RBB Bancorp

The following discussion provides information about the results of operations, financial condition, liquidity and capital resources of RBB and its wholly owned subsidiaries. This information is intended to facilitate an understanding and assessment of significant changes and trends related to our financial condition and results of operations. This discussion and analysis should be read in conjunction with our audited consolidated financial statements included in our 2025 Annual Report, and the unaudited consolidated financial statements and accompanying notes presented elsewhere in this Report. The financial results for the three and nine months ended September 30, 2026 are not necessarily indicative of the results expected for the year ending December 31, 2026.

We reported net income of $12.6 million, or $0.74 diluted earnings per share, for the quarter ended September 30, 2026, compared to net income of $10.1 million, or $0.59 diluted earnings per share, for the quarter ended June 30, 2026 and $10.1 million, or $0.59 diluted earnings per share for the quarter ended September 30, 2025. Compared with the prior quarter, net income for the third quarter of 2026 reflected higher net interest income and noninterest income, partially offset by higher credit costs, noninterest expense, and income tax expense. The third quarter of 2026 included a $2.7 million (pre-tax) gain on the sale of an office building in Brooklyn, New York. Compared with the third quarter of 2025, net income reflected higher net interest income and noninterest income and lower credit costs, partially offset by higher noninterest expense and income tax expense.

Provision for credit losses was $500,000 for the third quarter of 2026 compared to no provision for the second quarter of 2026 and a $625,000 provision for credit losses for the third quarter of 2025. The third quarter of 2026 provision for credit losses was due mainly to the impact of net loan growth, partially offset by improved portfolio credit quality trends and underlying economic forecast indicators. Net charge-offs in both the third quarter and second quarter of 2026 represented 0.01% of average loans on an annualized basis, compared to 0.84% for the third quarter of 2025.

Pre-tax pre-provision income totaled $17.3 million for the quarter ended September 30, 2026, compared to $14.1 million for the quarter ended June 30, 2026 and $13.9 million for the quarter ended September 30, 2025. Pre-tax pre-provision income totaled $46.9 million for the nine months ended September 30, 2026, compared to $39.1 million for the nine months ended September 30, 2025. The $7.8 million, or 20%, increase for the year-to-date results was due to our ability to grow net interest income by 12% while controlling noninterest expense, which increased 0.2% year over year. For additional information on pre-tax pre-provision income, including a reconciliation of this measure to its most comparable GAAP measure, see "Non-GAAP Financial Measures."

At September 30, 2026, total assets were $4.3 billion, an increase of $43.0 million from December 31, 2025. The increase in total assets was primarily the result of an increase of $84.9 million in loans held for investment, partially offset by a decrease of $25.9 million in investment securities available for sale. At September 30, 2026, total deposits were $3.4 billion, an increase of $44.9 million from December 31, 2025. The increase in total deposits was due to a $209.1 million increase in retail deposits offset by a $164.2 million decrease in wholesale deposits. The increase in retail deposits included a $281.4 million increase in nonmaturity interest-bearing deposits and a $102.6 million decrease in time deposits as a portion of the maturing time deposits moved into a high-yield savings product. Noninterest-bearing demand deposits increased $30.3 million to $556.8 million, or 16.4% of total deposits, at September 30, 2026, compared to $526.5 million, or 15.7% of total deposits, at December 31, 2025. The gross loan to deposit ratio was 100.1% at September 30, 2026, compared to 99.0% at December 31, 2025 and 98.1% at September 30, 2025.

Nonperforming assets decreased $4.9 million to $38.7 million, or 0.91% of total assets, at September 30, 2026, from $43.6 million, or 1.02% of total assets, at June 30, 2026, due to a $4.9 million decrease in nonperforming loans. In addition, compared to September 30, 2025, nonperforming assets decreased $15.7 million due to lower nonperforming loans combined with a higher OREO balance. Nonperforming loans totaled $18.8 million, $23.8 million, and $45.5 million as of September 30, 2026, June 30, 2026, and September 30, 2025. OREO totaled $19.8 million at September 30, 2026 and June 30, 2026, and $8.8 million at September 30, 2025.

Loans classified as substandard decreased by $4.2 million during the third quarter of 2026 due to payoffs/paydowns totaling $5.4 million, partially offset by additions of $1.2 million. Loans classified as special mention increased $4.1 million due to additions of $7.0 million, partially offset by payoffs/paydowns of $1.5 million, and upgrades of $1.4 million to pass-rated loans.

As of September 30, 2026, the allowance for credit losses totaled $44.4 million, up from $44.1 million at June 30, 2026. The $378,000 increase in the allowance for credit losses for the third quarter of 2026 was due to a provision for credit losses of $500,000, partially offset by net charge-offs of $122,000. The allowance for loan losses ("ALL") as a percentage of loans HFI decreased to 1.30% at September 30, 2026, compared to 1.32% at June 30, 2026. The ALL as a percentage of nonperforming loans HFI was 234% at September 30, 2026, up from 184% at June 30, 2026.

Total shareholders' equity was $534.2 million, or $31.75 book value per share, at September 30, 2026, compared to $535.2 million, or $31.51 book value per share, at June 30, 2026, and $514.3 million, or $30.18 book value per share at

September 30, 2025. The decrease in shareholders' equity for the third quarter of 2026 compared to the prior quarter was due mostly to an increase in unrealized losses on AFS securities, net of tax, of $6.8 million, common stock repurchases totaling $4.5 million and common stock cash dividends paid totaling $2.7 million, partially offset by net income of $12.6 million and stock-based compensation activity of $450,000. Tangible book value per share increased to $27.44 at September 30, 2026, up from $27.23 at June 30, 2026 and $25.89 at September 30, 2025. We repurchased 168,768 shares during the third quarter of 2026 at an average price of $26.37 per share. We repurchased 180,576 shares during the second quarter of 2026 at an average price of $24.65 per share. For additional information on tangible book value per share, see "Non-GAAP Financial Measures."