USCB - Earnings call 1 2023 | USCB Financial Holdings, Inc.

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Operator

Good morning, and welcome to the USCB Financial Holdings Conference Call. [Operator Instructions] Please note that this event is being recorded. I would like now to turn the conference over to Mr. Luis de la Aguilera, President and CEO of the company. Please go ahead.

Luis de la Aguilera

Good morning, and thank you for joining us today for USCB Financial Holdings 2023 First Quarter Earnings Call. the our Officer, is provide X. Well, Ben of bank's reviewing and Rob an what today you the Credit which quarter Chief Pazos, performance, a me difference QX on makes. CFO, highlights Anderson; overview can a With see of Slide highlights who will banking would discussions just safety heightening times. failed, client look inflation, about the Who during that after support deposit potential last suddenly X would ratios, have stressful intensifying earnings guidance for based recession? have our soundness industry of liquidity, uninsured Banking the and economic and weeks clients on on imagined call, and X banks any and confidence concerns is opportunity grow maintain to clients' see critical to relationships, and their to interact is It with on strengthen our them that as shortly. and trust we further more an the moment to operating are of first the Despite challenging a our pleased team challenges, reflecting consistency. the XXXX, announce these in strong quarter delivered environment prudent that with navigate performance to we USCB ability

financial by underwriting practices. demonstrate management loan risk and production, disciplined credit Our earnings solid robust driven results

years, of past loan was diversifying delivering non-CRE to trend non-CRE, a Over we are our Actually, lines, X by QX developing the focused multiple have loan business way. meaningful that expect in the which we bank's XX% portfolio on and production continue.

or we Our deposits cryptocurrencies are to We or do serve. owners communities have derived businesses, not exposure the local primarily either investments from crypto-related and any to their businesses.

of in the diversified loan customer a deposit and a enabling and build and States. is one us granular are stability reinforced by We bank, relationships, United the growing Florida core and commercial strength markets our base and fastest-growing portfolio to

income quarter the year. losses, quarter the and metrics loans of March ended for to March was million loans, of methodology results XXXX. for XX posted XX.X% March year, ended highlights, compared represented on of compared this our first losses for nonperforming. an X was the increase year. $XXX March loans, comparing XXXX. million strong. increased Net of compared at reserve for stockholders' resulted The $X X.XX% after-tax $X.XX, XX, in or book of million as for value last ratio by total quarter Nonperforming which an -- after-tax March allowance cumulative This excluding the $X.X single of loans to for X.XX% quarter XXXX, on to loans, the both a in XX.X% XX.XX% losses of XX.X% loss Average first and as retained share to for by unfunded of of diluted of $X.X for impact deposits was to The earnings. of review XX.XX% remain onetime quarter increase quarter $XXX,XXX. QX compared X.XX% commitments credit average $XXX of Annualized first quarter credit per Tangible compared last company per adjustment to let's the XX $X increase start of an X March we XX.XX% the for loan quarter to with or the adopted XXXX. to the March of Annualized as first return in XXXX, for X.XX% the of decrease $X.XX XX, to unrealized $X.XX. for XXXX, the classified XX, As was an of security last or ended compared XXXX, first the year. previous million was those estimating year, for increased efficiency first of the to a Effectively, in January CECL year. The credit resulted XXXX first including Average PPP compared an March XXXX. total to quarter the $XXX,XXX asset at allowance or quarter XXXX, XX, was of million the loans the return XX, Credit equity at last average share, X.XX% million our

During company market TB average a including share publicly costs. purchase U.S. repurchased announced Financial aggregate of $X.X the $XX.XX. made approximately price these weighted program. the were pursuant These shares Holdings, the quarter, repurchase company's at for was XXX,XXX transactions The of per Inc. to transaction price open million, repurchases

The based be repurchased financial March consistently on historical of page X shares is As is recapitalization. directionally Profitable risk XX, since contributive what and XXX,XXX program. performance team sound following self-explanatory, our management is under XX, to on select delivering. trends remain the showing our focused

which now Rob attention and CFO, results will turn be our key our our let's indicators, performance by reviewed Anderson. financial to So specific

Robert Anderson

and you, statements morning, at had looking Thank Luis, Century by In measures, Good our everyone. many financial another and Bank quarter. great U.S.

items the next getting a pages highlight on few into me Let couple specific details. of before

quarter. million million securities which the were of $XX $X.X the on very books balances rates. up $XXX securities At were pandemic are billion, the in Loan deposits First, and $X.X assets prior from most total put the interest banks end, in these at were is today, billion had we for during quarter, low like billion. the period $X.X quarter industry

$XXX million million negative securities mark-to-mark securities on from running fast portfolio million, $XXX a have these accounting includes now million taken rates the slightly sharp treatment. Total in the As a footnoted in in losses on equity now equity is unrealized due And the AOCI. and $XX.X slide, mark $XXX through up the have interest QX. to rise, although

SBA and CECL in $XXX,XXX provision higher prior quarter reflects on The Net to from the deposit execution booked the loan bank implemented with P&L. Moving loan the quarter $X.X growth. to decreased income interest sales. of million and income costs expense of our noninterest the due

that, our with let's share. And resulted the was our a quick a loan take basis, we Additionally, GAAP retained next increase through a day at ran earnings. indicators page. $X.X implementation to performance $X.XX reserve, net X in $X.X on loss CECL look or which million On million income a our

our soundness, remained strong. of terms credit metrics In

reserve in book detail a loan X.XX%, of discuss with coverage increased Our loss the more will our at in bit. Ben CECL ratio adoption and credit

our profitability, terms In was was on assets average quarter the X.XX% for and return XX.XX%. return average equity of on

Our I mark negative basis the book quarter. X.XX% cost the quarter from the in that was value per AOCI driven points earlier securities would funding. Efficiency a per book reflective to our value to and share, per Absent been and mark, repurchases ratio the down higher portfolio our tangible AOCI of have the share share of share on our $XX.XX. up $X.XX and stock XX.XX% referenced tangible NIM of $X.XX which XX by is slightly was per moved

the liquidity Let's on page. next hit on

liquidity industry During and to our funding issue industry. the of headline banks X created depository March, fail across Reserve the month to available notable institutions. additional a a new saw liquidity Federal make program The became

We the have accessed enrolled soon. the program access the to have in not do funding not bank program intend term or BTFP, and program but anytime

on-balance of is $XXX brokered million. Our excluding million, $XXX the CDs sheet in of liquidity in sheet off-balance excess excess is and our sources

continue beef liquidity sources pledging both loans securities, our end. We post up of have quarter and to expanded and our

is on CD environment. million liquidity wholesale current funding, of the have these access and CDs, Additionally, sufficient not on we are the self-imposed believe of to U.S. the listed which chart. policy funding, which we sources of self-imposed market Century listing all weather and products If include limits our has limits $XXX we are brokered in to Bank excess

first that, the book look increased and and XX.X% during or next $XX.X or prior the let's XX% or deposits is So to prior $XX.X DDA compared consistent quarter the quarter million X.X% on at million increased quarter. page. $XXX with of a X.X% X.X% increased first to compared DDA compared XXXX. Average deposits deposits take total million quarter with our and annualized the to million Average prior quarter the annualized deposit quarter Average $XX balances comprised compared to XXXX. the or the of of

clients industry. USC billion. Also, that weeks that prevalent not that the base. numerous this B deposit $X.XXX our will average did in of today. the spot billion end you notice speaks $X.XXX strength other You events the quarter X about last the shift with may March, of seems are balance experience our believe mix below of the within We institutions to of had conversations is concerned We note with happening quarterly who

in clients their we which lose provides depositor had more deposit. While to product, and quarter CDARS in happy into we the a had USCB, end, clients to not at report end. quarter post of deposits have clients ICS on and the with to CDARS few did To dollar ICS point, continued every their and that I'm product balances few these clients their that events, million some $XX.X put a the place with decided we to minimize insurance any ICS Intrafi, due

remain rate cycle. through deposit book, our the As the deposit see a with it relative beta XX% funds continue to of but to rate current Fed increases cost relates we to increases the

closer deposit take a So look the the next let's slide. book at on

deposit public XX.X% XX% XX,XXX deposit bank Our the in total. The commercial XX% fund which model, our has deposits accounts XX% bank. and business the with commercial reflects are accounts, a accounts, partially of accounts or book our or are diversified of personal collateralized. personal or retail business majority accounts, XX,XXX

public adjusted by $X.X quarter total XX,XXX in come uninsured public is we funds We end. end, the average in decrease account. collateralized far. see quarter the count ICS more The a fourth and place the million the a of and as portion so the quarter this business for a chart product lower below can the number XX% anticipate personal in down by clients you of or to XXX,XXX, of post compared the the X% quarter balance account average next significantly of to XXXX on continue As deposits XXXX is in fund left, amount to

it turn that, With me Lu. let to back

Luis de la Aguilera

Thank you, Rob.

the first XX. prior increased Average the loans million and to excluding on to loans, $XX.X $XXX $XX.X seen million for XX.X% compared annualized quarter QX XXXX. As XXXX, of PPP million on quarter or the compared graph or Slide

increased on XXXX. to basis competitive assessment prior of our loan yields, we points management. XXX and a coupons price As to on and note our based point, ongoing first bank, quarter relationship. To is that or quarter loan quality compared relationship-driven and Notwithstanding growth basis the compared risk and risk we the points XX focus this

as our Credit portfolio size. mix, concentrations Our be our loan and as average by average loan-to-value will Officer, weighted reviewing coverage CRE detailing type, loan debt service well Chief

portfolio. office strong look and leverage, low the portfolio. repayment look at a will note the bank's will -- this a diversified of close we nature Furthermore, you Here, take CRE

office all selection Following been our risk evaluates valued conservative CRE transacted, how the industry again, correction be will management pandemic, underwriting and significant as the course choice of guide buildings repriced, has and a classes. used, our and Covid the in there asset sector, office

XXX rates XX, to basis points graph impacted production over X throughout throughout strong Page the were as quarters, and As Fed time, the on to past loan slowed loan demand, posted borrowing bank CRE the budget this seen increased March exceeded quarters Over from costs on March. the and higher loan delivered past XXXX. forecasted have do over so we specifically or demand X refinancing. XXXX the The

for loans, our XXXX PPP at point-to-point Excluding XX.X%. ran loan growth

Fed's decreased led policy, of high monetary single-digit the XXX low new average. XXXX, which we demand, Still As the average for points portfolio basis effect growth loans has X.XX% expect XXXX. rates loan above higher in for an increased double-digit to QX and to the coupon to

and as in As was product which lending development was well and noted, lines, This totaling South quarter's well financing, million demand SBA strong first as loan new XX% previously namely shift and of in diversification non-CRE. HOA, are $XX of correspondent equipment all production, the of toward Florida. and bank yacht due diversified

With over Ben. to said, turn things let that me

Benigno Pazos

all. seen you, the Slide Thank Luis, numbers in from detailed of has as to Good have $X.XXX portfolio before. loan CRE $XXX and our XX and loans this owner-occupied not loans. On to amount morning million, book our changed includes you appreciably mix, billion,

loan I'm segment conservative million. today, up retail CRE quality quarter Our at that as to average low, from segments. to million. to book report XX% ranging average X to happy service is concentration end $X.X ranging the in all and is has ranging across That to covered even -- X.XX XXX asset times loan-to-values the from size XX%. biggest is million of with and conservatively $X from metrics The $XXX excellent. weighted

to Moving Slide XX.

have they -- coverage both segment. the The the We XXX have office in loan-to-values a in have -- office our CRE the for X% slide million segments. and loans $X.X loans and bucket that are this among bucket office are total largest total Nonowner-occupied and of not of is and average Key notes totaling loans. confirms an loans related. the just our of loan COE bucket X.Xx. XX% our X% Office do see XX% of information metrics are office debt balance XXX the of CRE you numbers service owner-occupied are the in weighted of CRE We weighted on they or of owner-occupied nonowner-occupied average million, average loans

before to year a asset maturities addition the we quality for are good. X% very what is In of within office book. our said loans, importantly, Most retail just

Moving XX. to Slide

to and quality good, Asset continues reflecting very underwriting be prudent management. risk conservative

result in no X. After nonaccrual several at The coverage quarters arrears in this and methodology year. ALLL XXX,XXX growth. do of forward. XXX%. in loan starting stands loans, January increase with [ we a of of anticipated continue category the [indiscernible] as of loan initial increase ] placed ACL going with none implementation X implemented quarter million CECL We to Our the The CECL subsequent the bank led an $X.X and the this

negligible, and just ratio X.XX%. results in book a dollar classified Our loans classified of of that to asset is loans

Going will talk about NIM. Rob XX, our to Slide

Robert Anderson

Ben. Thank by interest due an in Net compared to quarter, you, $XXX,XXX Okay. decreased deposit income predominantly to increase prior costs.

interest net compressed points to XX Our X.XX%. margin basis

higher-yielding earning of portfolio despite the million heightened expect levels cash cash flows of improve opportunity and to earning increased funds to the those we on quarter liquidity. $XX this higher rolling we grow book assets, year, mix given Our towards our challenging assets, our advances even have into FHLB off attention to deposit our team a held fully continues at reinvest securities With environment. we and end will though higher our approximately asset

market rate and to balances for X. shape our is a impact repricing. and result of According are balance in and interest having faster sheet sensitive our the year inverted and curve higher liability liability assets, X and a our the in the higher at year than has rate our loan saving sensitivity. yield magnitude is curve, the market variable asset in money for look portfolio short our a Under take accounts an on year model, an asset Let's our account short-term portfolio repricing liabilities, borrowings liability sensitive higher yield direct had of Furthermore, also of money X. particular increases which term. repricing This sensitivity

to further remains sheet forward. near XX%, and beta forward and stated the on compression deposit through-the-cycle shape current going our balance While composition, curves, XX% going we our yield given our current range of expect NIM future expectation and

fees quarters, had up number the quarters. new SBA little consistent from very on very and So quarter. saw movement are of noninterest to steady, take excited with about at that, coming securities in let's prior our let's our move fees look were next straightforward, solid we and we initiatives a quarter page. Service income. the We in expenses. some to this With this fees were book move

quarters, notice came in a in not remain highlight quarter. so here, AOCI price current Capital the happened $XX.X let's the has million would as end. benefits at up stocks $XX.XX. from XXX,XXX seasonal total shares shares so prior and Our prior the down bit The base was that authorization, hires you'll to and look a million at remaining and improved to an with of above these the expense items weighted levels banking capital. which well-capitalized increases up prior company and purchases were in but I company $X.X quarter repurchased under with The slightly quarter. Salaries levels were events, also XXX,XXX further mention by depressed line take line at bank payroll new few the a remaining average taxes. much

for I straightforward, comments. Lu it closing some back turn will capital With to

Luis de la Aguilera

and Team provide the depository effort and concerns are situation, USCB business the many located products new both quarter the expected teams U.S. made. further to to and fourth most mining delivering first the in line developing the rising opportunity, initiative efforts hear week, in and flight perceived clients one banking business relationships, by was that much This situation of share the our responding of designed Even in forecasted, reaching and relationship rates the existing of U.S. was and high-touch contacted contacting created by top immediate safety Century action clients to is took business effect, to who of markets liquidity business Century customers. caused with first This manager explain contracts directionally banking interest is results. of quarter to taking are, consistent launched advantageously Every and lenders of XXXX impacted of Bank to were in by Thank pressures and project of their led the challenges development consistency as the prices Florida banks. closed unexpected in in out challenging proactively you, our officers hundreds with our nonlending the XXXX. The Rob. and confidence has wallet solutions. a in the very with most times, transaction the attractive deposit project of potential expand U.S. deepen mining an

population is and arriving continuous mentioned Pivoting financing costs, denominated. for day the are largely this non-CRE XXX economy done slowing time, taken how borrowing by the and and every number lending estimated to of quality of a has chance. largest of the not opportunities. first Florida lead country manner state demand the Our with new in CRE our It in interest fourth rates million where an planning talent largest real was earlier state was verticals population non-CRE quarter Higher to $XX primed third and new related. residents in estate develop growth. I loan Florida businesses production by in is XXXX, XX% net in higher

million competencies most lines business rate current in lending the environment. Collectively, strong data. non-CRE Florida, to strong association developed homeowners. this all concentration has highest and in of of X underscore in I trend following of and for last point, we second loans XX% number lending, point in the X these over we all demand lending, expect have yacht are interest the To generated of the HOAs diversified this even highest and continue. Florida $XXX the recently, have HOAs to in Over accounting which nationwide, years, SBA

the we XX% new opportunity, vertical, On banking nation business In start-ups. Recognizing in SBA a operating application a modernization lockstep country our for this are Our a over XXXX, business million in developing going We lending We million new production past a $XX million businesses small to one Bank, grown in SBA and coordinate loan association number role in from U.S. January working rate, on our generated deposit this vessels we business development than initiative client-centric of coming booking. a with our plan big launching lines focused to in them new process Abrigo to small state plays develop our its tax has improve we will the profitable forever for the become have further we Again, Century currently be X.X closing of products registered X.X% business of more dynamically tech Florida is the May new in duration we plans. At year. with to in lending, of shortly. business In recreational worth financing, technology businesses small believe that with owner-operated represent there the to of this a and and quality million that million and consistently book Ongoing these is in Florida of over choice regards with all have individuals corporate loans. ticket the best total. activities part live in $XXX recognize loan highest entire high opportunities, and the to state announce the X, boating system has in this leverage performance. are Monday, in that loans DNA. process and launched low XXXX, newest since X our will generated in we process, financing. January underwriting $XX net with short the to that serve yard states of

clients Our next new process Pigeon across approval us more the small will board. experience including quarters, the for of coordinating Zelle our by make see share products, more tech digitally to responsive real-time we'll payment robotics deepen LOS automation multiple The loan business, several the to expand nonlending By our of transaction the works. for responding with our model. products in wallet business solution and clients' to digital service banking process relationships solutions, proactively with needs we delivery improve and our

open to I for now like the Q&A. would floor

Operator

with Rose first Our Instructions] [Operator question Michael James. with Raymond comes

Michael Rose

Yes, any It's guys that wanted the obviously to Florida production. for loan that slowing, the loan on understand versus appreciate is intentionally much start on I Obviously, maybe I place. of of always How is And and slowdown back slide I you think, you pulling growth. else. is everybody a much stronger just in market? sort

You important threw that are some really, think statistics, I here. out really Luis,

love it growth trying is get Just but color... commitments to the that coming just implying a pretty obviously assume a quarter's growth. some would because of sense this from greater I was And just decent deceleration some up, prior

Luis de la Aguilera

that Like are that pipeline yes, the with there's It's mentioned specifically and CRE very is there's said, yacht on on and financing. work on has on kind that -- on bullish level a very financing, I HOA sideline, loan demand non-CRE, pretty it. Well, the and side, on much at the that of of clearly, a our quarter at projects has of the pipeline in equipment investors just gone into and slowed going the is refinancing prime don't all or XX% strong, of Mike. second away, side, areas lot lot sector, X%, very SBA we're About Notwithstanding pleased. the we're the I sitting

people of X it things. think And job happen that something last is have really again, the We've been for done didn't a years. diversifying I quarter. at this good our So last

market are But that that the has So it think we there's that good into results. down. no I to to are put CRE provide the efforts slowed going question going

Michael Rose

color will for maybe I And the margin helpful. down. you, Rob, be the then that appreciate That's

expect grow the the one growth you kind you and quarter you full the excess continues, to But on put balances deposit that you from else. that's the I said of liquidity had compression -- the On give balances here. think probably we'll of sense been hand, in second for you magnitude for of the Can some can we see half and expect quarter, in back of of the that stabilization everybody year? kind what a margin us understanding impact

Robert Anderson

good Yes. question. a tough be sure get down don't environment. certainly on I we them, you've It's we're very in from be compression. of closer But and think, operating most say in and experiencing then the X We'd June to your the points to going probably points that to X Fed XX many could a are XX%. May banks if this margin XX down. be they're past XX to likely or May I It's XX would margin, increases I'm there's, basis X that we get increases, of and heard scheduled more in upcoming in rate -- quarter, if June. basis

Michael Rose

the That's expenses a helpful. higher me, I for. looking than And then touch kind maybe finally of were was just for what

Just mention puts think from takes? term. as about I should growth the here ongoing efforts here cadence How and of in SBA franchise balancing containment in with and guys you the investments the the balancing short cost heard the rollout just we are expense you

Robert Anderson

Yes.

is going base our think I expense from be steady fairly our today. to base So

type last open of in will some fourth FICA move We through number the this $XX hitting in think 'XX. built critical have to slots at try quarter. and just million going with as look Certainly, year, we quarter. you 'XX million XX, we're third at But in be had very into the we you are $XX.X QX. I Slide probably level. that If some $XX.X quarter We're new million the hold the hires, expense but current control to about

is I from say basis a would quarterly modeling term. So good near a the XX.X%

Operator

Piper Graham with comes Dick question Next with Sandler.

Graham Dick

all I million appreciate gave funding talk looks about lower just number I guys than of $XX in It you deposit was the end-of-period like on kind average. the So about front. color wanted general. the to the

end around crisis, seen. assume given I there we've understandable which know of wanted unexpected or I -- to borrowings how guys' probably deposit the the be it's unprecedented pay good the to in of quarter in your have growth some quarter. down balances So guys banking you some you in have things added that kind March think the that deposit to XQ? the of those and And there if then around enough must relates month also isn't strategy of borrowings. since trended movement And the coming where those But will

Robert Anderson

Certainly, some volatility. would Okay. a forward, little getting some Yes, XX with from see And say, did it great the happened events unprecedented nervous. that just March we I is overall, question. clients a

So lot the sales our education move into team did from product. ICS of there was We a clients ICS. the some about

the clients, significantly. minimize deposits, that since to institutions. lose those not move that around Some average. would that clients but spread versus the deposits decided It in other had, has I the who some there off time of bit didn't balances We say, leveled end. clients were I would mentioned larger I their balances spot say and the quarter deposit to little take a and

to move people more ICS. seeing are We

So we drop our and deposit to I trying then the ICS We're I number ICS grow costs. loan our is control product. But we'll overall, think balance because think think growth see terms sheet, in uninsured deposits still the slowing. the in you'll about of have funding how

their They giving very So CDs. mainly deposits, shopping and careful market we're have to. typically do We on core preferential rates be their to who relationships. people money have we're

lead if dollars going compression. are going in raises the of they're rates, that's again, pricey. And and margin to Fed cost incremental to pretty the coming So price, the to get more

I all opportunities lower of our think or relationships banks fighting over no do challenging and them from because from and bit bank of preference would to with having We CDs think for but CDs, they're our and rates. standpoint that. the can going doing funds. have brokered that, and to clients to all and same win either be are some, a couple with funding is brokered our opportunities think cost it we issues the have with our they're are of we competitors, a little quarters I hedging entertain I But some we and clients But the to next

Graham Dick

helpful. Okay. seeing crazy of the right amount is pressure everyone funding Yes, That's now.

So assume, through of are would from and it be at couple next least safe I level quarters? the here just borrowings to probably guess,

Robert Anderson

more would levels think current some might have books, liquidity. I go going will. on means that keep say carry heightened the bit And borrowings will We don't the the think here. we're Yes. cash. But a we quarter. borrowings will on having if I I attention a from to little up probably in substantially

Graham Dick

Okay. then $XXX,XXX it's one question. the know I but last over had for nonaccrual, And just year. appreciate last amazing you guess it. I tiny, credit I guys have a The

just I'm any only or it loan X basis around details outside because still you just for of hear to even would that could loans. the share norm points what though So the guys, you I say, was it's interested

Benigno Pazos

Yes.

SBA financing that we of loans. and a there. As you know, This it to rid to friendly actually, as anticipate another audited in issues. the point, we is to amount client condition. file loan X(a) in of XXX process is be. He on don't do is acquired XX%. growing a as that go has a back that no that the At he perfect XX% where loan get order he we process a the remain the portion. charge-off fair can And saw that through trying we as normal. this in debt I go We of loan, current, the is company. some remaining it's the That This guarantee building we to And court has completely said, was operates,

Operator

comes The with Gailey Brady next from KBW. question

Brady Gailey

Century active on to good the the see buyback quarter. was it U.S. in So

at I know stock, cheaper but than today it If forward? you on going have on it's then. authorization not you how where repurchased get the left, was ton. look the buyback could a you just you some Maybe aggressive thoughts

Robert Anderson

Yes.

popular across they're a the the X,XXX,XXX, not And industry lack we industry. I you kind XX banks shares. significantly. got that We buyback, chaos the So it's buyers I that name, those are XXX,XXX a on down. and think March share make right pick I mean, just did down well-run we're of had purchases XXX,XXX We has there's now. most happened your the And remaining. to value. shares mean price. And all way We a certainly, the an great impact banks, down. in bought of mean, it on prior

it. So attractive. balances. some to right your is work, putting But of is make loans very use capital to of best the price loan make the stock to and use capital We the now, prefer

it's We little will I come turbulent this think the a that topic But -- be remaining and Monday, time. XXX,XXX buyers meeting have price, up. could we a Board at shares

But So there's you very want certainly, thought school some of might preserve it's a at price to capital. that now. this right attractive

Brady Gailey

then about right. growth. wanted ask And anticipated deposit All I to

ratio, the at look loan-to-deposit for been up last it's ticking I As the year.

tick ratio loan So the see XX%, deposits said, guide, think at we single double that I Or loan-to-deposit low growth but Do relatively can it's as at you digit, low that continue still here? your to mean same grow is up high will you digit. pace?

Robert Anderson

Yes.

making market. to see would it That in mean, we're I progress deposits. think continue a little have that our good little core changed to on I to a bit bit. XX, really up the to I funding you're prior assets tick said with March going has

a competition and seeing lot it's CD rate are We and on being money side, market the of driven.

CDs that little think But and XX% deposit between have to some certainly, road. think down for I've I the move bit. brokered XX% to I operating always will profitability borrowings really said, So of a and you're loan the some prefer like profile. maybe see going up we a I kind strong advances

what, quarter, closer to I at think we're XX% it loan-to-deposit be next so. ratio, if XX% could So

Brady Gailey

think did over million All little year. then I $XX of end the at at asset, tax deferred was the size a it right. end the Where that about of the And March? of finish balance the

Robert Anderson

and right $XX.X send over million That's that timing NOL can quarter was portion has Yes. between tax, But trended different there's Brady. end the piece in the have down of there, -- to been is and you loss that And and give quarterly abnormal That piece bank of we XX.X%. I'll operating The for at at differences kind is you you time. of the net a pieces certainly of over number. the us. for book other kind lots big the

continue I I of is that the at end recall, that provide XX.X%. portion going think was we earnings, number. down. to fourth can number quarter, that I to If the NL as certainly, come confirm But

Brady Gailey

to Okay. probably. the not of is did would like a not the realize buyer the to a be eventually decide it able full guys that factor? DTA upon a sell idea near-term that limiting know And currently that you DTA Like I this is if the But having company, like this sale that is, is company? size

Robert Anderson

tricky. pretty upon is DTA Tax type ownership The depending changes.

million, under bit XX to if $XX that changes. had took ownership just it, you like have -- it's always happen shares, share now, a the roughly $XX $X impact. fully million every of in On lose you doesn't -- we a right million, If just

very situational, it's So Brady.

company shareholders. shareholder-focused. the the we team. we prefer I speak right management we're said for think run and But to I'll returns for always provide best our now, the We've can

Operator

Ross next Haberman The with comes with question RLH Investments.

Ross Haberman

question I the deposits. uninsured had a quick about

-- them I to CDARS And over your the next are said, to level? would significantly that down trying -- what of are You of thought migrating quarters? number to couple lower that you some actively about you moving get a what's guess,

Luis de la Aguilera

throughout as the question, have Again, presentation. a That's we good reiterated Ross.

about on a That's contacted we I large It a We with for Like balances. X.X top HOA a just the We the have many depository the clients are are. nature of deposits maintained bank, the larger municipal we have a very we commercial lot fine. it to do said, bank them. ultimately, side, even of our And lot and on put And information of going concerned to bank, on the said, about were way. every something. And -- let's we of they and gave them the we asked A and them. them one concerned ICS to talking when not but that them contacted it they A of for like no, lot single weeks industry, they side. clients. on been looked years. the our have lot are of we're that commercial, us spent were good

this to that quickly. low down. the that they is we by going doing to just number very top moved down So We been move model deposit it's dropped into interested It's XX difficult in say, haven't very, XXs we if things did the size, it. relationships it that

But So them. them done we've know will that up and our we to they a to do happen. It's everything product it's let can that available, it going But not the model to model. commercial is retail is could a to business bank. really going be

-- what our banking, correspondent those -- in is it million in got is. nobody's about going banks and $XXX also, deposits That we've it move We to there.

Ross Haberman

about sorry, the can discuss participations And amount one of just in unguaranteed books. are you on your dollar the thing which the dollars? portion And other ask -- I of was What the you question? Could SBA, one you amount mentioned. have which

Benigno Pazos

amount $X.X dollar was in amount The Yes. about the we The sold that million. participated market. the

As that -- in same don't the and we've participate out need I some participations. said, them and a of of have with been to for we good we to recently the banks is minimize Certainly, risk known banks and and with while a we've the bank. few file participations servicer do with reasons. the may -- lot we have audited situations, local is not standing. that a We by a portion bankers for few do asked in This a

is a As is on this I loan where not based said, bank growth participation.

something do. not don't are here necessarily We that We we should is to feel do that.

Operator

over like our remarks. to Mr. la concludes Luis for Aguilera This to turn de I'd any session. conference Q&A closing the back

Luis de la Aguilera

delivering the IPO, Caroline. here. only as We're is the new had since you, quarter-over-quarter team focused which management not since has we've Thank on gotten

you So back said, with work next get quarter. we'll and that see to

Operator

Thank This has concluded. conference presentation. today's you you. attending Thank for now

a may You good now disconnect. Have day.

USCB Financial (USCB) 28 Apr 232023 Q1 Earnings call transcript