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Date
Friday, July 25, 2025 at 3:00 p.m. ET
Call participants
President and Chief Executive Officer — Luis de la Aguilera
Chief Financial Officer — Rob Anderson
Chief Credit Officer — Bill Turner
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Takeaways
Net income-- $8.1 million, or $0.40 per diluted share, a 29% increase compared to the prior year.
Return on average equity-- 14.29% for the quarter, reflecting improved profitability.
Return on average assets-- 1.22% for the quarter.
Net interest margin (NIM)-- 3.28%, with improvement on both a quarterly and yearly basis.
Efficiency ratio-- 51.77%, the lowest since 2021.
Total loans-- $2.1 billion at quarter-end, increasing by $70 million sequentially (14.3% annualized) and $229 million year-over-year (12.5%).
Deposit growth-- Average deposits of $2.3 billion, up 13.7% annualized from the prior quarter.
Cost of deposits-- Lowered by three basis points sequentially, aided by a $17.1 million increase in average DDA balances (12.2% annualized growth).
Tangible book value per share-- Increased $0.30 for the quarter to $11.53.
Net charge-offs-- 14 basis points, with prior provisioning mitigating profit and loss impact this quarter.
Allowance for credit losses-- $24.9 million at quarter-end, with a ratio of 1.18% of loans, driven by a $1 million provision and $700,000 loss on liquidated collateral.
Nonperforming loans-- $1.4 million, down to 0.6% of loans, with no further losses expected.
Classified loans-- Decreased to $5.6 million (0.27% of portfolio, under 2% of capital), with no losses expected.
Commercial real estate portfolio-- $1.2 billion (57% of loans), with average loan-to-value below 60% and adequate debt service coverage.
Loan production-- $187 million in new loans closed during the quarter, with $95 million in new loan production booked in the last weeks of June; weighted average coupon on new loans was 7.12%.
Net interest income-- Increased $1.9 million sequentially (40.3% annualized) and $3.7 million year-over-year (21.5%), driven by higher balances and yields, plus lower deposit costs.
Noninterest income-- Represented 13.8% of total revenue and 0.5% of average assets; SBA loan sales were soft, but a strong third-quarter pipeline is anticipated.
Total expenses-- $12.6 million, rising primarily due to higher compensation and new hires, consistent with guidance.
Universal shelf offering-- $100 million universal shelf offering filed in May 2025, enabling timely access to capital for strategic initiatives.
Investment grade debt rating-- Received from Gold Bond Rating Agency, supporting foreign correspondent banking initiatives.
Foreign bank deposit balances-- $268 million at 1.74% cost, below overall funding costs, accounting for slightly above 10% of total deposits and managed well below 15% historically.
Balance sheet rate sensitivity-- Currently liability-sensitive for year one, trending neutral in year two, positioning for NIM improvement if rates decline.
AOCI impact-- Negative $41.8 million accumulated other comprehensive income, flat sequentially, reflecting low-yield legacy available-for-sale securities with a $2.8 impact on tangible book value per share.
Hiring and pipeline-- New deposit-focused hires made and more planned; management reports the pipeline supports continued double-digit loan growth for upcoming quarters, as discussed on the earnings call.
SBA 7(a) pipeline-- Management expects to double SBA 7(a) volume compared to last year.
Summary
USCB Financial Holdings(USCB 0.56%) reported record profitability metrics for the quarter, supported by robust loan and deposit growth. The company enhanced its strategic flexibility by filing a $100 million universal shelf offering and securing an investment grade rating from Gold Bond Rating Agency, which supports its foreign correspondent banking initiatives. International deposit balances are targeted for further growth but are managed to avoid outsized concentration. Asset quality remains sound, with declining classified and nonperforming loans and no new expected losses. Management signaled expectations for stable to improved net interest margin in a declining rate environment and outlined a strong pipeline in SBA lending and commercial loan origination.
Chief Executive Officer Luis de la Aguilera stated, "U. S. Century Bank's performance throughout the 2025 consistently met or exceeded management's budget expectations."
The $95 million in late-quarter loan closings are expected by management to materially benefit net interest income in the third quarter of 2025.
Chief Financial Officer Rob Anderson explained, "a rate cut environment, we're looking at a liability sensitive balance sheet, and our margin should improve. And that's what we've modeled out."
The foreign correspondent banking team, managing over 30 institutions primarily in the Caribbean Basin and Latin America, has been cited as a key growth driver in low-cost funding.
Management reports that commercial real estate averages less than 60% loan-to-value, and debt service coverage ratios are described as adequate for all segments.
Leadership views M&A opportunities as potential drivers for talent acquisition and market expansion, with a stated readiness to act if strategic situations arise.
Industry glossary
DDA: Demand deposit account, used for checking accounts that allow withdrawals at any time.
SOFR: Secured Overnight Financing Rate, a benchmark interest rate for dollar-denominated derivatives and loans.
AFS securities: "Available-for-sale" securities, fixed-income or equity instruments that a bank may sell, marked to market with changes recorded in other comprehensive income.
AOCI: Accumulated other comprehensive income, a balance sheet account reflecting unrealized gains or losses on certain assets.
SBA 7(a): A flagship U.S. Small Business Administration loan program for small business lending.
Full Conference Call Transcript
Luis de la Aguilera: Thank you, and good morning. Thank you for joining us for USCB Financial Holdings 2025 Second Quarter Earnings Call. With me today reviewing our Q2 highlights, is CFO, Rob Anderson and Chief Credit Officer, Bill Turner. Who will provide an overview of the bank's performance the highlights of which commence on Slide three. I'm very pleased to report that U. S. Century Bank delivered another consecutive record quarter with continued improvement in our profitability ratios. Posting a return on average equity of 14.29%, a return on average assets of 1.22%, and a fully diluted earnings per share of $0.40 compared to $0.31 per fully diluted share for the same period in 2024.
This past Monday, the bank marked its fourth anniversary since launching a successful IPO on 07/21/2021. Since then, management's overarching focus has been to safely grow the bank as a high performing franchise while prudently managing risk and capital allocation to deliver long term value to our shareholders. That goal remains. Our efforts continue. And as always, the team executes on a clearly defined and communicated business plan. Our strong franchise presence in key South Florida markets enables us to achieve steady, sustainable, profitable growth reflecting the success of our strategic initiatives and diversified business lines.
Also, the success of our deposit verticals has resulted in a diversified funding base which has helped us to manage our NIM under an evolving economic environment. Part of the success has been reflected in our valuation. USCB stands out as one of the few independent banks with a meaningful scale in the Miami Dade MSA, having $2.1 billion in local deposits across 10 branches. Positioning us uniquely among area competitors offering clients a relationship-driven experience backed by local decision making, with deep market knowledge. Our ability to combine personalized service with strong financial performance continues to differentiate USCB and our competitive landscape.
To this point, average deposits increased 13.7% annualized compared to the previous quarter to $2.3 billion reflecting the trust and confidence of our clients as well as the efforts to prudently hire proven production personnel. As previously reported, and in support of our deposit focus, we added four new producers in the first half of the year. Two in business banking, one deposit-focused business developer, and another supporting our association banking. Which targets the deposit-rich South Florida condominium market. Next month, our private client group will add another experienced vice president at our Coral Gables location. As management develops our three-year strategic plan, we aim to remain agile and responsive to accretive hiring and business opportunities and their execution.
To this point, the company has done two things to prepare ourselves for the quick execution if and when market conditions present themselves. In May, we filed a $100 million universal shelf offering. The shelf allows the company to offer various securities over a period of time as needed without the requirement to file a new registration statement for each offering. Shortly thereafter, Gold Bond Rating Agency assigned both the company and the bank investment grade debt ratings. The investment grade ratings will support the deposit gathering activity of our foreign correspondent bank team. As several of their existing and potential bank clients set deposit limits on US bank correspondence unless they are credit rated.
This action will allow us to gather more deposits from this customer base. We view both actions as customary and prudent steps to further prepare ourselves to quickly and efficiently execute strategic initiatives as they present themselves over time. The following page is self-explanatory. Directionally showing nine select historical trends since recapitalization. Profitable performance based on sound and conservative risk management, is what our team is focused on consistently delivering. So now let's draw our attention to our specific financial results and key performance indicators, which will be reviewed by our CFO, Rob Anderson.
Rob Anderson: Thank you, Lou, and good morning, everyone. Looking at pages five and six, I would describe the 2025 as a highly successful quarter for USCB. In fact, it was another record for us. Net income was $8.1 million or $0.40 per diluted share, up 29% over the prior year. Total loans were up 15.1% annualized compared to the prior quarter and the portfolio hit another milestone by closing above $2.1 billion. Deposits rose 4.5% annually from the previous quarter giving us strong liquidity to support upcoming loan growth. Profitability ratios were equally as impressive. Return on average assets was 1.22%. Return on average equity was 14.29%. The NIM improved to 3.28%. Efficiency ratio improved to 51.77%.
And our tangible book value per share was up 30¢ for the quarter to $11.53. And last, credit metrics remain within management expectations. The net charge off of 14 basis points this quarter was in large part provided for last quarter. So the impact on earnings this quarter was negligible. Bill will touch on this in a bit. So with that overview, let's discuss deposits on the next page. Deposits have demonstrated sustained growth on both quarterly and year over year basis. Through ongoing effective execution across our diverse business verticals we have been able to grow our deposit book and reduce the cost of deposits. Despite no movement in the fed funds rate this year.
The increase in deposit balances and improvement in the cost of funds is mostly driven by higher average DDA balances for the quarter. Average DDA balances increased $17.1 million or 12.2% annually compared to the prior quarter. And we successfully lowered interest bearing liabilities by five basis points from the prior quarter, which helped improve our overall cost of deposits by three basis points. Let's move on to the loan book. On a linked quarter basis, average loans grew $70 million or 14.3% annualized. Compared to the second quarter of 2024, we grew $229 million or 12.5%. Regardless of the comparison point, our growth was at the top end of our previous guidance.
Alongside this growth, we saw our loan yield climb six basis points from the previous quarter, and seven basis points compared to Q2 of 2024. The loan yield improvement was driven by higher yields on new loan production, and a stable SOFR rate throughout Q2. Looking ahead and assuming no rate changes this quarter, loan yields are expected to remain stable or improve slightly as new loans are booked with yields higher than the portfolio average yield. Moving on to page nine. For the quarter, we closed a $187 million in new loan production with $95 million of that closing in the last couple weeks of June.
Due to the late addition of these loans, the full impact of the quarterly loan production to interest income was not fully realized in Q2, but will more fully materialize in Q3. The weighted average coupon on new loans was 7.12% and 89 basis points higher than the portfolio average yield. Our loan portfolio continues to diversify, shifting away from real estate related loans and into other various loan types. Now having reviewed both deposit and loan performance, let's see the impact on the margin. On both a quarterly basis and a yearly basis, the NIM continues to improve. Reflecting the strength of our asset mix and disciplined balance sheet management.
Net interest income experienced notable growth increasing by $1.9 million or 40.3% annualized over the prior quarter, and up $3.7 million or 21.5% compared to Q2 of 'twenty four. This increase was driven by several factors, including a larger balance sheet higher yields on both loans and securities, coupled with lower deposit costs. Additionally, and as just mentioned, the $95 million in new loan production which happened late in the quarter will more fully impact earnings in Q3. Let's turn to page 11 to see the impact on changing rates on our balance sheet. In the past several quarters, our strategy has been to prepare for a lower rate environment and a more normalized yield curve.
This strategic positioning has begun to yield benefits as evidenced by an increasing margin and profitability. Our balance sheet currently demonstrates a liability sensitive profile for year one in transitions to an almost neutral balance sheet for year two. We view this transition very positively for two reasons. First, if rate cuts occur in the near term, this will allow us to reprice our funding sources more quickly than our assets, which should provide a boost to our net interest margin.
Second, as the yield curve returns to a more traditional shape, a positive upward sloping yield curve we'll we will be well positioned to capture the widening spread between lower cost short term funding and higher yielding long term assets. This combination of agility and preparedness enhances our ability to navigate both the declining and normalizing rate environment supporting sustained margin improvement in the quarters ahead. So with that, let me turn it over to Bill to discuss asset quality.
Bill Turner: Thank you, Rob, and good morning, everyone. Please turn to page 12. You can see from the first graph, the allowance for credit losses increased $24.9 million in the second quarter. The increase was due to the net effect of the million dollar quarterly provision and the $700,000 loss on the sales of a yacht and a tender vessel, which collateralized the consumer loan relationship. This amount had been reserved in previous quarters. The allowance for credit loss ratio is at an adequate 1.18% of the portfolio at second quarter end. The million dollar provision was driven by the $77 million in net loan growth during the quarter.
The remaining graphs on page 12 show the nonperforming loans at quarter end at $1.4 million and decreased to 0.6% of the portfolio, and are well covered by the allowance. The decrease was related to the liquidation of the vessels mentioned before, and the payoff of a non accrual residential loan. No losses are expected from these remaining non performing loans. Classified loans also decreased during the quarter to $5.6 million or 0.27% of the portfolio. And represents less than 2% of capital. The decrease was again related to the sale of the consumer loan relationship vessels and the residential loan payoff. No losses are expected from the remaining classified loans. The bank continues to have no other real estate.
On page 13, first graph shows the diversified loan portfolio mix as second quarter end. The loan portfolio increased $77 million on a net basis in the second quarter to $2.1 billion. Commercial real estate represents 57% of the portfolio for or $1.2 billion segmented between retail, multifamily, motor and warehouse properties. The second graph is a breakout of the commercial real estate portfolios for the non owner occupied and owner occupied portfolios, which also demonstrate their diversity. Case. The table to the right of the graph shows the weighted average loan to values of the commercial real estate portfolio at less than 60% and debt service coverage ratios are adequate for each portfolio segment.
The quality and payment performances are good for all segments of the portfolio, with the past due ratio at 0.19% and nonperforming loans remain below peer banks. Overall, the quality of the loan portfolio remains good. Now let me turn it back over to Rob.
Rob Anderson: Thank you, Bill. Noninterest income continues to improve with a variety of different revenue streams. Both wire and swap fees increased over the prior quarter, and as mentioned on previous calls, all loans are booked with prepayment penalties. So in the event of an early payoff, we receive compensation. These fees are booked under the other line item and service fees. Title insurance fees and bank owned life insurance are also in this line item. SBA loan sales were down slightly from the prior quarter but the pipeline is strong and we expect a higher number in Q3.
Overall, noninterest income was 13.8% of total revenue, and 0.5% to average assets, slightly lower than the prior quarter, so we'll look to improve upon this number in Q3. Let's, look at expenses on page 15. Our total expense base was $12.6 million and while up from the prior quarter, it was in line with guidance. The efficiency ratio was 51.77% and the lowest since 2021. In more detail, salaries and benefits rose by $318,000 from the previous quarter due to the additional new hires that Lou mentioned, and increased incentive accruals reflecting improved company performance. As stated previously, our incentive programs are aligned with our shareholders and are highly variable.
Looking forward, we expect the quarterly expense base to be at this level and perhaps gradually increase throughout the balance of 2025 with consistent improved overall company performance. So with that, let's turn to capital. The capital ratios remain strong, improved comp in comparison to the previous quarter and well above regulatory minimums. Providing a solid foundation for ongoing growth and strategic initiatives. The AOCI was a negative $41.8 million, flat compared to the previous quarter, which resulted in a negative $2.8 impact on our tangible book value per share metric. We have $285 million in AFS securities, and the majority of this was purchased during the pandemic with historically low interest rates.
The yield on these securities is low, below 3%, and hence, the large negative mark. We are hopeful that in the coming quarters that this asset can somewhat self-correct with improved rates, runoff, become a much smaller portion of the balance sheet with continued growth, or we have an opportunity to sell a portion of these securities with acceptable return economics to our shareholders. In short, we are monitoring each option to improve our forward earnings and profitability. As Lou mentioned, we completed a $100 million universal shelf offering, received investment grade debt ratings from Kroll, and are well prepared for a variety of strategic initiatives if and when they present themselves.
With that, let me turn it back to Lou for some closing comments.
Luis de la Aguilera: Thank you, Rob. U. S. Century Bank's performance throughout the 2025 consistently met or exceeded management's budget expectations. Without a doubt, we benefit and are propelled by the resiliency and strength of the Florida market. Which continues to attract businesses and residents across the nation drawn by our favorable client, pro business policies, and absence of state income tax. The state's total state GDP reached nearly $1.5 trillion and is projected to grow at 2.5 to 3% for 2025, continuing to outpace the national average. Florida has maintained a lower than average unemployment rate for more than fifty consecutive months and has added over a 113,000 jobs year over year as of January 2025. Again, outpacing the national growth rates.
Clearly, the strength of the market we serve provides the fuel to deliver continued strong profitability metrics, balance sheet growth, and operational efficiency. With that said, I would like to open the floor for Q and A.
Operator: Ladies and gentlemen, at this time, we'll begin the question star and then one on your touch tone phones. If you are using a speakerphone, we ask that you please pick up the handset prior to pressing the keys to ensure the best sound quality. To withdraw your questions, you may press star, and two. Once again, that is star and then one to ask a question. At this time, we'll pause momentarily to assemble the roster. And our first question today comes from Will Jones from KBW. Please go ahead with your question.
Will Jones: Yeah. Hey. Great. Good morning, guys.
Luis de la Aguilera: Morning.
Will Jones: Yeah. Hey. So, Lou and Rob, thanks for pointing out the, the investment grade rating. I think that's, you know, a very important step for you guys. And, Lou, you mentioned the opportunity this could provide just on the international deposit front. I guess just this first question is the strategy different trying to gather international deposits as opposed to domestic deposits? And you maybe just help us frame or give us just a, you know, a realistic idea of what this opportunity could be for? In terms of the deposit the deposit chance here?
Luis de la Aguilera: Certainly. The Global Group manages a portfolio of 30 banks. That are in the Caribbean Basin and Central America. There are two other banks that are not in that area. There's a few that are in Ecuador and one that is in Peru. We have segregated these banks into three categories. Let's just call them a banks, b banks, and c banks, and we're really grading them by their deposits with us. So an a bank will have deposits over $10 million on average. A b bank will have deposits maybe from $2 million to, to 10. And then the c banks have a average balances. I think we're about $1.5 million.
So what we're doing here is upgrading the b banks to a, maintaining and growing the a banks, and then growing the c banks. We started last year probably a more robust travel schedule than we've ever had. I think in the last quarter and a half of the year, we literally visited all the banks that are borrowing banks. And we saw deposits grow relatively quickly after that. This is very much a relationship driven strategy, and our executive who runs it has had almost forty years in the business. He travels with his successor. He knows these banks very well. They know him. And by extension, us.
So the plan is really to grow to grow that area in with the strategy that I just mentioned. But it just so happens that there's a number of these countries that have limits on how much they can have out to US banks, and this has been the case for the longest time. So getting the debt rating and sharing it with them is gonna give us the ability to, again, raise those deposits from c's to b's and from b to a's. And we're also looking at possibly three to five new banks in the portfolio for 2026.
So we're we're we're focused on that, and we will be we will be, reaching out to them probably in due time.
Will Jones: That's great. That's that's very helpful to understand. And just in terms of what you see the incremental cost of deposits on an inter you know, some of your international customers as opposed to you know, the incremental cost in, you know, on your domestic customers. What do you what do you see as the driving difference there?
Rob Anderson: Yeah. So, Will, I'll take that one. So on our, global banking front, we probably have $268 million in deposits as of, quarter end. The cost of those deposits are cheaper than the overall, funding cost. They're at 1.74%. So, certainly, you know, these are banking institutions and, you know, they want a relationship with a US based correspondent bank. And, we priced them, fairly low, and they're below our overall cost of deposits.
Will Jones: Yeah. Well, seems like a very attractive opportunity for you guys then. We're all while I've got you, just quick one on the margin. I know just looking back to my notes last quarter, it feels like rate cuts you know, are, you know, beneficial to you guys just in terms of your rate sensitivity? Though I say that every quarter, feels like, you know, we continue to outperform margin expectations and, you know, the margin was up you know, fairly significantly again this quarter. Do you still see the same, you know, NIM upside if we do get cuts later in the year?
Or have you, you know, really kind of recognized some of the benefit to margin, you know, earlier in the start half of the year and rate cuts will just more or less help you maintain stability as we look into the second half?
Rob Anderson: Yeah. The, on the deposit book, you know, we're looking at that for opportunities. You know, sometimes we will bring in a new client. We will give them a good rate. We're looking for a relationship, looking for their operating account. And, you know, if that doesn't materialize, we'll look to cut that rate until that happens. But, you know, on average, we had $1.2 billion in money market. So if rates do, get cut on the front end of the curve by the Fed, you know, we'd be looking to that money market book. To reduce rates. And I think we've been managing that pretty prudently in flat rate environment.
And, certainly, with that size of a money market book, we'll have opportunities to cut with the Fed cut, and that would help our margins. So in you know, a rate cut environment, we're looking at a liability sensitive balance sheet, and our margin should improve. And that's what we've modeled out.
Will Jones: Yeah. Okay. That's that's great. Thanks, for all the color this morning, and really nice quarter, guys.
Rob Anderson: Thank you.
Operator: Our next question comes from Freddie Strickland from Hofty Group. Please go ahead with your question.
Freddie Strickland: Hey. Good morning, Lou, Rob, and Bill. Just, want to talk about loan pipeline mix today. What do you have going on in the next, let's say, six months or so? And if we get rig cuts how does that change?
Luis de la Aguilera: Well, we actually, Bill, Rob, and I attend the pipeline meeting with the lenders every week. So it's 52 times a year. We're sitting in there. We're asked questions. We're seeing what's coming in the pipeline. We had two really solid months closing June and July. I think it was, like, $150 million in closings. The pipeline usually during the third quarter because of the summer months historically always dips a little. But we're we're projecting what we have in credit and what has already been closed in July, we feel very comfortable that we're gonna hit the numbers again. So we have the dry powder. Going into the fourth quarter.
And, we have, we have the volume in place to deliver the third. It's pretty it's pretty balanced as we have mentioned. You know, we have business coming in from numerous business verticals, whether it be the yacht loans, the, the association bank on the HOA side, and then on the commercial on the commercial side, I think it's pretty balanced with multifamily and, you know, warehouse and very select retail. So it continues to be more of the same, and we also believe we're gonna have a very strong year end on the SBA side, especially with the seven a's, the pipeline there looks really good.
We believe that we're going to double our SBA seven a volume from what it was last year.
Freddie Strickland: Gotcha. Thanks for that. You actually beat me to my next question, which was kinda on the gain on sale. Obviously, stepped down a little bit in the first, second quarter. It sounds like given the SBA pipeline, maybe we could see that come back up in the back half of the year?
Luis de la Aguilera: We believe so.
Freddie Strickland: Perfect. And just one more for me. Just great to see the DDAs rise during the quarter. Can you a little bit about what some of the biggest drivers were there? It sounds like we can maybe see that continue given some of your prepared remarks.
Rob Anderson: Yeah. Maybe I'll I'll I'll touch on that one. Know, certainly, you know, our desire is to have all of our clients view us as their main bank. And you know, so all of our team is incentivized on gathering deposits but specifically DDA. So, we have a lot of initiatives, and, we made some new hires this year. That are focused only on deposits.
You know, I think our loans have had a very strong trajectory and growing at double digits and the deposit and our funding base and making sure that's low cost core deposits is really, what we need to focus on and will be, helpful for us in the back half of this year and next year. But, certainly, I think, you know, no matter how many banks you talk to, they're always looking for low cost deposit and solid relationships. So you know, it we're out there on the street every day fighting with everyone else in town. So know, we'll see if we can get our share.
Freddie Strickland: Great. Thanks for that, Rob. Thanks for taking my questions, guys. I'll step back.
Operator: Certainly. Our next question comes from Michael Rose from Raymond James. Please go ahead with your question.
Michael Rose: Good morning, guys. Thanks for, taking my questions. Just two quick for me. Just back to the international deposit gathering strategy. Just wanted to better appreciate, you know, what the size of that book is and maybe what it could grow to as a percentage of deposits. You know, I think as analysts, investors, we're all always a little bit skeptical, probably wrongly so, see foreign deposits, you know, there's another bank, you know, within your market that has a pretty high concentration. And isn't necessarily viewed as kind of the greatest, thing. I'm certainly fine with it. But is there any sort of limiters as to you know, what you would want that to grow versus the domestic deposit?
Certainly understand why you're why you're doing it part of the strategy and everything, but wanted to better appreciate, you know, what the, what the limiters could be. Thanks.
Rob Anderson: Yeah. Hey, Michael. It's Rob. I'll I'll take this first just to some numbers out there. We have about $268 million in, our global course. Correspondent banking group. And as Lou mentioned, these are all foreign banks, but they're they're looking for a US correspondent, which you know, we have over 30 of them here. The cost of those deposits are rather low to our overall cost. So think it's a great funding source. We've been in this business for multiple years. And at $268 million, probably what? Know, little over, 10% of our total deposit book.
We don't have necessarily caps on that, but I don't think it's ever been above 15% the entire time I've been here for the last five years. So we'd look to grow it in tandem with our balance sheet. I think we could, get it a little bit bigger but I don't think it'll be anything that would remain outsized of our funding base. I don't know. Lou, anything else on I agree. The potential is there actually in the last board we were talking about. You know, the potential to do it because it truly is there. We've been we've been growing it, you know, since the recap. Ten years ago, it was one of what it is now.
Obviously, the bank was in a different situation back then. But we're dealing with countries that you know, will have the entire the entire bank network in one of these countries may be, seven to 10 banks. So the banks are in very good shape. We when we analyze them, you know, we it's not only the country risk. It's the bank risk. And because of the relationships that we have with the executive teams, you know, we just believe that it has tremendous potential.
We keep it at a certain level because we don't want it to have, know, an outsized concentration, but the potential to do that and the fees that come with it especially on the wire, is very significant. Another thing that we've been doing over time, is that we've been reaching out to the executives of these banks and you know, dozens of them have accounts here with us. As you know, it's very common for well heeled central and South Americans to maintain a second home in Florida. So we tap into that opportunity, and, and they've responded. So we like the business. We know the business. We handle it very conservatively.
And we've never had an issue on any on any of our subsequent safety and soundness examinations over the last fifteen years.
Michael Rose: No. No. It's a great overview. Really, really appreciate it. I assume the beta on those deposits is fairly low as well as the stickiness being pretty high. Is that is that a fair kind of assumption?
Luis de la Aguilera: Very fair. Very fair.
Michael Rose: Okay. Perfect. Alright. And then maybe just separately, we've seen a lot of m and a, you know, announced both in Florida and kind of more broadly, you know, one last night amongst some regional banks. How does that factor into maybe your hiring plans? I know dislocations are always opportunities for talent additions. And then just separately, just given the multiple and where you're trading on tangible, probably could open up some opportunities for you to actually look to acquire maybe some smaller banks in and around your markets. Is that something you guys are thinking about? Thanks.
Luis de la Aguilera: Well, Rob and I are we pretty much know every CEO in the Miami Dade MS I think part of our job is to keep close tabs and get relationships with them, and we're always we're always planting seeds when we have these discussions. So those possibilities are definitely there. In the past, when there have been merger you know, situations here in the local market. We have taken advantage of that. We took advantage of that. With Apollo. We took advantage of that with Professional. And if anything else happens, we will we'll move accordingly. We're always gonna be, opportunistic when those opportunities present themselves.
Rob Anderson: Yeah. Then maybe on the multiple Michael, I mean, I don't know. We're trading right around $1.50 a tangible book, but probably on earnings maybe a little bit lower than peers. I'll leave that to you guys. But, certainly, in our job is to run the bank and put up good numbers. I think we've done that consistently. We're very, positive about the outlook. For the balance of this year and next year as well. So, you know, we'll leave that to you guys on the multiples.
Michael Rose: Perfect. And maybe just one final one for me. Just going back to loan growth. Obviously, really nice growth this quarter above kind of the outlook you guys had laid out. Doesn't sound to me based on the prior questions that there's really any slowing here. So it's it's kind of a more of a mid teens growth rate, more we should expect here at least for the next couple of quarters just based on pipelines and previous commentary?
Rob Anderson: Yes. I mean, Lou mentioned that the summer is a little slow, but we do have a solid pipeline. I'd probably say just more conservatively, Michael, maybe on the lower teens. I mean, on page nine of our presentation, past two quarters, we've, you know, originated new loans, a hundred and eight a 182 in Q1, then a 187 you know, this quarter, but we really haven't been below a 150. Million for the past five quarters. So you know, I would anticipate, you know, between a 150 to a 180,000,000 you know, the next couple quarters as well. So that could lead to you know, low double digits. But, you know, could we reach the upper end of that?
Yeah. Perhaps.
Michael Rose: Perfect. Step back. Thanks for taking my questions.
Rob Anderson: Thanks, Michael.
Operator: And ladies and gentlemen, at this time, we'll be ending today's question and answer session. I'd like to turn the floor back over to management for any closing remarks.
Luis de la Aguilera: Well, on behalf of the entire management team and our board of directors, I wanna thank you for your interest and time. We're excited about our growth trajectory. And the strength of the franchise, and we look forward to updating you on our progress in the next quarter. So thank you, and have a great day.
Operator: Ladies and gentlemen, with that, we'll conclude today's conference call and presentation. We do thank you for joining. May now disconnect your lines.