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LOS ANGELES, CA – RBB Bancorp (NASDAQ: NASDAQ:RBB), a California-based state commercial bank with a market capitalization of $274 million, has announced the retirement of its Chief Executive Officer, David Morris, through a filing with the Securities and Exchange Commission. The retirement is set following the company's next annual shareholder meeting scheduled for May 21, 2025. The announcement comes as the bank's stock has experienced a significant 33% decline over the past six months, according to InvestingPro data.
According to the 8-K filing dated April 10, 2025, Morris and RBB Bancorp, along with its wholly-owned subsidiary Royal Business Bank, have agreed on a Retirement Agreement that outlines the conditions of his departure. The agreement supersedes Morris's previous employment contract from April 17, 2017. Despite recent market challenges, InvestingPro analysis reveals that four analysts have revised their earnings upward for the upcoming period, with the company expected to remain profitable this year.
Under the terms of the Retirement Agreement, Morris will receive a package that includes his current base salary through May 31, 2025, reimbursement of Medicare costs for him and his spouse until the end of 2025 or until he secures new employment, and a provision for a change-in-control event. If such an event occurs in 2025, he will be entitled to a payment equal to his latest annual salary and immediate vesting of all existing equity awards.
Furthermore, the agreement stipulates that any unvested equity awards held by Morris will continue to vest while he serves on the boards of RBB Bancorp and Royal Business Bank. These awards will fully vest if his board membership ends for any reason.
The filing, which provides official notice of Morris's departure and the related financial arrangements, is a standard requirement under SEC regulations and reflects the company's commitment to transparency. The information is based solely on the factual content of the press release statement. RBB Bancorp maintains a strong dividend track record, having consistently paid dividends for nine consecutive years, with a current yield of 4.14%.
Morris's tenure as CEO and the subsequent transition period are critical for investors and stakeholders, who will be monitoring the company's leadership changes closely. The company's stock, listed on the NASDAQ Global Select Market under the ticker RBB, may be influenced by these developments.
RBB Bancorp has not disclosed any additional details regarding the search for a new CEO or the transition plan following Morris's retirement. The company's annual shareholder meeting is expected to provide further insights into the bank's future leadership and strategic direction. Trading at $15.45, the stock is currently aligned with its Fair Value according to InvestingPro models, which offer comprehensive analysis through their Pro Research Reports covering over 1,400 US equities.
In other recent news, RBB Bancorp reported its fourth-quarter 2024 earnings, revealing an earnings per share (EPS) of $0.25, which fell short of the forecasted $0.36. However, the company's revenue exceeded expectations, coming in at $28.71 million against a forecast of $28.12 million. Analysts from Stephens revised their price target for RBB Bancorp shares to $23.00, down from the previous $25.00, while maintaining an Equal Weight rating on the stock. This adjustment followed the company's lower-than-expected earnings, attributed primarily to a higher provision for credit losses. The quarter also saw a significant shift in the bank's credit quality, with a $26 million construction and development loan moving to non-performing loans, impacting the overall loan portfolio. Despite these challenges, RBB Bancorp's net interest margin increased by 8 basis points to 2.76%, and the bank maintained a stable deposit base of $3.1 billion. Looking ahead, analysts project low to mid-single-digit loan growth for 2025, with a focus on resolving non-performing assets and expanding the bank's M&A strategy. Additionally, a leadership transition took place, with Johnny Lee stepping in as the new CEO, emphasizing the bank's strategic focus on relationship-driven commercial lending.
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