USCB Financial NASDAQ: USCB reported what management described as “another record quarter” for the first quarter of 2026, supported by loan and deposit growth, a stable net interest margin, and what executives said remained exceptionally strong credit quality.
First-quarter earnings and profitability metrics
Luis de la Aguilera, chairman, president, and CEO, said the company generated GAAP net income of $9.4 million, or $0.51 per diluted share, for the quarter ended March 31, 2026. On an operating (adjusted) basis, de la Aguilera said diluted EPS was $0.47, operating return on average assets (ROAA) was 1.25%, operating return on average equity (ROAE) was 15.92%, and the efficiency ratio was 52.36%.
Chief Financial Officer Rob Anderson said GAAP results included a $619,000 income tax benefit tied to an adjustment of the deferred tax asset related to 2025. After adjusting for that item, Anderson pointed to the operating metrics and also cited total risk-based capital of 14.09% and tangible book value per share of $12.23.
De la Aguilera said tangible book value per share increased 8.9% year-over-year to $12.23, “even after absorbing the market-related AOCI impacts.” He added the board declared a quarterly cash dividend of $0.125 per share in April.
Balance sheet growth and funding trends
De la Aguilera said total assets reached $2.8 billion, up 6.3% year-over-year. Loans increased 10.1% year-over-year from $2.2 billion, and deposits grew 8% year-over-year to $2.5 billion, which management attributed to its deposit-focused business verticals and a diversified deposit base.
Anderson said average deposits were about $2.4 billion in the quarter, up $212 million year-over-year, but down $26 million sequentially. He attributed the linked-quarter decline to a late fourth-quarter withdrawal of roughly $130 million by a large commercial client, which he said was anticipated and managed. On an end-of-period basis, Anderson said total deposits increased $149 million during the quarter.
Deposit-focused verticals—Association Banking, the Private Client Group, and Correspondent Banking—grew to 30% of deposits, or $747 million, as of March 31, according to de la Aguilera. He said that represented a $62 million quarter-over-quarter increase.
Funding costs improved during the quarter. De la Aguilera said deposit costs declined to 2.2%, improving 29 basis points from the prior year. Anderson said total deposit cost declined 8 basis points quarter-over-quarter to 2.2%, helping keep net interest margin steady.
During the Q&A, Anderson provided additional detail on pricing by specialty verticals, saying Private Client Group deposit costs were “a little over 2%,” Correspondent Banking was “probably around 1.65%,” and HOA-related deposits were “around a similar amount.” Anderson said the company was not anticipating near-term rate cuts and expected deposit costs to remain near current levels absent a rate cut.
Loan growth, production timing, and net interest margin
Anderson said average loans rose $46.8 million quarter-over-quarter, equating to an 8.9% annualized growth rate, while average loans grew 9.6% year-over-year. End-of-period net loan growth was $52 million, which he said reflected strong production but was affected by the timing of payoffs and originations.
Gross loan production totaled $188 million in the quarter, with $114 million—or 60%—closing in March, according to Anderson. De la Aguilera noted that over half of production occurred in March, and said the timing limited the quarter’s full earnings contribution even as the pipeline supported future net interest income expansion.
Anderson said Correspondent Banking loans represented 30% of quarterly production and carried a new loan yield of 5.13%. Excluding correspondent loans, he said the weighted average yield on new production was 6.2% for the quarter. He emphasized the correspondent loans are typically short-term (about 180 days), tied to SOFR, and are intended to add asset sensitivity and flexibility.
Net interest margin was 3.27% in the quarter, which Anderson said was flat, as improved deposit pricing was offset by lower-than-expected loan interest income driven by timing and SOFR volatility. He cited late-quarter loan closings, elevated early-quarter payoffs, and lower SOFR rates during much of the quarter as key factors, with higher securities portfolio yields and lower deposit costs helping stabilize the margin. Looking ahead, Anderson said the company expected “very modest margin expansion later this year” as recently originated loans season into earnings, though he cautioned that rate volatility could limit further deposit-cost improvement.
In response to an analyst question about the outlook, Anderson said he would “model flat to slightly up near term,” pointing to additional earning assets added late in March, a strong pipeline, and strong April loan activity.
Credit quality and allowance levels
Chief Credit Officer William Turner said the allowance for credit losses increased to $26.1 million at quarter end, representing 1.16% of the loan portfolio. Turner said the bank recorded a $602,000 provision primarily due to the $52 million in net loan growth, and that there were no loan losses during the quarter.
Turner said non-performing loans increased by roughly $500,000 during the quarter, with the non-performing ratio at 0.16% of the portfolio. He attributed the increase to two past-due residential real estate loans in the process of collection, adding that the loans were well collateralized and “no loss is expected.”
Classified loans increased to $6.8 million, or 0.3% of the portfolio, representing 2.2% of capital, Turner said, also tied to the two residential loans. He added that the bank continued to have no other real estate owned.
Fees, expenses, and strategic expansion plans
Anderson said non-interest income totaled $4.2 million in the first quarter, representing 15.8% of total revenue. Service fee income was $3.1 million, driven by “record swap fees” of $1.6 million amid strong loan activity and rate volatility. Anderson said swap-related fees were expected to normalize in the second quarter. In the Q&A, he said swap fees could return to around $700,000 per quarter, which he said would imply total fees “right around maybe $3.7 million” assuming other items remain equal.
On expenses, Anderson said total expenses were $13.7 million, down $564,000 from the prior quarter largely due to one-time items in the fourth quarter of last year. He said headcount increased in the quarter with more hires planned in the second quarter, and management expected expenses to rise “at a measured pace” while maintaining an efficiency ratio in the low 50% range.
De la Aguilera outlined several growth initiatives across South Florida, particularly Miami-Dade, Broward, and Palm Beach counties. He said the company launched a new lending team in March at its remodeled Doral headquarters banking center, focused on Miami-Dade’s Airport West market (including Doral, Hialeah, and Medley). He said the unit would be led by a senior lender and include business development officers, with most roles filled by reassigned staff and two new production hires, including a new senior C&I lender.
De la Aguilera also highlighted the Association Banking vertical, focused on condominium associations. He said the unit serves more than 470 condominium associations in the Tri-County market and had $160 million in deposits at quarter end, representing 29% year-over-year deposit growth. He said the unit ended the quarter with $126 million in loans, reflecting an 11.5% annual growth rate, and added that a new production officer was hired to focus on Palm Beach and the Treasure Coast.
Separately, de la Aguilera said the bank is considering expanding its physical presence by opening “two to four strategically located branches in Broward and Palm Beach counties over the next three years,” describing it as a complement to the company’s branch-light, technology-enabled model. He said the company already serves more than 2,100 clients in those two counties with approximately $445 million in loans and $415 million in deposits, despite operating one physical branch location between them.
In response to a question on Correspondent Banking, de la Aguilera said growth in that area was planned, noting the bank’s focus on the Caribbean Basin and Central America. He said USCB onboarded three new banks during the quarter and was evaluating five more. Anderson added that these correspondent relationships also include low-cost deposits and significant wire activity.
Closing the call, de la Aguilera said the first quarter was “a strong kickoff to our three-year strategic plan,” citing record earnings, prudent balance growth, stable margins, and “outstanding credit quality” while returning capital to shareholders.
About USCB Financial NASDAQ: USCB
USCB Financial NASDAQ: USCB is a bank holding company headquartered in Columbia, South Carolina, serving as the parent company of United Security Bank. Established to support community banking in the Midlands region, the company focuses on relationship-driven financial services tailored to both individuals and businesses. As a regional player, USCB Financial emphasizes personalized service through a network of full-service branch offices.
The company’s core business activities include commercial and consumer lending, deposit products and alternative delivery channels.
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