Third Quarter 2026
Filed Oct 19, 2026RBB Bancorp Reports Third Quarter 2026 Earnings and Declares Quarterly Cash Dividend of $0.16 Per Common Share
Third-quarter net income, net interest income, net interest margin and return on average assets increased from the prior quarter, while nonperforming assets and nonperforming loans declined. Results also included a $2.7 million gain on the sale of the Brooklyn office building, and special mention loans increased from the prior quarter.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Net interest income before provision for credit losses, three months ended September 30, 2026GAAP | $31.76M | $1.7 million increase | – |
| Provision for credit losses, three months ended September 30, 2026GAAP | $500K | – | – |
| Noninterest income, three months ended September 30, 2026GAAP | $5.11M | $2.1 million increase | – |
| Noninterest expense, three months ended September 30, 2026GAAP | $19.55M | $526,000 increase | – |
| Income before income taxes, three months ended September 30, 2026GAAP | $16.82M | – | – |
| Income tax expense, three months ended September 30, 2026GAAP | $4.18M | – | – |
| Effective tax rate, three months ended September 30, 2026GAAP | 24.9% | – | – |
| Net income, three months ended September 30, 2026GAAP | $12.64M | – | – |
| Basic net income per share, three months ended September 30, 2026GAAP | $0.75 | – | – |
| Diluted net income per share, three months ended September 30, 2026GAAP | $0.74 | – | – |
| Net interest margin, three months ended September 30, 2026GAAP | 3.16% | 10 basis points increase | – |
| Net interest spread, three months ended September 30, 2026GAAP | 2.39% | – | – |
| Yield on average earning assets, three months ended September 30, 2026other | 5.90% | 9 basis point increase | – |
| Cost of average total deposits, three months ended September 30, 2026other | 2.79% | – | – |
| Cost of average interest-bearing liabilities, three months ended September 30, 2026other | 3.51% | – | – |
| Return on average assets, annualized, three months ended September 30, 2026GAAP | 1.17% | – | – |
| Return on average shareholders' equity, annualized, three months ended September 30, 2026GAAP | 9.34% | – | – |
| Efficiency ratio, three months ended September 30, 2026other | 53.02% | – | – |
| Pre-tax pre-provision income, three months ended September 30, 2026non-GAAP | $17.32M | – | – |
| Tangible book value per share at September 30, 2026non-GAAP | $27.44 | – | – |
| Book value per share at September 30, 2026GAAP | $31.75 | – | – |
| Total assets at September 30, 2026GAAP | $4.25B | $23.7 million, or 2.2% annualized, decrease | $42.8 million, or 1.0%, increase |
| Loans held for investment at September 30, 2026GAAP | $3.40B | $89.8 million, or 10.8% annualized, increase | $96.6 million, or 2.9%, increase |
| Total deposits at September 30, 2026GAAP | $3.40B | $4.6 million, or 0.5% annualized, increase | $28.8 million, or 0.9%, increase |
| Nonperforming assets at September 30, 2026GAAP | $38.66M | $4.9 million, or 11.3%, decrease | – |
| Nonperforming assets to total assets at September 30, 2026GAAP | 0.91% | – | – |
| Nonperforming loans HFI at September 30, 2026GAAP | $18.84M | $4.9 million decrease | $26.6 million decrease |
| Allowance for credit losses at September 30, 2026GAAP | $44.45M | $378,000 increase | – |
| Allowance for loan losses to total loans HFI at September 30, 2026GAAP | 1.30% | – | – |
| Total shareholders' equity at September 30, 2026GAAP | $534.2M | $934,000 decrease | $19.9 million increase |
| Tangible common equity to tangible assets at September 30, 2026non-GAAP | 11.05% | – | – |
| Total capital to risk-weighted assets at September 30, 2026other | 22.05% | – | – |
Amounts quoted below without a unit are in thousands, as in the filing’s tables. Per-share figures are as printed.
2026 outlook
- Tax rateThe effective tax rate for 2026 is estimated to be 26.9%
Capital returns
- The Board of Directors has declared a quarterly cash dividend of $0.16 per common share.
- The dividend is payable on November 12, 2026 to shareholders of record on October 30, 2026.
- Common stock repurchases of $4.5 million during the third quarter of 2026.
- Common stock cash dividends paid of $2.7 million during the third quarter of 2026.
- Partial redemption of subordinated notes of $40 million was completed on July 1, 2026.
What drove it
- Net interest income increased due to a $2.1 million increase in interest income, partially offset by a $473,000 increase in interest expense.
- Interest income benefited from a $1.5 million increase in loan interest income, higher nonaccrual interest recoveries, one additional day in the quarter and a special dividend of $320,000 from the FHLB.
- The partial redemption of $40.0 million of subordinated notes on July 1, 2026 contributed to a decrease in the cost of borrowings.
- Retail deposits increased $63.3 million while wholesale deposits decreased $58.7 million during the third quarter of 2026.
- Noninterest income included a $2.7 million gain on the sale of the Bank's office building in Brooklyn, New York.
- Loans held for investment increased with $154.0 million of originations with an average yield of 6.30%, $30.5 million in advances and $21.9 million in purchases.
Concerns
- The $2.7 million gain on the sale of the Brooklyn office building was a significant contributor to other income.
- Special mention loans totaled $24.3 million, or 0.72% of total loans, at September 30, 2026, compared to $20.3 million, or 0.61% of total loans, at June 30, 2026.
- Noninterest-bearing deposits decreased $34.7 million from June 30, 2026 to $556.8 million, or 16.4% of total deposits.
- The period end weighted average interest rate for total deposits increased to 2.82% at September 30, 2026 from 2.75% at June 30, 2026.
- Noninterest expense increased due mainly to higher salaries and benefits and occupancy costs, including rent for the Brooklyn loan operations center after the building sale.
- Net unrealized pre-tax losses on available for sale securities increased $9.7 million to $30.6 million.
What to watch
- Whether retail deposit growth continues to reduce reliance on wholesale deposits.
- The sustainability of net interest margin after the FHLB special dividend and higher nonaccrual interest recoveries.
- Loan growth, including the stated healthy pipelines and business activity in the Company's markets.
- The trajectory of special mention loans, new delinquent loans and credit-loss provisioning.
- The relocation of the Brooklyn loan operations center to new leased space starting in 2027.
Balance sheet and cash flow
- Cash and cash equivalents were $190,290 at September 30, 2026, compared to $283,015 at June 30, 2026 and $234,930 at September 30, 2025.
- FHLB advances were $180,000 at September 30, 2026, compared to $160,000 at June 30, 2026 and $130,000 at September 30, 2025.
- Long-term debt, net of issuance costs, was $80,000 at September 30, 2026, compared to $120,000 at June 30, 2026 and $119,815 at September 30, 2025.
- Subordinated debentures were $15,538 at September 30, 2026, compared to $15,484 at June 30, 2026 and $15,320 at September 30, 2025.
- Available for sale securities totaled $381.3 million at September 30, 2026, a decrease of $25.8 million from June 30, 2026.
- Net unrealized pre-tax losses totaled $30.6 million at September 30, 2026, compared to net unrealized pre-tax losses of $20.9 million as of June 30, 2026.
Analysis
RBB Bancorp reported third-quarter 2026 net income of $12.6 million, or $0.74 diluted earnings per share, compared with $10.1 million, or $0.59 diluted earnings per share, in the second quarter of 2026. Net interest income before provision for credit losses was $31.8 million, compared with $30.1 million in the prior quarter, and net interest margin increased 10 basis points to 3.16%. Return on average assets rose to 1.17% from 0.97%, while the efficiency ratio improved to 53.02% from 57.46%.
The margin improvement reflected a 9 basis point increase in the yield on average total interest-earning assets to 5.90% and a 3 basis point decrease in total cost of funds to 2.97%. Management attributed higher interest income to increased loan interest income, higher nonaccrual interest recoveries, one additional day in the quarter and a $320,000 FHLB special dividend. The partial redemption of $40.0 million of subordinated notes reduced the cost of borrowings, although average FHLB advances increased and the period end weighted average interest rate for total deposits rose to 2.82%.
Balance-sheet activity showed $3.4 billion of loans held for investment, up $89.8 million from June 30, 2026, supported by $154.0 million of originations, $30.5 million in advances and $21.9 million in purchases. Total deposits were $3.4 billion, up $4.6 million sequentially, as a $63.3 million increase in retail deposits was mostly offset by a $58.7 million decrease in wholesale deposits. Noninterest-bearing deposits declined $34.7 million sequentially, while the loan-to-deposit ratio increased to 100.1% from 97.6%.
Credit indicators improved in several core categories. Nonperforming assets declined to $38.7 million, or 0.91% of total assets, from $43.6 million, or 1.02%, at June 30, 2026. Nonperforming loans declined $4.9 million to $18.8 million, and substandard loans declined to $57.3 million from $61.5 million. However, special mention loans increased to $24.3 million from $20.3 million. The company recorded a $500,000 provision for credit losses, and net charge-offs were $122,000.
Noninterest income increased to $5.1 million from $3.0 million, principally because of the $2.7 million gain on the sale of the Brooklyn office building, partly offset by an $875,000 decline in gain on sale of loans. Noninterest expense rose to $19.5 million from $19.0 million due to salaries and benefits and occupancy costs. Shareholders' equity was $534.2 million, down $934,000 sequentially, as $6.8 million of higher unrealized losses on available for sale securities, $4.5 million of repurchases and $2.7 million of cash dividends paid more than offset net income and stock-based compensation activity. The company declared a quarterly cash dividend of $0.16 per common share and estimated its full-year 2026 effective tax rate at 26.9%.
Management, verbatim
Our third quarter results reflected the continued strength of our core banking franchise as the partial redemption of our subordinated notes and the continued resolution of nonperforming assets contributed to higher net interest income.
Johnny Lee, President and Chief Executive Officer of RBB Bancorp
We continued to improve the quality of our funding base through strong retail deposit growth, which allowed us to reduce our reliance on wholesale deposits.
Johnny Lee, President and Chief Executive Officer of RBB Bancorp
Not in the filing
stated, not guessed- Total revenue was not reported.
- Segment revenue was not reported.
- Gross margin was not reported.
- Operating income was not reported.
- GAAP cash flow from operations was not reported.
- Free cash flow was not reported.
- Forward revenue guidance was not reported.
- Forward expense guidance was not reported.
- Forward net interest margin guidance was not reported.
- Prior-release outlook was not provided.
AlphAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.