RBB is a California-based state-chartered commercial bank that began operations in 2008. The bank caters to customers of Asian ethnicity, who have been dissatisfied by the nature and level of services being provided by existing Asian-American and Chinese-American banks. The bank was organized by a group of bankers who had a total of 82 years of work experience at various banks in California during the 1980s and 1990s. Some of the bankers began their careers in Asia.
The bank focuses on providing commercial banking services to first-generation immigrants. Chinese immigrants were the bank’s first target demographic, but now, the bank also focuses on Koreans and other Asian ethnicities. When targeting businesses, the bank looks for companies located in Southern California and Nevada with future expansion plans focused on Houston and New York. The bank’s target business clients have annual sales between $5 million and $50 million with an employee count between 50 and 500.
The company established RBB Bancorp as its holding company on January 2011 and acquired Las Vegas-based First Asian Bank in all-cash transaction in July 2011. That was followed by an all-cash acquisition of Oxnard-based Ventura County Business Bank in September 2011. A private placement offering for common stock in 2012 raised more than $54 million from investors.
Then, Royal Business Bank acquired Los Angeles National Bank as part of an all-cash transaction in May 2013. Another acquisition was completed in 2016 when the company purchased TFC Holding Company and its wholly-owned subsidiary, TomatoBank. These acquisitions were followed by another capital injection in March 2016 when the company issued $50 million in subordinated notes with a 6.5% fixed-to-floating rate. This injection qualified as Tier 2 capital and is referred to as long term debt in financial statements.
In all, at this time, the bank operates 13 branches across Los Angeles County and Ventura County in California and Clark County in Nevada. There are ten branches in downtown Los Angeles, two branches in Oxnard and Westlake Village, and one branch in Las Vegas.
Financials & Distribution
For the quarter ended March 31, 2017, net interest income after provisions for loan losses totaled $13.51 million, up from $11.04 million one year ago. Net interest margin declined to 4.06% from 4.11% one year ago. For the year ended December 31, 2016, the bank’s net interest income after provisions for loan losses totaled $51.51 million, up from $34.19 million in 2015. Net interest margin was reported at 4.43%, up from 3.72% in 2015.
At the end of March 2017, the bank had total assets of $1.51 billion, total loans of $1.13 billion, total deposits of $1.25 billion, and total stockholders’ equity of $183.50 million. Looking at the bank’s loan mix, Commercial Real Estate loans made up 51.0% of all loans at the end of March 2017. Commercial and Industrial loans made up 19.0% of all loans while Single-Family Residential loans made up 17.0% of the total. Small Business Administration loans made up the remaining 13.0% of total loans.
The bank expects to pay a quarterly dividend that equates to 20.0% of basic earnings per share for the four quarters immediately preceding the proposed payment. Based upon 2016 earnings, the bank paid a dividend of $0.30 in the first quarter of 2017.