Good day, everyone. Welcome to the RBB Bancorp Q1 2026 earnings call. At this time, all participants have been placed on a listen-only mode, and the floor will be open for your questions and comments after the presentation. It is now my pleasure to turn the floor over to your host, Rebecca Rico.

Thank you, Kelly. Good day, everyone, and thank you for joining us to discuss RBB Bancorp’s first quarter results for 2026. With me today are President and CEO, Johnny Lee; Chief Financial Officer, Lynn Hopkins; Chief Credit Officer, Jeffrey A; and Chief Operations Officer, Gary Sand. Johnny and Lynn will briefly summarize the results, which can be found in the earnings press release and investor presentation. Please refer to the disclaimer regarding forward-looking statements in the investor presentation and the Company’s SEC filings. Now, I would like to turn the call over to RBB Bancorp President and Chief Executive Officer, Johnny Lee.

Good day, everyone, and thank you for joining us today. The first quarter was a strong start to the year with continued earnings growth, expanding margin, and further improvement in operating metrics. We generated net income of $11.3 million, or $0.66 per share, which was an 11% increase from the fourth quarter and our highest quarterly earnings level in two years. Return on assets increased to 1.09%, and we continued to grow tangible book value per share. Net interest margin increased another 60 basis points to 3.15%, marking our fifth consecutive quarter of margin expansion. The increase was driven by both lower funding costs and higher asset yields. Our cost of deposits declined 10 basis points, and our spot rate on deposits ended the quarter at 2.79%, which gives us some additional opportunity for improvement in the second quarter. Loan growth was more modest in the first quarter, with loans increasing by approximately $11 million, or 1% annualized. We originated $131 million of new loans at an average yield of 0.4%, but that growth was offset by elevated payoffs and paydowns as some borrowers refinanced or sold assets. As we mentioned before, we remain disciplined on pricing and structure and have focused on profitable growth. Our pipelines remain healthy, and we continue to believe we are positioned to deliver stronger loan growth over the balance of the year. Deposits declined slightly during the quarter due to a reduction in wholesale deposits, but this was more than offset, from a quality standpoint, by another quarter of growth in retail relationships. We also continue to make progress on credit. Nonperforming assets declined 9% from the prior quarter and are down 24% from a year ago. Overall, we believe the first quarter reflected continued progress in returning RBB to its historical levels of performance. We continue to focus on disciplined growth, maintaining strong credit quality, and increasing long-term shareholder value. With that, I will hand it over to Lynn to talk about the results in more detail. Lynn?

Please feel free to refer to the investor presentation we have provided as I discuss the Company’s 2026 financial performance. As Johnny mentioned, net income for the first quarter was $11.3 million, or $0.66 per diluted share, which compares to $10.2 million, or $0.59 per diluted share, in the fourth quarter. Despite two fewer days in the quarter, net interest income increased $1 million to $30.5 million and included a $1.4 million decrease in interest expense partially offset by a $390 thousand decrease in interest income. The decrease in interest expense was due mainly to the shorter quarter and lower rates on retail deposits, as we continue to benefit from the repricing of our deposit portfolio into the current rate environment following the Federal Reserve rate cuts made toward the end of 2025. Retail deposits increased by $50 million and included a shift from time deposits into a high-yield savings product. The decrease in interest income was due to the shorter quarter and lower cash and securities yields, offset by higher loan yields and the receipt of a $430 thousand FHLB special dividend. Our net interest margin increased to 3.15% in the first quarter from 2.99% in the fourth quarter. The increase included an 8 basis point increase in the yield on earning assets and an 8 basis point decline in the overall cost of funds. The FHLB dividend added 4 basis points to our NIM in the first quarter. Turning to credit quality, nonperforming loans remained basically unchanged. Substandard loans decreased $2.7 million, and special mention loans increased $5.5 million. All special mention loans are on accrual status. We had effectively no net charge-offs in the quarter, and we recorded a small reversal of provision for credit losses supported by paydowns on nonperforming loans, overall stable credit quality, and…

Certainly. The floor is now open for questions. If you have any questions or comments, please press 1 on your phone at this time. Please hold for just a moment while we poll for questions. Your first question is coming from Brendan Nosal with Hovde Group. Please pose your question. Your line is live.

Hey, folks. Hope you are doing well. Thanks for taking the questions. Sorry—having a little trouble with the line. Can you folks hear me now? Okay, great. Maybe just starting off on asset quality. It is nice to see continued workout and improvement in ratios this quarter. Can you offer a little bit of color on some of the larger nonperforming assets you still have in the workout process? And then, to the extent that you are able to continue to work those out, what do you view as a normalized reserve-to-loan ratio as you work through the noise?

Okay, how about I start with the end of your question and work backwards. We will acknowledge we are elevated on our NPLs, and we would expect those to normalize down to a much smaller percent of our total loans. I think you are familiar that 90% of our NPLs are represented by the same three relationships, so that remains stable and understood. As far as a normalized coverage ratio, given the composition of our overall loan portfolio, we could see it coming down somewhat relative to the levels it is now. But we do go through a robust process and have to take into consideration everything that is going on in the market. I think it has an opportunity to move lower. As you recall, last year it was much higher with those reserves that ultimately—after some charge-offs—supported resolved loans. So that is where we would say we are going forward. With respect to specific comments on the NPLs, I can turn that over to Johnny or Jeffrey.

NPL actually is virtually unchanged during the quarter. However, there is a reduction of the number of the loans. There were two exits—one in [inaudible]—and those exits were successful workouts and then they paid off. One in there had just some technical issue that became nonaccrual. But virtually, it was a pretty quiet quarter.

I will just add, we have represented that our largest one is working its way through a bankruptcy process, and we will continue to work on that. So we do see an opportunity for NPLs to be resolved during 2026. But it is a process.

I will probably just add, they are still paying down.

Okay, that is super helpful color on that topic. Thank you. Maybe turning to capital. Ratios obviously remain quite strong. Asset quality is incrementally getting better from here with good line of sight. Any updated thoughts on deployment from here? I think you had a tranche of sub debt that was repricing and perhaps looking at the buyback at some point, but any updated color there would be great.

Sure. We have stated that we have been focused on the sub debt that is coming up for repricing. We recognize that its capital treatment will start to sunset. It does reprice April 1. We view the sub debt as a capital instrument that we are going to address this year. I think there is also an opportunity for us to look at a stock buyback, but the sub debt is our first priority. Based on the current interest rate environment and how we are looking at the balance sheet, there may be a good reason to look to retire a good portion of it. We are working through that process. As everyone knows, it does require regulatory approval.

Fantastic. I am going to try and sneak one more here. On the margin, can I get your thoughts on whether that 4 basis points of margin from the FHLB special dividend is one-time in nature? And then, to the extent that we do not get any more Fed cuts for the foreseeable future, talk about your expectations for the margin path from here.

Excellent question. There are definitely a few dynamics in our net interest margin. You are right: the FHLB special dividend is one time in nature. We would welcome a special dividend every quarter, but we do not view that as recurring. With the sub debt, our retirement dates are the first date of each quarter. In the near term, we will be absorbing the sub debt at a little bit higher price in the second quarter at least. The other thing I would point out is half of our mortgage portfolio is priced on a 30/360 basis, so we do get a bit of a benefit in the shorter quarters, and then it will normalize over the rest of the year. On one hand, we will have more days—which is usually higher net interest income—but from a margin perspective, it may push down a little bit. Having said all of that, I think we still have an opportunity to expand our margin from a more normalized basis, which is probably closer to or just above 3% with balance sheet growth in the current environment and some modest repricing of our deposits. That is where we are headed in the near term.

Your next question is coming from Kelly Motta with KBW. Please pose your question. Your line is live.

Hi, thanks for the question. Maybe on loan growth—the growth for the quarter was a bit more muted than we had expected. I think the pipelines coming into the quarter were quite strong. Can you provide any color as to where that variance came from, what drove that, and how pipelines are looking as we look ahead here?

Hi, Kelly. Thanks for the question. Q1 is always somewhat seasonal and, with the geopolitical risk and everything, there is still a lot of uncertainty out there. We try to balance—quality first—and then look to see, based on the competition on the pricing side, whether it makes sense to aggressively compete on certain types of deals. We were not prepared to compete at market rates in the 5.5% to 5.75% range for multifamily, and even lower for some CRE loans. So we stayed pretty disciplined during the first quarter in keeping our rates above 6%, unless there were enhancements to the yield with ancillary business such as deposits or other potential fee income that might come with the relationship. In that sense, we did let go of a few deals during the quarter. There were also somewhat higher paydowns and payoffs during the quarter, which impacted net growth. As to the pipeline, it is still very healthy. For Q2, based on the build we have right now, we should be able to trend toward what we have achieved in past years for the same quarters. I am very positive about the pipeline overall, but again, we are looking for quality first and making sure any pricing we compete on makes sense.

Got it, that is helpful. And then on the deposit cost, those came down quite nicely. You mentioned in your prepared remarks you had shifted some customers to different categories to help manage that. As we look ahead, barring rate cuts, is there still room to bring down deposit costs within categories outside time? And then within time, can you remind us of the roll-on versus roll-off rates?

I think there is still some opportunity, though with the latest changes in interest rates and the belly of the curve moving up, there is probably less opportunity. We have historically had a very strong 12-month CD ladder, and as those CDs mature—98% mature over a 12-month period—those have typically repriced into a lower environment. For the amounts that are coming off, they are probably pretty similar to these higher interest rates and the competition we are seeing. We are seeing things as high as 4% now being offered by other banks, so the opportunity is smaller. Having said that, our spot rate at the end of the quarter is lower than what the average was over the quarter, so I do think there is still a little bit of opportunity. We did mention that a portion of our CDs moved to a higher-yielding savings product. Looking at both our CDs and this particular product, about a third is able to reprice in the first quarter, and it probably reprices similarly or maybe a little bit lower than what we saw in the fourth quarter. We still have a fair amount repricing into the current quarter, but maybe it is a few basis points.

Got it, that is helpful. Last question, if I can just sneak it in, is regarding reports that there may be an executive order requiring banks to collect citizenship data on their customers. Have you looked at this, and any preliminary thoughts on how that could impact the way you do business?

Are you speaking to the SBA-type executive order?

I think this is broader. It is hypothetical, but there has been discussion about potentially requiring banks to collect citizenship data on their customers.

The only thing that we are watching more closely is the SBA administration’s recent procedural guideline, which restricts applicants to only be U.S. citizens. That is the one we are watching more closely.

You do have an SBA business—does that have any bearing on your expectations for that on a go-forward basis?

Not yet. There is no impact based upon our assessment.

We do not have any impact to that based upon our assessment.

Got it. Thank you so much.

Your next question is coming from Matthew Clark with Piper Sandler. Please pose your question. Your line is live.

Thanks. Good morning, everyone. Just wanted to drill into the loan growth outlook a little more. Coming into the year, the expectation was for high single digits. It looks a little more challenging after the first quarter. Do you still think you can bounce back and get close to something in that high single-digit range?

Let me make a couple comments, then I will turn it over to Johnny. We had loan production of about $145 million in the fourth quarter. We came into the first quarter with about $130 million, approximately the same yield, holding the line as we observed interest rates stop moving down, and even some talk of potentially moving up. We recognize our funding base. While we did not observe much of an impact from the government shutdown in our SBA business, I would say our originations in that area were a little lighter in the first quarter, so there is opportunity there. Our second and third quarters have historically been our highest producing quarters, so much so that they achieve that higher number. We are stringing together positive quarters. There is business to be done. With interest rates as high as they are, it will depend on whether people come off the sidelines and move forward. When I think about the range—high single digits—I would put it mid to high single digits. We are building off of a $3 billion and change portfolio. We are in big markets, and we should be able to participate. But to the extent that we are operating inside this interest rate environment, that might be tempered with maintaining NIM. Piecing together everything we are seeing—an attractive pipeline, and the fact that fourth and first quarters can be a little lower—we would still remain optimistic, but let us maybe anchor it in the mid to high single digits.

I echo Lynn’s comments. I am comfortable with mid to high single digits. Our pipeline is healthy. We just want to be very disciplined in the types of loans we fund, quality-wise, and ensure we are generating appropriate returns for the bank with these new relationships.

Great. The other one I had was to get a little more color on the CD repricing and the savings promotional product. Can you share the specific amount of CDs that are coming due and the related rate? And then it sounds like the renewal rate is similar—maybe a little bit lower—but I would like those specifics, including the promotional savings rate product.

We are looking at about 60% of our deposits fitting into the CDs and the flexible savings product, and about a third of them repriced in the first quarter. Our observation in the marketplace is that the more rate-sensitive money is now costing between 3.85% to 4%. We have been successful a little bit lower than that, and that is what it is actually coming off at. Our ladder at the same time last year, when we were putting on 12-month money, was around the 3.75% level, and that is what is coming due. Interestingly, it is now 3.85% to 4%, despite short-term or Fed funds rates being lower. Yes, we still have about 60% of our funding base in CDs and savings. About a third reprices in the first quarter, and we have been kind of in the 3.70% to 3.75% range. We are competing heavily and have done a really great job, but we are observing rates at 3.85% to 4% when we look around at offer rates.

Okay. Perfect. Thank you.

Your next question is coming from Jackson Laurent with Stephens. Please pose your question. Your line is live.

Good morning. This is Jackson on for Andrew Terrell. Maybe coming back to the margin, I appreciate the color on the short-term glide path. But looking a little longer term—you have run at a 4% NIM in the past. Do you see a path to get back to that level? And if so, what is required to get back there?

What you may be referring to is a point in time in RBB’s history where there was a very high percent of noninterest-bearing deposits. In order to move to a mid-3% net interest margin and beyond, it requires a high percent of noninterest-bearing deposits. We remain focused on building the commercial, or C&I, part of our business, which tends to have the more attractive deposits and funding base associated with it. Before we start talking about a NIM with a 4% handle, we need to squarely get into 3% to 3.25%. We believe we have the opportunity to do that, but it does require staying focused on our C&I business, growing that, bringing in more noninterest-bearing or less rate-sensitive customers, and continuing to work with our existing relationships so that we can move down our wholesale funding, which we did in the first quarter.

Got it, that is helpful. Thank you. And then just last one for me on fees. Could you talk about gain-on-sale margin trends and how we should think about loan sales versus loan retention going forward?

Loan sales fall into two buckets. One is our mortgage banking business, which tends to be higher volume and lower premium. We like to test the secondary markets to make sure we have an off-ramp relative to our loan production, but generally we hold the majority of it, look at our prepayments, and then balance our mortgage portion of the portfolio against our overall total portfolio. We have kept that at about 50%. We would like to continue to grow our commercial side, which includes multifamily, CRE, C&I, and SBA. On the SBA loan sales, those are smaller dollar volume but higher premium, and we would expect to be at similar, if not higher, levels than what we were able to achieve in 2025. 2025 was a little bit lower than 2024, with a little bit of disruption from the government shutdown and some noise. We still see that as a good opportunity. We hired a couple of people last year, so I think there is still opportunity in fee income to have that move higher in other quarters compared to the first quarter.

That is all I had. Thank you for taking the questions.

Thanks, Jackson.

Thank you.

There appear to be no further questions in the queue at this time. I would now like to turn the floor back over to Johnny Lee for any closing remarks.

Thank you. Once again, thank you for joining us today. We look forward to speaking to many of you in the coming days and weeks. Have a great day, everyone. Thank you.

Thank you, everyone. This does conclude today’s conference call. You may disconnect your phone lines at this time, and have a wonderful day. Thank you for your participation.