RBB(US:RBB)2025-04-29 19:02Financial 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]