RBB Bancorp Q4 2025 Earnings Call Summary

1Key Financial Results and Metrics

Net Income: $10.2 million, or $0.59 per share, stable from Q3 2025 and more than double from Q4 2024.

Return on Assets (ROA): and Net Interest Margin (NIM): Both stable from Q3 2025, with NIM at 2.99%.

Loan Growth: 8.6% year-over-year; Q4 originations at $145 million, up 32% from 2024.

Deposits: Increased 6.6% year-over-year, primarily in interest-bearing nonmaturing deposits.

Nonperforming Assets: Nonperforming loans decreased 45% and nonperforming assets decreased 34% year-over-year.

Effective Tax Rate: Reduced by 330 basis points in Q4 2025, expected to be 27%-28% in 2026.

Tangible Book Value: Increased 7.8% to $26.42 per share.

2Strategic Updates and Business Highlights

RBB Bancorp is focused on returning to historic performance levels, with significant improvements in credit quality and asset resolution.

The bank has maintained pricing discipline in loan originations, yielding 31 basis points above the current loan portfolio yield.

Continued community outreach efforts are aimed at attracting retail deposits and enhancing business client relationships.

The bank is optimistic about maintaining a healthy loan pipeline and expects to sustain high single-digit growth in 2026.

3Forward Guidance and Outlook

RBB anticipates continued loan growth in 2026, with expectations for a similar performance to 2025.

The bank expects incremental improvements in deposit costs in Q1 2026, despite intense competition.

Credit costs are expected to decrease significantly as credit quality stabilizes, with a focus on resolving classified and criticized assets.

4Bad News, Challenges, or Points of Concern

Deposit Competition: Increasing competition for deposits is putting pressure on deposit costs, with a noted beta of 30% for interest-bearing deposits.

Loan Growth Constraints: Q4 loan growth was muted due to a combination of payoffs, lower demand, and competitive dynamics, with the loan-to-deposit ratio around 99%.

Nonperforming Assets: While there has been improvement, the bank still has work to do in resolving remaining nonperforming assets.

Expense Increases: Anticipated increases in expenses in Q1 2026 due to seasonal taxes and salary adjustments.

5Notable Q&A Insights

Deposit Beta: The bank expects the deposit beta to continue increasing, with a significant portion of its funding base maturing in the next year.

Sub Debt Plans: RBB is considering rightsizing its $120 million of subordinated debt, which is eligible for redemption in April 2026.

Loan Competition: The bank is facing competitive pressures on loan rates, with some competitors offering lower fixed rates, but RBB aims to maintain a competitive edge through relationship-driven lending.

Expense Management: The bank is focused on managing expenses, with expectations for a stable run rate in 2026, while also addressing elevated legal and professional costs related to credit workouts. Overall, RBB Bancorp reported a solid performance in Q4 2025, with improvements in credit quality and a positive outlook for loan growth, despite facing challenges from competition and deposit costs.