USCB Financial Holdings, Inc.

Good morning, everyone, and welcome to the Q1 2026 USCB Financial Holdings, Inc. Earnings Conference Call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star and then one on your touchtone telephones. To draw your questions, you may press star and two. Please also note today's event is being recorded. At this time, I'd like to turn the conference call over to Lou de la Aguilera, Chairman, President, and CEO. Sir, please go ahead.

Good morning, and thank you for joining us for the USCB Financial Holdings First Quarter 2026 Earnings Call. I'm Lou de la Aguilera, Chairman, President, and CEO of USCB Financial Holdings. Joining me today are Rob Anderson, our Chief Financial Officer, and Bill Turner, our Chief Credit Officer. Rob will walk you through our financial results in detail and Bill will review credit quality and portfolio trends. We are very pleased to report on another record quarter highlighted by strong core earnings, disciplined balance sheet execution, and our continued focus on maintaining strong credit quality. For the quarter ending March 31st, 2026, the company generated net income of 9.4 million or 51 cents per diluted share on a gap basis. On an operating or adjusted basis, diluted EPS was 47 cents, operating ROAA was 125, ROAE was 1592%, and an efficiency ratio of 52.36%. These results reflect consistent execution of our long-term business model focused on discipline growth, prudent risk management, and sustainable profitability. At a high level, total assets reached 2.8 billion, up 6.3% year over year, Loans increased 10.1% year-over-year from 2.2 billion, driven by continued strong diversified production. Deposits grew 8% year-over-year to 2.5 billion, supported by specialized business verticals, as well as well-diversified deposit base. Our deposit-focused business verticals, namely association banking, a private client group, and correspondent banking have delivered have steadily grown to 30% of deposits, or $747 million as of March 31, 2026, a $62 million quarter-over-quarter increase. Net interest margin expanded to 3.27%, up from 3.1% the prior year, reflecting effective asset deployment and improving funding costs. Importantly, This growth has not come at the expense of credit quality. Non-performing loans remain exceptionally low at 0.16% of total loans and net charge-offs were effectively zero for the quarter. Our first quarter's performance demonstrates the benefits of actions we have taken over the past several quarters to enhance earning power and balance sheet resilience. Loan production was strong during the quarter with $188 million in gross loan production, over half of which occurred in March positioning us for continued momentum into the second quarter. While the timing of production limited full quarter earnings contribution, the pipeline supports future net interest income expansion. On the funding side, we continue to see the benefits of our specialized deposit franchises. Average deposits increased by nearly $212 million year over year, while deposit costs declined to 2.2%, improving by 29 basis points from the first quarter of last year. Capital remains a key strength of the company. During April, our board declared a quarterly cash dividend of 12.5 cents per share, reflecting confidence in our earning durability and capital generation. Tangible book value per share increased to $12.23, an 8.9% year-over-year increase, even after absorbing the market-related AOCI impacts. Overall, this was a balanced quarter with strong earnings, solid growth, stable margins, and strong credit quality, all while maintaining conservative capital levels. The following page is self-explanatory, directionally highlighting nine select historical trends since recapitalization. Consistent, efficient, profitable performance based on conservative risk management is what a team focuses on consistently delivering. Noting this overview, I'll now turn over the call to Rob to review our financial results in greater detail.

Okay. Thank you, Lou, and good morning, everyone. Looking at pages 5 and 6, I would describe the first quarter of 2026 as a highly successful quarter for USCB. The team posted very solid results, which I'm proud to share with you today. The balance sheet, specifically the loan book, continues to grow within our stated range of high single to low double-digit growth. Deposits increased this quarter, outpacing loan growth and ensuring sufficient liquidity for future lending. Credit remains solid, and our profitability ratios came in line with internal projections. While we made 51 cents on a gap basis, the company recognized a 619,000 income tax benefit in the quarter due to an adjustment of the deferred tax asset relating to 2025. Adjusting our gap figures for this one item, you'll find the operating or adjusted numbers on page 6. This includes operating return on average assets of 1.25%, operating return on average equity of 15.92%, efficiency ratio of 52.36%, operating diluted earnings per share 47 cents, NPA to assets of 0.13%, allowance for credit losses stable at 1.16%, total risk-based capital at 14.09%, and last tangible book value per share at $12.23. So with that overview, let's discuss deposits on the next page. Average deposits for the quarter totaled approximately $2.4 billion, representing an increase of $212 million year over year. On a linked quarter basis, average deposits declined by $26 million, and that sequential movement requires some context. Late in the fourth quarter, a large commercial plant withdrew approximately $130 million, which reduced our average balance deposit entering the first quarter. Importantly, this was anticipated and managed outflow. And at the end of the period chart demonstrates, we have since recovered from that decline. On an end of period basis, total deposits increased by 149 million during the quarter, highlighting both the resilience of our franchise and our ability to respond quickly to large discrete client movements. Equally important is the deposit pricing. Total deposit costs declined eight basis points quarter over quarter to 2.2%, which played a meaningful role in allowing us to keep the net interest margin stable. With ongoing rate volatility, we anticipate deposit costs will stay near current levels. Although some competitors are offering higher rates, a relationship-driven deposit base should ensure stable pricing and funding. So with that, let's move on to the loan book. On an average basis, loans increased $46.8 million quarter over quarter, which equates to an 8.9% annualized growth rate. Year over year, average loans grew 9.6% and well within management's expectations. Net loan growth at the end of the period was $52 million, showing strong production momentum, and two key dynamics stood out on this. First, a significant portion of our loan production occurred late in the quarter, and second, loan payoffs occurred early in the quarter. This timing is visible in the chart and translates to a lower earnings impact in the quarter. More specifically, on page 9, gross loan production totaled $188 million during the quarter, with $114 million, or 60%, closing in March. Additionally, SOFR rates were lower for most of the quarter, further influencing loan yield metrics. Correspondent banking loans represented 30% of quarterly production and carried a new loan yield of 5.13%. Excluding this segment, the weighted average yield on the new loan production was 6.2% for the quarter. It's important to remember that these correspondent loans are short-term in nature, typically 180 days, tied to SOPR, and serve a strategic purpose by adding asset sensitivity and optionality to the balance sheet. Additionally, these banks have over $250 million in low-cost deposits with significant wire volume, a very profitable business vertical for USCB. Looking ahead, we expect new loan production yields to remain around these levels. Turning to page 10, net interest margin was flat at 3.27% for the quarter. Despite successfully lowering deposit costs, overall margin was impacted by lower-than-expected loan interest income, largely driven by timing and volatility rather than structural pressure. Specifically, interest income was constrained, as mentioned before, by a combination of factors. Loan closings that occurred late in the quarter elevated payoffs early in the period and lowered SOFR rates throughout much of the quarter. These pressures were partially offset by improvements in deposit pricing and higher yields in the securities portfolio, which helped stabilize our margin. Importantly, we have now expanded in M quarter after quarter, and the underlying trajectory remains intact. As recently originated loans season into earnings, we expect incremental improvement in interest income, which should support a very modest margin expansion later this year. That said, ongoing rate volatility may limit the to which deposit costs can move material lower from here, and our focus remains on disciplined pricing, balance sheet mix, and execution, all aimed at protecting the margin while positioning the franchise for improved profitability. So with that, let me pass it over to Bill to discuss asset quality.