USCB Financial (USCB) 27 Oct 232023 Q3 Earnings call transcript

Thank you for standing by, and welcome to the Q3 2023 USCB Financial Holdings, Inc. Earnings Conference Call. I would now like to welcome Luis de la Aguilera, Chairman, President and CEO, to begin the call. Luis, over to you.

Good morning, and thank you for joining us today for USCB Financial Holdings Third Quarter 2023 Earnings Call. the our Officer, is provide X. Ben of bank's reviewing and Rob an today you the Credit what Chief Pazos, performance, me QX on CFO, highlights Anderson; overview can With see of Slide highlights who will

we about earnings, am the industry. soundness the highlight third safety pleased following earlier quarter loan banking rebound and in growth our concerns report to As I the this year of

the volume third production, doubling The saw more in $XXX the loan new of quarter million quarter. previous than

enhance commitment in both our in review Our QX new margin the will X% net increase exceeding to interest loans production is and weighted portfolio production on we consistent evident average. yield. Shortly, average coupon this in

of growth, trade. quarter. restructure XX% for we including gain NIM to banking. Throughout X.X%, portfolio out [ reflects reducing nonrecurring business small onetime We since the adaptive our financial non-CRE loans portfolio association investments. Despite which bolstered sized fortifying lending, the took quarter, with higher this these optimize the various diversification bank business early performance. new and This loan particularly and spread asset the us return numerous life This a beginning bank-owned generated we allow SBA to year a CRE separate over to by the decrease the of this securities loss offset which September's XX% BOLI loans security NIM production are the quarter, investment opportunity in insurance, production our transitioning in our to resilience of our our in encouraged third restructuring by Furthermore, revenue classes. lines the concentration the the and well lower-yielding from in increased of to by and comparable lines, will correspondent lending, a continued has been XXX% through is result diversification our contribution to XXXX, from loan all of ] loan $XXX,XXX

business is in in The $XX.X to $XX,XXX approval our This expedited business support without commitment assets, As generating fully new in XXXX, publicly field. the over committed U.S. XX of quarter the the SBA we SBA fees X(a) past to addition ever-improving to X.XX% our preferred $X clients small to launched and SBA noninterest traded the technology guaranteed can X, lending small in expense existing from an $XXX year-to-year accepts company Century in past Early efficiency between With totaling X.XX% over NASDAQ community. been observed the generated commercially XXXX the this X(a) Newtek on Florida's portion a on quarter. business process. In $XXX,XXX. Management's loans. Serving which on sale or in trends efficiently and partner, staff. gain we South ticket X,XXX while the of online listed industry million this SBA this opportunity said, and XXXX, and a is XXXX to have in XXX bank's over operational submitted. delivering be X(a) these initiative improved has initiative, with million since partnership September applications leader X.X% supporting [indiscernible] of we Since the loans focused million relationships launching lender, small business will declining seeing program partnership to which support and strategic industry-leading loans small a this needs business average integrated application [ that past One attract clients, the launched business and responsibility recognize clients. NewtekOne], SBA

Florida. To in any us this technology to here and expense focus efficient platform improve running to further investment delivering with growth trends an on bank attorney plans. The South and grown reinforced in in to committed XXXX, deposit our personalized which One targeted was X people focused $XXX the Directionally self-explanatory. consistently are deposits our showing and These risk Client aggregating our based the management new on another banking their quarter delivering. Group, third in in in is group following Private is allow on concierge hires. save new end, We on support our is conservative is recapitalization. businesses growing X launch and deposit association the page have performance since market. local million focused and what will Profitable X hires historical level service select our since sound the team low-cost

our CFO, Rob to our performance reviewed attention key indicators, and now which let's were So Anderson. specific financial results our turn by

The you, which morning, this initiatives, characterize management forwarder. and team believe several quarter Overall, good Lou, resilient. as on executed we would positively everyone. Thank impact I

we increase deposit Total were $XX quarters. With the portfolio numbers. slides, pointing billion. the with into and flat unrealized that, previous compared $X.X get quarter. recover up difficult a billion higher balances the closed to total quarter losses through is let's million from compared upcoming about I'll billion, for end, $XXX equity As Loan decrease move portfolio why why interest financial Deposits security the the out in quarter believe feels assets management our $X.X the securities $X.X be for the million at optimistic quarter. environment, previous more At quarter. million, remained a the to to starting the rates. Despite in we performance were and prior $XXX in we to operating were due quarters slight had the

However, average rate you'll review growth annual when we see balances an of XX.X%.

the inflection been down low we point with an some time. have September, expand curve the as saw yield and call. that conversation in for interest Net in we we inverted to in is The NIM the increasing. income NIM good point with in news prior on slightly Moving August the to the was on compared our both as July quarter an I'll steadily progress P&L.

loss in income up the to item, due Furthermore, income. this trade $X.X increase bank going On is diluted which for and security and and this fees were fees within high-touch from concierge Another loss $XXX,XXX GAAP earnings SBA Compared basis, executed with per our differentiates themselves forward. Expenses prior growth where income the a life competition. from to small we our higher flat booked verticals and year, provision quarter $X.XX line on will our our quarter prior noninterest a good quarter, was book. loan share. thing insurance noninterest wire higher provide was business the the portfolio, we loan in or net to last report million restructured

for briefly our Let's metrics performance quarter. the cover

credit strong. our soundness, remain of terms In metrics

reserve was loss loan to coverage Our down X.XX%. slightly

return X.XX% average on was X.X%. equity and our our profitability, of average assets terms return was In on

to we $XX.XX. quarter, share started value this was XX Our the referenced believe bit. Noninterest to share to this the able to moved book assets tangible in is reflective which in negative at the have from assets have a to expense normalization we per NIM been inflection our basis see Absent down a have down we share mark been ticked book $X.XX expense AOCI mark, X.X%, of higher-yielding are AOCI per would value an down in the of per share, on deposits average earlier. we per book X.XX% points but intangible $X.XX prior more near interest point as and on or quarter,

interest-bearing in with are centers to our around moving NIM mix continuing composition on A of pressure. big the we deposits, our much shift have higher out that is slower see happening next deposit felt we Moving DDA and rates part offering pace. interest-bearing wherever at costs of are It to deposits. and into Many still a deposit slide. competitors on the of story balances and our

we before, compared peers. Overall, slide. and overall X our have mentioned maintained is evident are takeaways from positive pricing discipline in to believe that as However, deposit deposit our this costs there

is our beta The assumptions deposit within that XX%. modeling first our is at

asset the third -- within expectations. our growth Nevertheless, to XX% average deposit attract total deposits ability going is monthly, that second DDA on slower expense a seen A NIM impact a our accounts. retain have which month positive to positive was impact costs much is increasing The material we faster will at and the on that a will slower interest have earning DDA growth on depend And but NIM our and pace. forward. a checking is the yield

move Let's forward.

our adjusted funds reflects the portion you excluded deposits XX%. deposits by our uninsured public XX% personal of accounts, XX% for community of XX% collateralized XX% are bank. uninsured the of is deposits and commercial broker. amount of business which diversified quarter, a the are public public partially portion base The funds, funds deposit the total in Our if the commercial collateralized collateralized accounts, are model, X% and

liquidity. Let's move forward to

increase an quarter, to to XXX basis decreased experienced our For periods increase the XX.X%, the loan an loan-to-deposit strong ratio to year. XXX increased we Accordingly, notice compared as points basis points demand. quarter previous liquidity previous previous and of this you'll compared from of

is is liquidity than $XXX sheet million $XXX sources, our listing excluding Our and brokered CDs off-balance more sheet on-balance million. and

we liquidity Given us book. this, confident me sources feel that let the back to that, environment. current our to are loan it With to navigate adequate turn these discuss Lou for

yields points million sudden quarter compared continue Average have after banks The the abated. year. trend failure in quarter other basis confidence end or the and in third loan seen XXX has compared quarter compared prior $XX.X Rob. XX.X% and XXXX. through $XXX increased SVB XXXX, you, crisis increased loan will the portfolio the the Thank loans demand annualized XX.XX% or Directionally, to by million to that to a the third slowdown of of the triggered

the the than Our production more market over so previous lenders doubled responded and did quarter.

loan production As was asset classes. over various well diversified noted,

the weighted we quarter, in the stopped points into points basis QX. active increase is XXX and activity, similar XXXX or pricing pipeline strong As the basis to we basis gross coupon from third XXX production XXX diversification graphic, XXXX in average. In on in portfolio QX closings continue new million, the the $XXX see above as quarter-to-quarter, QX forecast and average points to

mix will portfolio and quality Credit our continued Ben portfolio as be XX, volumes contributed on priority. our business ongoing reviewing production our Slide Officer, as verticals. loan Chief by Pazos Asset growing diversification non-CRE well is

Okay.

the it XX due costs. or increase in compared to Net Slide Let deposit interest income an XX. quarter, me up predominantly Page pick $XXX,XXX by on decreased to prior

While have the higher to a had margin. Despite expense than and NIM NIM been quarterly on NIM. quarter we decrease deposit X%, coupon saw the rate and first, new from further stabilize production average. that towards consequently, loan our deposits which has July's the quarter growth quarters. interest-bearing and the the loan September's NIM impacted both forward. This inflection year-to-year similar we points basis includes third in accounts increased above pace impact eventually NIM hikes, increasing expect Absent which reasons an on early X.X%, book. grew yields, and historical was August improve point interest will the was With XX we third we going average, and rise and quarter-over-quarter, in negative coupons the our can our our September's continue to on consistent believe the rates of in coming growth interest with to overcome has following: a

and quarter while for quarters. In and above, deposit reflects slower Second, experienced increases slower prior compared point to have we already X.XX%, of cost September, increasing in our pace to deposit X.XX% costs. was a the the was which rates

a us executed million allowed This trade security X% more the loans into we small Next, loss with and improvement. $X to XXX a restructuring. BOLI than low-yielding basis cash put point flow securities sell yielding our

X.X-year interest by for While paying of it does by in of make higher similar pay-fixed X tranche everyone cumulative further we in which previous multiple a longer fixed rate a rate advantage on spot knows, difference. Last, the things rate effect and to the receiving as us. set for swaps curve the swaps. million of for eventually items floating rate tender it took was amount inverted rate prepared the that interest interest sober. The environment This incremental another at swaps a yield $XXX we notional do small, benefit, putting provide is

us an to First, sensitive. it in million with income rates. at second, sheet liability additional current be provides annual positions net our less And balance on basis an $X interest it

asset This in balance liability to sense according $XXX sensitive asset year year turn now to the next years, sensitive page, you'll to to interest model, is of you a totality. our as for booking went chart. rate both direct notional our in when you sheet and from X neutral result of sheet can in asset million fact, the being sensitive. In is notice our swaps one And now the see balance

book C&I the front a on quarters, past received the curve. Furthermore, went paid variable fixed amount of Over with the SOFAR a sensitivity. the couple and where out loan loans we asset yacht curve duration, end payment of ] our of shorter [ increases efforts on and diversifying and the our

index our after our these had and a the is mechanism loans fixed loans and CRE year We unrealized hybrid As the while of next key HTM discussed the that our XX% year, book slide. A HTM, repricing of XX.X% the securities share. our of to or months, XX.X% practice million was and AFS we portfolio is $XX loans And million end with remaining have repricing helps market before, sheet an XX.X% million portfolio expect tangible approximately we at management we book to to XX-year and million classified variable X. losses, balance which preserve saved component and on the a to to within of for of is to the securities loans CMT per as the XXXX, priced as rate value of we the next $XXX X-year while classifying portfolio. held between me of By $XXX that reprice our reprice expect value maturity. which and leads is quarter, securities $XX of now third have X within liquidity to tied the fair classified

life duration from a for has of to year, the and the cash higher extended increased and the result the rest as Duration has modified has securities of and flows, portfolio X. of years which expect prepayments million of Our rates, securities as Ben X.X was And purchased let these discuss slowed we lows. me for we portfolio. receive $XX.X of the at the rates intend also to quality. expect that, yields to higher we flows million $XX.X to receive to were turn historical portfolio most another at when invest considerably XXXX, over it With cash average asset and Pazos

and to morning all. Rob, you, Thank good

increase Our the lower percentage absolute due quarter. model. strictly growth, AL yes, was economic the increase is which due to is to of improvement portfolio of in a reduction the percentage The outlook of $XXX,XXX in numbers, than and from slightly XXX% to previous the XXX% in it

We continue in C&I loan with one our areas just with status. nonaccrual

Slide to XX. Moving

own our on information have portfolio We mix.

$X.XXX little billion. of billion, over book Our amount CRE a $ to bit X loans

CRE lowest has year. is our of at concentration and the point decreased now the However,

XX% segment the of portfolio. concentration is CRE biggest which with retail Our million our in $XXX into translates

As do loan service Weighted from coverage ranging size we ranging usually gives XX%. the average X.XXx loan the you to Page value CRE book. to pay million XX% were the XX conservatively from from quarter, ranging in X.XXx every average to low, Debt to metrics of and ratio $X.X $X.X million.

Rob Going about our will to Slide talk XX, noninterest income.

a restructuring Service positive in gain you, was driven an strategic lower-yielding is full $XXX,XXX of forward. This Client bank-owned BOLI banking a $XXX,XXX offset the Thank had main is $XXX,XXX. by an compared opportunity wire income. income fees year which given foreign a The and increased Private going similar Okay. in portion by our other game buy, here We provide both nonrecurring quarter of quarter life the for item. fees took the correspondent will Ben. laws. and of activity And to which our this, noninterest a insurance, Group. increase to additional also increased we which the for with we size securities In annually short, surrendered higher-yielding prior onetime

earned back As points additional provides loss with on before, loss loans X of an at XXX $X liquidity with at mentioned and which the reinvested This approximately us us X%. basis million in the years. provided

at expenses look our closer a take Let's the quarter. for

prior legal good we sales through million based benefits Salaries average able increased Consulting base to up were on expense. Overall, were flat expense the to improve and of incentive accrual terms compared expense legal performance points total a as QX. by basis fees Our the we and $XX.X adjusted expense was to and due noninterest a as this onetime the quarter XX to discipline in year-over-year. $XXX,XXX assets was nonrecurring quarter.

In or more increased we per in feel be terms at quarter expenses of forward XXXX. slightly a $XX.X our will and rate, run near quarterly term near million

remain capitalized by look higher quarter. quick as before, And discussed was AOCI a take negatively levels Let's capital. above Capital at impacted rates this levels. well

opportunistic We share us closing decreases. for that our have the turn authorization summary, Lou it under I'll back current comments. some And be XXX,XXX price shares to to if allows which remaining with

management has managing presented active taken our and approach the for XXXX industry, balance expenses While a environment our a team yet sheet, liquidity, operating in challenging capital. prudent has

growing we that best advantage safely is dynamic full low Florida focus loan and will on profitability we in rate enhance and many growth. conditions continued for USCB taking double-digit is take for in action as the To opportunities. higher this and Our point, operate steady of the market country, a forecast longer as for margin expect and our these interest strong will The economy we and prepare growth with amongst diversified environment. we a

we a on maintaining personnel In cost we strategies. without efficiently additions to as added new partner. deposit savings personal complementary lending, in technology support Again, ticket and control focused our reinvest line expense small this will supporting business to our attract staff. growth, leveraging on QX, new growth production a initiative SBA focused clients best-in-class small partnership launched existing We business relationships

We initiatives BOLI deposit we September. insurance, which performance sheet continued are swaps costs rebounded coming are liquidity on point which at feel slowing, and our support a and actions and management rate in and have as growth. bank-owned have or of ongoing bolstered focus our new will online, that Balance inflection the included an with NIM restructure revenue. interest our life near Deposit are we XXXX

team headwinds open on delivering for While With let's floor questions. operating results. sustainable is challenging evident, focused management that environment said, the are the our a economic actively navigating

] Dick Graham Instructions] [Operator Piper line Our from the comes with question of [ first Sandler.

a seems now with swaps, moving to in right the growth right to bond of the today moving assume I there, parts I guess definitely just and wanted margin margin. you what loan given like putting I are maturities new X% It yield. said accretive but there's then the whatever direction on lot start the that you're is on things So on

and to So that there there September pretty mean, margin sounds mean could August doesn't average see there raise or versus to shouldn't it funding here, is XXX. as was I the at levels more you were comments side, rates and step-up we the there if look I you just on like the any -- be the as is sizable in it if expansion? any a $X.XX -- was large July -- guess, say that remains again a from I of reason be at from environment

So is momentum heading stop the there anything XQ? that should into

cost that I pain our And X%. it's impacted of to we earning -- in that on, that's mean rates take the at We assets catch of beginning deposit now No. a piece we're our And to production early of think the quickly could throwing we lot the on and is because slow. at a And deposits. was lot million how $XXX which a was margin. our rise loan put good have up. pretty

the in are of sheet, predominantly the and of think did ALCO for I environment. higher we And last the the management quarter more impact wanted movement a and our rate that that a in out X end for DDA booked of So at a so prepared margin. of weeks. With balance longer some we lot neutral X to the interest-bearing,

deposits we're mean, small, a relationships, that what things it. strong can And putting it, one, will us, and rate, #X doing the mentioned the move I $X around million on raising we very building putting to is loss I there's business. outrun mean, for edges. earning on -- number profitable it the but a and I assets it's impact tinkering margin our of focus low-cost So but

right So 'XX. moving anticipate the that I we in trend fourth into and and to quarter fully direction we're think in the moving keep

think Yes. I quarter. And on guess maturing that bonds the then are you $XX will I said just million fourth in in the XQ, mature

how Correct. go give bond there. optionality could maturing. use will pay -- to likely demand But upon we loan that there in. some deposits or We either we'll treasury had us borrowing a That that was will U.S. down depending come some most

put what at a getting today, loan into loans? the is the So what's would that you're pickup if -- spread be that if So you -- there X% bond.

XXX $XX Probably basis points million. on

points basis up. Got it. XXX Okay. pick

borrowings? there think actually is you about, or put question do there down pay so to a on I do growth And guys do decision? How you loan guess, you it that

of loan some growth now, say to raise deposits right have. we we're would and I looking the

deposit talent As we a new Lou aggregating gathering. we're mentioned, the are that som focused and hired deposit focusing on lot on

As the a heard you've you this deposits slugfest know, calls right I'm it quarter, sure real and now. throughout is for

Yes.

some deposit growth you borrowings, paying Well, into just some, I putting down going million -- that borrowings do new not that deposit Okay. growth not could $XX pay Do think hires can do and or guess, contribute. the generate good you if think organically through you the forward? even you off

I we kicks mean public the public quarter. we the funds some We'll could tap some on higher think we'll revenue in, have that's fourth that seasonality clients. tax seasonally have Yes. there that plan that funds in

borrowings as down. that our loan pay growth we So can as are down maintain it pay some But to to and those to probably are priorities well. borrowings use

Okay.

you I correctly, Okay. that the it another hear guys that million And other like on me but can just again. the through what's then sounded the X.X%, I've paying quarter what new the the X added you $XXX got million? to math and mean swap, fixed this quarter, on $XXX If -- right? you were last past paid I paying are remember from walk on

Yes.

at we're We're went again, roughly SOFR, $XXX spot, did X-year it right about X-year quarter. And the in the now, then $XXX the rate in receiving this is at early of curve. We fixed the on in XX% $XX $XX another portion on and $XX the on million, then paying $XXX We the So spot $XXX now. million at we on on which million. second right out spot. our X.X-year we the We million notional tender third quarter. in And September. we $XXX did did total And last swaps. just have then million did interest million million million

current So rates. point at more carry basis XX than an

Okay.

That's Okay. Got then margin, it. helpful. and last I'll the then it. on thing just And I really guess the leave

is, rate that true detail. over of is I or the on up side, fixed fixed maturity you But how through the repricing down next, break call guys with guess, the book, XXXX? lot see I which On XX%. rate is the for rate of variable fixed a I know, it, don't much loan

Not have a give the not number, a I you specific lot. to but lot.

Okay. That's it. needed. really All you taking there right. guys optimize That's helpful. would and if that all Well, to are it guess in, be appreciate and out driving expense could I like I on I be I technology. It revenue them just sneak spinning sounds more to one expenses. base, don't trying on personnel need costs

So is run then grow million here of going rate $XX.X good what's your from a Do you just in forward? sort think you and XXXX? slightly outlook this maybe

We're the there's quarter think hires, certainly, them get couple new the we'll talent whether I grow available or but in not not first slightly in fourth or in looking some or of XXXX. marketplace. we at quarter, the a

in in I is creep average need XXXX, would up the noninterest term a to number, a quarter revenue X.XX% it XX.X% that keeping the I well. down we say on eye are We argue near the And first. being expenses at benchmarks on but with will the revenue put peers now and to right would assets, expense keen but good to

Raymond Rose with Michael question line next of Our James. from the comes

expense to the follow on wanted commentary. up Just

done the little Why how And to how You've is that challenging South I well at ratio. performing tough the be a noted going now, environment of is asset get bunch hope better back ROTCE. growth. did to couple totally out you've market, of in balance better aggressive? be environment, the point. expense a -- to to is not it's for mention with accelerate revenue -- and going XXXX. for a yourself this you're just there's hiring I trying a Florida strong why But some But given for you just to now efforts given if bit position which X% a times of ROA, those talent appreciate I be not more understand XX% to

thoughts investment guys about expense side. the Just get think some balancing wanted but as to you also there savings,

question, deposits. have that at that. we at after the on are. I and side looking talent. Without are all the on we're We're next looking and on that And week X week are initiatives especially the scheduled HOA X focused interviews

a new announcing already place. that initiative quarter. the going in hires fourth have in Those we're be to We are

them got We be year, in it the we're but earlier in QX. launch ready going to to

fit build And We're so place. the in want focused the But our have hires to very want on they're already we find for. lines we -- to expenses. conservative and we make very that plans the for business that

always are that And opportunistic. the mean So we our will move in be Doesn't cost that we quickly we check. opportunity will fact keeping if the presents itself.

But know real sense there's can I breakdown? little from appreciate loan for year. a us a customer of you I growth an estate. initiative diversify to Luis. And grow just bit been give the then and if C&I base next -- outlook could you the the

versus if your for real be kind of might of you estate -- some could would be specialty that maybe of our year Just in terms of just kind next discuss that that contribute that business versus be what appreciated. might vehicles could broadly

developed rise with the that refinancing. down, Well, business shut pleased The lines deals do There's rates, in of has the And there's pretty in here lot down much market is don't work. CRE all interest been refinancing simply a year. just we not deals cash time, very am simply investment that all I of the just over of lot quick that flow. have. rates a we rise because no

then you is when in. in which has show that been of come yacht great. ] in boat with Beach. the Palm this usually continued We Miami see lending, really the International by Fort volume are The Lauderdale the followed is got very you've during February, growth And confident weekend. time [ period And

is to to longer their an the that initiative it's HOA kind player, a think, HOA. Our are active toe bank market no continue very had looked very put I and strongly. We, a into going of at idea in as

the is sourcing which person who those specialist, continue whatnot. continue lenders and has deals. this our in will all over product trained and senior and he a SBA have We they're C&I will equipment time, heads

I in than years. pleased is our to business in loan is years. XX% now, coming time production less from very think continue the X% XX% that X non-CRE these years, looking we were grow we're a through X expect -- of number about in X to that XX% XX% the to within to at So we that period right our went of reported next lines. And I going last that's I to maybe think

I choose all continue. that choose And real going very So a that that strong. credit think deals those will are denominated this is sense, and to prudent we make economy, but these will we are quality is estate

one assume you just last be? that mentioned you I Not maybe quarter. will when the the did kind sure for one the quarter, trade had you just this describe but in bull next I Rob. Can I income understand be that And will BOLI pickup quick higher. quarter, think of what

BOLI. it's $XXX,XXX on be annually, Yes, the maybe probably we so to going said $XXX,XXX

Okay. are.

if lot. missed Sorry a Thanks that. I

of Our Montgomery Feddie Strickland Janney comes next line question with from the Scott.

of just a $X.XX the to a backing level securities range, a question Just because lower guess? income I I good little The loss. or sale, will mean, noncore of out a good ex is of kind range next noninterest number like you on quarter, something there. the some following gain for the -- items up $X.XX on overall had noninterest be right, Michael's last income

Yes.

cater have talked seeing for to things income, that our -- we foreign in our attorney business lot of would calls positive Client business wire I and lot where doing be a as to well. is about. in Advantage think the Juris about One, and we a of Group, X We're point our crowd, our that high-touch we're Private fees. we've on demand and this prior in correspondent I noninterest wires

can fees you So wire has the that that's the see on picked piece. up, mainly service and

out loss things the the piece. If of you kind BOLI securities take on the gain one-off or like the

initiative. continue going The other to SBA climb to thing that's is our

but that with should treasury side quarter, just that [ here shall as little mentioned, helpful. a Lou in As we in on the the NewtekOne], fourth [ called fintech Lauderdale well. prove small, then Fort ] And management albeit benefits have company partnered beginning a

nonrecurring up noninterest to take increase I think year-over-year. see and we type you'll So steadily kind our expect the stuff onetime what of income

XX% per is Now XX% per year, year. that

I those good in that item total. line numbers are modeling think for

can SBA perfect. as That's Got I about it. well. ask

understand stone as interest Should back if virtual expect road, all and anytime So come slide, And don't sensitivity a cut margin a XX the that I causing we the up then make your we interest we there. this the to you've X down net basis about the conversely, is But income know December? sensitivity hike see and on. income slight benefit I if down trying look point net to in put would we swaps see I to where just And we've a had think end sure the Just rate happens soon. incrementally? to today. discussion

Yes.

years. swaps. we probably probably notional spot interest tender So the of X.X have on rate combined of about $XXX million all those is It's

an over up, XX the SOFR go go about receive that, rates loss interest we'll rates additional XX, benefit on those that if $X current if at income would additional of maybe and with be basis have, slightly carry, rates, less. million that. maybe net point And that's We down,

didn't dependent And in out our believe right management in can rate positions bit like. provide the certainly we're we be that be that's little to higher balance going our team somewhat are rates and that which for to a neutral sheet because the liability-sensitive, benefit So and a more for ALCO but longer. management now,

for one one me. That's helpful. And just last

Just you could pause? Fed go have below a and the expense XX%, assuming XXXX, about start with talked efficiency pickup growth to high the late potential maybe we the we back growth, XXs by limited here margin see loan

average the Yes. we pointed ratio efficiency expense why the noninterest to out the efficiency mean and certainly, both the the calculation. assets expense piece in I has revenue

margin a steady. bit more expand goal. our and we little happens bring down to as in the back So but hold our depends how on That's going and certainly the certainly we rates and bring XX%. ratio that's When quickly revenue efficiency how and expenses perform, that into under

comes from Gailey Brady the line with question Our KBW. of next

about know you But the annualized. quarter linked were deposits at I double-digit in did growth, quarter you've talked loan flat. But clearly XX% third which

still as deposit expectations a we quarter. remind side linked the are ticked ratio the maybe targeting new us, on just But So up environment, loan little of well? bit growth? the are kind the given loan-to-deposit double-digit And what

double-digit confident say, quarter. answer Yes. Brady, fourth we side, yes, we feel think would on on we loan And I'll first. have pipeline that for I growth. the loan about the the right now

the million where that all Silicon low Valley a kind be and the up was activity the double it new book production have have can we was Bank. But this previous and saw in of and similar if book fashion think quarters we we with was to with I little to and from keep that the cost. diversified the grow past we digits, that pace bit a with at deposit grow loan loan looked you happening $XXX quarter think

digits side, So the to it at money we'll on deposit grow definitely off flows. very they come security Probably the done, we near not be tougher, market I on loan the have fund get book. cash will because as to just need will double will little mentioned, but that or growth

quarter So Lou side. will Those where And in hires hires that strategies. we targeted the that on that new have the of first here others But couple we'll mentioned as believe the some coming announce we new deposit have. already aggregating push big a hires a deposit mention are well. towards we'll are we'll have we

that, of Century on SBA. do kind have could you good me, for think partnership right. Newtek if finally earnings U.S. isolate wondering, with over I'm the to then about That's and that you helpful. it's new One And that partnership, time? hear impact just All the what's just

forecast. in Brady, And wouldn't it them. new is our very much I put money with

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at speakers to further I you concludes now time. for no questions like today's are joining our for There call. presentation, and thank thank would This this us. all today's

may now disconnect. You