RBB earnings increased to $12.6 million, or $0.74 per diluted share, for the quarter ended September 30, 2026, as higher net interest income and a $2.7 million office-building sale gain supported profit. The October 19 announcement also included a quarterly cash dividend of $0.16 per common share, payable November 12.
Key Takeaways
- Quarterly profit rose from $10.1 million, or $0.59 per diluted share, in the second quarter.
- Net interest margin widened 10 basis points to 3.16%, with support from interest recoveries and a special dividend.
- Loan growth outpaced deposit growth, while nonperforming assets declined 11.3% from June 30.
Table of Contents
- RBB earnings gain from lending income and building sale
- Margin improves, but deposit pricing remains a pressure
- Loans expand faster than deposits as problem assets fall
- Dividend dates set as securities losses weigh on equity
- Conclusion
RBB earnings gain from lending income and building sale
RBB Bancorp’s third-quarter results announcement showed net interest income rising to $31.8 million from $30.1 million in the preceding quarter. Higher average loans, increased recoveries of interest on nonaccrual loans, one additional day in the quarter and a $320,000 Federal Home Loan Bank special dividend contributed to the increase.
The Los Angeles-based parent of Royal Business Bank also recorded a $2.7 million gain from selling its Brooklyn office building. That helped lift noninterest income to $5.1 million from $3.0 million, despite an $875,000 decline in gains on loan sales.
The property gain was therefore a material part of the earnings improvement, rather than evidence of stronger recurring banking revenue alone. The bank leased back space for its loan operations center through the end of 2026 and plans to move those operations to another leased Brooklyn location starting in 2027.
Noninterest expense increased to $19.5 million from $19.0 million, mainly reflecting salaries, benefits and occupancy costs. A lower effective tax rate of 24.9%, compared with 28.0%, also supported net income.
| Item | Details |
|---|---|
| Return on average assets | 1.17% in Q3 2026, versus 0.97% in Q2. |
| Efficiency ratio | 53.0% in Q3 2026, versus 57.5% in Q2. |
| Book value per share | $31.75 at September 30, versus $31.51 at June 30. |
| Allowance for loan losses | 1.30% of loans held for investment at September 30, versus 1.32% at June 30. |
Margin improves, but deposit pricing remains a pressure
Net interest margin increased to 3.16% from 3.06%. RBB attributed much of the improvement in earning-asset yields to higher nonaccrual interest recoveries and the Federal Home Loan Bank special dividend, neither of which should automatically be treated as a steady quarterly contribution.
Average funding costs fell to 2.97% from 3.00%, mainly because the company completed a $40 million partial redemption of subordinated notes on July 1. However, the quarter-end weighted average rate on deposits rose to 2.82% from 2.75%, showing that lower overall funding costs did not mean deposit pricing had eased.
Loans expand faster than deposits as problem assets fall
Loans held for investment increased $89.8 million during the quarter to $3.4 billion, equivalent to 10.8% annualized growth. Originations totaled $154.0 million at an average yield of 6.30%.
Deposits also totaled $3.4 billion but increased by only $4.6 million. Retail deposits grew $63.3 million, largely replacing a $58.7 million reduction in wholesale deposits. With lending expanding faster than funding, the loan-to-deposit ratio rose to 100.1% from 97.6%.
Nonperforming assets fell to $38.7 million from $43.6 million, driven by lower nonperforming loans. Credit trends were not uniformly stronger: special mention loans increased to $24.3 million from $20.3 million, although all remained on accrual status.
RBB recorded a $500,000 provision for credit losses, compared with no provision in the second quarter, mainly to reflect loan growth. Annualized net charge-offs remained at 0.01% of average loans.
Dividend dates set as securities losses weigh on equity
The board declared a $0.16 quarterly common dividend for shareholders of record on October 30, 2026, with payment scheduled for November 12. The company also repurchased $4.5 million of common stock during the third quarter.
Total shareholders’ equity declined $934,000 to $534.2 million despite the quarterly profit. Higher unrealized losses on available-for-sale securities, repurchases and dividends more than offset earnings and stock-based compensation activity. Pretax unrealized securities losses increased to $30.6 million from $20.9 million.
Conclusion
The results combined stronger lending income and lower problem assets with a material property-sale gain. Management’s next scheduled discussion is the October 20, 2026 earnings call at 11 a.m. Pacific time, ahead of the dividend record date on October 30.
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