RBB Bancorp (RBB) risk factors, FY2025 10-K

Risks Related to Interest Rates

1. 01Fluctuations in interest rates may reduce net interest income and otherwise negatively impact our financial condition and results of operations
2. 02We could recognize losses on securities held in our securities portfolio, particularly if interest rates increase or economic and market conditions deteriorate

Risks Related to Our Business

1. 03Changes in general business and economic conditions and any regulatory responses to such conditions could have a material adverse effect on our business, financial position, results of operations and growth prospects
2. 04Health crises have in the past, and could in the future, materially and adversely affect our business and our customers, counterparties, employees, and third-party service providers
3. 05We are subject to liquidity risk, which could adversely affect our financial condition and results of operations
4. 06Our business depends on our ability to attract and retain Asian-American immigrants as clients

Risks Related to Our Loans

1. 07Because a significant portion of our loan portfolio is comprised of real estate loans, negative changes in the economy affecting real estate values and liquidity could impair the value of collateral securing our real estate loans and result in loan and other losses
2. 08Many of our loans are to commercial borrowers, which have a higher degree of risk than other types of loans22% rewritten
3. 09We have a concentration in commercial real estate, which could cause our regulators to restrict our ability to grow
4. 10Our SFR loan product consists primarily of non-qualified SFR mortgage loans, which may be considered less liquid and more risky31% rewritten
5. 11The non-guaranteed portion of SBA loans that we retain on our balance sheet as well as the guaranteed portion of SBA loans that we sell could expose us to various credit and default risks27% rewritten
6. 12Curtailment of government guaranteed loan programs could affect a segment of our business
7. 13Real estate construction loans are based upon estimates of costs and values associated with the complete project. These estimates may be inaccurate, and we may be exposed to significant losses on loans for these projects
8. 14As of December 31, 2025, our nonperforming assets totaled $53.5 million, or 1.27%, of total assets, comprised of nonperforming loans of $44.6 million and other real estate owned ("OREO") of $8.8 million. Nonaccrual loans HFI were 1.35% of our loan HFI portfolio at December 31, 2025New

Risks Related to Our Deposits

1. 15Our deposit portfolio includes significant concentrations and a large percentage of our deposits are attributable to a relatively small number of clients46% rewritten

Risk Related to our Allowance for Credit Losses (“ACL”)

1. 16If we do not effectively manage our credit risk, we may experience increased levels of delinquencies, nonperforming loans and charge-offs, which could require increases in our provision for credit losses24% rewritten
2. 17Our ACL may prove to be insufficient to absorb potential credit losses in our loan portfolio

Risks Related to our Growth Strategy

1. 18Acquisitions may disrupt our business
2. 19Our business strategy includes plans for organic growth, and our financial condition and results of operation could be adversely affected if we fail to grow or fail to manage our growth effectively
3. 20As we expand our business outside of California markets, we may encounter risks that could adversely affect us
4. 21If we fail to maintain effective internal control over financial reporting, we may not be able to report our financial results accurately and timely
5. 22We are exposed to risks related to fraud and cyber-attacks83% rewritten
6. 23The development and use of new technologies, including artificial intelligence ("AI"), can present risks and uncertainties that could adversely affect our business and financial conditionNew
7. 24Potential environmental liabilities associated with commercial lending could materially and adversely affect our business and financial condition
8. 25A natural or man-made disaster or recurring energy shortage in our geographic markets, especially in California, could harm our business
9. 26Climate change could have a material negative impact on us and clients
10. 27We face strong competition from financial services companies and other companies that offer banking and mortgage banking services, which could harm our business
11. 28Legislative and regulatory actions taken now or in the future may increase our costs and impact our business, governance structure, financial condition or results of operations
12. 29Our use of third party vendors and our other ongoing third party business relationships are subject to increasing regulatory requirements and attention

Risks Related to an Investment in Our Common Stock

1. 30The price of our common stock may fluctuate significantly, and this may make it difficult for you to sell shares of common stock owned by you at times or at prices you find attractive
2. 31domestic and international economic factors, such as interest rates or foreign exchange rates, stock, commodity, credit, or asset valuations or volatility, unrelated to our performance
3. 32Our dividend policy may change
4. 33Our business and financial results could be impacted materially by adverse results in legal proceedings
5. 34Future sales or equity issuances could result in dilution, which could cause our common stock price to decline31% rewritten
6. 35Provisions in our charter documents and California law may have an anti-takeover effect, and there are substantial regulatory limitations on changes of control of bank holding companies