RBB Bancorp (RBB) Q2 2024 earnings summary

Executive summary

• Q2 2024 net income was $7.2 million ($0.39 per share), down from Q1 2024 and Q2 2023, reflecting stabilization with modest loan growth and unchanged funding costs.

• Net interest margin declined to 2.67% from 2.69% in Q1 2024, mainly due to loans migrating to non-accrual status and higher funding costs.

• Loan growth was $15.9 million to $20 million in Q2, with $115 million in new loan production at a 7.4% weighted average rate.

• Share repurchases totaled 448,190 shares for $8.1 million; book value per share rose to $28.12 and tangible book value per share to $24.06.

• Management expects margin expansion and continued loan growth in the second half of 2024, despite ongoing regulatory and credit risks.

Financial highlights

• Net interest income was $24.0 million, down $912,000 sequentially, with declines driven by lower interest income and non-accrual loans.

• Noninterest income rose to $3.5 million, benefiting from equity investment distributions, higher gains on loan sales, and OREO sales.

• Noninterest expense was stable at $17.1 million, with a decrease from Q2 2023 due to lower legal and professional fees.

• Efficiency ratio increased to 62.38% in Q2 2024, up from 60.07% in Q1 2024.

• Provision for credit losses was $557,000 in Q2 2024, with net charge-offs of $551,000.

Outlook and guidance

• Management is cautiously optimistic for net interest margin expansion in Q3 and Q4, assuming no further large non-accruals.

• Loan growth is expected to be low single-digit for the remainder of 2024, with stronger growth in the second half.

• Noninterest expenses are projected to remain near current levels for Q3 and Q4.

• Focus remains on improving risk profile, liquidity, and credit quality amid economic and regulatory uncertainty.