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spk00: Good morning, ladies and gentlemen, and welcome to the USCB Financial Holdings Incorporated First Quarter 2022 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question and answer session, and instructions will follow at that time. If anyone should require operator assistance, please press star, then zero key on your touchstone telephone. As a quick reminder, this call is being recorded and you can find the first quarter earnings materials, including the presentation deck, on the company's investor relations website. During the call, there may be reference to the unaudited financials and non-GAAP measures, which are reconciled to GAAP results, to the extent available without unreasonable efforts in the earnings materials. Additionally, comments on this conference call may include forward-looking statements regarding the company's expected operating, and financial performance for future periods. These statements are based on the company's current expectation and are subject to the Safe Harbor Statement for forward-looking statements. Actual results for future periods may differ materially from those expressed or implied by these forward-looking statements. I would now like to turn the call over to Lou de la Aguilera, President and CEO. Sir, you may now begin the conference.
spk05: Good morning, and thank you for joining us for our first quarter 2022 earnings call. I will review our Q1 highlights along with Ben Passos, our Cape Credit Officer, and CFO Rob Anderson, providing an overview of the bank's performance and some strategies we're executing to continue to generate consistent positive earnings power and drive long-term shareholder value. But first, I would like to expand on two important board-level approvals made this past quarter. As previously reported during the first quarter of 2022, the Board of Directors approved a new share repurchase program, which allows for the repurchase of 750,000 shares of Class A common stock. Repurchases under this program may be made in open market transactions. The timing and actual number of shares repurchased will depend on a variety of factors, including price, corporate and regulatory requirements, market conditions, and other corporate liquidity requirements and priorities. As of March 31st, 2022, the bank had not repurchased any shares. Independent board oversight and governance will always be a commitment made to our shareholders. To this end, U.S. Century Bank welcomed this past quarter Ramon A. Rodriguez, Robert E. Cafafian, and Maria C. Alonso to its board of directors, increasing our director count to nine. As noted in the accompanying press release, Ramon, Robert, and Maria bring to U.S. Century a wealth of business and community experience and will immediately make a positive impact. Their impressive backgrounds will provide important new strategic voices to the conversation of how we deliver U.S. Century Bank's mission to more individuals, families, businesses, and communities throughout the South Florida market. Our first quarter results demonstrate the focused execution of our business plan, reflecting solid growth in deposits and loans and an expanding NIM as we continue to deploy excess liquidity into higher yielding assets and securities to maximize returns. Compared to the first quarter of 2021, average deposits increased by 306.6 million or 23%. Well located in key commercial markets, our banking centers are well aligned with our lenders and business development officers as they support the coordinated business activities of these line partners. As a commercially focused bank, our primary target clients are owner-operated businesses, investors, retailers, distributors, and entrepreneurs, and their related personal accounts, which we consider as relationship retail business. Success in developing these relationships has been seen over time in the deposit growth of our banking centers, which over the past five years has increased by 709 million, or 119%. Presently, seven of our 10 banking centers have deposits at over 100 million, two of which have deposits of more than 200 million. Total loans were 1.3 billion as of March 31st, 2022, representing an increase of 154.4 million, or 14%, from March 31st, 2021. By comparison, average loans excluding Triple P's increased by 217.4 million, or 23%, compared to our first quarter, 2021. During the first quarter of 2022, we closed $159 million in new production with fundings of $141.3 million. On January 24, 2022, we opened a new commercial business office directly adjacent to our Coral Gables Banking Center, our second largest branch by deposits, and located in one of the most affluent submarkets in Miami-Dade County. Located in the commercial business district of Coral Gables, just east of the Miami International Airport, This loan production hub is staffed by two lenders and two business development officers with office space for three more. Three new lenders have been hired since November 2021. One of these joined the team in the first quarter of 2022, increasing our lending team by 27% as we now have 14 active lenders in production supported by nine business development officers. Very recent local merger and acquisition activity as well as changes in the executive leadership of some of our immediate competitors, is causing disruption in the market and opportunities for the acquisition of new clients, individual hires, and possible team lifts. In the past quarter alone, the announced acquisition of Apollo Bank by Seacoast Bank, as well as the planned acquisition of First Horizon by TD Bank, are opportunities to act upon. We are presently in active discussions with production personnel and anticipate to act on these opportunities. Our approach to credit is conservative and a pristine loan portfolio is indicative of our disciplined credit culture. Strong asset quality is reflective of our credit metrics and non-performing loans to total loans was 0% at March 31st, 2022 compared to 0.06% at March 31st, 2021. The allowance for credit losses represents 1.2% of total loans at March 31st, 2022, compared to 1.36% at March 31st, 2021. This decrease in coverage was mostly attributed to the reduced uncertainty around the economic impact of the COVID-19 pandemic on our loan portfolio. With that said, let me allow Rob to lead us through our first quarter performance in more detail.
spk03: Okay, thank you, Lou, and good morning, everyone. In looking at our financial statements and by many measures, U.S. Century Bank had another great quarter. Let me highlight a few items on the next couple of pages before getting into specific details. First, total assets are just under $2 billion. Loan balances are $1.3 billion. Deposits at $1.7 billion. We continue to put excess liquidity to work by growing our loan book, and our securities portfolio remains above $500 million. Specifically, at quarter end, we had 514 million in securities, and 122 million of those securities are classified as held to maturity or HTM to protect tangible book value in a rising rate environment. While our equity walked back to 192 million, it is being driven by the mark-to-market accounting in our securities portfolio. Had we not made the move last year to move securities from AFS to HTM, we would have seen it decrease another $8.7 million. Net interest income increased by $303,000 or 8.7% annualized compared to the last quarter and $1.9 million or 15.3% compared to the first quarter of 2021. We booked no provision expense for the quarter and expenses were up slightly from the prior quarter with a few new hires and a one-time expense related to the formation of the bank holding company. More on this in a bit. Net income was $4.9 million, or $0.24 a share, and I will point out that this quarter contained three items that either happened infrequently or are considered one-time items. I'll speak to each of them as we advance in the presentation, but in summary, we collected $161,000 in default interest from a prior client of the bank. Expenses contained $181,000 in legal expense associated with formation of the bank holding company. And finally, we recorded $300,000 in additional tax expense related to a catch-up entry to our DTA. Adjusting our net income and EPS for these items, we would have reported $0.26 for the quarter. While I'm not a big fan of, quote, adjustments, I know our analyst community take these into consideration, so I wanted to point them out for you. Also, I'll remind you that EPS comparisons to prior year will be difficult and not relevant due to the multitude of items we did to clean up our capital stack throughout 2021. Let's take a quick look at our key performance indicators. In terms of soundness, our credit metrics remain pristine. A slight recovery on the charge-off line and our loan loss reserve coverage ratio has come down to pre-pandemic levels of 1.20%. In terms of profitability, return on average assets was 1.03% for the quarter, and return on average equity was 9.75% for the quarter. Our NIM expanded slightly from the prior quarter to 3.22%, and our efficiency ratio was 58.88%. Last, our tangible book value per share came down to $9.60, which is reflective of the negative mark in OCI I referenced earlier. With that overview, let's look at our loan book. We separated out our core loans from Triple P loans, so you can see how each component piece is working. While the Triple P loans are going through the forgiveness process, our core loan book grew 69 million, or 25.2% annualized compared to the last quarter, and 217 million, or 22.7% compared to the first quarter. Loan yields were up three basis points from last quarter. Fees came down five basis points, and our loan coupon was higher by eight. In terms of new loan origination yields, this quarter we saw yields above 4%, and with interest rates rising, we feel the loan coupon will continue to climb. So with that, let's look how Triple P fees impacted our numbers. Triple P fees were steady at $1 million this quarter. We have 500,000 of unrealized Triple P fees remaining at quarter end, so you can expect this government-sponsored program to slowly come to an end. Also, we have 25 million of Triple P loans remaining on our books at quarter end. That's down from 42 million from the prior quarter. We expect most of the remaining Triple P loans to be forgiven over the next three months. With that, let's move on to deposits. Deposits continue to grow despite dropping rates slightly or holding them steady. Average deposits increased 88.2 million or 22.9% annualized compared to prior quarter. and 306.6 million or 22.8% compared to the first quarter of 21. We have no wholesale deposits and DDA average deposits grew 22.4 million or 15.2% annualized compared to prior quarter and 144 million or 29.9% compared to the first quarter of 21. Also, our deposit costs came down one basis point with the first 25 basis point rate increase from the Fed. As it relates to rate increases and given our excess liquidity, I would expect us to be able to slow walk any rate increases on the interest-bearing deposits and would expect slower overall deposit growth if we have clients seeking the highest rate in town. We believe our deposit base is relationship-oriented, granular in nature, and 38% of deposits are in DDA accounts, demonstrating that U.S. Century Bank is the primary bank for many of our clients. So let's see how this impacted our margins. Net interest income increased by $303,000 or 8.7% annualized compared to last quarter and $1.9 million or 15.3% compared to the first quarter of 2021. Net interest income growth is being driven by lower deposit costs and higher interest income generated by a larger loan and investment portfolio. Cash balances and securities continue to make up a third of our earning assets. Our ending cash balance at quarter end was $94 million, which will allow us to absorb the seasonality of tax season in April, where we see some liquidity come off our clients' balance sheets, and we'll be in a position to deploy excess liquidity into loan demand, which, as Lou mentioned, remains robust. Our NIM expanded to 3.22%, but if you exclude the impact of the triple P loan fees, we were basically flat. With that, let's see how sensitive our balance sheet is to interest rate movements and what you may expect in the coming quarters. While we already had a 25 basis point rate hike, like the rest of the world, we are expecting more rate increases to come this quarter and throughout 2022. We believe U.S. Century Bank is positioned well for this new rate cycle. First, our balance sheet is asset sensitive, which means our assets will reprice faster than our liabilities. 42% of our loan portfolio is fixed rate, while the remaining 58% is variable rate. Variable rate loans provide protection against rising interest rates. Variable rate loans are indexed to Prime, Constant Maturity Treasury, or CMT, and LIBOR. In terms of repricing, the bank will reprice 46% of the variable and hybrid rate loan portfolio within the following year. In fact, in the next six months, we have $258 million of loans repricing with a weighted average coupon of 3.87%. As it relates to our securities portfolio, we expect to receive $45 million from prepayments and maturities, or approximately 9% of the total portfolio this year. Currently, our portfolio is invested at a 185 yield. Effectively, we can reinvest these cash flows at 3%, which will result in an additional $515,000 of interest income annually. were deployed into new loan production at much higher yields. All positive scenarios for NIM and net interest income. According to our ALM model static run, the bank's net interest income will increase slightly with a parallel rate shock in year one. A parallel rate shock assumes all points of the curve move in a parallel fashion. This is highly unlikely. In fact, the forward rate curve is showing a much flatter yield curve where the Fed will lift the front end or short-term rates with the belly of the curve meaning points from 3 to 10 years remaining at current levels or rising slightly. This makes forecasting our NIM and the impact to our net interest income challenging the forecast, add in the fact that the PPP loans will soon be disappearing, and we have more complexity. For the short term, I would guide you to model a modest increase in our NIM with rising rates offset by the negative impact of declining PPP loan fees. I would also model higher NIM by the end of 2022 and into 2023, from where we are today given the current economic and rate outlook. We will closely monitor this and update you on our next call. So let's move on to non-interest income. We had a solid quarter of fee generation with SBA producing 334,000 in fees related to SBA loan sales, and we collected 161,000 of default interest from a prior client of the bank. I believe this action, which is the second collection with default interest rate in the past year, speaks to our ability to properly attach collateral and covenants with penalties in the event of default. More on credit in a bit. With fees straightforward, let's take a closer look at expenses for the quarter. While our total expense base moved up to $9.6 million for the quarter, we had a lingering legal bill for the formation of the bank holding company. Despite this one item, our expenses and efficiency ratio were in line with the guidance we provided you last quarter. While we detailed line item explanations, I would say that we are starting to see some signs of wage inflation, including exception requests for merit increases above our target, new hires coming in with a higher salary than those leaving the role, specifically in technology roles, and the acquisition cost of new hires is also going up. Having said all this, I believe you can expect the near-term quarterly run rate to be around $9.6 million. slightly higher depending on our ability to hire new revenue producers. Again, I would reiterate, interest in team liftouts and the dislocation happening in our market. With that, let me turn it back to Lou to speak about our business verticals. Thanks, Rob.
spk05: Collectively, these five business verticals closed Q1 2022 with a combined $364 million in deposits and $237 million in non-CRE loans, further diversifying the loan portfolio. Four of these five business lines were developed and introduced since the recapitalization, primarily as deposit aggregating strategies. Still, as can be seen, diversified non-CRE loan growth has been achieved, generating ongoing deal flow. The JurisAdvantage program, a deposit gathering business line focused on developing law firms and their partner owners with concierge-level service, commenced operations in 2017 and expanded its focus to include other professionals, including doctors and CPAs. Deposits for the JA program increased 24% to $149 million since Q1 2021, presently servicing 54 small and mid-sized law firms. Also in 2017, our community association program saw an 8% growth in deposits and a 26% growth in loans over the past quarter. HOA deposits tend to be somewhat deposit sensitive, and we offer service over premium pricing to build a portfolio. Nonetheless, we are servicing over 8,000 doors and 298 association relationships. Launched in mid-2019, our SBA 7 loan program generated $2.2 million in non-interest income in 2021. In Q1 2022, we closed $4.4 million in new production, generating $334,000 in fee income. At present, the second quarter pipeline has $3 million approved and scheduled to close with $8.2 million in underwriting, having over $900,000 in net fee potential. All loans are tracking to close. Our global banking group grew loans 18% to $67 million compared to the same period last year. then relief deposits increased a modest 2% for the same period, closing Q1 2022 at $141 million. Servicing 23 bank clients throughout the Caribbean and Central American Basin by offering foreign corresponding bank services, the department generates strong wire transfer and service fees. Let's take a look at our new yacht business. Targeting high net worth clients in one of the most active yacht markets in the country, This new vertical officially launched January 2022. The bank closed its first transactions this past quarter, totaling 3.8 million, and we have an active pipeline of over 16 million, of which 9.3 million are already approved and scheduled to close. As expected, over 60% of the loans being processed are Florida residents, giving us the opportunity to further develop and cross-sell these new clients. When considering closed and or closed, loans approved, we are at 40% of our first year goal in the first four months of 2022. Rob?
spk03: Sure. Our allowance for credit losses was 1.2%, and that's down from the prior quarter. The allowance excluding PPP loans was at 1.22%, down from prior quarters, but in line with pre-pandemic levels. There are no loans under deferment due to COVID-19. We have no OREOs, and no non-performing loans. I would like to mention the team's efforts around CECL and state that our progress is on track with a new software being implemented. We intend to have preliminary model results this upcoming quarter. We'll provide you updates as we progress throughout 2022. For modeling purposes, I believe a 1.20% coverage ratio is a safe assumption moving forward. With credit straightforward, let's look at our capital metrics. As you know, 2021 was quite an active year as it relates to our capital simplification efforts. These efforts continued in the fourth quarter of 2021 as we exchanged all remaining B shares for common A shares and we formed a bank holding company which provides more efficient access to capital while allowing flexibility for growth and acquisitions. As mentioned previously, the board approved a share repurchase program in January of 2022 for 750,000 shares or approximately 4% of our total shares outstanding. I would emphasize the repurchases will be opportunistic in nature and to provide support in the event of stock market volatility. We did not repurchase any shares in the first quarter of 2022. With capital straightforward, I'll turn it back to Lou for some closing comments.
spk05: Thanks, Rob. Our final slide lists eight powerful takeaways, which I believe underscore the opportunities of the South Florida market as well as its strong potential. Florida is one of the fastest-growing states, as is the Miami-Dade MSA, which was recently listed as one of the top 10 fastest-growing in the country. The powerful dynamics spurred by a growing population, favorable weather, lower taxes, and a business-friendly environment has truly charged the area's growth in this post-pandemic era. These factors, along with continued M&A activity, add to the scarcity value for strong, performing, and well-positioned franchises. The path chartered by this management team and board speaks us to the discipline, experience, and capacity which led a troubled, underperforming bank to a successful IPO in six short years. Focus on delivering robust organic growth, maintaining strong asset quality, and ever-improving performance and profitability. This team is focused and excited and committed on delivering consistent results. Thank you. So, operator, you can open up the line for Q&A.
spk00: Thank you. Ladies and gentlemen, if you have a question at this time, please press the star, then the one key on your touchstone telephone. If your question has been answered or you wish to remove yourself from the queue, please press the pound key. One moment for our questions. Our first question comes from the line of Steven Scotton with Piper Sandler. You may proceed with your question.
spk01: Hey, good morning, everyone. Thanks for the time. Morning, Stephen. I guess maybe just at a very high level, if you could touch on kind of when you think about the business model today, obviously everything seems like it's going in the right direction. Results were great. Credit looks like a complete non-issue today, at least, which is great. How do you think about those strategic priorities as you continue to move the bank forward? Where do you think the one or two most important endeavors are for the bank to continue this progress?
spk05: Well, continuing to capitalize and bringing in the right people, especially on the production area, is one of them. And to that point, we've been talking to some, I think, very talented individuals which are looking to join us. We have our focus on the Broward market, as I have reported before, and I believe that I will shortly be be reporting some good news up there. Our analytics of Broward have been very, very good, considering we only have one location up there. Our focus has always been to follow our clients, and we've done that very successfully over the last number of years. I think our last analysis, we had over 800 client relationships, business relationships up in the Broward and Palm Beach areas, so we are going to continue focusing along those lines. Our loan portfolio becomes ever more diversified as we have been adding the business lines that I reviewed. I remember years ago when everything seemed to be commercial real estate. If you look at the active pipeline by asset class, it is significantly diversified with CNI, SBA, owner-occupied, yacht loans, multifamily loans. So we're very pleased with that progress, and we continue to focus on diversifying the portfolio and bringing in fully banked relationships. We continue making investments in technology, and I will be prepared in future calls to share that with a group, but I think that this is going to bring us greater efficiency and greater capacity to service our clients.
spk01: Okay, great. Very helpful. And then I guess if we are thinking about, the efforts on the new hire front, and I know I think you said three new lenders, up to 14 active lenders now, and then in active discussions with some other teams. How do we think about just how many people you all would consider adding, obviously if they're the right people, and then how you manage the expense build around that or maybe any numbers you have about, you know, earn backs on the investment in those new people loan books you'd target them bringing over, any sort of incremental detail about how you think about that new hire activity?
spk03: Yeah, hey, Steven, it's Rob. I'll take that one. You know, certainly, you know, there's some opportunities that come across our way. They're not always the right ones, but, you know, right now what I would say is that we're always on the look and we're willing to hire very well-qualified and demonstrated execution on revenue producers. So, you know, Lou and the team know a lot of people in the market And, you know, sometimes people will leave their existing place for a variety of reasons. And, you know, I would say that we are striving to keep our efficiency ratio under a 60%. And at times, you know, we may have to hire, you know, a couple people. I don't think you're going to see us hire like 10 people, but you could see us hire two to three at a time in a quarter. And we will hire them and the expectation on the production levels are well discussed with both Lou, our chief lending officer. They typically meet with our credit team to understand the credit profile and what's expected of them. And we typically model that out. So in year one, we basically are breaking even and making money within 12 to 18 months if they hit their goals accordingly. So that's the short answer. But, you know, we have opportunities in the market, and we'll always look for demonstrated revenue producers.
spk01: Great. Very helpful. And then just maybe last thing for me, I mean, obviously we're looking at a higher rate environment. Things are improving, should improve on the NI front. I'm just wondering if there's any focus on the fee income side of the business at all, if there's any lines of business you guys would look to add on the fee side of things or any desire to diversify the revenue streams at all. Maybe not the time to do that, I don't know, given the rate outlook, but just curious how you're thinking about that.
spk05: Well, I think we've done a lot of activity in diversifying the business lines. Again, as I shared with you, one of the ones that we're really focused on is the SBA 7A. We're very excited. As we mentioned, that initiative launched in 2019, and it's doubled year over year. Last year, generating over $2.2 million, and this year our target goal is well in excess of $3 million. We are focused on that one, have been training our lenders to source and to understand these deals, and they've all really stepped up to the plate. So we believe we're going to have great activity. Treasury management is another area. We just launched this past year a new treasury management program model and we believe that we're going to be doing very well. Again, being a commercially oriented bank, our treasury management teams line up with their commercial lending counterparts and they source not only new customers but the entire portfolio that we have. So again, we are excited about seeing good traction in that area.
spk01: and congrats on the continued success. Thanks, Steven.
spk00: Our next question comes from the line of Brady Gailey with KBW. Please proceed with your question.
spk04: Hey, thanks. Good morning, guys. Brady, good morning. So 30% loan growth is higher than I think your guidance previously of high single-digit to low double-digit. I know quarter-to-quarter can be volatile. What's the update on how you guys are thinking about loan growth going forward?
spk05: I still think we're sticking to our low single or high single digit, low double digit. We are cognizant that that level is not going to be always in play, but we are bullish on the pipeline that we built. This is something that we tracked on a weekly basis in constant conversations with our senior lending officer, our chief credit officer, and the lenders. There's constant interaction with them. Management is fully aware of the business opportunities that are being lined up and are coming in. And I believe that at a high single digit, low double digit is what we're focused on. But the demand is clearly there.
spk04: Okay. And with that level of loan growth, and with the stock at, you know, 145 of tangible book value, do you think the buyback, you know, you're not active in the buyback at this point?
spk03: Correct. You know, I think it's more opportunistic. We want our investors to know that we're going to stand behind the stock. And at 145, you know, You know, we weren't active in the coming quarter. Now that can change. You know, sometimes as we build earnings and our capital, you know, our stock is one of the better investments. But right now we see organic loan growth as the opportunity in front of us, and that's our priority. Okay.
spk04: And, Rob, it sounds like there is a little bit of noise in the deferred tax asset. I think you mentioned the $300,000 catch-up. Where did the DTA finish at the end of the quarter? What was the dollar balance?
spk03: Yeah, I'll get that. I've got that coming in. Yeah, there was a little bit of a catch-up entry on the DTA, so the NOL portion came down. The NOL portion, which is the big portion of it, came in around $28 million, and I think the entire DTA is probably right around $38 million. Okay. And that's usually detailed out in our queue that we will have out there here in a few weeks.
spk04: Yeah. So despite earning money, it looks like the DTA was about $34 million at year-end. So it's up a little bit on a linked quarter basis?
spk03: Yeah. And I can get you more detail on that. I don't have the specifics in front of me. But the big part was on the OCI piece. Gotcha. Okay.
spk04: All right. Great. Thanks, guys. Thank you.
spk00: And our next question comes from the line of Michael Rose with Raymond James. Please proceed with your question.
spk02: Hey, good morning, guys. Thanks for taking my questions. I just wanted to dig into the NIMH commentary a little bit and just wanted to clarify that the outlook is off the the reported NIM at 322, and I think you said that's going to be modestly higher in second quarter and then end the year, you know, higher than that. What does that assume for rate hikes for this year? And then also, you know, does it assume that the, you know, securities portfolio is relatively flat? I heard your comments earlier that, you know, you have $45 billion from here that'll, you know, you know, mature and then you'll reinvest it at higher rates. But just given the increased cash position queue on queue, would you expect to, you know, potentially grow the book or is it just a mix shift from, you know, and using that funding to fund loan growth that's rolling off the bond book? Thanks.
spk03: Yeah, no, it's a great question. And, you know, this area can be very complex when we're, you know, modeling it on a forward basis. I would say first you've got the triple P fees that are kind of winding down, you know, we've been steady about $1 million a quarter, and we only have $500,000 left. So one, that's going to be lower. So that's going to work against us. Next would be, you know, everyone is expecting rate increases. There's varying, you know, differences, but, you know, we're supposed to get, what, 50 basis points here in the near term, and that's only going to help us. We also have about $94 million at quarter end of cash sitting on the balance sheet. And with good loan growth, we're originating loans today higher than our average loan book. So we think, A, our loan yields are going to increase. We're going to slow walk the deposit increases, if any at all, because we have so much liquidity. So that alone should help us on that. between the difference between our loans and deposits. And then, as we mentioned, securities will continue to have cash flow products that roll off. We can either A, invest that into higher-yielding securities. Today, securities are at 185. We can easily reinvest that at a similar type duration at 3%. So that's an opportunity. So I would expect very, very near-term. There's probably one negative and a whole bunch of positives I would expect that to be slightly positive for the upcoming quarter in Q2, but certainly for the remainder of 22, I'd say that's positive, and into 23 as well. We've heard six rate increases. You take the forward curve, and again, the forward curve, if you pull that off of Bloomberg, it's really a flatter curve. It's not a parallel shock. It's a flatter curve, which means the Fed's going to raise on the front end. I would guide you to very slight increases on the NIM in the second quarter, but maybe that continues to rise through 22 and 23, if that helps you out some. I know it's difficult.
spk02: No, it is, and that's great color, Rob. I appreciate all the moving parts here. And, Lou, just on some of the – I appreciate the color on some of the verticals. You know, it did look like the yacht loans were down queue on queue, though, despite some origination. So was that kind of a pay down or two? Or I assume that's it, but we're just looking for any color.
spk05: No, that is correct. I think I believe it was about $11 million in pay downs that we had from the original tranches that we purchased in July or was it June, June and August of last year. Remember, this is a short duration project. book. It's proven to be so, but that's part of why we like it. So you're looking at a 20-year fixed rate loans to very wealthy individuals that have a maturity or a duration, let's say, of about 36 to 42 months. So we're going to be, you know, we believe we're going to beat our goal for 2022. And the good thing is that we're getting to know these customers. The very first one that closed with us, requested to meet with me, and we ended up in a two-and-a-half-hour meeting. He opened accounts and is going to be transferring some business now in the second quarter. So if we can continue doing that and leveraging that opportunity, we'll do it all day long.
spk02: That's great, Collin. Maybe just one final housekeeping question for me. So, Rob, if I back out the $300,000 tax – item this quarter. It looks like the tax rate was, you know, around 23%. Is that what we should be using going forward? Yeah, I would say a little higher, maybe 24 and a half. Perfect. All right. Thanks for taking my questions. Thank you, Mike. Thank you.
spk00: Thank you, and this concludes our question and answer session. Ladies and gentlemen, thank you for participating in today's conference. This concludes today's program. You may all disconnect. Everyone, have a great day.
spk05: Thank you very much.
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