RBB(US:RBB)2025-11-07 21:33Financial Performance - Net income for Q3 2025 was $10.1 million, or $0.59 diluted earnings per share, an increase from $9.3 million in Q2 2025 and $7.0 million in Q3 2024[183]. - The company reported a decrease in the effective tax rate contributing to higher net income in Q3 2025 compared to the previous quarter[183]. - Net interest income for the three months ended September 30, 2025, was $29.3 million, an increase from $27.3 million in the previous quarter[191]. - The efficiency ratio improved to 57.36% for the third quarter of 2025, compared to 57.22% in the previous quarter[191]. - The return on average assets was 0.97% for the third quarter of 2025, compared to 0.93% in the previous quarter[191]. - Net interest income increased by $1.9 million to $29.3 million for Q3 2025 compared to Q2 2025, driven by a $3.2 million increase in interest income[204]. - Noninterest income for Q3 2025 decreased to $3.3 million, down $5.2 million from Q2 2025, primarily due to the absence of ERC funds received in the previous quarter[220]. - Noninterest income for the nine months ended September 30, 2025, increased by $1.5 million to $14.1 million compared to $12.6 million in the same period of 2024[222]. Asset and Liability Management - Total assets increased by $216.0 million to $4.2 billion as of September 30, 2025, primarily due to a $249.3 million increase in gross loans held for investment, reaching $3.3 billion[185]. - Total deposits rose by $282.7 million to $3.4 billion, driven by a $295.2 million increase in interest-bearing deposits[185]. - Total liabilities increased by $209.5 million to $3.7 billion at September 30, 2025, primarily due to a $282.7 million increase in deposits[289]. - Total shareholders' equity was $514.3 million, with a book value per share of $30.18, compared to $517.7 million and $29.25 per share at June 30, 2025, primarily due to common stock repurchases of $12.5 million[189]. - Cash and cash equivalents decreased by $22.8 million, or 8.9%, to $234.9 million as of September 30, 2025[236]. Loan Portfolio and Credit Quality - The loan portfolio increased by $249.3 million, or 10.9% annualized, reaching $3.3 billion as of September 30, 2025, primarily driven by increases in SFR mortgage loans ($157.0 million) and CRE loans ($85.2 million)[249]. - Nonperforming assets decreased by $6.7 million to $54.3 million, representing 1.29% of total assets as of September 30, 2025, down from 1.49% at June 30, 2025[187]. - The allowance for credit losses totaled $45.4 million, a decrease of $6.2 million from $51.6 million at June 30, 2025, with the allowance as a percentage of loans HFI decreasing to 1.36%[188]. - The provision for credit losses for Q3 2025 was $625,000, significantly lower than $2.4 million in Q2 2025, reflecting net loan growth and improved credit quality metrics[216]. - Net charge-offs for Q3 2025 totaled $6.9 million, representing 0.84% of average loans, compared to 0.42% in Q2 2025[216]. Interest Income and Expense - The net interest margin (NIM) was 2.98% for Q3 2025, an increase of 6 basis points from 2.92% in Q2 2025, attributed to a 6 basis point increase in yield on average interest-earning assets[205]. - The total cost of deposits was $3,251,564 thousand with a cost of 3.03% for the three months ended September 30, 2025, slightly down from 3.05% in the previous quarter[197]. - Interest expense on deposits decreased by $10.2 million to $72.2 million for the nine months ended September 30, 2025, primarily due to lower average rates paid on interest-bearing deposits[212]. - The average cost of funds decreased to 3.12% for Q3 2025 from 3.14% in Q2 2025, reflecting a decrease in the average cost of interest-bearing deposits[206]. Taxation - The effective tax rate for Q3 2025 was 23.5%, lower than the statutory rate due to the realization of purchased Federal tax credits[232]. - The annual effective tax rate for fiscal 2025 is estimated to be in the range of 26% to 27%[232]. Noninterest Expense - Total noninterest expense for Q3 2025 was $18.7 million, a decrease from $20.5 million in Q2 2025, with salaries and employee benefits accounting for $10.6 million[228]. - For the nine months ended September 30, 2025, noninterest expense was $57.7 million, up $6.2 million from $51.5 million in the same period of 2024, with salaries and employee benefits increasing by $2.9 million[231]. - The increase in salaries and employee benefits expense for the nine months ended September 30, 2025, was $2.9 million, attributed to staffing and incentives[231]. Shareholder Information - Book value per share increased to $30.18 from $28.66 at December 31, 2024, while tangible book value per share rose to $25.89 from $24.51[306]. - Common shares outstanding as of September 30, 2025, are 17,043,897, a decrease from 17,720,416 as of December 31, 2024[322].