RBB(US:RBB)2025-10-21 19:02Financial Data and Key Metrics Changes - Net income for the third quarter 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, rising by $1.9 million to $29.3 million, driven by higher interest income of $3.2 million [6][8] - Net interest margin expanded by six basis points to 2.98%, marking a 30 basis point increase over the last four quarters [3][7] Business Line Data and Key Metrics Changes - Loans held for investment grew by $68 million or 8% on an annualized basis, primarily from the in-house mortgage origination business [4] - Third quarter loan originations totaled $188 million at a blended yield of 6.70%, which is 67 basis points above the prior quarter's blended loan portfolio yield [4][9] - Non-performing loans decreased by $11.3 million or 20% to $44.5 million, attributed to charge-offs and upgrades [9][10] Market Data and Key Metrics Changes - Total deposits increased by $178 million from the end of the second quarter to $3.4 billion, with growth across all deposit categories [11] - The allowance for loan losses to total loans held for investment ratio stood at 1.36% as of September 30, indicating appropriate risk coverage [11] 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 [20][21] - There is an ongoing effort to deepen relationships in existing markets and explore opportunities for sub-debt refinancing next year [55] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism regarding core earnings growth and lower credit costs, viewing these as positive signs for the future [3] - The company remains vigilant in addressing credit issues and is focused on maintaining loan growth while managing operating costs [20][21] Other Important Information - The tangible book value per share increased to $25.89, reflecting a 12% annualized increase [11] - The company repurchased 660,000 shares, or 4% of shares outstanding, during the third quarter [11] Q&A Session Summary Question: Asset quality improvement and future expectations - Management acknowledged progress in asset quality but indicated that more work is needed, with a focus on resolving significant non-accrual loans [18][20] Question: Capital and share repurchase authorization - The company has about $4 million left in the current share repurchase program and is considering future buyback opportunities [22][23] Question: Deposit beta and interest rates - Management noted that deposit beta has slowed due to fierce competition for liquidity, and they expect to capitalize on upcoming rate cuts [28][30] Question: Loan growth and portfolio mix - The pipeline remains healthy, with a focus on residential mortgage and commercial loans, although seasonality may moderate growth in Q4 [34][35] Question: Interest recovery and FHLB advances - There was no significant interest recovery in Q3, and FHLB advances were replaced with brokered deposits at a higher rate [42][43] Question: Margin expansion and future rate cuts - Management believes they can continue to expand margins despite potential rate cuts, driven by loan growth and origination yields [48][50]