RBB(US:RBB)2026-01-27 20:02Financial 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, net interest income increased by 13% to $112 million due to loan growth and a decline in funding costs [8] Business Line Data and Key Metrics Changes - Loans grew at a solid 8.6% for the year, with fourth quarter originations at $145 million, 32% higher than in 2024 [4][11] - Non-performing loans decreased by 45% and non-performing assets decreased by 34% since the end of the previous year [6][12] - Fourth quarter non-interest income declined by $486,000 from the third quarter, but all categories of non-interest income increased compared to the fourth quarter of 2024, except for other income [9] 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 interest-bearing deposit rate declined by 55 basis points from the fourth quarter of 2024 [6] Company Strategy and Development Direction - The company aims to return to historic performance levels, focusing on resolving remaining non-performing assets [3] - There is an expectation of high single-digit growth in 2026, supported by a healthy loan pipeline [4] - The company is looking to rightsize its subordinated debt and may become more active in share buybacks after addressing this [18] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence that credit performance will continue to improve in future quarters, having turned a corner on credit issues [3] - The competitive landscape for deposits remains intense, but the company is optimistic about maintaining deposit growth [5][16] - Management anticipates that future annual credit costs will be much lower now that credit has stabilized [12] 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% [10] 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 subordinated debt refreshes? - The company plans to rightsize its $120 million subordinated debt eligible for redemption in April, looking for more attractive market opportunities [17] Question: How should we think about the buyback this year? - Management suggested that after addressing subordinated debt, there will be opportunities to be more active in buybacks [18] Question: What is the outlook for net interest margin (NIM)? - Management believes there is potential for NIM expansion as deposit costs may decrease with upcoming maturities [26] Question: What is the competition like for commercial real estate loans? - The company is facing competition but remains strategic in its lending relationships, maintaining yields above competitors [52][55]