United Bancorporation of Alabama, Inc.

Good morning, everyone. I appreciate, once again, y'all taking the time out of your day to join us here for a few minutes as we recap some events from Q1 and give you guys an opportunity to kind of hear what's going on at United Bank. So at the end of the first quarter, we reported net income of $4.8 million. That is an earnings per share of $1.42. That is compared to $6.3 million and $1.75 million for the same period last year. The net interest margin continues to be right on the money, right where we have been reporting at 456, strong and stable, right where we were the prior year and the most recent quarter as well. So pricing remains disciplined. And as we still kind of work in an uncertain environment, we've done a pretty good job of keeping that margin where we would like to see it. Alongside of the returns that we've just reported, and David will speak to this in just a moment, we did make a $2 million provision during the first quarter, and David can get into the specifics of that. And then lastly, reporting a 155 ROA. So all in all, a good solid quarter, good start to the year, lots to do and lots going on around here that we'll get into as the call goes on. But I guess with that, I'd like to turn it over to David and let him talk about the loan book just a little bit. Sure.

Good morning, everyone. We appreciate you tuning in. So Just going to go through some highlights on growth initially. Year-over-year growth from last year to this period was 6.9%, or right at $57 million. So pleased with the growth. Q1, a little slower than we would have liked, but we're hitting our stride again. Q1 growth was 1.3%, or $10.9 million. So still showing pretty good pipeline, as we've talked about previously on these calls. Our affordable housing group continues to do well. We've seen some traction with our new markets group as well, continuing to have good pipeline opportunity. Growth for the first quarter, again, multifamily, as I just mentioned. And also, we are in the planning season, you know, initial stages for ag production. So, we saw some of our farmers draw down on their ag production loans in Q1. A lot of those guys have land rent that becomes due. They have various and sundry, you know, chemicals and seed costs that they acquire. So, they draw down on those production lines. And then saw some modest growth in C&I lending for the quarter. So, you know, multiple lines of business showing okay growth. And as I mentioned, good pipeline looking forward. Loan-to-deposit ratio has improved. So we've been kind of bouncing around that 80%. So we ended the quarter at 81.38%. which is a good target. Pleased with that number. So kind of get into the non-performing. So I know you guys may have some questions about that side. So non-performing, we're down a little bit between Q4 of last year and Q1. We dipped down to 15.3. That was driven by the sale of a piece of Oreo. So we have our old paste branch that we had been holding in oreo for about two or three years now so we consummated the sale the end of uh of q1 so good to good to move that over and convert that to cash for the bank uh non-accruals did show a slight increase that was driven by a timber related relationship so it's a legacy relationship we've been working through uh some challenges that went over into non-accrual um I feel like we're in good shape there. We'll continue to work through that relationship. As I've talked about in the past, those non-accruals are concentrated primarily in three large relationships. You know, one was a legacy participation, one is related to manufacturing, and then another related to farming. Not seeing a lot of consistency in terms of one market segment. There seems to be no systemic issue we're seeing there, just kind of the same that we've talked about in the past, no correlation. Kind of as a result of those non-accruals and non-performings, the Texas ratio is at 7.57%. And then one of the things I did want to talk about for just a few minutes for you all was the allowance for credit loss. As Mike mentioned a moment ago, we did put an extra $2 million, about 2.3 in the reserve in Q1 that bumped up our allowance to 1.66% or right at $14.6 million. So that is an increase up from, from 12.3 at the end of the year. And, One of the largest credits we have that we're working through resolution, I mentioned the manufacturing facility, has exiting bankruptcy first quarter, and we're working through, that's going to actually come into, there's two parts to that credit. Part of it will be related to new markets. Part of it will be related directly to some real estate debt. So we'll be, you know, We have an eye towards resolution for that credit, and that's the reason for the increase in the reserve. So we're confident right now with where we have the reserves, particularly related to that credit. We feel like we're well covered for the write-downs we'll need to take for it and be working through a resolution here pretty soon for that. Other item I did want to mention to you all is past dues were up slightly, a good chunk, at the end of the quarter. That was primarily due to one large relationship of $5 million that carried it month in. Please do announce that that is actually current now. There's a tenant for that facility, so there's operating cash there. That was a... a industrial warehouse site that had a tenant back out at the last minute, no reserves there in order to carry the interest. So they were negotiating a lease right at the end of the quarter, hoped to have that initial payment coming in, and that didn't actually happen until the first part of Q2. So we resolved that large credit, and it's in good standing now. So Lots of work, good growth, some resolution on the backside with special assets we're working through. But I feel like we can start pivot in Q2 and start focusing on growth and concern less about some of those resolutions and credits. Okay. Liam, we'll turn it over to you.

Sure. Thanks so much. So on the securities front, we have not been very active in the investment portfolio, so not really much change there. The book value of the portfolio is just over $300 million, with a book yield just shy of 3.25%. The weighted average life is about seven years and duration just shy of five years. So that's kind of what the portfolio is looking like. It's providing cash flow for us currently, as well as some yield. Switching over to deposits, deposits continue to be flat on growth. just over a billion dollars. You know, we are starting to see, well, we've had some competition with regard to rates as we kind of stay in this slightly elevated, not sure if we're going to see a decrease in rates later on this year, but that's allowed us to still offer some attractive rates, which is starting to yield some results for us. So we're starting to see some growth on the deposit side. And all of that, of course, is providing additional liquidity for securities and deposits for us at the end of the quarter, our cash to asset ratio was 11.41%. You know, maintaining liquidity is continuous and always will be a priority for us as we manage deposits and deposit concentrations. And that's really all on that front. So we'll hand it over to Mike.