RBB(US:RBB)2025-10-21 19:00Financial Data and Key Metrics Changes - Third quarter net income totaled $10,100,000 or $0.59 per share, representing a 9% increase from the previous quarter and a 45% increase year-over-year [3][5] - Net interest margin increased by six basis points to 2.98% compared to the prior quarter, and has increased by 30 basis points over the last four quarters [4][6] - Net interest income rose for the fifth consecutive quarter, up $1,900,000 to $29,300,000, driven by higher interest income [6][11] Business Line Data and Key Metrics Changes - Loans held for investment grew by $68,000,000 or 8% on an annualized basis, with significant growth from the in-house mortgage origination business [4][6] - Third quarter loan originations totaled $188,000,000 at a blended yield of 6.7%, which is 67 basis points above the prior quarter's blended loan portfolio yield [4][8] - Nonperforming loans decreased by $11,300,000 or 20% to $44,500,000, indicating improved asset quality [9][10] Market Data and Key Metrics Changes - Total deposits increased by $178,000,000 to $3,400,000,000, with growth across all deposit categories [11] - The average loan portfolio yield expanded by nine basis points to 6.12% due to strong origination yields and repricing of loans [8] Company Strategy and Development Direction - The company is focused on addressing nonperforming loans while minimizing the impact on earnings and capital [4][10] - There is an ongoing effort to manage operating costs to be below 2% of average assets while maintaining loan growth [7][11] - The company is considering opportunities for share buybacks and refinancing of subordinated debt in the future [21][53] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about core earnings growth and lower credit costs, viewing these as positive signs for the future [3][6] - The company remains vigilant in addressing remaining credit issues and is focused on improving asset quality [16][18] - Management indicated that competition for liquidity remains stiff, impacting the ability to reduce funding costs significantly [6][28] Other Important Information - The allowance for loan losses to total loans held for investment ratio stood at 1.36% as of September 30, which management believes appropriately addresses the risk in the loan portfolio [10] - The tangible book value per share increased to $25.89, reflecting a 12% annualized increase [11] Q&A Session Summary Question: What inning do you think you're 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][18] Question: How much is left in the current share repurchase authorization? - Approximately $4,000,000 remains in the current program, and management is considering future buyback opportunities [21][22] Question: What is the expected deposit beta with potential rate cuts? - Management indicated that deposit beta has slowed due to fierce competition for liquidity, and they expect to capitalize on maturing time deposits [25][28] Question: Was there any interest recovery during the third quarter? - Management confirmed that there were no significant anomalies in net interest income related to interest recovery during the quarter [38] Question: What rates were the FHLB advances maturing at? - The FHLB advances matured at a rate of approximately 3.40%, and were replaced with brokered deposits at rates closer to 4% [40][41]