Core Points - RBB Bancorp declared a quarterly cash dividend of $0.16 per common share, payable on February 12, 2025, to shareholders of record as of January 31, 2025 [1] - The Company has donated $30,000 to support families affected by the recent wildfires in Los Angeles County and is providing resources for counseling and wellness support [2] - As of September 30, 2024, RBB Bancorp had total assets of $4.0 billion and operates primarily in Asian-centric communities across several states [3] Financial Performance - The quarterly cash dividend of $0.16 per share reflects the Company's ongoing commitment to returning value to shareholders [1] - The total assets of RBB Bancorp amount to $4.0 billion, indicating a solid financial foundation [3] Community Engagement - The Company is actively involved in community support, having partnered with non-profit organizations to assist low-to-moderate income communities affected by wildfires [2] - RBB Bancorp is committed to monitoring the situation and exploring further contributions for recovery efforts [2] Operational Overview - RBB Bancorp operates through its subsidiary, Royal Business Bank, which provides a range of banking services including consumer and business banking, primarily targeting Asian-centric communities [3] - The Bank has multiple branches across California, Nevada, New York, New Jersey, Illinois, and Hawaii, enhancing its accessibility to diverse customer bases [3]

Core Viewpoint - Wall Street anticipates a year-over-year decline in earnings for RBB due to lower revenues, with actual results being crucial for near-term stock price movements [1][2]. Earnings Expectations - RBB is expected to report quarterly earnings of $0.36 per share, reflecting a year-over-year decrease of 16.3% [3]. - Revenues are projected to be $28.18 million, down 14.8% from the same quarter last year [3]. Estimate Revisions - The consensus EPS estimate has been revised 2.19% lower in the last 30 days, indicating a reassessment by analysts [4]. - A negative Earnings ESP of -1.69% suggests analysts have become bearish on RBB's earnings prospects [10][11]. Earnings Surprise Prediction - The Zacks Earnings ESP model indicates that a positive or negative reading can predict earnings deviations, but its predictive power is significant mainly for positive readings [7][8]. - RBB's current Zacks Rank is 4, making it challenging to predict an earnings beat [11]. Historical Performance - RBB has beaten consensus EPS estimates in the last four quarters, with a recent surprise of +2.63% [12][13]. Conclusion - RBB does not appear to be a strong candidate for an earnings beat, and investors should consider other factors before making decisions [16].

Core Viewpoint - RBB Bancorp will release its financial results for the fourth quarter and year ended December 31, 2024, on January 21, 2025, after market close [1] Financial Results Announcement - The management will hold a conference call on January 22, 2025, at 11:00 a.m. Pacific Time to discuss the financial results [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 September 30, 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 offers services including remote deposit, E-banking, mobile banking, various types of loans, trade finance, and wealth management services [4] - The Company operates multiple branches across several states, with its administrative and lending center located in Los Angeles, California [4]

Core Viewpoint - RBB Bancorp announces leadership changes, with Mr. Johnny Lee appointed as President and CEO of the Company and the Bank, effective January 1, 2025, and May 22, 2025, respectively, succeeding Mr. David Morris, who will retire on May 21, 2025 [1][4][5] Leadership Changes - Mr. Johnny Lee, currently President and Chief Banking Officer of Royal Business Bank, will take on the roles of President of the Company and CEO of the Bank starting January 1, 2025, and will become CEO of the Company on May 22, 2025 [1][5] - Mr. David Morris will resign as CEO of the Bank and President of the Company effective January 1, 2025, and will retire on May 21, 2025, while remaining on the Boards of Directors [4][5] - Mr. Mina Rizkalla will be promoted to Executive Vice President and Chief Risk Officer for both the Company and the Bank, effective January 1, 2025 [5] Company Overview - RBB Bancorp is a community-based financial holding company headquartered in Los Angeles, California, with total assets of $4.0 billion as of September 30, 2024 [6] - The wholly-owned subsidiary, Royal Business Bank, provides a range of banking services primarily to Asian communities and Asian-centric businesses across various locations, including Los Angeles County, Orange County, and New York [6][7]

[PART I – FINANCIAL INFORMATION (UNAUDITED)](index=4&type=section&id=PART%20I%20%E2%80%93%20FINANCIAL%20INFORMATION%20(UNAUDITED)) This section presents the unaudited consolidated financial statements, including balance sheets, income statements, and cash flow information, for RBB Bancorp and its subsidiaries [ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)](index=4&type=section&id=ITEM%201.%20CONSOLIDATED%20FINANCIAL%20STATEMENTS%20(UNAUDITED)) The unaudited consolidated financial statements for RBB Bancorp show a slight decrease in total assets and shareholders' equity, with net income declining to $7.0 million for Q3 2024 Consolidated Balance Sheet Highlights ($ thousands) | Metric | Sep 30, 2024 | Dec 31, 2023 | | :-------------------------- | :----------- | :----------- | | Total Assets | 3,990,477 | 4,026,025 | | Total Liabilities | 3,480,749 | 3,514,765 | | Total Shareholders' Equity | 509,728 | 511,260 | Consolidated Statements of Income Highlights ($ thousands, except EPS) | Metric | Three Months Ended Sep 30, 2024 | Three Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2024 | Nine Months Ended Sep 30, 2023 | | :-------------------------- | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Net Income | 6,999 | 8,473 | 22,280 | 30,392 | | Basic EPS | 0.39 | 0.45 | 1.22 | 1.60 | | Diluted EPS | 0.39 | 0.45 | 1.22 | 1.60 | - Net cash used in investing activities for the nine months ended September 30, 2024, was **$62,024 thousand**, compared to net cash provided of **$89,850 thousand** in the prior year[10](index=10&type=chunk) [NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)](index=11&type=section&id=NOTES%20TO%20CONSOLIDATED%20FINANCIAL%20STATEMENTS%20(UNAUDITED)) This section provides detailed disclosures and explanations for the consolidated financial statements, covering accounting policies, specific asset and liability categories, and other financial commitments [NOTE 1 - BUSINESS DESCRIPTION](index=11&type=section&id=NOTE%201%20-%20BUSINESS%20DESCRIPTION) RBB Bancorp operates as a bank holding company for Royal Business Bank and RBB Asset Management Company, primarily serving Asian-centric communities, generating revenue from interest on loans and investment securities, and noninterest sources - As of September 30, 2024, RBB Bancorp had total assets of **$4.0 billion**, total loans of **$3.1 billion**, total deposits of **$3.1 billion**, and total shareholders' equity of **$509.7 million**[12](index=12&type=chunk) - The company's primary revenue sources are interest on loans and investment securities, supplemented by noninterest income from lending/deposit services, loan servicing, gain on sales of loans, and wealth management services[16](index=16&type=chunk) - RBB Bancorp operates as a Minority Depository Institution (MDI), which provides eligibility for support from the FDIC and other federal regulatory agencies, including technical assistance[14](index=14&type=chunk) [NOTE 2 - BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES](index=13&type=section&id=NOTE%202%20-%20BASIS%20OF%20PRESENTATION%20AND%20SUMMARY%20OF%20SIGNIFICANT%20ACCOUNTING%20POLICIES) The financial statements are unaudited and prepared in accordance with SEC rules for Form 10-Q and GAAP, with management making estimates and assumptions for credit losses, deferred tax assets, goodwill, and fair value measurements - The adoption of ASU 2022-03 (Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions) on January 1, 2024, did not have a **material impact** on consolidated financial statements[22](index=22&type=chunk) - The adoption of ASU 2023-02 (Investments - Equity Method and Joint Ventures) on January 1, 2024, did not have a **material impact** on consolidated financial statements[23](index=23&type=chunk) - ASU 2023-07 (Segment Reporting) and ASU 2023-09 (Income Taxes) are not expected to have a **material impact** on consolidated financial statements upon their respective effective dates[25](index=25&type=chunk)[26](index=26&type=chunk) [NOTE 3 - INVESTMENT SECURITIES](index=14&type=section&id=NOTE%203%20-%20INVESTMENT%20SECURITIES) The company's investment portfolio consists of available-for-sale (AFS) and held-to-maturity (HTM) securities, with AFS securities showing a net unrealized loss of $23.2 million as of September 30, 2024, primarily due to yield curve movement Investment Securities Fair Value ($ thousands) | Category | Sep 30, 2024 | Dec 31, 2023 | | :------------------------- | :----------- | :----------- | | Available for Sale (AFS) | 305,666 | 318,961 | | Held to Maturity (HTM) | 5,087 | 5,097 | | **Total** | **310,753** | **324,058** | AFS Securities Unrealized Gains and Losses (Sep 30, 2024, $ thousands) | Metric | Amount | | :-------------------- | :------- | | Gross Unrealized Gains | 1,020 | | Gross Unrealized Losses | (24,235) | | **Net Unrealized Loss** | **(23,215)** | - The unrealized losses were primarily attributed to yield curve movement, together with widened liquidity spreads and credit spreads. No allowance for credit losses was recorded for AFS or HTM securities, as the company expects to recover the amortized cost basis and has no intent to sell[34](index=34&type=chunk) [NOTE 4 - LOANS AND ALLOWANCE FOR CREDIT LOSSES](index=18&type=section&id=NOTE%204%20-%20LOANS%20AND%20ALLOWANCE%20FOR%20CREDIT%20LOSSES) The loan portfolio, concentrated in Southern California and New York, increased to $3.09 billion at September 30, 2024, primarily driven by commercial real estate (CRE) loans, leading to an increased Allowance for Credit Losses (ACL) and significantly higher nonaccrual loans Loans Held for Investment (HFI) Balances ($ thousands) | Loan Type | Sep 30, 2024 | Dec 31, 2023 | | :---------------------------------- | :----------- | :----------- | | Construction and land development | 180,196 | 181,469 | | Commercial real estate | 1,252,682 | 1,167,857 | | Single-family residential mortgages | 1,473,396 | 1,487,796 | | Commercial and industrial | 128,861 | 130,096 | | SBA | 48,089 | 52,074 | | Other | 8,672 | 12,569 | | **Total Loans HFI** | **3,091,896**| **3,031,861**| Allowance for Credit Losses (ACL) Activity ($ thousands) | Metric | Three Months Ended Sep 30, 2024 | Nine Months Ended Sep 30, 2024 | | :---------------------------------- | :------------------------------ | :----------------------------- | | Beginning balance | 42,365 | 42,543 | | Provision for credit losses | 3,300 | 3,857 | | Charge-offs | (1,210) | (1,991) |\ | Recoveries | 9 | 55 | | **Ending balance (ACL)** | **44,464** | **44,464** | Nonaccrual Loans ($ thousands) | Loan Type | Sep 30, 2024 | Dec 31, 2023 | | :---------------------------------- | :----------- | :----------- | | Construction and land development | 19,032 | — | | Commercial real estate | 20,430 | 10,569 | | Single-family residential mortgages | 13,997 | 18,103 | | Commercial and industrial | 6,464 | 854 | | SBA | 739 | 2,085 | | Other | — | 8 | | **Total Nonaccrual Loans** | **60,662** | **31,619** | [NOTE 5 - LOAN SERVICING](index=24&type=section&id=NOTE%205%20-%20LOAN%20SERVICING) The company services various loan types for others, generating $605,000 in net loan servicing income for Q3 2024, with servicing assets' fair value estimated using discounted cash flow analysis Principal Balances of Loans Serviced for Others ($ thousands) | Loan Type | Sep 30, 2024 | Dec 31, 2023 | | :------------------------- | :----------- | :----------- | | Mortgage loans | 955,134 | 1,014,017 | | SBA loans | 96,756 | 100,336 | | Commercial real estate loans | 3,774 | 3,813 | | Construction loans | 6,378 | 4,710 | Loan Servicing Income, Net of Amortization ($ thousands) | Period | 2024 | 2023 | | :------------------------------ | :--- | :--- | | Three Months Ended Sep 30 | 605 | 623 | | Nine Months Ended Sep 30 | 1,773| 1,959| - Estimated fair value of servicing assets for mortgage loans was **$11.0 million** (Sep 30, 2024) and for SBA loans was **$2.5 million** (Sep 30, 2024), determined using discounted cash flow analysis with specific discount, prepayment, and default rates[63](index=63&type=chunk)[64](index=64&type=chunk) [NOTE 6 - GOODWILL AND INTANGIBLES](index=27&type=section&id=NOTE%206%20-%20GOODWILL%20AND%20INTANGIBLES) Goodwill remained stable at $71.5 million with no impairment, while other intangible assets, primarily core deposit intangibles (CDI), decreased to $2.2 million due to amortization - Goodwill amounted to **$71.5 million** at both September 30, 2024, and December 31, 2023, with no impairment identified[66](index=66&type=chunk) Core Deposit Intangibles (CDI) Unamortized Balance ($ thousands) | Date | Amount | | :----------------- | :----- | | Sep 30, 2024 | 2,194 | | Dec 31, 2023 | 2,795 | CDI Amortization Expense ($ thousands) | Period | 2024 | 2023 | | :------------------------------ | :--- | :--- | | Three Months Ended Sep 30 | 200 | 236 | | Nine Months Ended Sep 30 | 602 | 708 | [NOTE 7 - DEPOSITS](index=27&type=section&id=NOTE%207%20-%20DEPOSITS) Total deposits decreased to $3.09 billion at September 30, 2024, primarily due to a significant decrease in wholesale time deposits, partially offset by an increase in retail deposits and noninterest-bearing demand deposits Total Deposits ($ thousands) | Date | Amount | | :----------------- | :----------- | | Sep 30, 2024 | 3,092,184 | | Dec 31, 2023 | 3,174,760 | Wholesale Time Deposits ($ millions) | Date | Amount | | :----------------- | :----- | | Sep 30, 2024 | 147.3 | | Dec 31, 2023 | 405.6 | - Time deposits held through the CDARS program were **$133.4 million** (Sep 30, 2024) and ICS deposits totaled **$135.5 million** (Sep 30, 2024), reflecting efforts to enhance liquidity[70](index=70&type=chunk) [NOTE 8 - LONG-TERM DEBT](index=28&type=section&id=NOTE%208%20-%20LONG-TERM%20DEBT) Long-term debt, primarily 4.00% fixed-to-floating rate subordinated notes due April 1, 2031, remained stable at $119.4 million, following the redemption of $55.0 million of 2028 Subordinated Notes in December 2023 Long-term Debt, Net of Issuance Costs ($ thousands) | Date | Amount | | :----------------- | :----------- | | Sep 30, 2024 | 119,433 | | Dec 31, 2023 | 119,147 | - The company issued **$120.0 million** of 4.00% fixed-to-floating rate subordinated notes in March 2021, maturing April 1, 2031, with a call option beginning April 1, 2026[73](index=73&type=chunk) - The **$55.0 million** of 6.18% fixed-to-floating rate subordinated notes (2028 Subordinated Notes) were redeemed on December 1, 2023[72](index=72&type=chunk) [NOTE 9 - SUBORDINATED DEBENTURES](index=28&type=section&id=NOTE%209%20-%20SUBORDINATED%20DEBENTURES) Subordinated debentures, totaling $15.1 million, are associated with three trust preferred securities and are included in Tier 1 capital for regulatory purposes, featuring variable interest rates linked to three-month CME Term SOFR Subordinated Debentures, Net ($ thousands) | Date | Amount | | :----------------- | :----------- | | Sep 30, 2024 | 15,102 | | Dec 31, 2023 | 14,938 | Subordinated Debentures Details (Sep 30, 2024, $ thousands) | Trust | Principal Amount | Stated Rate | Maturity | | :---------- | :--------------- | :---------- | :--------------- | | TFC Trust | 5,155 | 6.86% | March 15, 2037 | | FAIC Trust | 7,217 | 7.46% | December 15, 2034 | | PGBH Trust | 5,155 | 7.31% | December 15, 2034 | - Interest expense on subordinated debentures was **$386 thousand** for the three months ended September 30, 2024, and **$1.2 million** for the nine months ended September 30, 2024[82](index=82&type=chunk) [NOTE 10 - BORROWING ARRANGEMENTS](index=29&type=section&id=NOTE%2010%20-%20BORROWING%20ARRANGEMENTS) The company utilizes secured and unsecured lines of credit from the FHLB, FRB, and other financial institutions, with FHLB advances totaling $200.0 million and significant unused borrowing capacity as of September 30, 2024 - At September 30, 2024, the company had a secured borrowing capacity with the FHLB of **$966.7 million**, collateralized by **$1.3 billion** in loans[85](index=85&type=chunk) - FHLB advances outstanding totaled **$200.0 million** at September 30, 2024, including a **$50.0 million** putable advance executed on September 30, 2024, with a **3.42% rate** and a four-year final maturity[85](index=85&type=chunk)[88](index=88&type=chunk) - The company had secured borrowing capacity with the FRB of **$47.0 million** and federal funds borrowing capacity of **$92.0 million** from other financial institutions, with no amounts outstanding under these lines as of September 30, 2024[86](index=86&type=chunk)[87](index=87&type=chunk)[88](index=88&type=chunk) [NOTE 11 - INCOME TAXES](index=30&type=section&id=NOTE%2011%20-%20INCOME%20TAXES) The company recorded an income tax provision of $2.6 million for Q3 2024, with an effective tax rate of 26.9%, lower than the statutory rate due to the utilization of tax credits from LIHTC investments and new Federal transferable tax credits Income Tax Provision and Effective Tax Rate | Period | Income Tax Provision ($ thousands) | Effective Tax Rate | | :------------------------------ | :----------------------- | :----------------- | | Three Months Ended Sep 30, 2024 | 2,571 | 26.9% | | Three Months Ended Sep 30, 2023 | 3,611 | 29.9% | | Nine Months Ended Sep 30, 2024 | 8,342 | 27.2% | | Nine Months Ended Sep 30, 2023 | 12,752 | 29.6% | - The lower effective tax rate is primarily due to utilizing a higher level of tax credits, including benefits from Low-Income Housing Tax Credit (LIHTC) investments and new Federal transferable tax credits made available under the Inflation Reduction Act of 2023[222](index=222&type=chunk) [NOTE 12 - COMMITMENTS AND CONTINGENCIES](index=30&type=section&id=NOTE%2012%20-%20COMMITMENTS%20AND%20CONTINGENCIES) The company has various financial commitments, including loan commitments and unused lines of credit totaling $182.4 million, along with unfunded commitments for affordable housing partnerships and SBIC funds, and a recorded reserve for unfunded loan commitments Financial Commitments ($ thousands) | Category | Sep 30, 2024 | Dec 31, 2023 | | :--------------------------------- | :----------- | :----------- | | Commitments to make loans | 81,263 | 77,844 | | Unused lines of credit | 94,783 | 106,315 | | Commercial and similar letters of credit | 2,952 | 3,904 | | Standby letters of credit | 3,353 | 2,687 | | **Total** | **182,351** | **190,750** | - Unfunded commitments for affordable housing partnerships and Small Business Investment Company (SBIC) funds totaled **$6.7 million** at September 30, 2024, an increase from **$3.3 million** at December 31, 2023[94](index=94&type=chunk) Reserve for Unfunded Commitments ($ thousands) | Date | Amount | | :----------------- | :----- | | Sep 30, 2024 | 779 | | Dec 31, 2023 | 640 | [NOTE 13 - LEASES](index=31&type=section&id=NOTE%2013%20-%20LEASES) The company leases operating facilities under non-cancellable operating leases, with ROU assets of $29.3 million and lease liabilities of $30.9 million as of September 30, 2024, reflecting a weighted-average remaining lease term of 6.84 years Operating Lease Metrics ($ thousands) | Metric | Sep 30, 2024 | Dec 31, 2023 | | :--------------------------------- | :----------- | :----------- | | ROU assets | 29,283 | 29,803 | | Lease liabilities | 30,880 | 31,191 | | Weighted-average remaining lease term | 6.84 years | 7.63 years | | Weighted-average discount rate | 2.80% | 1.72% | - Total future minimum lease payments as of September 30, 2024, amounted to **$34.1 million**[96](index=96&type=chunk) [NOTE 14 - RELATED PARTY TRANSACTIONS](index=31&type=section&id=NOTE%2014%20-%20RELATED%20PARTY%20TRANSACTIONS) Deposits from principal officers, directors, and their affiliates increased to $30.6 million at September 30, 2024, with certain directors and their affiliates also holding $6.0 million in RBB's subordinated debentures, and no outstanding loans to related parties Deposits from Principal Officers, Directors, and Affiliates ($ millions) | Date | Amount | | :----------------- | :----- | | Sep 30, 2024 | 30.6 | | Dec 31, 2023 | 25.7 | - Certain directors and their affiliates owned **$6.0 million** of RBB's subordinated debentures as of September 30, 2024, and December 31, 2023[98](index=98&type=chunk) - There were no loans or outstanding loan commitments to any principal officers or directors, or their affiliates at September 30, 2024, and December 31, 2023[98](index=98&type=chunk) [NOTE 15 - STOCK-BASED COMPENSATION](index=32&type=section&id=NOTE%2015%20-%20STOCK-BASED%20COMPENSATION) The company's stock-based compensation plans include stock options and restricted stock units (RSUs), with compensation expense for stock options at $14,000 and RSUs at $250,000 for Q3 2024, and 140,475 unvested RSUs outstanding Stock Option Compensation Expense ($ thousands) | Period | 2024 | 2023 | | :------------------------------ | :--- | :--- | | Three Months Ended Sep 30 | 14 | 59 | | Nine Months Ended Sep 30 | 49 | 190 | Restricted Stock Units (RSUs) Compensation Expense ($ thousands) | Period | 2024 | 2023 | | :------------------------------ | :--- | :--- | | Three Months Ended Sep 30 | 250 | 84 | | Nine Months Ended Sep 30 | 740 | 420 | - As of September 30, 2024, there were **140,475 unvested RSUs** outstanding and **1,004,658 shares** of common stock available for issuance under the Amended OSIP[109](index=109&type=chunk)[101](index=101&type=chunk) [NOTE 16 - REGULATORY MATTERS](index=34&type=section&id=NOTE%2016%20-%20REGULATORY%20MATTERS) RBB Bancorp and its subsidiary bank were in compliance with all Basel III capital requirements and the capital conservation buffer as of September 30, 2024, with the bank considered "well-capitalized" Consolidated Capital Ratios (Sep 30, 2024) | Ratio | Actual Ratio | Minimum Required for Adequacy Purposes (1) | Minimum Required for Well-Capitalized Depository Institution | | :--------------------------------- | :----------- | :----------------------------------------- | :----------------------------------------------------------- | | Tier 1 Leverage Ratio | 12.19% | 4.00% | 5.00% | | Common Equity Tier 1 Risk-Based Capital Ratio | 18.16% | 4.50% | 6.50% | | Tier 1 Risk-Based Capital Ratio | 18.75% | 6.00% | 8.00% | | Total Risk-Based Capital Ratio | 24.80% | 8.00% | 10.00% | Bank Capital Ratios (Sep 30, 2024) | Ratio | Actual Ratio | Minimum Required for Adequacy Purposes (1) | Minimum Required for Well-Capitalized Depository Institution | | :--------------------------------- | :----------- | :----------------------------------------- | :----------------------------------------------------------- | | Tier 1 Leverage Ratio | 14.19% | 4.00% | 5.00% | | Common Equity Tier 1 Risk-Based Capital Ratio | 21.84% | 4.50% | 6.50% | | Tier 1 Risk-Based Capital Ratio | 21.84% | 6.00% | 8.00% | | Total Risk-Based Capital Ratio | 23.10% | 8.00% | 10.00% | - Both RBB and the Bank were in compliance with all capital adequacy requirements and the capital conservation buffer requirements as of September 30, 2024, and the Bank was considered **"well-capitalized"**[115](index=115&type=chunk)[114](index=114&type=chunk) [NOTE 17 - FAIR VALUE MEASUREMENTS AND FAIR VALUE OF FINANCIAL INSTRUMENTS](index=35&type=section&id=NOTE%2017%20-%20FAIR%20VALUE%20MEASUREMENTS%20AND%20FAIR%20VALUE%20OF%20FINANCIAL%20INSTRUMENTS) The company categorizes financial assets and liabilities measured at fair value into three levels based on observability of inputs, with recurring measurements including available-for-sale securities and equity securities/derivatives, and non-recurring measurements for collateral-dependent loans and OREO - Financial assets and liabilities are grouped into Level 1 (quoted prices in active markets), Level 2 (observable inputs other than Level 1), and Level 3 (unobservable inputs) for fair value measurement[122](index=122&type=chunk)[123](index=123&type=chunk)[124](index=124&type=chunk) Assets Measured at Fair Value (Sep 30, 2024, $ thousands) | Category | Level 1 | Level 2 | Level 3 | Total | | :--------------------------------- | :------ | :------ | :------ | :------ | | Securities available for sale | — | 305,666 | — | 305,666 | | Equity securities | — | — | 23,161 | 23,161 | | Interest rate lock contracts | — | — | 23 | 23 | | Forward mortgage loan sale contracts | — | — | 10 | 10 | | Collateral dependent loans | — | — | 25,768 | 25,768 | - Collateral-dependent individually evaluated loans had an aggregate fair value of **$25.8 million** as of September 30, 2024, with partial charge-offs of **$1.2 million** and specific reserves of **$2.5 million** during the three months ended September 30, 2024[132](index=132&type=chunk) [NOTE 18 - EARNINGS PER SHARE](index=40&type=section&id=NOTE%2018%20-%20EARNINGS%20PER%20SHARE) Basic and diluted earnings per share for the three months ended September 30, 2024, were $0.39, a decrease from $0.45 in the prior year, with nine-month EPS also declining Earnings Per Share (EPS) | Period | Basic EPS (2024) | Diluted EPS (2024) | Basic EPS (2023) | Diluted EPS (2023) | | :------------------------------ | :--------------- | :----------------- | :--------------- | :----------------- | | Three Months Ended Sep 30 | $0.39 | $0.39 | $0.45 | $0.45 | | Nine Months Ended Sep 30 | $1.22 | $1.22 | $1.60 | $1.60 | - Options to purchase **40,000 shares** and **125,686 shares** of common stock were excluded from the calculation of diluted EPS for the three and nine months ended September 30, 2024, respectively, due to their anti-dilutive effect[139](index=139&type=chunk) [NOTE 19 – REVENUE FROM CONTRACTS WITH CUSTOMERS](index=41&type=section&id=NOTE%2019%20%E2%80%93%20REVENUE%20FROM%20CONTRACTS%20WITH%20CUSTOMERS) Total noninterest income for Q3 2024 was $5.7 million, significantly higher than the prior quarter and prior year, primarily due to a $2.8 million recovery of a fully charged-off loan, while revenue from contracts with customers (in-scope ASC 606) remained relatively stable Total Noninterest Income ($ thousands) | Period | 2024 | 2023 | | :------------------------------ | :----- | :----- | | Three Months Ended Sep 30 | 5,746 | 2,770 | | Nine Months Ended Sep 30 | 12,606 | 7,625 | - The increase in noninterest income for the three and nine months ended September 30, 2024, was mostly due to a **$2.8 million recovery** of a fully charged-off loan, included in 'Other income'[208](index=208&type=chunk)[209](index=209&type=chunk)[210](index=210&type=chunk) In-Scope Noninterest Income (ASC 606, $ thousands) | Period | 2024 | 2023 | | :------------------------------ | :----- | :----- | | Three Months Ended Sep 30 | 1,270 | 1,482 | | Nine Months Ended Sep 30 | 4,190 | 4,105 | [NOTE 20 - QUALIFIED AFFORDABLE HOUSING PROJECT INVESTMENTS](index=42&type=section&id=NOTE%2020%20-%20QUALIFIED%20AFFORDABLE%20HOUSING%20PROJECT%20INVESTMENTS) Investments in qualified affordable housing projects increased to $10.5 million at September 30, 2024, with unfunded commitments of $5.8 million, and the company recognized tax credits of $336,000 and amortization expense of $367,000 for Q3 2024 Investments in Qualified Affordable Housing Projects ($ millions) | Date | Amount | | :----------------- | :----- | | Sep 30, 2024 | 10.5 | | Dec 31, 2023 | 6.4 | Tax Credits and Amortization Expense ($ thousands) | Period | Tax Credits (2024) | Amortization Expense (2024) | Tax Credits (2023) | Amortization Expense (2023) | | :------------------------------ | :----------------- | :-------------------------- | :----------------- | :-------------------------- | | Three Months Ended Sep 30 | 336 | 367 | 255 | 282 | | Nine Months Ended Sep 30 | 906 | 969 | 765 | 846 | - Total unfunded commitments related to these investments were **$5.8 million** at September 30, 2024, an increase from **$2.3 million** at December 31, 2023[147](index=147&type=chunk) [NOTE 21 - REPURCHASE OF COMMON STOCK](index=42&type=section&id=NOTE%2021%20-%20REPURCHASE%20OF%20COMMON%20STOCK) The Board of Directors authorized a repurchase program for up to 1,000,000 shares on February 29, 2024, which the company completed during Q3 2024 by repurchasing 508,275 shares for $11.0 million - The Board of Directors authorized the repurchase of up to **1,000,000 shares** of common stock on February 29, 2024[149](index=149&type=chunk) Common Stock Repurchase Activity (Q3 2024) | Metric | Amount | | :-------------------------------- | :------- | | Shares Repurchased | 508,275 | | Weighted Average Share Price | $21.53 | | Total Cost of Repurchase ($ millions) | $11.0 | - The authorized repurchase program was completed during the third quarter of 2024[149](index=149&type=chunk) [NOTE 22 - SUBSEQUENT EVENTS](index=42&type=section&id=NOTE%2022%20-%20SUBSEQUENT%20EVENTS) On October 21, 2024, the Board of Directors declared a common stock cash dividend of $0.16 per share, payable on November 12, 2024 - A common stock cash dividend of **$0.16 per share** was declared on October 21, 2024[150](index=150&type=chunk) - The dividend is payable on November 12, 2024, to common shareholders of record as of October 31, 2024[150](index=150&type=chunk) [ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS](index=43&type=section&id=ITEM%202.%20MANAGEMENT%27S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) This section provides management's perspective on the company's financial performance, condition, liquidity, and capital resources, including forward-looking statements and discussions of critical accounting policies and overall financial overview - The report contains forward-looking statements reflecting current views on future events, results of operations, financial condition, and performance, which are subject to various risks and uncertainties[152](index=152&type=chunk) - Critical accounting policies, including the allowance for credit losses, investment securities, goodwill, and income taxes, require management to make significant estimates and assumptions[157](index=157&type=chunk) [CRITICAL ACCOUNTING POLICIES](index=44&type=section&id=CRITICAL%20ACCOUNTING%20POLICIES) Management's critical accounting policies include the allowance for credit losses (ACL), investment securities, goodwill, and income taxes, involving significant estimates and assumptions, with sensitivity analyses indicating potential ACL changes under various stress scenarios - A positive **25% change** in prepayment speed would decrease the ACL by **$1.4 million (3.18%)**, while a negative **25% change** would increase it by **$1.7 million (3.59%)**[159](index=159&type=chunk) - A **one percentage point increase** in the unemployment rate would increase the ACL by **$1.1 million (2.32%)**, and a **one percentage point decrease** would reduce it by **$1.1 million (2.46%)**[159](index=159&type=chunk) - Under a 'Moderate Stress' scenario, the ACL would increase by **$9.3 million (21.38%)**, and under a 'Major Stress' scenario, it would increase by **$24.4 million (56.10%)**, with management concluding the company would remain **well-capitalized**[160](index=160&type=chunk) [OVERVIEW](index=46&type=section&id=OVERVIEW) RBB Bancorp reported net income of $7.0 million for Q3 2024, a decrease from Q3 2023, with total assets slightly decreasing to $4.0 billion due to lower cash and AFS securities, partially offset by increased loans, and deposits declining due to wholesale outflows - Net income for the quarter ended September 30, 2024, was **$7.0 million ($0.39 diluted EPS)**, compared to **$8.5 million ($0.45 diluted EPS)** for the same quarter in 2023[168](index=168&type=chunk) - Total assets were **$4.0 billion** at September 30, 2024, a decrease of **$35.5 million** from December 31, 2023, primarily due to an **$82.0 million decrease** in cash and cash equivalents and a **$13.3 million decrease** in AFS investment securities, partially offset by a **$60.0 million increase** in gross loans HFI[169](index=169&type=chunk) - Total deposits decreased by **$82.6 million (2.6%)** to **$3.1 billion** at September 30, 2024, compared to December 31, 2023, mainly due to a **$119.9 million decrease** in time deposits, which included a **$258.3 million decrease** in wholesale deposits partially replaced by a **$138.4 million increase** in retail deposits[172](index=172&type=chunk) - The Allowance for Credit Losses (ACL) totaled **$44.5 million** at September 30, 2024, an increase of **$2.1 million** from June 30, 2024, driven by a **$3.3 million provision** for credit losses and **$1.2 million net charge-offs**[174](index=174&type=chunk) - The company repurchased **508,275 shares** of common stock at a weighted average price of **$21.53** during Q3 2024, completing the authorized program[176](index=176&type=chunk) [ANALYSIS OF THE RESULTS OF OPERATIONS](index=48&type=section&id=ANALYSIS%20OF%20THE%20RESULTS%20OF%20OPERATIONS) Net interest income for Q3 2024 increased slightly from Q2 2024 but decreased year-over-year due to higher interest expense and lower average interest-earning assets, while noninterest income saw a substantial increase from a loan recovery, and provision for credit losses rose due to higher specific reserves Net Interest Income ($ thousands) | Period | 2024 | 2023 | | :------------------------------ | :----- | :----- | | Three Months Ended Sep 30 | 24,545 | 27,589 | | Nine Months Ended Sep 30 | 73,387 | 93,616 | Net Interest Margin (NIM) | Period | NIM (2024) | NIM (2023) | | :------------------------------ | :--------- | :--------- | | Three Months Ended Sep 30 | 2.68% | 2.87% | | Nine Months Ended Sep 30 | 2.68% | 3.31% | Noninterest Income ($ thousands) | Period | 2024 | 2023 | | :------------------------------ | :----- | :----- | | Three Months Ended Sep 30 | 5,746 | 2,770 | | Nine Months Ended Sep 30 | 12,606 | 7,625 | - Noninterest income for Q3 2024 increased by **$2.3 million** from Q2 2024, primarily due to a **$2.8 million recovery** of a fully charged-off loan[208](index=208&type=chunk) Provision for Credit Losses ($ thousands) | Period | 2024 | 2023 | | :------------------------------ | :----- | :----- | | Three Months Ended Sep 30 | 3,300 | 1,399 | | Nine Months Ended Sep 30 | 3,857 | 3,793 | [ANALYSIS OF FINANCIAL CONDITION](index=60&type=section&id=ANALYSIS%20OF%20FINANCIAL%20CONDITION) Total assets decreased slightly to $4.0 billion, primarily due to a reduction in cash and AFS investment securities, partially offset by an increase in loans held for investment, while deposits declined due to wholesale outflows and nonperforming loans significantly increased - Total assets decreased by **$35.5 million** to **$4.0 billion** at September 30, 2024, from December 31, 2023, mainly due to an **$82.0 million decrease** in cash and cash equivalents and a **$13.3 million decrease** in AFS investment securities, partially offset by a **$60.0 million increase** in gross loans HFI[224](index=224&type=chunk) - Total loans HFI increased by **$60.0 million (2.0%)** to **$3.09 billion** at September 30, 2024, primarily driven by an **$84.8 million increase** in commercial real estate (CRE) loans[240](index=240&type=chunk) Nonperforming Loans ($ thousands) | Date | Amount | | :----------------- | :----------- | | Sep 30, 2024 | 60,662 | | Dec 31, 2023 | 31,619 | - Special mention loans increased by **$44.7 million** to **$77.5 million** at September 30, 2024, primarily due to one **$43.6 million C&D loan**[278](index=278&type=chunk) - Total deposits decreased by **$82.6 million** to **$3.09 billion** at September 30, 2024, with a **$258.3 million decrease** in wholesale deposits[282](index=282&type=chunk) - Shareholders' equity decreased by **$1.5 million** to **$509.7 million** at September 30, 2024, due to common stock repurchases and dividends, partially offset by net earnings and lower net unrealized losses on AFS securities[301](index=301&type=chunk) [ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK](index=80&type=section&id=ITEM%203.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) The company is exposed to market risk, primarily interest rate, price, and basis risk, which is managed by the ALCO through monitoring and quantification using Income Simulation (NII at Risk) and Economic Value of Equity (EVE) analyses, indicating a liability-sensitive profile within policy limits - The company's primary sources of market risk are interest rate risk, price risk, and basis risk[324](index=324&type=chunk) Net Interest Income (NII) at Risk Sensitivity (Sep 30, 2024, $ thousands) | Rate Change | Dollar Change | Percent Change | | :---------- | :------------ | :------------- | | -300 bps | 14,164 | 14.0% | | -200 bps | 7,749 | 7.7% | | -100 bps | 3,278 | 3.2% | | +100 bps | (923) | (0.9)% | | +200 bps | (2,340) | (2.3)% | | +300 bps | (3,735) | (3.7)% | Economic Value of Equity (EVE) Sensitivity (Sep 30, 2024, $ thousands) | Rate Change | Dollar Change | Percent Change | | :---------- | :------------ | :------------- | | -300 bps | (38,362) | (6.2)% | | -200 bps | (7,042) | (1.1)% | | -100 bps | 5,931 | 1.0% | | +100 bps | (14,843) | (2.4)% | | +200 bps | (38,871) | (6.2)% | | +300 bps | (70,526) | (11.3)% | [ITEM 4. CONTROLS AND PROCEDURES](index=81&type=section&id=ITEM%204.%20CONTROLS%20AND%20PROCEDURES) The company's management, including the CEO and CFO, evaluated the effectiveness of disclosure controls and procedures as of September 30, 2024, concluding they were effective, with no material changes to internal control over financial reporting during the quarter - The company's disclosure controls and procedures were evaluated as **effective** as of September 30, 2024[334](index=334&type=chunk) - There have been no **material changes** in the company's internal control over financial reporting during the fiscal quarter ended September 30, 2024[336](index=336&type=chunk) [PART II - OTHER INFORMATION)](index=83&type=section&id=PART%20II%20-%20OTHER%20INFORMATION) This section provides additional disclosures on legal proceedings, risk factors, equity security sales, defaults, mine safety, other information, and exhibits [ITEM 1. LEGAL PROCEEDINGS](index=83&type=section&id=ITEM%201.%20LEGAL%20PROCEEDINGS) The company is involved in routine litigation incidental to its business but management believes these proceedings will not have a material adverse impact on its financial statements - There are no **material pending legal proceedings** other than ordinary routine litigation incidental to the company's business[338](index=338&type=chunk) - Management believes that the disposition of pending litigation will not have a **material effect** on the company's consolidated financial statements[338](index=338&type=chunk) [ITEM 1A. RISK FACTORS](index=83&type=section&id=ITEM%201A.%20RISK%20FACTORS) There have been no material changes to the risk factors previously disclosed in the 2023 Annual Report, and the company reiterates that unforeseen risks or uncertainties could significantly impact its financial condition, results of operations, and cash flows - No **material changes** to the risk factors previously disclosed in Part I, Item 1A. "Risk Factors" of the 2023 Annual Report[339](index=339&type=chunk) - The materiality of any risks and uncertainties, including unforeseen ones, could result in **significant adverse effects** on the company's financial condition, results of operations, and cash flows[339](index=339&type=chunk) [ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS](index=83&type=section&id=ITEM%202.%20UNREGISTERED%20SALES%20OF%20EQUITY%20SECURITIES%20AND%20USE%20OF%20PROCEEDS) The company completed its authorized stock repurchase program during the third quarter of 2024, repurchasing 508,275 shares of common stock for $11.0 million - The Board of Directors approved a stock repurchase program on February 29, 2024, to buy back up to **1,000,000 shares** of common stock[340](index=340&type=chunk) Common Stock Repurchase Activity (Q3 2024) | Period | Total Number of Shares Purchased | Average Price per Share ($) | | :-------------------------------- | :----------------------------- | :-------------------------- | | July 1, 2024 to July 31, 2024 | 380,903 | 21.53 | | August 1, 2024 to August 31, 2024 | 127,372 | 21.55 | | **Total** | **508,275** | **21.53** | - The company repurchased **508,275 shares** for **$11.0 million** during the third quarter of 2024, completing the authorized repurchase program[340](index=340&type=chunk) [ITEM 3. DEFAULTS UPON SENIOR SECURITIES](index=83&type=section&id=ITEM%203.%20DEFAULTS%20UPON%20SENIOR%20SECURITIES) No defaults upon senior securities were reported - There were **no defaults** upon senior securities[341](index=341&type=chunk) [ITEM 4. MINE SAFETY DISCLOSURES](index=83&type=section&id=ITEM%204.%20MINE%20SAFETY%20DISCLOSURES) This item is not applicable to the company - Mine Safety Disclosures are **not applicable** to the registrant[342](index=342&type=chunk) [ITEM 5. OTHER INFORMATION](index=83&type=section&id=ITEM%205.%20OTHER%20INFORMATION) During the quarter ended September 30, 2024, no officer or director adopted or terminated Rule 10b5-1 trading plans or non-Rule 10b5-1 trading arrangements, except for CEO David Morris who adopted a Rule 10b5-1 plan to sell 9,000 shares by April 30, 2026 - David Morris, Chief Executive Officer, adopted a Rule 10b5-1 trading plan on July 26, 2024, to sell **9,000 shares** of common stock with an expiration date of April 30, 2026[343](index=343&type=chunk) [ITEM 6. EXHIBITS](index=85&type=section&id=ITEM%206.%20EXHIBITS) This section lists the exhibits filed with the Form 10-Q, including articles of incorporation, bylaws, specimen stock certificates, certifications (Sarbanes-Oxley Act), and Inline XBRL documents - Exhibits include corporate governance documents (Articles of Incorporation, Bylaws), Specimen Common Stock Certificate, and certifications from the CEO and CFO pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act of 2002[348](index=348&type=chunk)[349](index=349&type=chunk) - The filing also includes various Inline XBRL documents (Instance, Schema, Calculation, Definition, Label, Presentation Linkbase Documents) and the cover page formatted in Inline XBRL[350](index=350&type=chunk) [SIGNATURES](index=87&type=section&id=SIGNATURES) The report is duly signed on November 8, 2024, by David Morris, Chief Executive Officer, and Lynn Hopkins, Executive Vice President and Chief Financial Officer, pursuant to the requirements of the Securities Exchange Act of 1934 - The report was signed by David Morris, Chief Executive Officer, and Lynn Hopkins, Executive Vice President, Chief Financial Officer, on November 8, 2024[352](index=352&type=chunk)

RBB (RBB) reported $30.29 million in revenue for the quarter ended September 2024, representing a year-over-year decline of 14.2%. EPS of $0.39 for the same period compares to $0.63 a year ago.The reported revenue represents a surprise of +7.51% over the Zacks Consensus Estimate of $28.17 million. With the consensus EPS estimate being $0.38, the EPS surprise was +2.63%.While investors closely watch year-over-year changes in headline numbers -- revenue and earnings -- and how they compare to Wall Street expe ...

RBB (RBB) came out with quarterly earnings of $0.39 per share, beating the Zacks Consensus Estimate of $0.38 per share. This compares to earnings of $0.63 per share a year ago. These figures are adjusted for nonrecurring items. This quarterly report represents an earnings surprise of 2.63%. A quarter ago, it was expected that this bank holding company would post earnings of $0.34 per share when it actually produced earnings of $0.39, delivering a surprise of 14.71%. Over the last four quarters, the company ...

LOS ANGELES, Oct. 21, 2024 (GLOBE NEWSWIRE) -- RBB Bancorp (NASDAQ:RBB) and its subsidiaries, Royal Business Bank (the “Bank”) and RBB Asset Management Company (“RAM”), collectively referred to herein as “the Company,” announced financial results for the quarter ended September 30, 2024. Third Quarter 2024 Highlights Net income totaled $7.0 million, or $ 0.39 diluted earnings per shareReturn on average assets of 0.72%, compared to 0.76% for the quarter ended June 30, 2024Net interest margin of 2.68% compare ...

In its upcoming report, RBB (RBB) is predicted by Wall Street analysts to post quarterly earnings of $0.38 per share, reflecting a decline of 39.7% compared to the same period last year. Revenues are forecasted to be $28.17 million, representing a year-over-year decrease of 20.2%. The consensus EPS estimate for the quarter has undergone a downward revision of 2% in the past 30 days, bringing it to its present level. This represents how the covering analysts, as a whole, have reassessed their initial estimat ...

Wall Street expects a year-over-year decline in earnings on lower revenues when RBB (RBB) reports results for the quarter ended September 2024. While this widely-known consensus outlook is important in gauging the company's earnings picture, a powerful factor that could impact its near-term stock price is how the actual results compare to these estimates. The stock might move higher if these key numbers top expectations in the upcoming earnings report, which is expected to be released on October 21. On the ...