Financial Data and Key Metrics Changes - First quarter net income declined to $2.3 million or $0.13 per share, primarily due to strategic actions taken to address non-performing assets [3] - Non-performing assets were reduced by 20% and net exposure to non-performing loans decreased by 32% to $51 million [3] - Net interest income before provisions increased for the third consecutive quarter to $26.2 million [8] - Net interest margin increased by 12 basis points to 2.88% due to a decline in the cost of interest-bearing deposits [6][10] Business Line Data and Key Metrics Changes - Loans held for investment grew by $90 million or 12% on an annualized basis, driven by growth in commercial, SBA, and SFR balances [5] - Total first quarter loan originations amounted to $201 million at a blended yield of 6.77% [6] - Non-interest income declined by $4.34 million to $2.3 million due to lower gains on the sale of loans [10] Market Data and Key Metrics Changes - Total deposits increased at an 8% annualized rate to $3.14 billion, with growth in money market accounts and CDs offsetting a decline in non-interest bearing accounts [13] - The loan portfolio yield remained stable at 6.03% [12] Company Strategy and Development Direction - The company is focusing on resolving non-performing loans quickly while minimizing the impact on earnings and capital [3] - There is an ongoing effort to reduce reliance on wholesale funding, with a successful CD campaign in the first quarter [46] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in resolving remaining non-performing assets and expects to report additional progress in upcoming quarters [4] - The company anticipates continued loan growth, albeit at a more moderate pace than the first quarter [6] - Management believes that by the second half of 2025, there could be a target for reducing non-performing loans to a normal baseline [54] Other Important Information - The company’s tangible book value per share increased to $24.63 [13] - Capital ratios remain strong, with all capital ratios above regulatory well-capitalized levels [14] Q&A Session Summary Question: Thoughts on potential share repurchase - Management recognizes that a buyback is one of the best uses of excess capital and is working to put a buyback in place [19] Question: Dynamics within the margin and FHLB advances - The FHLB advances are fully priced into the March net interest margin, and the net interest margin is slightly below the quarter's average [21] Question: Margin drag from non-accrual loans - There is a drag on net interest margin from non-accrual loans, with $20 million potentially returning to accrual status [24] Question: Appetite for more problem loan sales - Management is open to sales but believes they are well reserved for future write-offs [29] Question: Exposure to tariff impacts - Management has reached out to top customers and does not observe any potential financial impact from tariffs at this time [34] Question: Loan growth expectations and deposit trends - Management expects to fund loan growth organically and noted some migration into higher-yielding products [46] Question: Non-interest expenses outlook - Management estimates operating expenses to be around $17.5 million to $18 million, with some moderation expected [66]

Financial Data and Key Metrics Changes - First quarter net income declined to $2,300,000 or $0.13 per share, primarily due to strategic actions taken to address non-performing assets [3] - Non-performing assets were reduced by 20% and net exposure to non-performing loans decreased by 32% to $51,000,000 [3] - Net interest income before provisions increased for the third consecutive quarter to $26,200,000 [9] - Net interest margin increased by 12 basis points to 2.88% due to a decline in the cost of interest-bearing deposits [7][9] Business Line Data and Key Metrics Changes - Loans held for investment grew by $90,000,000 or 12% on an annualized basis, driven by growth in commercial, SBA, and SFR balances [5] - Total first quarter loan originations amounted to $201,000,000 at a blended yield of 6.77% [6][7] - Non-interest income declined by $4,340,000 to $2,300,000 due to lower gains on the sale of loans [10] Market Data and Key Metrics Changes - Total deposits increased at an 8% annualized rate to $3,140,000,000, with growth in money market accounts and CDs offsetting a decline in non-interest bearing accounts [14] - The loan portfolio yield remained stable at 6.03% [11] Company Strategy and Development Direction - The company is focusing on resolving non-performing loans quickly while minimizing the impact on earnings and capital [3] - There is an ongoing effort to implement a share repurchase program as capital ratios are strong and the current share price is attractive [20] - The company aims to continue loan growth, albeit at a more moderate pace than the first quarter [7] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in resolving remaining non-performing assets and expects to report additional progress in upcoming quarters [4] - The company anticipates that lower future provisions and redeployment of capital will lead to increasing net interest income after provisions [9] - Management acknowledged the uncertainty surrounding the tariff situation but reported no immediate financial impact from their top customers [36] Other Important Information - The company’s tangible book value per share increased to $24.63 [14] - Capital ratios remain strong, with all ratios above regulatory well-capitalized levels [15] Q&A Session Summary Question: Thoughts on potential share repurchase - Management recognizes that a buyback is one of the best uses of excess capital and is working to implement it [20] Question: Dynamics within the margin and FHLB advances - The FHLB advances are fully priced into the March net interest margin, and the net interest margin is slightly below the quarter's average [22] Question: Margin drag from non-accrual loans - There is a drag on net interest margin from non-accrual loans, with potential recoveries being considered [25] Question: Loan growth expectations and deposit trends - Management expects to fund loan growth organically and noted some migration from non-interest bearing deposits to higher-yielding products [49] Question: Time frame for resolving non-performing loans - Management believes that by the second half of 2025, there could be significant progress in reducing non-performing loans [56] Question: Composition of the loan growth pipeline - The pipeline is primarily composed of CRE loans and single-family residences, with C&I loans expected to contribute more as new hires come online [63]

Financial Data and Key Metrics Changes - First quarter net income declined to $2,300,000 or $0.13 per share, primarily due to strategic actions taken to address non-performing assets [3] - Non-performing assets were reduced by 20% and net exposure to non-performing loans decreased by 32% to $51,000,000 [3][4] - Net interest income before provisions increased for the third consecutive quarter to $26,200,000 [9] - Net interest margin increased by 12 basis points to 2.88%, driven by a decline in the cost of interest-bearing deposits [7][9] Business Line Data and Key Metrics Changes - Loans held for investment grew by $90,000,000 or 12% on an annualized basis, with strong results from commercial, SBA, and SFR balances [5][6] - Total first quarter loan originations reached $201,000,000 at a blended yield of 6.77% [6] - Non-interest income declined by $4,340,000 to $2,300,000 due to lower gains on the sale of loans [10] Market Data and Key Metrics Changes - Total deposits increased at an 8% annualized rate to $3,140,000,000, with growth in money market accounts and CDs [13] - The ratio of allowance for loan losses to total loans held for investments increased by nine basis points to 1.65% [13] Company Strategy and Development Direction - The company is focusing on resolving non-performing loans quickly while minimizing the impact on earnings and capital [3] - There is an ongoing effort to redeploy capital previously tied up in non-performing assets to increase net interest income in the coming quarters [9] - The company aims to be the bank of choice for Asian Americans nationwide, with a commitment to addressing challenges faced in recent years [15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in resolving remaining non-performing assets and expects to report additional progress in upcoming quarters [4] - The company anticipates continued loan growth, albeit at a more moderate pace than the first quarter [7] - Management acknowledged the uncertainty surrounding tariffs but reported no immediate financial impact from current trade dynamics [34][56] Other Important Information - The company has strong capital ratios, with all capital ratios above regulatory well-capitalized levels [14] - The tangible book value per share increased to $24.63 [13] Q&A Session Summary Question: Thoughts on potential share repurchase - Management recognizes that a buyback is one of the best uses of excess capital and is working to implement it [19] Question: Dynamics within the margin and FHLB roll - The FHLB advances are fully priced into the March net interest margin, and the net interest margin is slightly below the quarter's average [21] Question: Margin drag from non-accruals - There is a drag on net interest margin from non-accrual loans, with potential recoveries being considered [24] Question: Loan growth expectations and deposit trends - Management expects to fund loan growth organically and noted a seasonal decline in non-interest bearing deposits [46] Question: Composition of the loan growth pipeline - The pipeline is primarily composed of CRE loans and single-family residences, with C&I loans expected to contribute more in the future [61]

Financial Performance - Diluted Earnings Per Share (EPS) decreased to $0.13 in 1Q25 [6], compared to $0.39 in 2Q24 [6] - Net income decreased to $2290 thousand in 1Q25 [6], compared to $7245 thousand in 2Q24 [6] - The efficiency ratio increased to 6509% in 1Q25 [6], compared to 6238% in 2Q24 [6] - Return on Average Assets decreased to 024% in 1Q25 [6], compared to 076% in 2Q24 [6] Balance Sheet & Capital - Gross Loans Held for Investment (HFI) increased to $3143063 thousand in 1Q25 [6], compared to $3047712 thousand in 2Q24 [6] - Total Deposits increased to $3142628 thousand in 1Q25 [6], compared to $3023605 thousand in 2Q24 [6] - Common Equity Tier 1 (CET1) Ratio decreased to 1787% in 1Q25 [6], compared to 1889% in 2Q24 [6] Asset Quality - Non-Performing Loans (NPLs) decreased to $60380 thousand in 1Q25 [6], compared to $81038 thousand in 4Q24 [6] - NPLs/Total Loans decreased to 192% in 1Q25 [6], compared to 264% in 4Q24 [6] - NPAs decreased by $165 million, or 20% [7, 31]

RBB (RBB) reported $28.46 million in revenue for the quarter ended March 2025, representing a year-over-year increase of 0.7%. EPS of $0.13 for the same period compares to $0.43 a year ago.The reported revenue represents a surprise of -1.11% over the Zacks Consensus Estimate of $28.78 million. With the consensus EPS estimate being $0.38, the EPS surprise was -65.79%.While investors closely watch year-over-year changes in headline numbers -- revenue and earnings -- and how they compare to Wall Street expecta ...

Financial Performance - The Company reported net income of $2.3 million, or $0.13 diluted earnings per share, for Q1 2025, a decline from $4.4 million, or $0.25 per share, in Q4 2024[4] - Noninterest income for Q1 2025 was $2.3 million, a decrease of $434,000 from Q4 2024, primarily due to lower net gain on sale of loans[11] - Noninterest expense increased to $18.5 million, up $873,000 from Q4 2024, mainly due to higher salaries and employee benefits[12] - The effective tax rate for Q1 2025 was 28.2%, up from 13.3% in Q4 2024, attributed to lower tax credits and higher estimated pre-tax net income[13] - Basic net income per share was $0.13 for the quarter, down from $0.25 in the previous quarter, a decline of 48%[36] - The return on average assets for Q1 2025 was 0.24%, down from 0.44% in Q4 2024 and 0.81% in Q1 2024[41] - Return on average tangible common equity (ROATCE) for the three months ended March 31, 2025, was 2.12%, down from 3.98% for the same period in 2024[54] Loan and Deposit Growth - Net loans held for investment grew by $89.8 million, or 12% annualized, compared to Q4 2024, with a total of $3.1 billion as of March 31, 2025[15] - Total deposits increased by $58.8 million, or 7.7% annualized, to $3.1 billion as of March 31, 2025, with interest-bearing deposits rising by $93.6 million[17] - Total loans as of March 31, 2025, increased to $3,143,063 thousand, up from $3,053,230 thousand as of December 31, 2024, representing a growth of 2.9%[49] - Total deposits reached $3,142,628 thousand as of March 31, 2025, an increase from $3,083,789 thousand as of December 31, 2024, reflecting a growth of 1.9%[51] Asset Quality - Nonperforming assets decreased by $16.5 million, or 20.3%, to $64.6 million, representing 1.61% of total assets at March 31, 2025[18] - The provision for credit losses was $6.7 million for Q1 2025, compared to $6.0 million in Q4 2024, driven by an increase in specific reserves[10] - The allowance for credit losses increased to $52.6 million, with the allowance for loan losses as a percentage of loans held for investment rising to 1.65%[22] - Nonperforming loans held for investment (HFI) were $60,380 thousand, with a ratio of 1.92% to total loans HFI[45] - The allowance for loan losses was $51,932 thousand, equating to 1.65% of total loans HFI[45] Capital and Equity - As of March 31, 2025, total shareholders' equity was $510.3 million, reflecting a $2.4 million increase from December 31, 2024, but a $3.7 million decrease from March 31, 2024[24] - The increase in shareholders' equity for Q1 2025 was attributed to lower net unrealized losses on available for sale securities of $3.0 million and net income of $2.3 million, offset by cash dividends paid of $2.9 million[24] - For the last twelve months, shareholders' equity decreased due to common stock repurchases of $19.2 million and dividends paid of $11.6 million, despite net income of $20.9 million[24] - Book value per share increased to $28.77 at March 31, 2025, up from $28.66 at December 31, 2024, and $27.67 at March 31, 2024[24] - Tangible common equity as of March 31, 2025, was $436,969 thousand, slightly up from $434,368 thousand as of December 31, 2024[53] - The common equity to assets ratio remained stable at 12.73% as of March 31, 2025, compared to 12.72% as of December 31, 2024[53] Interest and Margin - The net interest margin expanded to 2.88%, up from 2.76% in Q4 2024, due to a decrease in the overall cost of funds[8] - Net interest income before provision for credit losses was $26,163 thousand for the three months ended March 31, 2025, up from $25,977 thousand in the previous quarter, an increase of 0.72%[36] - The cost of average total deposits for Q1 2025 was 3.13%, down from 3.35% in Q4 2024[41] - Interest on loans was $45,621 thousand for the quarter, slightly down from $46,374 thousand in the previous quarter, a decrease of 1.62%[36] Operational Overview - RBB Bancorp operates primarily in Asian-centric communities across multiple states, including California, Nevada, New York, New Jersey, and Illinois[27] - The company provides a range of banking services, including commercial and industrial loans, SBA loans, and wealth management services[27] - Management will hold a conference call on April 29, 2025, to discuss Q1 2025 financial results[28] - The company utilizes non-GAAP financial measures to enhance understanding of its operational performance[31] - Forward-looking statements are subject to various risks and uncertainties that could materially affect actual results[32]

Core Viewpoint - RBB reported quarterly earnings of $0.13 per share, significantly missing the Zacks Consensus Estimate of $0.38 per share, marking a 65.79% earnings surprise to the downside [1]. Financial Performance - The company posted revenues of $28.46 million for the quarter ended March 2025, which was 1.11% below the Zacks Consensus Estimate and a slight increase from $28.25 million a year ago [2]. - Over the last four quarters, RBB has surpassed consensus EPS estimates two times and topped consensus revenue estimates two times [2]. Stock Performance - RBB shares have declined approximately 22.8% since the beginning of the year, contrasting with the S&P 500's decline of 6.1% [3]. - The current Zacks Rank for RBB is 4 (Sell), indicating expectations of underperformance in the near future [6]. Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.39 on revenues of $29.14 million, and for the current fiscal year, it is $1.60 on revenues of $118.77 million [7]. - The trend for estimate revisions ahead of the earnings release was unfavorable, which may impact future stock performance [6]. Industry Context - The Banks - West industry, to which RBB belongs, is currently ranked in the bottom 33% of over 250 Zacks industries, suggesting potential challenges for stock performance [8].

Core Points - RBB Bancorp reported a net income of $2.3 million, or $0.13 diluted earnings per share, for Q1 2025, a decline from $4.4 million, or $0.25 per share, in Q4 2024 [3][8] - The decline in net income was attributed to a $6.7 million pre-tax provision for credit losses, primarily aimed at reducing exposure to nonperforming loans [3][4] - The company reduced its net exposure to nonperforming loans by 32% since year-end, bringing it down to $51 million [4] Financial Performance - Net interest income for Q1 2025 was $26.2 million, slightly up from $26.0 million in Q4 2024, driven by a decrease in interest expense [5][8] - The net interest margin (NIM) increased to 2.88% in Q1 2025, up from 2.76% in Q4 2024, due to a decrease in the overall cost of funds [6][8] - Noninterest income decreased to $2.3 million in Q1 2025 from $2.7 million in Q4 2024, mainly due to lower net gains on loan sales [11][8] Credit Quality - Nonperforming assets decreased by $16.5 million, or 20.3%, to $64.6 million at the end of Q1 2025 [8][17] - The provision for credit losses was $6.7 million in Q1 2025, compared to $6.0 million in Q4 2024, reflecting an increase in specific reserves [10][8] - The allowance for loan losses as a percentage of loans held for investment increased to 1.65% at March 31, 2025, from 1.56% at December 31, 2024 [20][8] Balance Sheet - Total assets increased to $4.0 billion as of March 31, 2025, a $16.9 million increase from December 31, 2024 [13][8] - Loans held for investment totaled $3.1 billion, reflecting a 12% annualized growth compared to the previous quarter [14][8] - Total deposits rose to $3.1 billion, an increase of $58.8 million, or 7.7% annualized, from the previous quarter [16][8] Shareholders' Equity - Total shareholders' equity was $510.3 million at March 31, 2025, a $2.4 million increase from December 31, 2024 [23][8] - Book value per share increased to $28.77, and tangible book value per share rose to $24.63 as of March 31, 2025 [8][23]

Core Viewpoint - RBB Bancorp will release its financial results for the first quarter ended March 31, 2025, on April 28, 2025, after market close [1] Financial Results Announcement - A conference call to discuss the financial results will be held on April 29, 2025, at 11:00 a.m. Pacific Time [2] - Interested parties can listen to the call by dialing specific numbers or via a live webcast on the Company's website [3] Corporate Overview - RBB Bancorp is a community-based financial holding company headquartered in Los Angeles, California, with total assets of $4.0 billion as of December 31, 2024 [4] - The wholly-owned subsidiary, Royal Business Bank, provides a range of banking services primarily to Asian-centric communities across various locations in California, Nevada, New York, New Jersey, Illinois, and Hawaii [4] - The Bank operates multiple branches across these regions, including nine in Los Angeles County and additional branches in other states [4]

Financial Performance - For the year ended December 31, 2024, net earnings were $26.7 million, a decrease of $15.8 million, or 37.2%, from $42.5 million in 2023 due to a $19.9 million decrease in net interest income [271]. - Net interest income for 2024 was $99.4 million, down from $119.3 million in 2023, attributed to a $15.4 million increase in interest expense [282]. - Noninterest income increased slightly to $15.3 million in 2024 from $15.0 million in 2023 [282]. - The efficiency ratio for 2024 was 60.30%, compared to 52.64% in 2023, indicating a decline in operational efficiency [282]. - The provision for loan losses was $9.8 million in 2024, significantly higher than the $3.9 million in 2023, indicating a proactive approach to managing credit risk [366]. - Income tax expense dropped to $9.0 million in 2024, a 49.3% decrease from $17.8 million in 2023, with the effective tax rate falling to 25.3% [316]. Assets and Liabilities - Total assets as of December 31, 2024, were $4.0 billion, a decrease of $33.5 million, or 0.8%, from the previous year, primarily due to a $178.7 million decrease in interest-earning cash [272]. - Total liabilities decreased by $30.2 million, or 0.9%, to $3.5 billion at December 31, 2024, primarily due to a $91.0 million decrease in deposits [384]. - Total deposits decreased to $3.1 billion, down $91.0 million, or 2.9%, compared to the previous year, with a significant decrease in wholesale deposits [275]. - Cash and cash equivalents decreased by $173.6 million, or 40.3%, to $257.7 million as of December 31, 2024, from $431.4 million at December 31, 2023 [381]. Loans and Credit Quality - Loans held for investment (HFI) increased to $3.1 billion, up $21.4 million, or 0.7%, from $3.0 billion at December 31, 2023, driven by increases in commercial real estate and single-family residential mortgage loans [274]. - The allowance for loan losses (ALL) was $47.7 million, reflecting an increase of $5.8 million from $41.9 million in 2023, with a provision for loan losses of $9.8 million in 2024 compared to $3.9 million in 2023 [278]. - Nonperforming assets totaled $81.0 million, or 2.03% of total assets, at December 31, 2024, compared to $31.6 million, or 0.79% of total assets, at December 31, 2023, indicating a significant increase in nonperforming assets [373]. - The ratio of net charge-offs to average LHFI was 0.13% for 2024, compared to 0.10% in 2023, showing a slight deterioration in credit quality [366]. Capital and Equity - Shareholders' equity decreased by $3.4 million, or 0.7%, to $507.9 million as of December 31, 2024, primarily due to common stock repurchases and dividends paid [279]. - The Tier 1 leverage capital ratio was 11.92% as of December 31, 2024, compared to 11.99% in 2023, indicating the company remains well capitalized under Basel III standards [280]. - The Common Equity Tier 1 Risk-Based Capital Ratio for the consolidated entity was 17.94% in 2024, down from 19.07% in 2023, with a minimum requirement of 4.50% [416]. Interest Income and Expense - The net interest margin (NIM) decreased to 2.70% in 2024, down 46 basis points from 3.16% in 2023 [286]. - Interest expense on total interest-bearing liabilities increased by $15.4 million, or 15.2%, to $117.3 million in 2024 [292]. - The average cost of total deposits rose to 3.54% in 2024 from 2.87% in 2023, driven by a 72 basis point increase in the average rate paid on interest-bearing deposits [293]. Securities and Investments - As of December 31, 2024, total securities amounted to $425.4 million, with available-for-sale securities at $420.2 million, representing 98.8% of total securities [322]. - The fair value of mortgage-backed securities (residential) was $55,677,000, with unrealized losses of $6,674,000 as of December 31, 2024 [329]. - The weighted-average yield for total available-for-sale securities was 4.06% as of December 31, 2024 [327]. Operational Efficiency - Total noninterest expense decreased by $1.5 million, or 2.2%, to $69.2 million in 2024, primarily due to a $3.7 million reduction in legal and professional expenses [314]. - Salaries and employee benefits increased by $1.6 million, or 4.2%, to $39.4 million in 2024, attributed to merit increases and rising health benefit costs [314]. - The noninterest expenses to average assets ratio remained stable at 1.76% for both 2024 and 2023 [314]. Risk Management - The company employs a comprehensive methodology to monitor credit quality, including a risk classification system for potential problem loans [357]. - The company utilizes a discounted cash flow approach for estimating expected credit losses, incorporating economic forecasts and internal factors [361]. - The NII at risk results are within board policy limits, indicating effective risk management practices [437].