RBB Bancorp: The Quiet Turnaround Gains a Second Act

Sub-debt redemption and a San Francisco Bay Area team bolster a credit story that's finally translating into earnings.

RBB · Earnings Call · 2026-07-21

A Buttoned-Up Balance Sheet

RBB Bancorp's Q2 2026 report reads less like a turnaround and more like a steady cadence of execution. The bank earned $10.1 million, or $0.59 per share, a 13% year-over-year gain, and nonperforming assets slipped to 1.02% of assets. The progress isn't flashy, but it's tangible: “net income of $10.1 million, or $0.59 per share, which represents a 13% increase from the same quarter in 2025” — Johnny Lee, Chief Executive Officer · 2026-07-21. The driver is a credit book that's finally healing. nonperforming assets declined 11% sequentially, and net charge-offs were essentially zero. CFO Lynn Hopkins noted that the allowance now covers 184% of non-performing loans, up sharply as the largest problem credit moved to REO with an as-is appraisal supporting the carrying value. That progress has fueled a re-rating in the stock, which is up about 18% over the past three months and within a whisker of its 90-day high. The market is rewarding what management has been promising for two years: reduce the credit drag, redeploy capital, and let the operating leverage show up. At 0.7x tangible book, the multiple still offers room for repurchase-driven accretion.

New Turf, Same Discipline

The most distinctive, company-specific development this quarter was the announcement of a loan production office in Burlingame and the hire of a commercial banking team led by John Curtis, the former CEO of Bank of the Orient. The move extends RBB's franchise into the San Francisco Bay Area, a market with one of the largest Asian-American communities in the U.S. — a natural demographic fit for a bank whose niche has been the Asian-American business community.

On that note, I want to highlight an exciting development in our franchise expansion into Northern California. We recently announced the opening of a loan production office in Burlingame and hiring of a commercial banking team in the San Francisco Bay Area that will be led by John Curtis.
Johnny Lee, Chief Executive Officer · 2026-07-21

The new team brings over 80 years of combined experience and a ready pipeline of relationships. CEO Johnny Lee expects the group to contribute to commercial loan growth in the second half of the year, potentially nudging the bank toward loan production of mid-to-high single digits. “With this team on board, I would expect, hopefully during the second half of the year to contribute to our commercial loan growth, particularly. Hopefully that will move us to the mid to higher single digit sort of marks” — Johnny Lee, Chief Executive Officer · 2026-07-21. This is a genuine strategic expansion, not just a defensive play.

Capital Gets to Work

Management has been signaling for a year that it would address the sub-debt stack. In Q2, it made good on that promise. On July 1, RBB redeemed $40 million of subordinated notes at par, reducing future interest expense. CFO Lynn Hopkins walked through the math: “On July 1st, we completed the partial redemption of $40 million of our subordinated notes at 100% of par, plus accrued interest, for a total payment of approximately $40.7 million.” — Lynn Hopkins, Chief Financial Officer · 2026-07-21. This follows the repricing of the remaining $120 million from fixed 4% to floating 698 basis points in April — a drag this quarter but a manageable one given the bank's improving earning asset yields. The capital story was already telegraphed in prior calls. In April, Hopkins said: “I view the sub debt as a capital instrument that we are going to address this year... there may be a good reason to look to retire a good portion of it.” — Lynn Hopkins, Chief Financial Officer · 2026-04-21 Now that the redemption is done, the next lever is the newly authorized 1-million-share buyback (6% of shares outstanding). With earning asset yields holding above 6% on new production and deposit costs still being actively managed, the bank is positioning itself to compound earnings from a cleaner base.

What to Watch

The immediate question is whether loan growth can resume as expected. Total deposits grew $51 million in the quarter, and Interest Bearing Deposits costs crept down 5 basis points, but the margin compression from the sub-debt repricing and a one-off FHLB dividend means NIM will need to recover through balance-sheet mix. Analysts pressed on the CD ladder, and Hopkins offered a granular view: roughly $1.5 billion in CDs mature over the next 12 months at an average cost of 3.60%, with about 40% repricing in Q3. That repricing, combined with the lower sub-debt balance, should support NIM recovery. RBB is not a headline-grabbing growth story. It's a disciplined credit workout that's now entering the payoff phase. The Northern California expansion adds a fresh growth vector, and the capital actions — sub-debt redemption and buyback — are direct responses to a valuation that still sits far below historical norms. If the new lending team delivers and credit keeps improving, the market may finally re-rate this bank as a compounder rather than a workout.