USCB Financial (NASDAQ:USCB) reported second-quarter 2026 net income of $9.1 million, or $0.49 per diluted share, up from $0.40 per diluted share a year earlier. The company said the quarter was marked by record loan production, higher net interest margin, controlled expenses and continued low credit losses as total assets surpassed $3 billion.
Chairman, President and CEO Luis de la Aguilera said the asset milestone reflected years of relationship-driven growth in South Florida. Total assets rose 11% year over year, while loans reached $2.3 billion, up 9.9%. Deposits totaled $2.5 billion, up 5% from the prior year.
Margin expansion and loan growth
Average loans increased $81.2 million from the first quarter, an annualized growth rate of 15%, while the loan portfolio yield increased to 6.20% from 6.11% in the first quarter. The company reported record new loan production of $272 million, with $116 million, or 42.6% of the quarterly total, closed during June.
Correspondent Banking loans accounted for $83 million, or 30.6%, of quarterly loan production. Anderson said those loans are generally 180-day notes tied to SOFR and carried a 5.22% new-loan yield. Excluding Correspondent Banking activity, new loan production carried a weighted average yield of 6.20%.
The company reiterated its expectation for high-single-digit to low-double-digit net loan growth during the second half of 2026. Anderson said third-quarter production could moderate from the record second-quarter level to roughly $175 million to $190 million, though he described the pipeline as robust.
USCB said its loan production remained diversified, with 42% classified as commercial real estate and 58% as non-commercial real estate. De la Aguilera said commercial real estate concentration has declined from 63% of the portfolio in 2020 to 57% by mid-2026.
Deposit mix and funding strategy
Average deposits rose $61.9 million from the first quarter, or 10.2% on an annualized basis. Average noninterest-bearing demand deposits increased $47.4 million, or 32.5% annualized, pushing average DDA balances above $600 million.
The improved deposit mix helped lower the total deposit cost by four basis points sequentially to 2.16%, a 30-basis-point improvement from a year earlier. However, end-of-period deposits were modestly below the prior quarter after the company exited brokered certificates of deposit and other high-cost, non-relationship deposits.
Anderson said USCB replaced some of that funding with lower-cost Federal Home Loan Bank advances. He said the company would continue to prioritize granular, low-cost deposits while using wholesale funding selectively to optimize the balance sheet.
De la Aguilera also highlighted a new deposit initiative supporting 1031 exchange real estate transactions. Through a partnership with a Florida-based qualified intermediary, U.S. Century is serving as a depository bank for those transactions. The initiative had generated $22 million in deposits since its launch, he said.
Credit quality remains low
Chief Credit Officer Sergio Garrido said asset quality improved during the quarter. Nonperforming loans declined to $2.1 million, or 0.09% of total loans, from $3.6 million, or 0.16%, in the preceding quarter. Classified loans also declined to 0.10% of total loans from 0.30% at March 31.
The allowance for credit losses increased to $26.7 million, though the allowance ratio edged down to 1.15% from 1.16%. The company recorded a $1.3 million provision for credit losses, primarily due to loan growth. Net charge-offs totaled $288,000, or 0.05% of average loans, while nonperforming assets represented 0.07% of total assets.
Anderson said the higher provision weighed on second-quarter earnings because it was recognized upfront, while income from recently originated loans is expected to be more fully reflected in third-quarter results.
Expenses, capital and outlook
Noninterest expense totaled $14 million, increasing $255,000 from the first quarter. The increase was primarily related to a $312,000 excise tax on share repurchases completed in 2025. The efficiency ratio improved to 49.97% from 52.34% in the first quarter, falling below 50% for the first time, management said.
Return on average assets was 1.26%, return on average equity was 15.9%, and pre-tax, pre-provision return on average assets was 1.93%. Tangible book value per share increased 3.35% sequentially to $12.64. Total risk-based capital stood at 13.88%.
The board declared a quarterly cash dividend of $0.125 per share, payable Sept. 4 to shareholders of record Aug. 17.
For near-term modeling, Anderson said management expects net interest margin in a range of 3.40% to 3.50%. Higher deposit costs amid competitive conditions could pressure the lower end of that range, while repricing maturing loans at higher rates could support the upper end.
De la Aguilera said USCB continues to invest in lending teams, technology and specialized deposit channels while operating a branch-light model. The company has reduced its branch count from 18 to nine and expects to close its Miami Lakes branch later this year.
About USCB Financial (NASDAQ:USCB)
USCB Financial (NASDAQ: USCB) is a bank holding company headquartered in Columbia, South Carolina, serving as the parent company of United Security Bank. Established to support community banking in the Midlands region, the company focuses on relationship-driven financial services tailored to both individuals and businesses. As a regional player, USCB Financial emphasizes personalized service through a network of full-service branch offices.
The company’s core business activities include commercial and consumer lending, deposit products and alternative delivery channels.
