RBB Bancorp

Second-quarter 2026 net income was $10.1 million, or $0.59 per diluted share, versus $11.3 million, or $0.66, in Q1 and $9.3 million, or $0.52, in Q2 2025. Net interest income was $30.1 million, non-interest income was $3.0 million, and non-interest expense was $19.0 million. Net interest margin was 3.06%, down from 3.15% in Q1 but up 14 bps year over year; the cost of average interest-bearing deposits fell 5 bps to 3.34%. Loan originations were $159 million, loans held for investment were $3.3 billion, deposits were $3.4 billion, and the loan-to-deposit ratio was 98%. The company recorded zero provision for credit losses, net charge-offs of $83,000, and non-performing loans declined to $23.8 million; non-performing assets fell to 1.02% of total assets. For outlook, management said NIM has room to improve from loan growth and the partial retirement of subordinated debt, expenses should stay in the $18 million-$19 million range, and loan growth should improve in the second half of 2026.

Johnny Lee said the quarter showed continued progress in improving RBB’s earnings power through better credit quality, loan and deposit growth, and capital actions. He highlighted the new Burlingame loan production office and Northern California commercial banking team as a strategic expansion into a market he called a natural fit for RBB, with a focus on building commercial lending momentum in the second half. His tone was constructive and confident, repeatedly pointing to a “healthy” pipeline and saying the company is on track for a strong second half of 2026.

Lynn Hopkins emphasized that earnings were pressured sequentially mainly by lower REO gains and higher subordinated debt expense after the $120 million notes repriced from 4% to a floating 6.98%, which added about $830,000 of interest expense in the quarter. She said the company completed a partial redemption of $40 million of subordinated notes on July 1 for about $40.7 million, and book value per share rose to $31.15 while tangible book value per share rose to $27.23. Credit remained strong with zero provision, $83,000 of net charge-offs, allowance for credit losses at $43.7 million, and coverage of non-performing loans at 184%; CET1 was about 18% and TCE to tangible assets about 11%. She also said expenses should stay in the $18 million-$19 million range, with any future relief likely coming from technology decisions and lower professional service fees as credit resolves.

Analysts focused on the path for net interest margin, core deposit competition, loan growth from the new Northern California team, OREO resolution timing, expense run rate, and capital returns. Management said margin should improve if loan growth comes through and the partial sub-debt redemption helps, while deposit pricing remains competitive but retail and non-interest-bearing growth and the Flex savings product are helping. On the OREO asset, they said they want an “ASAP” resolution but expect it to take the second half of 2026 because it is a large, partially completed construction project that needs the right buyer. They also said the buyback appetite is healthy, about 181,000 shares were repurchased at roughly $24.65-$24.75 on average, and they are considering a higher dividend but prioritized capital actions first.