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EVP & CFO Annette Burns explained that the company paid off $118 million of sub-debt with a 5.45% rate that was set to reset to nearly 9%. By using liquidity costing around 4.25-4.4%, the bank realized significant savings. Regarding credit, Burns stated that while Q2 performance was excellent, the low level of net charge-offs is not expected to recur. She guided that a more normalized quarterly range for net charge-offs is likely between $3 million and $5 million.

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CFO Annette Burns confirmed that the majority of future charge-offs are expected to come from the Auto and Residential Solar books, as commercial charge-offs are more episodic. Executive Scott Kingsley noted that the specific AUM/AUA figures were not in the presentation but offered to provide them offline.

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Senior EVP & CFO William Burns responded that he doesn't foresee major changes in classified/criticized assets but noted potential opportunities to unload some loans given the write-downs. Regarding capital, Burns explained that the CRE concentration is expected to decrease naturally due to new originations and strong capital accretion. While the bank initially planned to pause share repurchases post-merger, he indicated that capital ratios are looking stronger than anticipated, leaving the door open for future buybacks.

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CFO William Burns responded that credit quality has been steady and improving, with delinquencies at historically low levels and no significant workout pipeline. He noted that about $1 billion in loans are set to reprice through 2026, following a successful repricing of a similar amount since mid-2023. Mr. Burns explained that margin expansion is driven by both sides: repricing CDs on the funding side and a large portfolio of adjustable-rate loans that will benefit as deposit costs potentially fall.

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CEO Christopher Gruseke stated that while there isn't a hard target for DDAs, the bank aims to meaningfully expand this percentage and reduce its wholesale funding ratio. He also noted that future reductions in brokered deposits will be balanced against loan growth opportunities. President & Chief Banking Officer Matthew McNeill added that the healthcare portfolio remains strong and is not expected to be materially impacted by recent Medicaid legislation.

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CEO Christopher Gruseke stated that while there isn't a hard target for DDA growth, the bank is focused on meaningfully expanding it and reducing its wholesale funding ratio. He also noted that brokered deposits will continue to decrease over time, contingent on deposit gathering efforts and market opportunities. President & Chief Banking Officer Matthew McNeill added that the healthcare book remains strong and profitable, with borrowers not appearing to be significantly impacted by recent legislative changes.

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CEO Christopher Gruseke explained that while there isn't a hard target for DDAs, the bank aims to meaningfully expand this category and reduce wholesale funding, driven by recent investments in new teams. He also noted that brokered deposits, already reduced by half, will likely continue to decrease over time depending on market opportunities. President & Chief Banking Officer Matthew McNeill added that the healthcare loan portfolio remains strong and is not expected to be negatively impacted by recent legislative changes.

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CEO Christopher Gruseke responded that while there is no hard target for the DDA ratio, the bank is focused on meaningfully expanding it through recent investments in new teams. He also noted that brokered deposits will continue to decline over time, but the pace will depend on market opportunities and loan growth. President & Chief Banking Officer Matthew McNeill added that the healthcare loan book remains strong and is not expected to be materially impacted by recent legislative changes.

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CEO Christopher Gruseke stated there is no hard target for DDAs but the bank aims to meaningfully expand them and will reduce brokered deposits based on market opportunities. President & Chief Banking Officer Matthew McNeill added that the healthcare portfolio is performing well and is not expected to be materially impacted by recent legislation.

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EVP & CFO Gregory Robertson explained that the excess liquidity was necessary for a correspondent bank transition and will be maintained through the upcoming Oakwood conversion. He clarified that the credit migration involved previously identified relationships moving to nonaccrual, for which the bank is adequately reserved. CEO Jude Melville emphasized these were not surprises and resolutions are being pursued cooperatively. Robertson projected that as these credits resolve, NPAs should decline significantly through the end of the year.

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CEO Jude Melville responded that the bank is not looking to significantly down-scope any particular loan area, having already managed down its C&D exposure. The focus remains on maintaining a balanced portfolio and improving execution in C&I lending. On M&A, Melville was clear that the priority is to grow within the existing Louisiana and Texas footprint, filling in current markets. He stated that expanding east is not a priority at this time.

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CFO Gregory Robertson indicated an opportunity to pay down approximately $50 million in FHLB maturities in the coming year, contingent on continued organic deposit growth. Regarding loan renewals, CEO David Melville emphasized the focus is on disciplined repricing for the entire relationship, whether retaining existing loans or originating new ones. Melville also explained that the recent strength in Louisiana-based loan growth was a logical outcome of a strategic de-emphasis on construction lending, which was more concentrated in the Dallas market.

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CFO Gregory Robertson stated that the Q4 consensus noninterest expense estimate of approximately $50 million is a fair run rate and a good launching point for 2025. He clarified that significant cost savings from the Oakwood deal are not expected until late 2025 and into 2026, as originally modeled. CEO David Melville detailed the growth strategy, stating the top priority is organic growth within the current footprint, followed by team lift-outs and then opportunistic M&A. He emphasized that while Texas is a key growth market, the core Louisiana franchise continues to perform strongly.

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President, CEO & Chairman Luis de la Aguilera described the loan pipeline as balanced across verticals like yacht loans, association banking, and commercial real estate, and projected a doubling of SBA 7A volume compared to last year, which should boost gain-on-sale income. CFO Rob Anderson stated that the DDA growth was driven by a company-wide strategic focus on gathering low-cost operating accounts and becoming the primary bank for clients.

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President, CEO & Chairman Luis de la Aguilera described the loan pipeline as balanced and strong, particularly highlighting the SBA 7(a) pipeline, which he expects to double in volume year-over-year, suggesting a rebound in gain-on-sale income. CFO Rob Anderson explained that DDA growth is a key focus supported by new hires and incentive programs aimed at making USCB the primary bank for its clients.

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President, CEO & Chairman Luis de la Aguilera described the loan pipeline as balanced across verticals like yacht loans, association banking, and commercial real estate, and projected strong SBA 7(a) loan volume that could double from last year, boosting gain on sale income. CFO Rob Anderson attributed the DDA growth to a focused strategy, including new hires dedicated to deposit gathering and team-wide incentives to secure low-cost core operating accounts.

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President, CEO & Chairman Luis de la Aguilera described the loan pipeline as balanced across verticals like yacht loans, association banking, and commercial real estate, and projected strong SBA 7(a) volume for the year-end, which should increase gain-on-sale income. CFO Rob Anderson added that the DDA growth stems from a company-wide strategic focus on gathering low-cost core operating accounts from clients.

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CEO Luis de la Aguilera described the loan pipeline as balanced across verticals like yacht loans, association banking, and commercial real estate, and projected that SBA 7(a) loan volume could double from the previous year, suggesting a rebound in gain-on-sale income. CFO Rob Anderson attributed the growth in DDA to strategic initiatives focused on making USCB the primary bank for clients, supported by new deposit-focused hires and company-wide incentives.

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President, CEO & Chairman Luis de la Aguilera described the loan pipeline as balanced across multiple verticals and projected hitting Q3 targets, noting the SBA 7(a) pipeline is particularly strong and could double last year's volume, suggesting higher gain-on-sale income ahead. CFO Rob Anderson explained that the DDA growth was driven by a company-wide focus on gathering low-cost operating accounts, with new hires dedicated to deposit gathering to support strong loan growth.

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CFO Robert Anderson cited competitive deposit rate pressures, higher cash balances, and the mix of lower-yielding (though full-relationship) correspondent banking loans as factors tempering the NIM outlook, reiterating the "flat to up" guidance. Executive Luis de la Aguilera stated they do not anticipate a significant tariff impact on their correspondent banking clients. Chief Credit Officer William Turner confirmed he expects both nonperforming and classified loan levels to improve in Q2, citing the resolution of a specific nonperforming yacht loan.

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CFO Robert Anderson projected that swap fee activity, which exceeded $3 million in 2024, would likely decrease in 2025, with the bank aiming to offset this with growth in other areas like TM, wire, and SBA fees. Executive Luis de la Aguilera stated a plan to more than double SBA fee volume in 2025. He expects steady growth in yacht financing, expansion of existing global banking relationships, and 'tremendous opportunities' in HOA lending due to state-mandated building certifications.

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CFO Robert Anderson stated that the swap fee pipeline is robust for Q4 and the near term, suggesting the current income level is a good modeling number for the next six months before potentially moderating. He outlined capital deployment priorities as first supporting organic growth, then evaluating dividend levels, and using buybacks opportunistically. CEO Luis de la Aguilera confirmed that customer sentiment remains steady, allowing the bank to be selective, and that the diversified business model supports a consistent low double-digit growth outlook.

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CFO Thomas M. Lyons confirmed it is possible to come in at the lower end of the expense guidance, though he noted some non-recurring severance costs in Q2 and that incentive accruals are typically reviewed in the second half of the year. President and CEO Anthony Labozzetta explained that brokered deposits were strategically used to offset seasonal municipal outflows and replace maturing high-yield CDs. He anticipates strong municipal inflows in Q3, with Mr. Lyons adding that Q2 is historically the trough for these deposits.

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CFO Tom Lyons confirmed that quarterly expenses are expected to track toward the lower end of the guided $113 million to $115 million range for the rest of the year. CEO Anthony Labozzetta described the insurance business as seasonal, with Q1 and Q2 being the strongest, and noted it has been growing at a rate close to 20% year-over-year. On capital, Lyons stated that while they want the flexibility for opportunistic buybacks, their primary focus is deploying capital to fund the strong and profitable organic loan growth pipeline.

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CFO Tom Lyons detailed that approximately $3 billion in CDs will reprice over the next 12 months, noting the balance sheet is very neutral to rate changes. Regarding wealth management, Lyons stated there is little room to increase the fee rate, which is already strong. CEO Tony Labozzetta added that the focus is on growing assets under management (AUM) through cross-channel synergies. On credit, Lyons confirmed they are actively working to resolve the remaining nonperforming assets and REO through customer workouts and potential note sales.

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CFO David Kirkley acknowledged NIM expansion from repricing might slow slightly in Q3 but expects more opportunities in Q4 and beyond as fixed-rate loans mature. CEO John Bordelon addressed M&A, stating the bank's higher stock valuation now allows them to consider larger partners, potentially up to $1 billion in assets. He confirmed that while they have had discussions in Louisiana, the bulk of opportunities have been in Texas.

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CFO David Kirkley acknowledged that the pace of NIM expansion from loan repricing might see a slight slowdown in Q3 but is expected to pick up again in Q4 and beyond as more fixed-rate loans originated in 2021 mature. On M&A, Chairman, President & CEO John Bordelon explained that the bank's improved stock valuation has expanded its potential target size up to the $1 billion asset range. He noted that while conversations have occurred in both Louisiana and Texas, the bulk of opportunities have been in Texas.

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CFO David Kirkley responded that no significant expense lumpiness is anticipated, with increases being gradual. Executive John Bordelon detailed the loan strategy, highlighting a focus on C&I lending to foster full banking relationships, and noted that loan pricing has stabilized. Regarding fee income, Bordelon acknowledged potential regulatory pressure on deposit fees, while Kirkley pointed to expected growth in treasury management fees, SBA loan sales, and mortgage loan sales as key drivers for noninterest income.

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Executive John Bordelon confirmed that a series of rate cuts could restore loan growth, particularly in the 1-to-4 family portfolio, and identified Houston, New Orleans, and Lafayette as the strongest growth markets. He clarified that a key nonaccrual credit was related to a partner dispute on performing rental properties and is expected to be fully resolved. CFO David Kirkley and Bordelon explained that gradual rate cuts allow them to manage repricing more effectively than the disclosure's shock scenario suggests, potentially protecting the margin. Kirkley noted that while annual merit raises occur in April, no other material expense drivers are anticipated for 2025.

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President & CEO Duane Dewey attributed the non-interest income growth to broad-based improvement across wealth management, brokerage, and mortgage banking. On M&A, he reiterated the focus on contiguous Southeastern markets for targets generally in the $1 billion to $5 billion asset range, while noting an increase in available opportunities and a willingness to be opportunistic.

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President & CEO Duane Dewey explained that non-interest income growth was broad-based, benefiting from positive market performance impacting wealth management and brokerage, alongside steady improvement in the mortgage business. Regarding M&A, Dewey reiterated interest in contiguous markets across the Southeast and suggested a target size in the $1 billion to $5 billion range would be a good fit, while remaining opportunistic for any value-creating transaction.

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President & CEO Duane Dewey confirmed that the non-interest income growth was due to 'all of the above,' citing positive impacts from market performance on wealth management and brokerage, alongside steady improvement in mortgage banking. Regarding M&A, Dewey outlined a focus on contiguous markets in the Southeast and Texas, suggesting a target size in the $1 billion to $5 billion range would be a good fit, while emphasizing they remain opportunistic.

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President & CEO Duane Dewey explained that the non-interest income growth was broad-based, driven by market performance boosting wealth management and brokerage fees, along with steady improvement in mortgage banking. Regarding M&A, he reiterated interest in contiguous markets across the Southeast and suggested a target size in the $1 billion to $5 billion range would be a good starting point, while remaining opportunistic.

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President & CEO Duane Dewey stated that non-interest income growth was broad-based, with positive contributions from wealth management, brokerage, and mortgage banking. Regarding M&A, he reiterated a focus on contiguous markets in the Southeast and Texas, with a target size in the $1 billion to $5 billion range, while remaining opportunistic.

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President & CEO, Duane Dewey, stated that the growth in non-interest income was broad-based, with positive contributions from wealth management, brokerage, and an improving mortgage business. Regarding M&A, he reiterated interest in contiguous markets across the Southeast and specified a target size range of $1 billion to $5 billion as a good starting point, while remaining opportunistic for other value-additive deals.

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EVP & CFO Daniel Doherty confirmed the $45-46 million quarterly expense guidance is 'all-in' and stated that share repurchases would not be aggressive at current prices, with the strategy focused on supporting the stock below book value. President & CEO Mark DiFazio added that the tech project's timeline extension would not increase its overall budget and expressed confidence in continued deposit growth across all verticals, not just municipal.

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Executive Daniel Dougherty clarified the NIM outlook, projecting a Q1 margin around 3.60% and a full-year 2025 margin of 3.70% to 3.75%, likely ending the year closer to 3.80%. Executive Mark DeFazio addressed the other topics, stating that while office occupancy trends are more positive, they vary significantly by building class and location. He asserted that MCB faces no significant competitive pricing pressures on loans, as the bank is capitalizing on market dislocation while competitors are focused on restructuring.

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Executive Mark DeFazio explained that the prior GPG cost arrangement was a reimbursement and not part of the reserve; he also noted the departing client is covering 75% of remaining exit costs. Regarding weather, DeFazio confirmed the bank surveyed all Florida clients and collateral and found only very minor, non-adverse damage from the hurricanes. On the digital budget, DeFazio stated there was no increase, and CFO Daniel Dougherty added that post-project IT expenses would align with the previous run rate.

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