RBB Bancorp (NASDAQ: RBB) reported net income of $12.6 million, or $0.74 in diluted earnings per share, for the third quarter ended September 30, 2026. The result marked an increase from the $10.1 million net income, or $0.59 per share, recorded in the second quarter of 2026.
The company’s net interest margin expanded to 3.16% in the third quarter, up from 3.06% in the prior quarter. Net interest income rose to $31.8 million from $30.1 million, driven by a $2.1 million increase in interest income that partially offset a $473,000 rise in interest expense. Johnny Lee, President and Chief Executive Officer of RBB Bancorp, attributed the results to the continued strength of the core banking franchise, citing the partial redemption of subordinated notes and the resolution of nonperforming assets as contributors to higher net interest income.
Nonperforming assets decreased by $4.9 million, or 11.3%, to $38.7 million at the end of the third quarter. Book value per share increased to $31.75 and tangible book value per share rose to $27.44 as of September 30, 2026, compared to $31.51 and $27.23 at June 30, 2026. The company completed a partial redemption of $40 million in subordinated notes on July 1, 2026.
Noninterest income climbed to $5.1 million, an increase of $2.1 million from the second quarter’s $3.0 million. This growth was primarily due to a $2.7 million gain on the sale of an office building in Brooklyn, New York. The bank entered into a four-month lease for its loan operations center through the end of 2026, with plans to relocate to new leased space in Brooklyn starting in 2027.
Noninterest expense totaled $19.5 million, up $526,000 from the second quarter. The increase was driven by higher salaries and benefits, as well as occupancy costs associated with a full quarter of operations for the Northern California loan production office and rent for the Brooklyn loan operations center after the building sale. Consequently, the efficiency ratio improved to 53.0% from 57.5% in the second quarter.
The provision for credit losses was $500,000 in the third quarter, compared to no provision in the second quarter. This provision reflected loan loss reserves due to net loan growth, partially offset by improved credit quality trends and underlying economic forecast indicators.
Loans held for investment reached $3.4 billion as of September 30, 2026, representing a 10.8% annualized increase from June 30, 2026. Total assets stood at $4.3 billion, a slight decrease from the prior quarter but a 1% increase year-over-year.
RBB Bancorp declared a quarterly cash dividend of $0.16 per common share alongside its earnings announcement.