RBB Bancorp : Earnings Release Presentation Q3 2023

NASDAQ: RBB

2023 Third Quarter

Earnings Results

October 23, 2023

Disclosure Statement

This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements often include the words "believes," "expects," "anticipates," "estimates," "forecasts," "intends," "plans," "targets," "potentially," "probably," "projects," "outlook" or similar expressions or future or conditional verbs such as "may," "will," "should," "would" and "could" and the negative of these terms and similar words, although some forward-looking statements may be expressed differently. Forward-looking statements also include, but are not limited to, statements regarding plans, objectives, expectations or consequences of announced transactions, known trends and statements about future performance, operations, products and services of RBB Bancorp ("RBB" or the "Company") and its subsidiaries.

These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from our historical experience and our present expectations or projections. Such risks and uncertainties and other factors include, but are not limited to, adverse developments or conditions related to or arising from: (1) business and economic conditions generally and in the financial services industry, nationally and within our current and future geographic markets, including the tight labor market, ineffective management of the U.S. federal budget or debt or turbulence or uncertainly in domestic of foreign financial markets; (2) the strength of the United States economy in general and the strength of the local economies in which we conduct operations; (3) possible additional provisions for loan losses and charge-offs; (4) credit risks of lending activities and deterioration in asset or credit quality; (5) extensive laws and regulations and supervision that we are subject to, including potential supervisory action by bank supervisory authorities; (6) increased costs of compliance and other risks associated with changes in regulation, including any amendments to the Dodd-Frank Wall Street Reform and Consumer Protection Act (the "Dodd-Frank Act"); (7) compliance with the Bank Secrecy Act and other money laundering statutes and regulations; (8) potential goodwill impairment; (9) liquidity risk; (10) fluctuations in interest rates; (11) the transition away from the London Interbank Offering Rate (LIBOR) and related uncertainty as well as the risks and costs related to our adopted alternative reference rate, including the Secured Overnight Financing Rate ("SOFR"); (12) risks associated with acquisitions and the expansion of our business into new markets; (13) inflation and deflation;

1. real estate market conditions and the value of real estate collateral; (15) environmental liabilities; (16) our ability to compete with larger competitors; (17) our ability to retain key personnel; (18) successful management of reputational risk; (19) severe weather, natural disasters, earthquakes, fires; or other adverse external events could harm our business; (20) geopolitical conditions, including acts or threats of terrorism, actions taken by the United States or other governments in response to acts or threats of terrorism and/or military conflicts, including the conflicts between Russia and Ukraine and in the Middle East, which could impact business and economic conditions in the United States and abroad; (21) public health crises and pandemics, including the COVID-19 pandemic, and their effects on the economic and business environments in which we operate, including our credit quality and business operations, as well as the impact on general economic and financial market conditions; (22) general economic or business conditions in Asia, and other regions where the Bank has operations; (23) failures, interruptions, or security breaches of our information systems; (24) climate change, including any enhanced regulatory, compliance, credit and reputational risks and costs; (25) cybersecurity threats and the cost of defending against them; (26) our ability to adapt our systems to the expanding use of technology in banking; (27) risk management processes and strategies; (28) adverse results in legal proceedings; (29) the impact of regulatory enforcement actions, if any; (30) certain provisions in our charter and bylaws that may affect acquisition of the Company; (31) changes in tax laws and regulations; (32) the impact of governmental efforts to restructure the U.S. financial regulatory system; (33) the impact of future or recent changes in the Federal Deposit Insurance Corporation ("FDIC") insurance assessment rate of the rules and regulations related to the calculation of the FDIC insurance assessment amount; (34) the effect of changes in accounting policies and practices or accounting standards, as may be adopted from time-to-time by bank regulatory agencies, the U.S. Securities and Exchange Commission ("SEC"), the Public Company Accounting Oversight Board, the Financial Accounting Standards Board or other accounting standards setters, including Accounting Standards Update 2016-13 (Topic 326, "Measurement of Current Losses on Financial Instruments, commonly referenced as the Current Expected Credit Losses Model, which changed how we estimate credit losses and may further increase the required level of our allowance for credit losses in future periods; (35) market disruption and volatility; (36) fluctuations in the Company's stock price; (37) restrictions on dividends and other distributions by laws and regulations and by our regulators and our capital structure; (38) issuances of preferred stock; (39) our ability to raise additional capital, if needed, and the potential resulting dilution of interests of holders of our common stock; (40) the soundness of other financial institutions; and (41) other risks detailed from time to time in our filings with the SEC including our Quarterly Reports on Form 10-Q and our Annual Reports on Form 10-K, all of which could cause actual results to differ from those set forth in the forward-looking statements.

Annualized, pro forma, projected and estimated numbers are used for illustrative purpose only, are not forecasts and may not reflect actual results.

There can be no assurance that other factors not currently anticipated by us will not materially and adversely affect our business, financial condition and results of operations. You are cautioned not to place undue reliance on our forward looking statements, which reflect management's analysis and expectations only as of the date of such statements. Forward looking statements speak only as of the date they are made, and we do not intend, and undertake no obligation, to publicly revise or update forward looking statements, whether as a result of new information, future events or otherwise, except as required by federal securities law.

Non-GAAP Financial Measures

Certain financial information in this presentation has not been prepared in accordance with U.S. generally accepted accounting principles ("GAAP") and is presented on a non-GAAP basis. Investors should refer to the reconciliations included in this presentation and should consider the Company's non-GAAP measures in addition to, not as a substitute for or superior to, measures prepared in accordance with GAAP. These measures may not be comparable to similarly titled measures used by other companies.

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3rd Quarter 2023 | Financial Highlights

($ in thousands, except per share data)	4Q22	1Q23	2Q23	3Q23
Earnings & Profitability
EPS	$0.92		$0.58	$0.58	$0.63
Net Income	$17,581		$10,970	$10,949	$11,965
Pre-Provision Net Revenue*	$27,189		$17,552	$15,902	$18,441
Net Interest Margin	4.26%		3.70%	3.37%	2.87%
Efficiency Ratio*	34.24%		51.86%	53.80%	47.78%
ROAA, annualized	1.80%		1.12%	1.08%	1.17%
ROTCE*, annualized	10.81%		10.66%	10.33%	11.04%
Balance Sheet & Capital
Total Gross HFI Loans	$3,336,449	$3,342,416	$3,195,995	$3,120,952
Total Deposits	$2,977,683	$3,151,062	$3,175,416	$3,154,072
CET1 Ratio	16.03%		16.33%	16.91%	17.78%
TCE Ratio*	10.65%		10.40%	10.64%	10.80%
Tangible Book Value per Share*	$21.58		$22.10	$22.40	$22.72
Asset Quality
Provision for Credit Losses	$1,887		$2,014	$380	$1,399
Net Loan Charge-offs	$85		$157	$580	$2,206
Substandard Loans	$61,966		$77,716	$74,072	$71,401
Total Loan ACL/Funded HFI Loans	1.23%		1.29%	1.35%	1.36%
NPAs/Total Assets	0.61%		0.66%	1.04%	0.99%

Highlights

Net Income	EPS
$12.0 million	$0.63

PPNR*	ROTCE*
$18.4 million	11.04%

Net Loan to Deposit	NIM
Ratio (1)
97.6%	2.87%

Substandard loans	NPL
$71.4 million	$40.1 million

•	See reconciliation of GAAP to non-GAAP financial measures in the appendix and in the Company's Earnings Press Release	3
(1) Bank net loan to deposit ratio is 95.4%

Strategically Managed Balance Sheet

($ in thousands, except per share		12/31/22		3/31/23		6/30/23		9/30/23
data)
Cash and cash equivalents & ST	$	84,148	$	231,303	$	246,925	$331, 391
investments
AFS debt securities		256,830		293,371		391,116		354,378
HTM debt securities		5,729		5,722		5,718		5,214
HFS loans		---		---		555		62
Total gross HFI loans		3,336,449		3,342,416		3,195,995	3,120,952
Allowance for credit losses		(41,076)		(43,071)		(43,092)		(42,430)
Net HFI loans		3,295,373		3,299,345		3,152,903	3,078,522
Other assets		276,978		280,343		278,401		299,787
Total assets	$	3,919,058	$	4,110,084	$	4,075,618	$4,069,354
Total deposits	$	2,977,683	$	3,151,062	$	3,175,416	$3,154,072
FHLB advances		220,000		220,000		150,000		150,000
LT debt and subordinated debentures		188,305		188,504		188,703		188,903
Other liabilities		48,507		55,761		61,209		70,376
Total liabilities	$	3,434,495	$	3,615,327	$	3,575,328	$3,563,350
Total shareholders' equity	$	484,563	$	494,757	$	500,290	$ 506,004
Book value per share	$	25.55	$	26.05	$	26.34	$	26.64
Tangible book value per share*	$	21.58	$	22.10	$	22.40	$	22.72
Tangible common equity ratio*		10.7%		10.4%		10.6%		10.8%
Net loans to deposits ratio		110.7%		104.7%		99.3%		97.6%

Net loans to deposits ratio

Millions	110.7%
$3,295	$3,299	$3,153	$3,079
in		104.7%
$
			99.3%	97.6%
	$2,978	$3,151	$3,175	$3,154

12/31/22 3/31/23 6/30/23 9/30/2023

Net loans

Deposits

Net loans to deposits ratio (1)

Cash and investment securities increased

Net loans to deposits ratio decreased to 97.6%

Deposits decreased while borrowings remained constant

•	See reconciliation of GAAP to non-GAAP financial measures in the appendix and in the Company's Earnings Press Releases.	4
•	(1) Bank level net loan to deposit ratio is 95.4%

Diversified Loan Portfolio

Diversified across business lines

SFR1 - Mainly non-QM loans

C&I - Majority secured by assets

SBA - Primarily SBA 7(a) loans for business acquisition or working capital

56.1% Fixed rate and 43.9% Variable rate3

Annualized yield on HFI loans of 5.99% for the third quarter of 2023

Loan Portfolio Composition as of 9/30/23

By Business

Line:

SFR1	CRE2
46%
48%

	SBA		C&I
		4%
	2%
	CRE (Owner-	C&I	Consumer
By Collateral Type:	& Other
Occupied)	2.1%
0.3%
	9.4%
		C&D
		6.9%
	CRE (Non-
	Owner-		1-4 Family
	Occupied)
	11.7%		53.3%

Multifamily

16.3%

(1)	Excludes HFS Loans	5
(2)	Includes construction and land development loans
(3)	Fixed rate loans include loans that have initial fixed rate terms prior to converting to variable rate loans

Commercial Real Estate : Office Portfolio as of September 30, 2023

		LTV Distribution
Thousandsin$	$19,127
	$9,361	$8,910
	$3,783	$3,362
		$129
<45% 45%-55%	55%-65%65%-75%75%-85% >85%

	Region Breakdown
	($ in Thousands)
	NY,	NV, $60
Other	$1,090
Regions,
$8,914
		CA,
		$17,986
	IL,
	$16,622

CA IL Other Regions NY NV

CRE Office exposure is $44.7 million: 3.4% of CRE portfolio and 1.4% of total loans

LTV distribution:

• Average weighted LTV ~62%
• Over 70% of loans with LTV <65%

Regional distribution : ~ 80% of properties located within primary service areas

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Business Line Profile: CRE | C&D

As of September 30, 2023:

CRE Loans		C&D Loans			CRE and C&D Portfolio ($mm)
$1,164.2 million		$259.8 million
	$276.9	$281.2
					$256.9	$259.8
Single		Land
Family		Development
6.5% Other Owner	12.1%
Occupied
17.7%

Other Non-Owner

Occupied

Multifamily28.0%

47.8%

Commercial	Residential
Construction	Construction	$1,312	$1,288	$1,183	$1,164.2
28.8%	59.1%

12/31/22 3/31/23 6/30/23 9/30/2023

CRE Loans		C&D Loans

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Residential Mortgage Portfolio as of September 30, 2023

Distribution by Geography

SoCal NY NorCal IL NJ NV Other

NV Other

IL 1% 1% 3%

Distribution by LTV

<=50	>50, <=55	>55, <=60
>60, <=65	>65, <=70	>70

NorCal

6%

NJ 2%

SoCal

>70	<=50
9%
16%
	>50, <=55

$1.50 billion41% Residential

Mortgage

Loans

NY 46%

>65, <=70	$460,434	8%
30%	Avg. loan size

61% Avg. LTV

>55, <=60

21%

>60, <=65

16%

8

Business Line Profile: C&I | SBA

As of September 30, 2023:

C&I Loans		SBA Loans					C&I and SBA Portfolio ($mm)
$127.7 million		$50.4 million
			Unguaranteed
			Unsecured
			2.4%
Shared		Guaranteed
7.5%	$61.4
Nat'l Credits
3.7%							$58.5
							$53.5	$50.4
			$201.2	$156.0	$131.5	$127.7
Credit Lines
	Unguaranteed
96.3%
	Secured by RE	12/31/22	3/31/23	6/30/23	9/30/2023
	90.1%
								C&I Loans			SBA Loans

By Business:

Unguaranteed SBA Loans:

			By Location:			Other 9.5%
Other Real			Oregon		Nevada
Estate					6.6%
			6.8%		Washington
45.0%
					7.5%
			Gas	Texas
			Stations	8.0%	California
	8.5%
Hotel/Motels					61.7%
46.5%

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Deposits

	Total Deposits			Average Deposit Growth - QoQ Annualized
					$ in thousands
$3,154 million
																	$3,141		+2%	$3,155
								$2,972		$3,017			+17%
		$2,899	-2%		+19%					$60			$55
				$75		$68		$63					$111			$124
						$137		$121					$432			$403
				$147			$562		$459
				$613
IB															$717
	MMA													$710
Savings													$763
		$532			$632
6.0%		13.3%
	Time
		Deposits,	$567			$716		$913					$1,222			$1,285
		$250,000 and
			under
	DDA		39.2%	$965			$857		$698					$606			$571
	18.1%
		Time deposits,					3Q22			4Q22		1Q23					2Q23			3Q23
		greater than
		$250,000					Non-interest Bearing			Core Time			Non-Core Time	QoQ annualized growth (%)
		23.3%					MMA					IB Savings			DDA
							Total

	Average Cost of Deposits by Type
Uninsured Deposits ($ billions)
in bps

$1.7	$1.5
56.4%
50.5%

$1.4 $1.3 $1.3

43.9%	38.6%	39.9%

		433
	383	398
	347	324
	314
280	275	234261
211	229
193	189
137		165	144
	136

9/30/22

12/31/22

3/31/23

6/30/23

9/30/23

Uninsured Deposits

Collaterelized Deposits

Adjusted non-insured deposit (1)

Uninsured Deposits Net of Collateralized Deposits/Total Deposits

82	89	89			80		69
55					48
	17	17	16	21	45
Total Deposit IB Deposit	Time	MMA	Savings	IB Checking

3Q22 4Q22 1Q23 2Q23 3Q23

(1) Excludes REIT and Holdco Cash

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