RBB Bancorp : Earnings Release Presentation Q1 2025 (Opens in a new Window)

NASDAQ: RBB

2025 First Quarter

Earnings Results

April 28, 2025

This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements often include the words "believes," "expects," "anticipates," "estimates," "forecasts," "intends," "plans," "targets," "potentially," "probably," "projects," "outlook" or similar expressions or future or conditional verbs such as "may," "will," "should," "would" and "could" and the negative of these terms and similar words, although some forward-looking statements may be expressed differently. Forward-looking statements also include, but are not limited to, statements regarding plans, objectives, expectations or consequences of announced transactions, known trends and statements about future performance, operations, products and services of RBB Bancorp ("RBB" or the "Company") and its subsidiaries.

Certain matters set forth herein (including the exhibits hereto) constitute forward-looking statements relating to the Company's current business plans and expectations and our future financial position and operating results. These forward-looking statements are subject to risks and uncertainties that could cause actual results, performance and/or achievements to differ materially from those projected. These risks and uncertainties include, but are not limited to, the effectiveness of the Company's internal control over financial reporting and disclosure controls and procedures; the potential for additional material weaknesses in the Company's internal controls over financial reporting or other potential control deficiencies of which the Company is not currently aware or which have not been detected; business and economic conditions generally and in the financial services industry, nationally and within our current and future geographic markets, including the tight labor market, ineffective management of the United States ("U.S.") federal budget or debt or turbulence or uncertainly in domestic or foreign financial markets; the strength of the U.S. economy in general and the strength of the local economies in which we conduct operations; adverse developments in the banking industry highlighted by high-profile bank failures and the potential impact of such developments on customer confidence, liquidity and regulatory responses to these developments; possible additional provisions for credit losses and charge-offs; credit risks of lending activities and deterioration in asset or credit quality; extensive laws and regulations and supervision that we are subject to, including potential supervisory action by bank supervisory authorities; compliance with the Bank Secrecy Act and other money laundering statutes and regulations; potential goodwill impairment; liquidity risk; failure to comply with debt covenants; fluctuations in interest rates; risks associated with acquisitions and the expansion of our business into new markets; inflation and deflation; real estate market conditions and the value of real estate collateral; the effects of having concentrations in our loan portfolio, including commercial real estate and the risks of geographic and industry concentrations; environmental liabilities; our ability to compete with larger competitors; our ability to retain key personnel; successful management of reputational risk; severe weather, natural disasters, earthquakes, fires, including direct and indirect costs and impacts on clients, the Company and its employees from the January 2025 Los Angeles County wildfires; or other adverse external events could harm our business; geopolitical conditions, including acts or threats of terrorism, actions taken by the U.S. or other governments in response to acts or threats of terrorism and/or military conflicts, including the conflicts between Russia and Ukraine, in the Middle East, and increasing tensions between China and Taiwan, which could impact business and economic conditions in the U.S. and abroad; tariffs, trade policies, and related tensions, which could impact our clients, specific industry sectors, and/or broader economic conditions and financial market; public health crises and pandemics, and their effects on the economic and business environments in which we operate, including our credit quality and business operations, as well as the impact on general economic and financial market conditions; general economic or business conditions in Asia, and other regions where the Bank has operations; failures, interruptions, or security breaches of our information systems; climate change, including any enhanced regulatory, compliance, credit and reputational risks and costs; cybersecurity threats and the cost of defending against them; our ability to adapt our systems to the expanding use of technology in banking; risk management processes and strategies; adverse results in legal proceedings; the impact of regulatory enforcement actions, if any; certain provisions in our charter and bylaws that may affect acquisition of the Company; changes in tax laws and regulations; the impact of governmental efforts to restructure the U.S. financial regulatory system and increased costs of compliance and other risks associated with changes in regulation, including any amendments to the Dodd-Frank Wall Street Reform and Consumer Protection Act; the impact of changes in the Federal Deposit Insurance Corporation ("FDIC") insurance assessment rate and the rules and regulations related to the calculation of the FDIC insurance assessments; the effect of changes in accounting policies and practices or accounting standards, as may be adopted from time-to-time by bank regulatory agencies, the SEC, the Public Company Accounting Oversight Board, the Financial Accounting Standards Board or other accounting standards setters; fluctuations in the Company's stock price; restrictions on dividends and other distributions by laws and regulations and by our regulators and our capital structure; our ability to raise additional capital, if needed, and the potential resulting dilution of interests of holders of our common stock; the soundness of other financial institutions; our ongoing relations with our various federal and state regulators, including the SEC, FDIC, FRB and California Department of Financial Protection and Innovation; our success at managing the risks involved in the foregoing items and all other factors set forth in the Company's public reports, including its Annual Report as filed under Form 10-K for the year ended December 31, 2024, and particularly the discussion of risk factors within that document. The Company does not undertake, and specifically disclaims any obligation, to update any forward-looking statements to reflect occurrences or unanticipated events or circumstances after the date of such statements except as required by law. Any statements about future operating results, such as those concerning accretion and dilution to the Company's earnings or shareholders, are for illustrative purposes only, are not forecasts, and actual results may differ.

There can be no assurance that other factors not currently anticipated by us will not materially and adversely affect our business, financial condition and results of operations. You are cautioned not to place undue reliance on our forward looking statements, which reflect management's analysis and expectations only as of the date of such statements. Forward looking statements speak only as of the date they are made, and we do not intend, and undertake no obligation, to publicly revise or update forward looking statements, whether as a result of new information, future events or otherwise, except as required by federal securities law.

Non-GAAP Financial Measures

Certain financial information in this presentation has not been prepared in accordance with U.S. generally accepted accounting principles ("GAAP") and is presented on a non-GAAP basis. Investors should refer to the reconciliations included in this presentation and should consider the Company's non-GAAP measures in addition to, not as a substitute for or superior to, measures prepared in accordance with GAAP. These measures may not be comparable to similarly titled measures used by other companies.

First Quarter 2025 2

Diluted Earnings Per Share (EPS)

$

0.39 $

0.39 $

0.25

$

0.13

Earnings & Profitability

1Q25

4Q24

3Q24

2Q24

($ in thousands, except per share data)

Net Interest Income before Provision for Credit Losses Net Income	$ 23,965 $ 7,245	$ 24,545 $ 6,999	$ 25,977 $ 4,385	$ 26,163 $ 2,290
Net Interest Margin (NIM)	2.67%	2.68%	2.76%	2.88%
Efficiency Ratio (1)	62.38%	57.51%	61.48%	65.09%
Return on Average Assets(2)	0.76%	0.72%	0.44%	0.24%
Return on Tangible Common Equity(2)(3)	6.65%	6.40%	3.98%	2.12%
Balance Sheet & Capital
Gross Loans Held for Investment (HFI)	$ 3,047,712	$ 3,091,896	$ 3,053,230	$ 3,143,063
Total Deposits	$ 3,023,605	$ 3,092,184	$ 3,083,789	$ 3,142,628
Common Equity Tier 1 (CET1) Ratio	18.89%	18.16%	17.94%	17.87%

11.53%	11.13%	11.08%	11.10%
$ 24.06	$ 24.64	$ 24.51	$ 24.63

Tangible Common Equity to Tangible Assets (TCE) Ratio (3) Tangible Book Value per Share(3)

Asset Quality

Net Loan Charge-offs Nonperforming Loans (NPLs) Nonperforming Assets (NPAs)

$ 551 $

$ 54,589 $

$ 54,589 $

1,201 $

60,662 $

60,662 $

2,006

81,038

81,038

$

⁽⁴⁾ $

⁽⁴⁾ $

2,643

60,380

64,550

NPLs/Total Loans 1.79% 1.96% 2.64% 1.92% NPAs/Total Assets 1.41% 1.52% 2.03% 1.61%

First Quarter 2025

(1) Ratio calculated by dividing noninterest expense by the sum of net interest income before provision for credit losses and noninterest income; (2) Annualized; (3) See reconciliation of GAAP to non-GAAP financial measures in the

appendix and in the Company's Earnings Press Release; (4) 4Q24 includes $11.2 million loans HFS 3

NPL Reduction

$20.7 million, or 25%

NPA Reduction

$16.5 million, or 20%

TCE Ratio (3)

Net Loan to Deposit Ratio

98.4%

Expanded NIM

2.88%

Annualized Loan Growth

12%

Diluted EPS

$0.13

Net Income

$2.3 million

1Q25 Highlights

$3,006

$3,024

99.4%

Net Loan to Deposit Ratio 98.6%

97.5%

.4%

$3,091

$3,006

$3,092

$3,048

$3,084

$3,143

98

$ in Millions

($ in thousands, except per share data)	6/30/2024	9/30/2024	12/31/2024	3/31/2025
Cash and Due From Banks	$ 253,369	$ 349,990	$ 258,345	$ 239,423
Available for Sale (AFS) Securities	325,582	305,666	420,190	378,188
Held to Maturity (HTM) Securities	5,200	5,195	5,191	5,188
Loans Held for Sale (HFS)	3,146	812	11,250	655
Gross Loans HFI	3,047,712	3,091,896	3,053,230	3,143,063
Allowance for Loan Losses (ALL)	(41,741)	(43,685)	(47,729)	(51,932)
Net HFI loans	3,005,971	3,048,211	3,005,501	3,091,131
Other Assets	274,918	280,603	292,000	294,815
Total Assets	$ 3,868,186	$3,990,477	$ 3,992,477	$4,009,400
Total Deposits	$3,023,605	$3,092,184	$3,083,789	$3,142,628
Federal Home Loan Bank (FHLB) Advances	150,000	200,000	200,000	160,000
Long-term Debt and Subordinated Debentures	134,385	134,535	134,685	134,835
Other Liabilities	48,905	54,030	66,126	61,631
Total Liabilities	$ 3,356,895	$3,480,749	$ 3,484,600	$3,499,094
Total Shareholders' Equity	$ 511,291	$ 509,728	$ 507,877	$ 510,306
Book Value per Share	$28.12	$28.81	$ 28.66	$ 28.77
Tangible Book Value per Share (1)	$24.06	$24.64	$ 24.51	$ 24.63
Common Equity Ratio	13.22%	12.77%	12.72%	12.73%
Tangible Common Equity Ratio (1)	11.53%	11.13%	11.08%	11.10%
Loan to Deposit Ratio	99.4%	98.6%	97.5%	98.4%

6/30/2024 9/30/2024 12/31/2024 3/31/2025

Net loans Deposits

Net Loan to Deposit Ratio

Loans HFI increased $90 million, or 12% annualized, with increases in all categories except construction and land development (C&D) portfolio and other loans.

Deposits increased $59 million, or 8% annualized.

$150 million in FHLB advances with an average cost of 1.18% matured and were replaced with $110 million in FHLB advances with various terms at an average rate of 3.88%

1. See reconciliation of GAAP to non-GAAP financial measures in the appendix and in the Company's Earnings Press Release.

   First Quarter 2025 4

   Diversified loan portfolio at 3/31/25
   
   

   • SFR - Mainly non-qualified mortgage loans

   • CRE - Loans secured by commercial real estate, including multifamily and owner occupied and non-owner occupied CRE

   • C&I - Majority secured by assets

   • SBA - 7(a)program loans for business acquisition or working capital and 504 program loans

     Loan Portfolio Composition as of 3/31/25

     Other 1%

     CRE

     58% of total loans are fixed rate and 42% are variable rate(1) First Quarter Activity included
     
     

   • $201 million in production at an average rate of 6.77%

   • Annualized yield on loans HFI of 6.03%

   • Annualized net HFI loan growth of 12%

   • When loan sales, charge-offs and foreclosures are considered, annualized net HFI loan growth was 16%

SFR

48%

SBA 2%

C&I 4%

40%

C&D 5%

Business Line ($ in thousands)	March 31, 2025	1Q25 Yield	December 31, 2024	4Q24 Yield
Single-family residential mortgages (SFR)	$ 1,545,822	5.43%	$ 1,494,022	5.26%
Commercial real estate (CRE)	1,245,402	6.15%	1,201,420	6.17%
Construction and land development (C&D)	158,883	8.17%	173,290	7.35% (2)
Commercial and industrial (C&I)	135,538	7.67%	129,585	7.47%
Small Business Adminstration (SBA)	50,651	9.32%	47,263	17.04% (3)
Other	6,767	8.80%	7,650	8.72%
Total Loans HFI	$ 3,143,063	6.03%	$ 3,053,230	6.03%

200,863

6.77%

Production $ $ 125,651 7.11%

First Quarter 2025

(1) Fixed rate loans include loans that have initial fixed rate terms prior to converting to variable rate loans at a future date occurring more than 2 years from March 31,

2025. (2) 4Q24 C&D yield impacted by the reversal of nonaccrual interest of $880K for a $26.4 million loan migrating to nonaccrual. (3) 4Q24 SBA yield impacted by the 5

recapture of nonaccrual interest for SBA participation loans of $894K.