RBB Bancorp (RBB) Q3 2024 Earnings Call Transcript

Motley Fool Transcribing, The Motley Fool

Mon, January 26, 2026 astatine 10:22 AM CST 25 min read

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Tuesday, October 22, 2024 astatine 2 p.m. ET

• President and Chief Executive Officer — David Morris

• Chief Financial Officer — Lynn Hopkins

• Chief Credit Officer — Johnny Lee

David Morris: Thank you, Rebecca. Good day, everyone, and convey you for joining america today. We reported 3rd 4th nett income of $7 million, oregon $0.39 per share, with results including a pre-tax $2.8 cardinal betterment connected a afloat charged-off indebtedness and a $3.3 cardinal recognition provision. Net involvement borderline accrued by 1 ground point, which was little than we expected, but we stay optimistic that it volition person the accidental to grow implicit the adjacent fewer quarters with the expected diminution successful short-term marketplace involvement rates. We began to spot immoderate of the deposit funded indebtedness maturation we referenced past quarter.

Loans accrued by $44 cardinal successful the 3rd quarter, supported by $175 cardinal of indebtedness accumulation astatine a weighted mean complaint of 7.26%. Johnny volition speech much astir our expectations for indebtedness maturation implicit the adjacent fewer quarters. Deposits accrued by $69 cardinal from the past 4th with non-interest bearing deposits remaining stable. We proceed to absorption connected attracting and retaining halfway deposits to money our indebtedness growth. We did summation wholesale deposits successful the 3rd 4th arsenic they were little costly than retail deposits. But astatine 4.8% of full deposits, we are importantly little reliant connected them than a twelvemonth agone erstwhile they were astatine 13.9% of full deposits.

Non-performing loans accrued successful the 3rd 4th and Johnny volition stock much accusation astir that. But we proceed to enactment done these loans and judge we volition beryllium capable to resoluteness the bulk of them by mid adjacent year. We were pleased to denote the solution and termination of our Consent Order successful August. Our directors and unit worked precise hard to code our regulatory concerns and to fortify our compliance programs. With this hard enactment down us, we judge we person the accidental to absorption connected maturation and different value-creating opportunities for the bank. With that, I manus it implicit to Johnny.

Johnny Lee: Thank you, David. As David mentioned, loans grew astatine a 5.8% annualized complaint successful the 3rd quarter. Supporting this maturation was a precise robust $175 cardinal of indebtedness production, which comes aft beardown 2nd 4th indebtedness accumulation of $117 million. Net indebtedness maturation has been tempered by payoffs and paydowns owed chiefly to borrowers' deficiency of further request [indiscernible] loans oregon their tendency to hold until rates travel down further earlier refinancing. Payoffs besides included loans with higher imaginable recognition hazard that RBB wanted to exit and loans that were refinanced by different banks that connection assertive rates and recognition presumption that we were not consenting to match.