RBB(US:RBB)2026-01-27 20:00Financial Data and Key Metrics Changes - Fourth quarter net income totaled $10.2 million, or $0.59 per share, stable from the third quarter but more than double the earnings from the same quarter a year ago [3][7] - Return on Assets (ROA) and Net Interest Margin (NIM) were stable from the third quarter while increasing sharply from a year ago [3] - For the year, loans grew at a solid 8.6%, with loan originations for the year being 32% higher than in 2024 [4][12] - Non-performing loans decreased by 45% and non-performing assets decreased by 34% since the end of last year [6][13] Business Line Data and Key Metrics Changes - Fourth quarter loan originations were $145 million, with a healthy pipeline expected to support high single-digit growth in 2026 [4] - Net interest income increased by 13% to $112 million for the year, driven by loan growth and a decline in funding costs [9] - Non-interest income categories increased except for other income, with a decline in non-interest expenses due to year-end accruals [10][11] Market Data and Key Metrics Changes - Total deposits increased by 8.6% compared to the fourth quarter a year ago, with strong growth in interest-bearing non-maturity deposits [5] - Average demand deposits remained stable in 2025, comprising 16% of total deposits [5] - The average rate on interest-bearing deposits declined by 55 basis points from the fourth quarter of 2024 [6] Company Strategy and Development Direction - The company aims to return to its historic performance levels, focusing on resolving remaining non-performing assets [3] - There is a commitment to maintaining pricing and structuring discipline in loan originations [4] - The company plans to be more active in buyback programs after addressing sub-debt [18] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in having turned a corner on credit, expecting continued improvement in performance [3] - The competitive landscape for deposits remains intense, impacting deposit costs [6][16] - Management anticipates that credit costs will be much lower now that credit has stabilized [13] Other Important Information - Tangible book value per share increased by 7.8% during 2025, ending the year at $26.42 [14] - The effective tax rate in 2026 is expected to be between 27% and 28% [11] Q&A Session Summary Question: What is the outlook for deposit beta going forward? - Management indicated that the deposit beta is expected to continue increasing due to a large portion of the funding base maturing over the next year [16] Question: Any updates on sub-debt refreshes in April? - Management is looking at opportunities to rightsize the sub-debt for the balance sheet and capital stack [17] Question: How should we think about the buyback this year? - Management expects to be more active in buyback programs after addressing sub-debt [18] Question: Can you discuss the margin outlook for 2026? - Management believes there is an opportunity for deposit costs to continue to come down, which could lead to margin expansion [25][27] Question: What are the expectations for credit metrics in the next 12 months? - Management is optimistic about resolving non-performing loans and expects continued improvement in credit metrics [29][31] Question: What is the current competition like for commercial real estate loans? - Management noted that competition remains intense, but they are strategically focused on relationship-driven lending [54][56]