$

5,666





$

1,064



Loans 30-89 days past due to total loans



0.20

%





0.27

%





0.08

%

Nonperforming loans



$

6,354





$

2,586





$

6,553



Nonperforming loans to total loans



0.30

%





0.12

%





0.51

%

Nonperforming assets



$

8,429





$

4,642





$

6,846



Nonperforming assets to total assets



0.30

%





0.16

%





0.38

%

Allowance for loan losses to total loans



0.89

%



0.86

%



1.14

%

Allowance for loan losses to nonperforming loans



292.12

%



705.18

%



223.67

%

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





0.01

%





-0.02

%





0.00

%



























Regulatory and other capital ratios—Company

























Tangible common equity to tangible assets





12.01

%





10.96

%





14.28

%

Tier 1 leverage ratio





12.19

%





11.61

%





15.23

%

Tier 1 common capital to risk-weighted assets





16.96

%





16.29

%





18.29

%

Tier 1 capital to risk-weighted assets





17.45

%





16.77

%





18.54

%

Total capital to risk-weighted assets





23.77

%





22.98

%





23.16

%



























Regulatory capital ratios—bank only

























Tier 1 leverage ratio





14.17

%





13.43

%





14.84

%

Tier 1 common capital to risk-weighted assets





20.31

%





19.39

%





18.06

%

Tier 1 capital to risk-weighted assets





20.31

%





19.39

%





18.06

%

Total capital to risk-weighted assets





21.30

%





20.35

%





19.14

%

 

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



2019





2019





2018





2018





2018



Interest income









































Loans, including fees



$

34,240





$

35,839





$

33,829





$

23,445





$

21,132



Investment securities and other





1,703







1,367







1,352







1,028







1,152



Total interest income





35,943







37,206







35,181







24,473







22,284



Interest expense









































Deposits





9,035







7,247







6,661







4,139







3,408



Interest on subordinated debentures and other





1,929







1,747







1,325







925







920



Other borrowings





662







2,300







1,613







793







129



Total interest expense





11,626







11,294







9,599







5,857







4,457



Net interest income before provision for loan losses





24,317







25,912







25,582







18,616







17,827



Provision for loan losses





357







550







1,890







1,695







700



Net interest income after provision for loan losses





23,960







25,362







23,692







16,921







17,127



Noninterest income





5,496







4,202







5,489







2,105







2,793



Noninterest expense





14,899







15,325







15,503







8,654







8,191



Earnings before income taxes





14,557







14,239







13,678







10,372







11,729



Income taxes





4,415







3,859







4,188







2,041







2,292



Net income



$

10,142





$

10,380





$

9,490





$

8,331





$

9,437



Net income per common share - basic



$

0.51





$

0.52





$

0.49





$

0.50





$

0.58



Net income per common share - diluted



$

0.50





$

0.51





$

0.48





$

0.48





$

0.54



Cash dividends declared per common share



$

0.10





$

0.10





$

-





$

0.09





$

0.09



Cash dividends declared



$

2,007





$

2,007





$

-





$

1,489





$

1,470



Yield on average assets, annualized



1.43

%





1.44

%





1.35

%





1.73

%





2.18

%

Yield on average earning assets



5.37

%





5.51

%





5.45

%





5.40

%





5.47

%

Cost of average deposits



1.62

%





1.43

%





1.28

%





1.17

%





1.01

%

Cost of average interest-bearing deposits



1.99

%





1.78

%





1.61

%





1.46

%





1.26

%

Cost of average interest-bearing liabilities



2.29

%





2.17

%





1.91

%





1.75

%





1.53

%

Accretion on loans to average earning assets



0.11

%





0.16

%





0.14

%





0.05

%





0.23

%

Net interest margin



3.64

%





3.84

%





3.88

%





4.11

%





4.37

%

 

RBB BANCORP AND SUBSIDIARIES

SELECTED FINANCIAL HIGHLIGHTS

(Unaudited)

(Dollars in thousands, except per share amounts)



Loan Portfolio Detail



As of June 30,

2019





As of March 31,

2019





As of December 31,

2018





As of  September 30,

2018





As of  June 30,

2018

(dollars in thousands)



$





%





$





%





$





%





$





%





$





%

Loans:















































































Commercial and industrial



$

283,919







13.6





$

269,556







12.7





$

304,084







14.2





$

299,817







21.7





$

311,186







24.2

SBA





79,474







3.8







82,571







3.9







84,500







3.9







87,406







6.3







97,142







7.6

Construction and land development





118,807







5.7







125,686







5.9







113,235







5.3







110,710







8.0







94,901







7.4

Commercial real estate (1)





756,452







36.2







756,313







35.7







758,721







35.4







524,174







38.0







492,993







38.4

Single-family residential mortgages





853,404







40.7







885,951







41.8







881,249







41.2







359,111







26.0







287,860







22.4

Other loans





382







0.0







336







0.0







226







0.0

























Total loans (2)



$

2,092,438







100.0





$

2,120,413







100.0





$

2,142,015







100.0





$

1,381,218







100.0





$

1,284,082







100.0

Allowance for loan losses





(18,561)















(18,236)















(17,577)















(16,178)















(14,657)









Total loans, net



$

2,073,877













$

2,102,177













$

2,124,438













$

1,365,040













$

1,269,425





















(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)



2019





2018





2019





2018

Beginning balance



$

18,236





$

13,957





$

17,577





$

13,773

Additions to the allowance charged to expense





357







700







907







884

Recoveries (charged-off) on loans





(32)













77







Ending balance





18,561







14,657







18,561







14,657

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, 2019 and 2018.





June 30,



(dollars in thousands, except per share data)



2019





2018





















Tangible common equity:

















Total shareholders' equity



$

393,820





$

286,202



Adjustments

















Goodwill





(58,383)







(29,940)



Core deposit intangible





(6,828)







(1,280)



Tangible common equity



$

328,609





$

254,982



Tangible assets:

















Total assets-GAAP



$

2,801,956





$

1,816,872



Adjustments

















Goodwill





(58,383)







(29,940)



Core deposit intangible





(6,828)







(1,280)



Tangible assets



$

2,736,745





$

1,785,652



Common shares outstanding





20,077,524







16,544,627



Tangible common equity to tangible assets ratio





12.01

%





14.28

%

Tangible book value per share



$

16.37





$

15.41



 

Cision View original content:http://www.prnewswire.com/news-releases/rbb-bancorp-reports-second-quarter-earnings-for-2019-300888928.html

SOURCE RBB Bancorp

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