RBB(US:RBB)2025-10-21 19:00Financial Data and Key Metrics Changes - Third quarter net income totaled $10.1 million or $0.59 per share, representing a 9% increase from the previous quarter and a 45% increase year-over-year [3][5] - Net interest income increased for the fifth consecutive quarter, up $1.9 million to $29.3 million, driven by higher interest income of $3.2 million [5][6] - Net interest margin expanded by 6 basis points to 2.98%, a 30 basis point increase over the last four quarters [3][6] Business Line Data and Key Metrics Changes - Loans held for investment grew by $68 million or 8% on an annualized basis, with third quarter loan originations totaling $188 million at a blended yield of 6.70% [4][5] - Non-performing loans decreased by $11.3 million or 20% to $44.5 million, attributed to charge-offs and upgrades [9][10] - Total deposits increased by $178 million to $3.4 billion, with growth across all deposit categories [11] Market Data and Key Metrics Changes - The spot rate on deposits was 2.97%, which was six basis points below the third quarter's average of 3.03% [6] - The loan portfolio yield expanded by 9 basis points to 6.12%, primarily due to strong origination yields [9] Company Strategy and Development Direction - The company is focused on addressing remaining credit issues and improving asset quality, with a goal of resolving significant non-accrual loans [18][19] - There is an ongoing effort to deepen relationships in existing markets and explore opportunities for sub-debt refinancing next year [54] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about core earnings growth and lower credit costs, indicating a positive outlook for the future [3][5] - The company remains vigilant in managing credit quality and is focused on maintaining strong loan growth despite competitive pressures [18][19] Other Important Information - The company repurchased 660,000 shares or 4% of shares outstanding in the third quarter, with a tangible book value per share increasing to $25.89 [11][12] - Non-interest expenses decreased by $1.8 million to $18.7 million, primarily due to the absence of ERC-related expenses from the previous quarter [8] Q&A Session Summary Question: What inning do you think you are in regarding credit resolution? - Management acknowledged that while progress has been made, there is still work to do, and they are focused on resolving remaining credit issues [16][17] Question: How much is left in the current share repurchase authorization? - Approximately $4 million remains in the current program, and management is considering future buyback opportunities [20] Question: What is the expected deposit beta with potential rate cuts? - Management indicated that deposit beta may have slowed due to fierce competition for liquidity, but they expect to capitalize on upcoming opportunities [26][27] Question: What is the outlook for loan growth and portfolio mix? - The pipeline remains healthy, with a focus on residential mortgages and a gradual shift towards C&I loans, although seasonality may moderate growth in Q4 [36][37] Question: Was there any interest recovery during the third quarter? - There was no significant interest recovery or anomalies in net interest income during the third quarter [42] Question: What rates were the FHLB advances maturing at? - The FHLB advances matured at a rate of 3.40%, and were replaced with brokered deposits at higher rates [44]