Executive Summary

Record quarter: Diluted EPS $0.38 (+65% YoY), ROAA 1.19%, ROAE 14.15%, efficiency ratio 52.79% as NII growth and fee income outpaced modest expense growth .
Mixed vs. Street: EPS slightly above consensus ($0.38 vs $0.376*), while revenue (S&P “net revenue” after provision) was below ($22.15m vs $22.94m*) as NIM ticked down 6 bps q/q on lower SOFR, higher cash, and lower average DDAs [functions.GetEstimates].
Balance sheet momentum: Loans surpassed $2.0B (EOP loans +13% annualized q/q), deposits +25% annualized q/q; tangible book value/share rose to $11.23; Board maintained $0.10 dividend declared Apr 21, 2025 .
Outlook: Management sees NIM “flat to slightly up,” operating expenses drifting to ~$12.3–$12.4m near term, and loan/deposit growth in high single-digit to low double-digit range, with clean credit and potential NPA improvement in Q2 post yacht disposition .
Potential stock catalysts: Sustained loan/deposit growth, expense discipline driving sub-53% efficiency, and any rate cuts aiding deposit costs and margin, partly offset by competitive deposit pricing and SOFR-linked repricing headwinds .

What Went Well and What Went Wrong

What Went Well

Earnings quality and profitability: EPS $0.38 (+65% YoY) as NII rose 26% YoY and noninterest income rose 51% YoY; ROAA 1.19%, ROAE 14.15%, efficiency ratio improved to 52.79% .
Balance sheet growth and liquidity: EOP loans topped $2.0B (+$63.4m; +13% annualized q/q), deposits +$135.6m q/q; liquidity sources aggregated $826m (per presentation) and TBV/share +$0.42 q/q to $11.23 .
Diversified fee momentum: Noninterest income $3.72m, aided by ~$500k prepayment penalties and $525k SBA 7(a) gains; noninterest income at 0.58% of average assets .

Management quote: “Our collective efforts delivered a fully diluted EPS of $0.38…reflects solid execution across…loan and deposit growth, maintaining disciplined pricing, clean asset quality, and strong cost controls.” — Luis de la Aguilera, CEO .

What Went Wrong

Revenue vs. consensus: S&P “revenue” (net revenue after provision) came in at ~$22.15m versus ~$22.94m* consensus, as lower SOFR, higher cash balances, and lower average DDAs pressured NIM [functions.GetEstimates].
Margin compressed sequentially: NIM 3.10% (-6 bps q/q) given 90-day SOFR decline (4.35% vs 4.69% prior quarter) impacting ~28% of variable loans, and elevated average cash .
Asset quality markers ticked up (still benign): NPLs/loans rose to 0.20% from 0.14% q/q (3 smaller resi loans), though management expects improvement in Q2 after a yacht collateral sale (loss reserved last year) .

Financial Results

Results vs. Estimates (S&P Global definitions)

Metric	Q1 2025 Consensus	Q1 2025 Actual
Diluted EPS ($)	0.376*	0.38
Revenue ($)	22.944m*	22.150m*

Values marked with * were retrieved from S&P Global; revenue reflects S&P “net revenue” (net interest income after provision + noninterest income) [functions.GetEstimates].

P&L Summary

Metric	Q1 2024	Q4 2024	Q1 2025
Net Interest Income ($m)	15.16	19.36	19.12
Provision for Credit Losses ($m)	0.41	1.03	0.68
Noninterest Income ($m)	2.46	3.63	3.72
Operating Revenue ($m) (NII + Noninterest)	17.62	22.99	22.83
Net Income ($m)	4.61	6.90	7.66
Diluted EPS ($)	0.23	0.34	0.38

Margins & Profitability

Metric	Q1 2024	Q4 2024	Q1 2025
Net Interest Margin (%)	2.62	3.16	3.10
Efficiency Ratio (%)	63.41	55.92	52.79
ROAA (%)	0.76	1.08	1.19
ROAE (%)	9.61	12.73	14.15

Balance Sheet Highlights (Period-End)

Metric	Q1 2024	Q4 2024	Q1 2025
Total Loans HFI ($m)	1,821.20	1,972.85	2,036.21
Total Deposits ($m)	2,102.79	2,174.00	2,309.57
Noninterest-Bearing DDA ($m)	576.63	575.16	605.49
Total Assets ($m)	2,489.14	2,581.22	2,677.38
Tangible Book Value/Share ($)	9.92	10.81	11.23
Total Risk-Based Capital (%)	12.98	13.51	13.72

KPIs and Credit

KPI	Q1 2024	Q4 2024	Q1 2025
Deposit Cost (%)	2.76	2.48	2.49
Interest-Bearing Deposit Cost (%)	3.84	3.43	3.34
NPLs / Total Loans (%)	0.03	0.14	0.20
ACL / Loans (%)	1.18	1.22	1.22
Net Charge-offs / Avg Loans (%)	0.00	0.00	0.00

Loan Mix (Q1 2025)

Category	% of Loans	Notes
CRE – Non-owner occupied	47%	WA LTV ~56–59%, DSCRs >1.3 across types
CRE – Owner occupied	15%	Part of $1.15B CRE book
Residential RE	11%	$301m EOP
Commercial & Industrial	10%	$256m EOP
Correspondent Banks	12%	Short-term, self-liquidating trade finance
Consumer & Other	5%	$219m EOP

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Net Interest Margin	2025 run-rate	Not specified	“Flat to slightly up”	New color
Operating Expenses	Near-term quarters	~“around $12m” (prior commentary)	$12.3–$12.4m expected	Raised modestly
Loan Growth	2025	Not specified	High single-digit to low double-digit	New color
Deposit Growth	2025	Not specified	High single-digit to low double-digit	New color
Noninterest Income (Swaps)	Q2 2025	Not specified	“Expect Q2 to have better results”	Up sequentially
Credit – NPA trajectory	Q2 2025	Not specified	NPAs expected to improve post yacht sale	Improving
Dividend	Ongoing	Raised to $0.10 in Jan 2025	$0.10 declared Apr 21, payable Jun 5, 2025	Maintained

Earnings Call Themes & Trends

Topic	Previous Mentions (Q3’24 and Q4’24)	Current Period (Q1’25)	Trend
NIM trajectory	NIM 3.03% (Q3); 3.16% (Q4) amid deposit cost management	3.10%; guide flat-to-slightly up; rate cuts would help	Slight q/q dip; cautiously constructive
Deposit dynamics	Steady growth; focus on cost and mix	Avg DDA down but EOP DDA $605m; strong deposit growth across verticals; IB deposit cost -9 bps q/q	Growth with competitive pricing pressures
Loan growth/mix	Consistent growth, diversified CRE/C&I	Loans >$2B; EOP +$63m; new loan WAC 6.67% (7.15% ex-correspondent)	Accelerating late-quarter production
Macro/Trade	Not prominent	Tariff uncertainty noted; heightened risk management	New risk monitoring emphasis
Credit quality	Benign; low losses	NPLs 0.20%; expected Q2 improvement after yacht sale; no losses expected on certain resi NP loans	Still strong, improving outlook
Expenses/efficiency	Efficiency 53–56%; expense elevation in Q4 from non-routine items	Efficiency 52.79% (best since 3Q21); expenses to drift up with hires/performance	Positive leverage; controlled uptick ahead

Management Commentary

Strategy and execution: “After a record 2024…our best quarter since the bank launched its IPO…relationship-driven organic growth.” — Luis de la Aguilera, CEO .
Margin outlook: “Flat to slightly up…rate cuts…will benefit us on the deposit cost” — Rob Anderson, CFO .
ALCO and modeling: “Models are loaded with conservative assumptions…we would be looking to outperform those assumptions again if the Fed were to cut rates.” — CFO .
Credit vigilance: “Time for heightened risk management…new loan production carefully vetted…Florida economy remains strong.” — CEO .
Expense discipline: “Total expense base was $12.1m and in line with previous guidance…expect the quarterly expense base to gradually increase throughout 2025 due to new hires and…bonus accruals.” — CFO .

Q&A Highlights

Deposits: Growth led by correspondent banking, HOAs, and business banking; some seasonality; outlook constructive .
NIM: Guided flat-to-slightly up; competitive deposit pricing and SOFR-linked repricing are headwinds; excess liquidity in Q1 weighed on NIM but supports loan growth .
ALCO vs. realized margin: Management expects to outperform conservative model assumptions if rates fall; DDA recovery late in quarter supportive .
Expenses: Base around $12.1m could move to ~$12.3–$12.4m near term given hiring/performance accruals .
Capital allocation: Focus remains on organic growth versus buybacks .
Credit: NPAs expected to improve in Q2 due to yacht resolution; classifieds also expected to decline .

Estimates Context

EPS: $0.38 actual vs $0.376* consensus; modest beat, driven by stronger fee income, operating leverage, and solid NII YoY [functions.GetEstimates].
Revenue (S&P net revenue definition): ~$22.15m* actual vs ~$22.94m* consensus; miss attributable to lower SOFR dampening variable loan yields, higher average cash, and lower average DDAs pressuring total earning asset yields [functions.GetEstimates].
Analyst coverage depth: 5 EPS estimates and 4 revenue estimates for Q1 2025* [functions.GetEstimates].
Values marked with * were retrieved from S&P Global.

Key Takeaways for Investors

Earnings quality improving: ROAA 1.19%, ROAE 14.15%, and efficiency 52.79% indicate durable profitability; expense control plus fee momentum (SBA gains, prepayment penalties) support near-term earnings .
Margin setup is balanced: NIM dipped 6 bps q/q on SOFR/cash/DDA mix, but management guides flat-to-slightly up; any Fed cuts could accelerate deposit cost relief and margin resiliency given embedded loan floors .
Growth runway intact: Loans >$2B with diversified mix; deposits scaling across verticals (HOA, correspondent, business banking); TBV/share trending higher .
Credit still benign: NPLs up to 0.20% but expected to improve in Q2; ACL/loans steady at 1.22%; net charge-offs near zero .
Watch competitive deposit pricing: Management notes pricing pressure and customer CD demand; deposit beta management remains critical to NIM outcomes .
Expenses to edge up: Hires and performance accruals move expense base toward ~$12.3–$12.4m; continued operating leverage is key to maintain sub-53% efficiency .
Dividend provides yield support: $0.10 quarterly maintained; capital ratios remain strong (Total RBC 13.72%) .

USCB FINANCIAL HOLDINGS, INC. (USCB)·Q1 2025 Earnings Summary