• Earnings Per Share (EPS): $0.34 per diluted share, up from $0.14 in Q4 2023.
• Net Income: $6.9 million, an increase of $4.2 million or 153.7% compared to Q4 2023.
• Average Deposits: Increased by $225 million or 11.8% compared to Q4 2023.
• Average Loans: Increased by $260 million or 15.3% compared to Q4 2023.
• Net Interest Margin (NIM): 3.16%, up 13 basis points from the prior quarter.
• Return on Average Assets (ROAA): 1.08% for Q4 2024, compared to 0.48% in Q4 2023.
• Return on Average Equity (ROAE): 12.73% for Q4 2024, compared to 5.8% in Q4 2023.
• Efficiency Ratio: 55.92%, adjusted to 51.41% excluding nonrecurring expenses.
• Tangible Book Value Per Share: Decreased by $0.09 to $10.81.
• Allowance for Credit Losses: Increased to $24 million, representing 1.22% of the portfolio.
• Nonperforming Loans: $2.7 million, representing 0.14% of the portfolio.
• Quarterly Cash Dividend: Doubled to $0.10 per share, payable on March 5, 2025.

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Release Date: January 24, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• USCB Financial Holdings Inc (NASDAQ:USCB) reported a significant increase in net income, reaching $6.9 million or $0.34 per diluted share, a 153.7% increase compared to the fourth quarter of 2023.
• The company achieved a record year with net interest income before provision increasing by $5 million or 34.7% compared to the fourth quarter of 2023.
• Average deposits increased by $225 million or 11.8% year-over-year, driven by deposit-focused business lines targeting private clients, attorneys, and medical professionals.
• USCB Financial Holdings Inc (NASDAQ:USCB) doubled its quarterly cash dividend to $0.10 per share, reflecting strong earnings power and capital levels.
• The bank's net interest margin (NIM) improved significantly from 2.62% to 3.16% in 2024, showcasing effective management of deposit costs and loan yields.

Negative Points

• Loan coupon rates decreased by 7 basis points compared to the prior quarter, indicating potential pressure from market competition.
• The tangible book value per share decreased by $0.09 to $10.81, impacted by a higher AOCI interest rate mark and increased share count.
• Nonrecurring expenses negatively impacted fully diluted earnings per share by $0.04 for the quarter.
• The allowance for credit losses increased to $24 million, with a provision related to a consumer loan relationship involving repossessed assets.
• The time deposit portfolio, representing 15% of total deposits, faces repricing challenges, potentially impacting future deposit costs.

Q & A Highlights

Q: The yields on new loan production were down in the fourth quarter. Is this due to increased competition impacting pricing? A: Luis De La Aguilera, CEO, explained that it's a combination of both lower rates and increased competition. However, they focus on pricing where they want to be and will pass on opportunities that don't align with their growth strategy.

Q: How do you think about deposit growth in the year ahead, especially with increased competition? A: Robert Anderson, CFO, stated that deposit growth is aligned with loan growth, and they expect this trend to continue. The challenge is to have strong bankers who can produce on both sides of the balance sheet.

Q: Can you provide details on the maturity schedule and repricing dynamics of the time deposit portfolio? A: Robert Anderson, CFO, mentioned that about $180 million will mature in the next year. They are pricing these lower and expect the book to come down over time, especially if there are rate drops in 2025.

Q: Are there any concerns about association deposits given the challenges from hurricanes and insurance in South Florida? A: Luis De La Aguilera, CEO, is bullish on association banking, focusing on professionally managed associations with strong credit qualifiers. He believes these verticals will continue to grow.

Q: What are the hiring plans for 2025, and how does the market look for competition in lending hires? A: Luis De La Aguilera, CEO, stated that they are properly staffed for 2025 plans but remain opportunistic for hiring when individuals become available. They feel comfortable with current staffing levels.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.