RBB(US:RBB)2025-05-12 21:21Financial Performance - For the quarter ended March 31, 2025, net income was $2.3 million, or $0.13 diluted earnings per share, down from $4.3 million, or $0.25 diluted earnings per share in the previous quarter and $8.0 million, or $0.43 diluted earnings per share in the same quarter last year [173]. - Net income for Q1 2025 was $2.290 million, a decrease from $4.385 million in Q4 2024, with earnings per share dropping to $0.13 from $0.25 [181]. - The return on average assets (annualized) decreased to 0.24% in Q1 2025 from 0.44% in Q4 2024, reflecting a decline in profitability [181]. - The efficiency ratio increased to 65.09% in Q1 2025, compared to 61.48% in Q4 2024, indicating a rise in noninterest expenses relative to income [181]. - The efficiency ratio increased to 65.1% in Q1 2025 from 61.5% in Q4 2024, attributed to higher noninterest expenses and lower noninterest income [210]. - The return on average tangible common equity (ROATCE) was 2.12% for the three months ended March 31, 2025, down from 3.98% for the same period in 2024 [308]. Asset and Liability Management - Total assets increased by $16.9 million to $4.0 billion as of March 31, 2025, with total deposits rising by $58.8 million to $3.1 billion [174]. - Total assets as of March 31, 2025, were $4.0 billion, reflecting a $16.9 million increase from December 31, 2024, primarily due to an $89.8 million rise in gross loans HFI [216]. - Total liabilities increased by $14.5 million to $3.5 billion, mainly due to a $58.8 million rise in deposits, offset by a $40.0 million decrease in FHLB advances [274]. - Noninterest-bearing liabilities totaled $586.3 million, showing a decrease from $596.9 million in the previous quarter [1]. - The company maintained a wholesale funding ratio of 9.8% at March 31, 2025, down from 10.7% at December 31, 2024 [292]. Loan Portfolio - Gross loans held for investment (HFI) increased by $89.8 million, or 12% annualized, to $3.1 billion during the first quarter of 2025 [174]. - Loans held for investment (HFI) increased by $89.8 million, or 2.9%, to $3.1 billion as of March 31, 2025, compared to $3.0 billion at December 31, 2024 [231]. - The total loan portfolio as of March 31, 2025, included $1.5 billion in SFR mortgages, representing 49.2% of total loans, up from 48.9% at December 31, 2024 [232]. - Single-family residential (SFR) mortgage loans HFI increased by $51.8 million, while commercial real estate (CRE) loans rose by $44.0 million [231]. - The commercial and industrial (C&I) loans increased by $6.0 million, while construction and land development (C&D) loans decreased by $14.4 million [231]. Credit Quality - The provision for credit losses totaled $6.7 million for the quarter ended March 31, 2025, compared to $6.0 million in the previous quarter and zero in the same quarter last year [173]. - Nonperforming assets decreased by $16.5 million to $64.6 million, representing 1.61% of total assets as of March 31, 2025, down from 2.03% at December 31, 2024 [177]. - The allowance for loan losses increased to $51.9 million as of March 31, 2025, compared to $47.7 million at December 31, 2024 [232]. - Net charge-offs for Q1 2025 were $2.6 million, with an annualized net charge-off rate of 0.35% of average loans, up from 0.26% in Q4 2024 [176]. - The ALL as a percentage of nonperforming loans HFI increased to 86% at March 31, 2025, from 68% at December 31, 2024 [258]. Interest Income and Expense - Net interest income for Q1 2025 was $26.163 million, compared to $25.977 million in Q4 2024, reflecting a positive trend in interest income despite a decrease in interest income from $54.555 million in Q4 2024 [181]. - Interest expense decreased by $2.4 million, while interest income decreased by $2.2 million, primarily due to fewer days in the quarter and lower average excess liquidity [193]. - The average cost of interest-bearing deposits decreased by 29 basis points, contributing to a $1.5 million reduction in interest expense [193]. - The net interest margin improved to 2.88% in Q1 2025 compared to 2.76% in Q4 2024 [193]. - The yield on total loans was 6.01% in Q1 2025, down from 6.07% in Q1 2024, reflecting lower market interest rates [197]. Investment Securities - Available for sale (AFS) investment securities totaled $378.2 million, with a pre-tax net unrealized loss of $25.0 million as of March 31, 2025 [174]. - The total securities portfolio decreased from $425.4 million at December 31, 2024, to $383.4 million at March 31, 2025 [221]. - The total unrealized losses on available for sale securities were $25,930 thousand, primarily due to changes in interest rates [229]. - The company holds all investment securities in an unrealized loss position with investment grade credit ratings as of March 31, 2025 [230]. - The company has the ability and intention to hold securities until their fair values recover to cost or maturity [228]. Shareholders' Equity - Total shareholders' equity rose to $510.3 million, with a book value per share of $28.77, up from $28.66 at the end of 2024 [179]. - Shareholders' equity increased by $2.4 million, or 0.48%, to $510.3 million as of March 31, 2025, driven by net income of $2.3 million and lower unrealized losses on AFS securities [290]. - The tangible common equity to tangible assets ratio was 11.10% as of March 31, 2025, compared to 11.08% a year earlier [308]. - The average balance of shareholders' equity was $512,262 thousand for the three months ended March 31, 2025 [308]. Tax and Regulatory Compliance - 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 [212]. - As of March 31, 2025, the company was in compliance with all covenants under its long-term debt agreements and subordinated debt [285]. - The consolidated Tier 1 Leverage Ratio was 12.07%, exceeding the regulatory minimum of 4.00% [299]. - The Common Equity Tier 1 Risk-Based Capital Ratio for the consolidated entity was 17.87%, well above the required 4.50% [299].