After market hours Monday, specialty consumer bank RBB Bancorp (RBB -0.08%) reported its latest set of quarterly results. Investors were obviously pleased with the numbers, as they traded up the company's stock by just under 2% the following day. That meant a convincing beat over the S&P 500 index, which only inched up by 0.3%.
A better-than-expected fourth quarter
For its fourth quarter of 2023, RBB booked revenue of just over $33 million, which was slightly down from the more than $41 million it earned in the same period of 2022. Net income also fell, declining to a bit more than $12 million ($0.64 per share) against fourth-quarter 2022's nearly $17.6 million.
During the quarter, the company managed to grow its total deposits (to almost $3.2 billion from the year-ago figure of a bit under $3 billion). Its loans held for investment dropped, however, to slightly over $3 billion from $3.3 billion in the same quarter last year.
One key reason investors didn't punish RBB for the declines is that the bank did better than expected. On average, analysts tracking the stock were anticipating less than $28 million on the top line, and only $0.35 per share in net income.
Adjusting and rebalancing
RBB chalked up its better-than-expected performance to several recent top-down initiatives. It quoted CEO David Morris as saying that, among other moves, the bank "increased liquidity and mitigated balance sheet risk by strategically exiting certain higher risk lending relationships and reducing our loan to deposit ratio."
