RBB(US:RBB)2024-05-09 21:02Financial Performance - For the quarter ended March 31, 2024, net income was $8.0 million, or $0.43 diluted earnings per share, down from $12.1 million, or $0.64 per share in the previous quarter[185]. - Net income for the three months ended March 31, 2024, was $8.0 million, down from $12.1 million for the same period in 2023[197]. - Basic earnings per share decreased to $0.43 for the three months ended March 31, 2024, down from $0.64 for the previous quarter[197]. - Net interest income for Q1 2024 was $24.9 million, a decrease of $9.2 million from $34.1 million in Q1 2023, driven by higher interest expense of $10.3 million[210]. - Noninterest income for Q1 2024 was $3.4 million, a decrease of $4.0 million from $7.4 million in Q4 2023, primarily due to the absence of a $5.0 million CDFI ERP award recognized in Q4 2023[217]. - Total noninterest expense increased to $16.97 million in Q1 2024, up $576,000 from $16.39 million in Q4 2023[223]. Asset and Liability Management - Total assets decreased by $148.0 million, or 3.7%, to $3.9 billion from $4.0 billion at December 31, 2023, primarily due to a $162.1 million decrease in cash and cash equivalents[186]. - Total liabilities decreased by $150.7 million to $3.4 billion at March 31, 2024, primarily due to a $146.4 million decrease in deposits[279]. - Total deposits decreased by $146.4 million, or 4.6%, to $3.0 billion as of March 31, 2024, primarily due to a decline in interest-bearing deposits[189]. - Total interest-bearing liabilities were $2,873.0 million with an average cost of 4.19% for Q1 2024[205]. - The total cost of deposits was $3,117.2 million with a cost of 3.59% for Q1 2024[208]. Loan Portfolio - Total loans held for investment decreased by $4.5 million, or 0.15%, to $3.0 billion at March 31, 2024, with notable decreases in single-family residential mortgages and commercial and industrial loans[188]. - The loan-to-deposit ratio increased to 98.6% at March 31, 2024, compared to 94.2% at December 31, 2023[188]. - Single-family residential (SFR) mortgage loans represent approximately 50% of total loans as of March 31, 2024, with a balance of $1.46 billion[246]. - The loan portfolio composition includes 6.5% in construction and land development, 38.9% in commercial real estate, 48.4% in SFR mortgages, 4.0% in commercial and industrial loans, and 1.8% in SBA loans as of March 31, 2024[246]. - The total loans HFI at the end of the period were $3.027 billion, down from $3.342 billion at the end of 2023[265]. Credit Quality - The allowance for loan losses (ALL) as a percentage of loans held for investment (HFI) was 1.38% as of March 31, 2024, unchanged from December 31, 2023[192]. - The company recorded no provision for credit losses in Q1 2024, compared to a provision of $2.0 million in Q1 2023, reflecting improved credit quality metrics[215]. - Nonperforming assets totaled $37.0 million, or 0.95% of total assets, as of March 31, 2024, an increase from $31.6 million or 0.79% at December 31, 2023[270]. - The company reported net charge-offs to average loans HFI of 0.02% for the three months ended March 31, 2024, compared to 0.10% for the twelve months ended December 31, 2023[264]. Capital and Equity - Total shareholders' equity increased by $2.7 million to $514.0 million compared to December 31, 2023, driven by net earnings of $8.0 million[193]. - Shareholders' equity increased by $2.7 million, or 0.5%, to $514.0 million as of March 31, 2024, from $511.3 million at December 31, 2023, driven by net earnings of $8.0 million and stock option exercises of $541,000[295]. - The tangible common equity to tangible assets ratio was 19.10% as of March 31, 2024, compared to 19.07% at December 31, 2023[302]. - The company exceeded all regulatory capital requirements under Basel III, with a total risk-based capital ratio of 25.91% as of March 31, 2024[302]. Interest Rate Sensitivity - The net interest margin for Q1 2024 was 2.69%, compared to 2.73% in Q4 2023[208]. - Net interest margin decreased to 2.69% for Q1 2024, down 101 basis points from 3.70% in Q1 2023, primarily due to a 157 basis point increase in the cost of interest-bearing deposits[211]. - Net interest income sensitivity showed a dollar change of $9,640,000 with a 100 basis point decrease in rates, representing a 9.1% change[321]. - Economic Value of Equity (EVE) is expected to decrease in both up and down rate scenarios, indicating sensitivity to interest rate changes[324]. Operational Efficiency - The efficiency ratio increased to 60.07% for the three months ended March 31, 2024, compared to 49.58% for the previous quarter[197]. - The average interest rate on total interest-bearing deposits increased to 4.32% for the three months ended March 31, 2024, compared to 3.56% for the year ended December 31, 2023[281]. - Noninterest expense for Q1 2024 was $17.0 million, an increase of $576,000 from Q4 2023, primarily due to higher salaries and employee benefits expenses of $1.1 million[224]. Investment Portfolio - Available for sale investment securities totaled $335.2 million, with a pre-tax net unrealized loss of $30.2 million due to higher market interest rates[187]. - The weighted-average book yield on the total investment portfolio at March 31, 2024, was 4.16%, compared to 4.00% at December 31, 2023[235]. - The total available for sale securities amounted to $335.194 million with a weighted average yield of 4.27% as of March 31, 2024[240]. - The company actively monitors its investment portfolio to ensure adequate credit support and identify potential credit impairment[231].