8-K
USCB FINANCIAL HOLDINGS, INC. (USCB)
1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
__________________________
FORM
8-K
__________________________
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act
of 1934
Date of Report (Date of earliest event reported):
January 26, 2023
__________________________
USCB Financial Holdings, Inc.
(Exact name of Registrant as Specified in Its Charter)
__________________________
Florida
001-41196
87-4070846
(State or Other Jurisdiction
of Incorporation)
(Commission File Number)
(IRS Employer
Identification No.)
2301 N.W. 87th Avenue
,
Miami
,
Florida
33172
(Address of Principal Executive Offices)
(Zip Code)
Registrant’s Telephone
Number, Including Area Code: (
305
)
715-5200
__________________________
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation
of the registrant under
any of the following provisions:
☐
Written communications pursuant
to Rule 425 under the Securities Act (17 CFR 230.425)
☐
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a
-12)
☐
Pre-commencement communications pursuant to Rule 14d-2(b)
under the Exchange Act (17 CFR 240.14d-2(b))
☐
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading
Symbol(s)
Name of each exchange on which registered
Class A common stock, $1.00 par value per share
USCB
The Nasdaq Stock Market LLC
Indicate by
check mark
whether the
registrant is
an emerging
growth company
as defined
in Rule
405 of
the Securities
Act of
1933
(§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b
-2 of this chapter).
Emerging growth company
☒
If
an
emerging
growth
company,
indicate
by
check
mark
if
the
registrant
has
elected
not
to
use
the
extended
transition
period
for
complying with any new or revised financial accounting standards provided
pursuant to Section 13(a) of the Exchange Act.
☐
2
Item 2.02. Results of Operations and Financial Condition.
On January 26, 2023, USCB Financial
Holdings, Inc. (the “Company”), issued
a press release announcing its financial
results
for the fourth quarter ended December 31, 2022. A copy of the press release is furnished as Exhibit 99.1 to
this Current Report on Form
8-K and is incorporated herein by reference.
The information
in this Item
2.02, including
Exhibit 99.1, is
being furnished
and shall not
be deemed
“filed” for purposes
of
Section 18 of the
Securities Exchange Act
of 1934 (the “Exchange
Act”), or otherwise subject
to the liability of
that section, and
shall
not be deemed
to be incorporated
by reference into
any filing under
the Securities Act of
1933 (the “Securities
Act”) or the
Exchange
Act.
Item 7.01. Regulation FD Disclosure.
As previously announced, at 9:00
a.m. ET on January 27, 2023, the
Company will hold an earnings conference
call to discuss
its financial performance
for the quarter ended
December 31, 2022. A
copy of the slides
forming the basis of
the presentation is being
furnished as Exhibit 99.2 to this Current Report on Form
8-K and is incorporated herein by reference. A copy of the
slides has also been
posted to the Company’s investor relations
website, located at investors.uscenturybank.com.
The information
in this Item
7.01, including
Exhibit 99.2, is
being furnished
and shall not
be deemed
“filed” for purposes
of
Section 18
of the
Exchange Act,
or otherwise
subject to
the
liability of
that section,
and
shall not
be deemed
to be
incorporated
by
reference into any filing under the Securities Act or the Exchange Act.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
Exhibit No.
Description
99.1
USCB Financial Holdings, Inc. Press Release, dated January 26, 2022
99.2
Earnings Presentation, dated January 27, 2022
104
Cover Page Interactive Data File (embedded within the Inline XBRL document)
exhibit991
1
Exhibit 99.1
EARNINGS RELEASE
USCB Financial Holdings, Inc. Reports EPS of $0.22, Operating EPS
of $0.29 for Q4 2022
MIAMI – January 26, 2023 – USCB Financial Holdings, Inc. (the “Company”) (NASDAQ: USCB)
, the holding company for U.S.
Century Bank
(the “Bank”),
reported net
income of
$4.4 million
or $0.22
per diluted
share for
the three
months ended
December 31,
2022, compared with net income of $5.7 million or $0.30 per diluted
share, for the same period in 2021.
Near quarter
end, the
Bank executed
a portfolio
restructuring strategy
which resulted
in a
sale
of $17.0
million of
its lower-yielding
available-for-sale securities for
an after-tax
loss of $1.5
million or $0.07
EPS in the quarter.
Proceeds from the
sale will be reinvested
in securities and loans currently yielding, on average, 430-460 basis points higher
than the securities that were sold. The loss on sale of
securities
is
expected
to
have
a
nominal
impact
on
tangible
book
value,
as
such
loss
was
previously
reflected
in
capital
through
accumulated other comprehensive income
(AOCI).
Additionally, the
reinvestment from the sale proceeds
into higher yielding earning
assets will have a $0.03 EPS positive impact on 2023 earnings.
Excluding gain (loss) from
the sale of securities, Non-GAAP
Operating net income was
$5.9 million or $0.29
per diluted share for
the
fourth quarter ended December 31, 2022, compared to $5.6 million
or $0.30 per diluted share, for the same period in 2021.
"Despite a challenging operating environment, 2022 afforded
us extraordinary opportunities for growth and profitability.
While a soft
landing for
the economy
is expected
in 2023,
we are
taking a
prudent approach
with our
balance sheet
by limiting
growth in
certain
assets, maintaining
appropriate capital
and reserve
levels, managing
liquidity,
and preparing
for a
range of
economic scenarios.”
said
Luis de la Aguilera, President and Chief Executive Officer.
Unless otherwise stated, all percentage
comparisons in the bullet points
below are calculated for
the quarter ended December 31,
2022
compared to the quarter ended December 31, 2021 and annualized
where appropriate.
Profitability
•
Annualized return on average assets for the quarter ended December 31, 2022 was 0.86% compared to 1.23% for the fourth quarter
of 2021.
Non-GAAP Operating
return on assets
for the
quarter ended
December 31, 2022
was 1.14%
compared to
1.22% for
the
fourth quarter of 2021.
•
Annualized return
on average stockholders’
equity for the
quarter ended December
31, 2022 was
9.91%
compared to 11.08
%
for
the fourth quarter of 2021. Non-GAAP Operating return on equity for the quarter ended
December 31, 2022 was 13.23% compared
to 11.03% for the fourth quarter of 2021.
•
The efficiency ratio for the quarter
ended December 31, 2022 was 59.81%
compared to 55.74% for the
fourth quarter of 2021. Non-
GAAP Operating efficiency ratio for the quarter ended December 31, 2022 was 53.46% compared to 55.85% for the fourth quarter
of 2021.
•
Net interest margin increased to 3.45% for the quarter ended December 31, 2022 compared
to 3.19% for the fourth quarter of 2021.
•
Net interest income
before provision
for credit
losses was $16.
9
million for
the quarter ended
December 31, 2022,
an increase of
$2.8 million or 19.8% compared to the fourth quarter of 2021.
Balance Sheet
•
Total assets were $2.1 billion at December 31, 2022, representing an increase
of $231.9 million or 12.5% from December 31, 2021.
•
Total loans were $1.5 billion at December 31, 2022, representing an increase of $317.3 million or 26.7% from December 31, 2021.
•
Total
deposits were
$1.8
billion at
December 31, 2022,
representing an
increase of
$238.9 million
or 15.0%
from December 31,
2021.
2
•
Total
stockholders’
equity
was
$182.4 million
at
December 31,
2022,
representing
a
decrease
of
$21.5
million
or
10.5%
from
December 31, 2021. Total stockholders’ equity includes
unrealized security losses
of $44.8 million
at December 31, 2022
compared
to unrealized security loss of $2.5 million at December 31, 2021.
Asset Quality
•
The allowance for
credit losses
increased by $2.4
million to $17.5 million
at December 31, 2022
from $15.1 million
at December 31,
2021.
•
The allowance for credit losses represented 1.16% of total loans at December
31, 2022 compared to 1.27% at December 31, 2021.
•
Non-performing loans to total loans was 0.00% at December 31,
2022 compared to 0.10% at December 31, 2021.
Non-interest Income and Non-interest Expense
•
Non-interest
income was negative
$0.1 million
for the
three months
ended December 31, 2022
compared to
$2.6 million
for the
same
period
in
2021.
Non-interest
income
was
negative
in
the
fourth
quarter
of 2022
due
to
a
$2.0
million
loss
on
the
sale
of
securities.
•
Non-interest
expense
was
$10.0 million
for
the
three
months
ended
December 31,
2022,
an
increase
of
$0.7
million
or
7.5%
compared to the same period in 2021.
Capital
•
As of December 31, 2022,
total risk-based capital ratios for the Company and the Bank were 13.65% and 13.58%,
respectively.
•
Tangible
book value
per common
share of
$9.12 was
negatively affected
by $2.24
due to
after tax
unrealized security
losses of
$44.8 million at
December 31, 2022. At
December 31, 2021, tangible
book value of
$10.20 was negatively
affected by $0.
13 due
to $2.5 million after tax unrealized security losses.
Conference Call and Webcast
The Company will
host a conference
call on Friday,
January 27, 2023,
at 9:00 a.m. Eastern
Time to
discuss the Company’s
unaudited
financial results for the quarter ended December 31, 2022. To access the conference call, dial (866) 652-5200 (U.S. toll-free) and ask to
join the USCB Financial Holdings Call.
Additionally,
interested
parties can
listen to
a live
webcast
of the
call in
the “Investor
Relations” section
of the
Company’s
website
at www.uscentury.com
.
An archived version of the webcast will be available in the same location shortly after
the live call has ended.
About USCB Financial Holdings, Inc.
USCB Financial Holdings, Inc.
is the bank holding company for
U.S. Century Bank. Established in 2002,
U.S. Century Bank is one of
the largest community banks headquartered in
Miami, and one of
the largest community banks in
the state of Florida.
U.S. Century Bank
is rated 5-Stars by BauerFinancial, the nation’s leading independent bank rating firm. U.S. Century Bank offers customers a wide range
of
financial
products
and
services
and
supports
numerous
community
organizations,
including
the
Greater
Miami
Chamber
of
Commerce, the South
Florida Hispanic Chamber
of Commerce, and
ChamberSouth. For more
information or to
find a banking
center
near you, please call (305) 715-5200 or visit www.uscentury.com.
Forward-Looking Statements
This earnings
release may contain
statements that are
not historical in
nature and are
intended to be,
and are hereby
identified as,
forward-
looking statements for
purposes of the safe
harbor provided by
Section 21E of
the Securities Exchange
Act of 1934,
as amended. The
words “may,”
“will,” “anticipate,” “should,”
“would,” “believe,”
“contemplate,” “expect,”
“aim,” “plan,”
“estimate,” “continue,”
and
“intend,”
as
well
as
other
similar
words
and
expressions
of
the
future,
are
intended
to
identify
forward-looking
statements.
These
forward-looking
statements
include
statements
related
to
our
projected
growth,
anticipated
future
financial
performance,
and
management’s long-term performance goals, as
well as
statements relating to
the anticipated effects
on results of
operations and financial
condition from expected
developments or events,
or business
and growth strategies,
including anticipated internal
growth and the
balance
sheet restructuring.
These forward-looking statements involve significant risks and uncertainties that could cause our actual
results to differ materially from
those anticipated in such statements. Potential risks and uncertainties include,
but are not limited to:
3
•
the strength of the United States economy in general and the strength of the local economies in
which we conduct operations;
•
the continuation of the COVID-19 pandemic and its impact on us, our employees, customers and third-party service providers, and
the ultimate extent of the impact of the pandemic and related government
stimulus programs;
•
our ability to successfully manage interest rate risk, credit risk, liquidity risk,
and other risks inherent to our industry;
•
the
accuracy
of
our
financial
statement
estimates
and
assumptions,
including
the
estimates
used
for
our
credit
loss
reserve
and
deferred tax asset valuation allowance;
•
the efficiency and effectiveness of our internal
control environment;
•
our ability to comply with
the extensive laws and
regulations to which we are
subject, including the laws for
each jurisdiction where
we operate;
•
legislative or regulatory changes and changes in accounting principles, policies, practices or guidelines, including the effects of the
forthcoming implementation of the Current Expected Credit Losses (“CECL”)
standard;
•
the effects of
our lack of
a diversified loan
portfolio and concentration in
the South Florida
market, including the
risks of geographic,
depositor, and industry concentrations, including
our concentration in loans secured by real estate;
•
effects of climate change
•
the concentration of ownership of our common stock;
•
fluctuations in the price of our common stock;
•
our ability to
fund or access
the capital markets
at attractive rates
and terms and
manage our growth,
both organic
growth as well
as growth through other means, such as future acquisitions;
•
inflation, interest rate, unemployment rate, market, and monetary
fluctuations;
•
impacts of international hostilities and geopolitical events
•
increased competition and its effect on the pricing of our products
and services as well as our margin;
•
the effectiveness
of our risk management
strategies, including operational
risks, including, but
not limited to, client,
employee, or
third-party fraud and security breaches; and
•
other risks described in this earnings release and other filings we make with the
Securities and Exchange Commission (“SEC”).
All forward-looking statements are necessarily only estimates of future results, and there can be no assurance that actual results will not
differ materially from
expectations. Therefore, you
are cautioned not
to place undue
reliance on any
forward-looking statements. Further,
forward-looking
statements included
in this
earnings release
are made
only as
of the
date hereof,
and we
undertake no
obligation
to
update or
revise any
forward-looking statement
to reflect
events or
circumstances after
the date
on which
the statement
is made
or to
reflect the occurrence of unanticipated events, unless required to
do so under the federal securities laws.
You should also review the risk
factors described in the reports the Company filed or will file with the SEC and, for periods prior to the completion of the bank holding
company reorganization in December 2021, the Bank
filed with the FDIC.
Non-GAAP Financial Measures
This earnings
release includes financial
information determined by
methods other than
in accordance with
generally accepted accounting
principles (“GAAP”). This financial
information includes certain
operating performance measures. Management
has included these
non-
GAAP
measures
because
it
believes
these
measures
may
provide
useful
supplemental
information
for
evaluating
the
Company’s
underlying
performance
trends. Further,
management
uses these
measures
in managing
and
evaluating
the
Company’s
business
and
intends to
refer to
them in
discussions about
our operations
and performance.
Operating performance
measures should
be viewed
in
addition
to,
and
not
as
an
alternative
to
or
substitute
for,
measures
determined
in
accordance
with
GAAP,
and
are
not
necessarily
comparable
to non-GAAP measures that
may be presented
by other companies.
To
the extent applicable,
reconciliations of these
non-
GAAP measures to the most directly
comparable GAAP measures can be
found in the ‘Non-GAAP Reconciliation
Tables’ included
in
the exhibits
to this earnings release.
All numbers included in this press release are unaudited unless otherwise noted.
Contacts:
Investor Relations
InvestorRelations@uscentury.com
Media Relations
Martha Guerra-Kattou
MGuerra@uscentury.com
4
USCB FINANCIAL HOLDINGS, INC.
CONSOLIDATED STATEMENTS
OF INCOME (UNAUDITED)
(Dollars in thousands, except per share data)
Three Months Ended December 31,
Twelve Months Ended December 31,
2022
2021
2022
2021
Interest income:
Loans, including fees
$
17,836
$
12,786
$
60,825
$
48,730
Investment securities
2,306
2,216
9,346
7,886
Interest-bearing deposits in financial institutions
455
29
929
106
Total interest income
20,597
15,031
71,100
56,722
Interest expense:
Interest-bearing checking
34
14
86
59
Savings and money market accounts
2,866
510
5,173
2,082
Time deposits
616
292
1,509
1,531
FHLB advances and other borrowings
215
139
671
554
Total interest expense
3,731
955
7,439
4,226
Net interest income before provision for credit losses
16,866
14,076
63,661
52,496
Provision for credit losses
880
-
2,495
(160)
Net interest income after provision for credit losses
15,986
14,076
61,166
52,656
Non-interest income:
Service fees
1,093
961
4,010
3,609
Gain (loss) on sale of securities available for sale, net
(1,989)
35
(2,529)
214
Gain on sale of loans held for sale, net
205
107
891
1,626
Gain on sale of other assets
-
983
-
983
Loan settlement
-
-
161
2,500
Other non-interest income
568
558
2,695
1,766
Total non-interest income
(123)
2,644
5,228
10,698
Non-interest expense:
Salaries and employee benefits
6,080
5,634
23,943
21,438
Occupancy
1,256
1,267
5,058
5,257
Regulatory assessments and fees
222
93
930
783
Consulting and legal fees
371
539
1,890
1,454
Network and information technology services
483
268
1,806
1,466
Other operating expense
1,602
1,518
5,682
5,279
Total non-interest expense
10,014
9,319
39,309
35,677
Net income before income tax expense
5,849
7,401
27,085
27,677
Income tax expense
1,415
1,751
6,944
6,600
Net income
4,434
5,650
20,141
21,077
Preferred stock dividend
-
-
-
2,077
Exchange and redemption of preferred shares
-
-
-
89,585
Net income (loss) available to common stockholders
$
4,434
$
5,650
$
20,141
$
(70,585)
Per share information:
Net income (loss) per common share, basic
$
0.22
$
0.30
$
1.01
$
(6.72)
Net income (loss) per common share, diluted
$
0.22
$
0.30
$
1.00
$
(6.72)
Weighted average shares outstanding:
Common share, basic
20,000,753
18,913,914
19,999,323
10,507,530
Common share, diluted
20,172,438
19,023,686
20,176,838
10,507,530
5
USCB FINANCIAL HOLDINGS, INC.
SELECTED FINANCIAL DATA (UNAUDITED)
(Dollars in thousands, except per share data)
As of or For the Three Months Ended
12/31/2022
9/30/2022
6/30/2022
3/31/2022
12/31/2021
Income statement data:
Net interest income
$
16,866
$
16,774
$
15,642
$
14,379
$
14,076
Provision for credit losses
880
910
705
-
-
Net interest income after provision for credit losses
15,986
15,864
14,937
14,379
14,076
Service fees
1,093
934
1,083
900
961
Gain (loss) on sale of securities available for sale, net
(1,989)
(558)
(3)
21
35
Gain on sale of loans held for sale, net
205
330
22
334
107
Gain on sale of other assets
-
-
-
-
983
Loan settlement
-
-
-
161
-
Other income
568
1,083
515
529
558
Total non-interest income
(123)
1,789
1,617
1,945
2,644
Salaries and employee benefits
6,080
6,075
5,913
5,875
5,634
Occupancy
1,256
1,281
1,251
1,270
1,267
Regulatory assessments and fees
222
269
226
213
93
Consulting and legal fees
371
604
398
517
539
Network and information technology services
483
488
448
387
268
Other operating expense
1,602
1,415
1,315
1,350
1,518
Total non-interest expense
10,014
10,132
9,551
9,612
9,319
Net income before income tax expense
5,849
7,521
7,003
6,712
7,401
Income tax expense
1,415
1,963
1,708
1,858
1,751
Net income
4,434
5,558
5,295
4,854
5,650
Preferred stock dividend
-
-
-
-
-
Net income available to common stockholders
$
4,434
$
5,558
$
5,295
$
4,854
$
5,650
Per share information:
Net income per common share, basic
$
0.22
$
0.28
$
0.26
$
0.24
$
0.30
Net income per common share, diluted
$
0.22
$
0.28
$
0.26
$
0.24
$
0.30
Balance sheet data (at period-end):
Cash and cash equivalents
$
54,168
$
73,326
$
83,272
$
94,113
$
46,228
Securities available-for-sale
$
230,140
$
248,571
$
339,464
$
392,214
$
401,542
Securities held-to-maturity
$
188,699
$
178,865
$
116,671
$
122,361
$
122,658
Total securities
$
418,839
$
427,436
$
456,135
$
514,575
$
524,200
Loans held for investment
(1)
$
1,507,338
$
1,431,513
$
1,372,733
$
1,258,388
$
1,190,081
Allowance for credit losses
$
(17,487)
$
(16,604)
$
(15,786)
$
(15,074)
$
(15,057)
Total assets
$
2,085,834
$
2,037,453
$
2,016,086
$
1,967,252
$
1,853,939
Non-interest-bearing deposits
$
629,776
$
662,808
$
653,708
$
656,622
$
605,425
Interest-bearing deposits
$
1,199,505
$
1,133,834
$
1,085,012
$
1,056,672
$
984,954
Total deposits
$
1,829,281
$
1,796,642
$
1,738,720
$
1,713,294
$
1,590,379
FHLB advances and other borrowings
$
46,000
$
26,000
$
66,000
$
36,000
$
36,000
Total liabilities
$
1,903,406
$
1,860,036
$
1,836,018
$
1,775,213
$
1,650,042
Total stockholders' equity
$
182,428
$
177,417
$
180,068
$
192,039
$
203,897
Capital ratios:
Leverage ratio
9.61%
9.48%
9.43%
9.47%
9.55%
Common equity tier 1 capital
12.53%
12.56%
12.65%
13.35%
13.70%
Tier 1 risk-based capital
12.53%
12.56%
12.65%
13.35%
13.70%
Total risk-based capital
13.65%
13.65%
13.74%
14.49%
14.92%
(1)
Loan amounts include deferred fees/costs.
6
USCB FINANCIAL HOLDINGS, INC.
AVERAGE BALANCES, RATIOS, AND OTHER DATA
(UNAUDITED)
(Dollars in thousands)
As of or For the Three Months Ended
12/31/2022
9/30/2022
6/30/2022
3/31/2022
12/31/2021
Average balance sheet data:
Cash and cash equivalents
$
61,892
$
77,887
$
80,254
$
99,911
$
87,819
Securities available-for-sale
$
242,144
$
331,206
$
370,933
$
385,748
$
374,589
Securities held-to-maturity
$
184,459
$
116,733
$
120,130
$
122,381
$
114,108
Total securities
$
426,603
$
447,939
$
491,063
$
508,129
$
488,697
Loans held for investment
(1)
$
1,456,780
$
1,398,761
$
1,296,476
$
1,211,432
$
1,158,755
Total assets
$
2,051,867
$
2,026,791
$
1,968,381
$
1,913,484
$
1,828,037
Interest-bearing deposits
$
1,150,049
$
1,107,129
$
1,071,709
$
1,023,844
$
958,241
Non-interest-bearing deposits
$
653,820
$
655,853
$
644,975
$
626,400
$
603,735
Total deposits
$
1,803,869
$
1,762,982
$
1,716,684
$
1,650,244
$
1,561,976
FHLB advances and other borrowings
$
37,500
$
43,935
$
36,330
$
36,011
$
36,000
Total liabilities
$
1,874,311
$
1,841,503
$
1,781,784
$
1,711,624
$
1,625,675
Total stockholders' equity
$
177,556
$
185,288
$
186,597
$
201,860
$
202,362
Performance ratios:
Return on average assets
(2)
0.86%
1.09%
1.08%
1.03%
1.23%
Return on average equity
(2)
9.91%
11.90%
11.38%
9.75%
11.08%
Net interest margin
(2)
3.45%
3.47%
3.37%
3.22%
3.19%
Non-interest income to average assets
(2)
(0.02)%
0.35%
0.33%
0.41%
0.57%
Efficiency ratio
(3)
59.81%
54.58%
55.34%
58.88%
55.74%
Loans by type (at period end):
(4)
Residential real estate
$
185,636
$
186,551
$
203,662
$
204,317
$
201,359
Commercial real estate
$
970,410
$
928,531
$
843,445
$
782,072
$
704,988
Commercial and industrial
$
126,984
$
121,145
$
131,271
$
134,832
$
146,592
Foreign banks
$
93,769
$
94,450
$
84,770
$
63,985
$
59,491
Consumer and other
$
130,429
$
100,845
$
109,250
$
73,765
$
79,229
Asset quality data:
Allowance for credit losses to total loans
1.16%
1.16%
1.15%
1.20%
1.27%
Allowance for credit losses to non-performing loans
%
%
%
%
1,265%
Non-accrual loans less non-accrual TDRs
-
-
-
-
1,190
Non-accrual TDRs
-
-
-
-
-
Loans over 90 days past due and accruing
-
-
-
-
-
Total non-performing loans
(5)
-
-
-
-
1,190
Non-performing loans to total loans
%
%
%
%
0.10%
Non-performing assets to total assets
%
%
%
%
0.06%
Net charge-offs (recoveries of) to average loans
(2)
(0.00)%
0.03%
(0.00)%
(0.01)%
(0.05)%
Net charge-offs (recovery of) credit losses
(2)
91
(7)
(17)
(157)
Interest rates and yields:
(2)
Loans
4.86%
4.53%
4.35%
4.35%
4.32%
Investment securities
2.13%
1.94%
2.04%
1.85%
1.81%
Total interest-earning assets
4.21%
3.82%
3.60%
3.43%
3.41%
Deposits
0.77%
0.34%
0.21%
0.20%
0.21%
FHLB advances and other borrowings
2.27%
1.63%
1.53%
1.54%
1.51%
Total interest-bearing liabilities
1.25%
0.59%
0.38%
0.37%
0.38%
Other information:
Full-time equivalent employees
191
191
192
190
187
(1)
Loan amounts include deferred fees/costs.
(2)
Annualized.
(3)
Efficiency ratio is defined as total non-interest expense divided
by sum of net interest income and total non-interest
income.
(4)
Loan amounts exclude deferred fees/costs.
(5)
The amounts for total non-performing loans and total non-performing
assets are the same for the dates presented since there were
no impaired investments or other
real estate owned (OREO) recorded.
7
USCB FINANCIAL HOLDINGS, INC.
NET INTEREST MARGIN (UNAUDITED)
(Dollars in thousands)
Three Months Ended December 31,
2022
2021
Average
Balance
Interest
Yield/Rate
(1)
Average
Balance
Interest
Yield/Rate
(1)
Assets
Interest-earning assets:
Loans
(2)
$
1,456,780
$
17,836
4.86%
$
1,158,755
$
12,786
4.32%
Investment securities
(3)
429,020
2,306
2.13%
490,797
2,216
1.81%
Other interest-earnings assets
53,717
455
3.36%
80,170
29
0.14%
Total interest-earning assets
1,939,517
20,597
4.21%
1,729,722
15,031
3.41%
Non-interest-earning assets
112,350
98,315
Total assets
$
2,051,867
$
1,828,037
Liabilities and stockholders' equity
Interest-bearing liabilities:
Interest-bearing checking
$
61,976
34
0.22%
$
56,558
14
0.10%
Saving and money market deposits
871,269
2,866
1.31%
673,993
510
0.30%
Time deposits
216,804
616
1.13%
227,690
292
0.51%
Total interest-bearing deposits
1,150,049
3,516
1.21%
958,241
816
0.34%
FHLB advances and other borrowings
37,500
215
2.27%
36,000
139
1.51%
Total interest-bearing liabilities
1,187,549
3,731
1.25%
994,241
955
0.38%
Non-interest-bearing demand deposits
653,820
603,735
Other non-interest-bearing liabilities
32,942
27,699
Total
liabilities
1,874,311
1,625,675
Stockholders' equity
177,556
202,362
Total liabilities and stockholders' equity
$
2,051,867
$
1,828,037
Net interest income
$
16,866
$
14,076
Net interest spread
(4)
2.96%
3.03%
Net interest margin
(5)
3.45%
3.19%
(1)
Annualized.
(2)
Average loan balances include non-accrual loans. Interest income on loans includes accretion
of deferred loan fees, net of deferred loan costs.
(3)
At fair value except for securities held to maturity. This amount includes FHLB
stock.
(4)
Net interest spread is the average yield on total interest-earning
assets minus the average rate on total interest-bearing liabilities.
(5)
Net interest margin is the ratio of net interest income to total
interest-earning assets.
8
USCB FINANCIAL HOLDINGS, INC.
NON-GAAP FINANCIAL MEASURES (UNAUDITED)
(Dollars in thousands)
As of or For the Three Months Ended
12/31/2022
9/30/2022
6/30/2022
3/31/2022
12/31/2021
Pre-tax pre-provision ("PTPP") income:
Net income
$
4,434
$
5,558
$
5,295
$
4,854
$
5,650
Plus: Provision for income taxes
1,415
1,963
1,708
1,858
1,751
Plus: Provision for credit losses
880
910
705
-
-
PTPP income
$
6,729
$
8,431
$
7,708
$
6,712
$
7,401
PTPP return on average assets:
PTPP income
$
6,729
$
8,431
$
7,708
$
6,712
$
7,401
Average assets
$
2,051,867
$
2,026,791
$
1,968,381
$
1,913,484
$
1,828,037
PTPP return on average assets
(1)
1.30%
1.65%
1.57%
1.42%
1.61%
Operating net income:
Net income
$
4,434
$
5,558
$
5,295
$
4,854
$
5,650
Less: Net gains (losses) on sale of securities
(1,989)
(558)
(3)
21
35
Less: Tax effect on sale of securities
504
141
1
(5)
(9)
Operating net income
$
5,919
$
5,975
$
5,297
$
4,838
$
5,624
Operating PTPP income:
PTPP income
$
6,729
$
8,431
$
7,708
$
6,712
$
7,401
Less: Net gains (losses) on sale of securities
(1,989)
(558)
(3)
21
35
Operating PTPP income
$
8,718
$
8,989
$
7,711
$
6,691
$
7,366
Operating PTPP return on average assets:
Operating PTPP income
$
8,718
$
8,989
$
7,711
$
6,691
$
7,366
Average assets
$
2,051,867
$
2,026,791
$
1,968,381
$
1,913,484
$
1,828,037
Operating PTPP return on average assets
(1)
1.69%
1.76%
1.57%
1.42%
1.60%
Operating return on average assets:
Operating net income
$
5,919
$
5,975
$
5,297
$
4,838
$
5,624
Average assets
$
2,051,867
$
2,026,791
$
1,968,381
$
1,913,484
$
1,828,037
Operating return on average assets
(1)
1.14%
1.17%
1.08%
1.03%
1.22%
Operating return on average equity:
Operating net income
$
5,919
$
5,975
$
5,297
$
4,838
$
5,624
Average equity
177,556
185,288
186,597
201,860
202,362
Operating return on average equity
13.23%
12.79%
11.39%
9.72%
11.03%
Operating Revenue:
Net interest income
$
16,866
$
16,774
$
15,642
$
14,379
$
14,076
Non-interest income
(123)
1,789
1,617
1,945
2,644
Less: Net gains (losses) on sale of securities
(1,989)
(558)
(3)
21
35
Operating revenue
18,732
19,121
17,262
16,303
16,685
Operating Efficiency Ratio:
Total non-interest expense
$
10,014
$
10,132
$
9,551
$
9,612
$
9,319
Operating revenue
18,732
19,121
17,262
16,303
16,685
Operating efficiency ratio
53.46%
52.99%
55.33%
58.96%
55.85%
(1)
Annualized.
9
USCB FINANCIAL HOLDINGS, INC.
NON-GAAP FINANCIAL MEASURES (UNAUDITED)
(Dollars in thousands, except per share data)
As of or For the Three Months Ended
12/31/2022
9/30/2022
6/30/2022
3/31/2022
12/31/2021
Tangible book value per common share (at period-end):
(1)
Total stockholders' equity
$
182,428
$
177,417
$
180,068
$
192,039
$
203,897
Less: Intangible assets
-
-
-
-
-
Tangible stockholders' equity
$
182,428
$
177,417
$
180,068
$
192,039
$
203,897
Total shares issued and outstanding (at period-end):
Common shares
20,000,753
20,000,753
20,000,753
20,000,753
19,991,753
Total common shares issued and outstanding
20,000,753
20,000,753
20,000,753
20,000,753
19,991,753
Tangible book value per common share
(2)
$
9.12
$
8.87
$
9.00
$
9.60
$
10.20
Operating diluted net income per common share:
(1)
Operational Net Income
$
5,919
$
5,975
$
5,297
$
4,838
$
5,624
Total weighted average diluted common stock
20,172,438
20,148,208
20,171,261
20,109,783
19,023,686
Operating diluted net income per common share:
$
0.29
$
0.30
$
0.26
$
0.24
$
0.30
Tangible Common Equity/Tangible Assets
Tangible stockholders' equity
182,428
177,417
180,068
192,039
203,897
Tangible Assets
2,085,834
2,037,453
2,016,086
1,967,252
1,853,939
Tangible Common Equity/Tangible Assets
8.75%
8.71%
8.93%
9.76%
11.00%
(1)
The Company believes these non-GAAP measurements
are key indicators of the ongoing earnings power
of the Company.
(2)
Excludes the dilutive effect, if any, of shares of common stock issuable upon exercise of outstanding
stock options.
exhibit992
Exhibit 99.2
USBC FINANCIAL HOLDINGS Fourth Quarter 2022 Earnings Presentation January
27, 2023
Forward-Looking Statements This presentation may contain statements
that are not historical in nature and are intended to be, and are hereby
identified as, forward-looking statements for purposes of the
safe harbor provided by Section 21E of the Securities Exchange Act
of 1934, as amended. The words “may,” “will,” “anticipate,”
“should,” “would,” “believe,” “contemplate,”
“expect,” “aim,” “plan,” “estimate,” “continue,”
and “intend,” as well as other similar words and expressions of the
future, are intended to identify forward-looking statements.
These forward-looking statements include statements related to
our projected growth, anticipated future financial performance, and
management’s long-term performance goals, as well as statements relating
to the anticipated effects on results of operations and financial
condition from expected developments or events, or business and
growth strategies, including anticipated internal growth and balance
sheet restructuring. These forward-looking statements involve
significant risks and uncertainties that could cause our actual results to differ
materially from those anticipated in such statements. Potential risks
and uncertainties include, but are not limited to: • the strength of the United
States economy in general and the strength of the local economies in which
we conduct operations; • the continuation of the COVID-19 pandemic
and its impact on us, our employees, customers and third-party
service providers, and the ultimate extent of the impacts of the pandemic and related
government stimulus programs; • our ability to successfully manage
interest rate risk, credit risk, liquidity risk, and other risks inherent to
our industry; • the accuracy of our financial statement estimates and assumptions,
including the estimates used for our credit loss reserve and deferred
tax asset valuation allowance; • the efficiency and effectiveness of
our internal control environment; • our ability to comply with the extensive laws
and regulations to which we are subject, including the laws for each jurisdicti
on where we operate; • legislative or regulatory changes and changes
in accounting principles, policies, practices or guidelines, including the
effects of the forthcoming implementation of the Current Expected
Credit Losses (“CECL”) standard; • the effects of our lack of a diversified
loan portfolio and concentration in the South Florida market,
including the risks of geographic, depositor, and industry concentrations,
including our concentration in loans secured by real estate; effects
of climate change • the concentration of ownership of our common stock;
• fluctuations in the price of our common stock; • our ability to fund or access
the capital markets at attractive rates and terms and manage our
growth, both organic growth as well as growth through other means, such
as future acquisitions; • inflation, interest rate, unemployment rate,
market, and monetary fluctuations; impacts of international hostilities
and geopolitical events • increased competition and its effect on the
pricing of our products and services as well as our margin; • the effectiveness of our risk
management strategies, including operational risks, including, but
not limited to, client, employee, or third-party fraud and security breaches;
and • other risks described in this presentation and other filings we make
with the Securities and Exchange Commission (“SEC”). All forward
-looking statements are necessarily only estimates of future results, and
there can be no assurance that actual results will not differ materially
from expectations. Therefore, you are cautioned not to place
undue reliance on any forward-looking statements. Further,
forward-looking statements included in this presentation are made only
as of the date hereof, and we undertake no obligation
to update or revise any forward-looking statement to reflect events
or circumstances after the date on which the statement is made or to reflect
the occurrence of unanticipated events, unless required to do so under the
federal securities laws. You should also review the risk factors
described in the reports USCB Financial Holdings, Inc. filed or will file with the SEC and,
for periods prior to the completion of the bank holding company reorganization
in December 2021, U.S. Century Bank filed with the FDIC. Non-GAAP Financial
Measures This presentation includes financial information
determined by methods other than in accordance with generally accepted accounting
principles (“GAAP”). This financial information includes certain operating
performance measures. Management has included these non-GAAP
measures because it believes these measures may provide useful supplemental
information for evaluating the Company’s underlying performance
trends. Further, management uses these measures in managing and
evaluating the Company’s business and intends to refer to them
in discussions about our operations and performance. Operating performance
measures should be viewed in addition to, and not as an alternative
to or substitute for, measures determined in accordance with GAAP,
and are not necessarily comparable to non-GAAP measures that may
be presented by other companies. To the extent applicable, reconciliations
of these non-GAAP measures to the most directly comparable GAAP measures
can be found in the ‘Non-GAAP Reconciliation Tables’ included in the
presentation. All numbers included in this presentation are unaudited
unless otherwise noted. 2
Q4 2022 Highlights Capital/ Credit Credit metrics remain strong. There were
no loans classified as nonperforming. ACL coverage ratio was 1.16%.
No shares repurchased during the quarter; Board approved repurchase
program in place covering 750,000 shares of common stock. Profitability
Net income was $4.4 million or $0.22 per diluted share. Non-GAAP
Operating net income was $5.9 million or $0.29 per diluted share. Executed
a portfolio restructuring strategy which resulted in a sale of $17.0 million
of lower-yielding securities for an after-tax loss of $1.5 million or $0.07 EPS. Proceeds
from the sale of securities will be reinvested in higher yielding assets generating
an additional $0.03 in 2023 EPS. ROAA was 0.86% and ROAE was 9.91%. Non-GAAP
Operating ROAA was 1.14% and Non-GAAP Operating ROAE 13.23%. Efficiency
ratio was 59.81%. Non-GAAP Operating efficiency ratio was 53.46%.
NIM was 3.45% and NII was $16.9 million, compared to 3.19% and $14.1
million the fourth quarter 2021. Growth Average
deposits increased by $241.9 million or 15.5% compared to fourth quarter
- Average loans, excluding PPP loans, increased $347.8 million
or 31.4% compared to fourth quarter 2021. Tangible Book Value
per Share was $9.12, up $0.25 from prior quarter. After tax
unrealized security losses impact of $2.24 in TBV for quarter end. 3
Historical Financial Data (EOP for Balance Sheet amounts) Loans (1) in millions
$735 $1,507 Deposits in millions $782 $1,829 Total stockholder’s
equity in millions $86 $182 ACL/Total Loans 1.17% 1.16% Net Charge Off
in thousands ($1,019) $65 Nonperforming Assets/Total Assets 1.58%
0% Total Revenue in millions 37 69 Efficiency ratio 94.15% 59.81%
PTPP ROAA (2) 0.24% 1.44% (1) Loan amounts include deferred
fees/costs. (2) Non-GAAP financial measure. 4
Business Verticals JA/PCG(1) Deposits EOP $172 Million 33% Growth
YoY Loans EOP $9 Million 266% Growth YoY HOA(2) Deposits EOP $97 Million
42% Growth YoY Loans EOP $73 Million 59% Growth YoY Global Deposits
EOP $177 Million 14% Growth YoY Loans EOP $94 Million 58% Growth
YoY Yachts Loans EOP $125 Million 57% Growth YoY
- $77MM in loan production in 2022 - 32% of the purchased portfolio was paid
off in 2022 SBA(3) Loans EOP $38 Million - $19MM closed in SBA 7As in 2022
- $891K in gain on sale of loans in 2022 (1) JA/PCG: Jurist Advantage/Private
Client Group (2) HOA: Homeowners Association (3) Does not include PPP
Loans. 5
Financial Results In thousands (except per share data) Balance Sheet (EOP) Total
Securities $418,839 $427,436 $524,200 Total Loans (1) $1,507,338 $1,431,513
$1,190,081 Total Assets $2,085,834 $2,037,453 $1,853,939 Total
Deposits $1,829,281 $1,796,642 $1,590,379 Total
Equity (2) $182,428 $177,417 $203,897 Income Statement Net Interest Income
$16,866 $16,774 $14,076 Non-interest Income ($123) $1,789 $2,644
Total Revenue $16,743 $18,563 $16,720 Provision for
Credit Losses $880 $910 $0 Non-interest Expense $10,014 $10,132 $9,319
Net Income $4,434 $5,558 $5,650 Diluted Earning Per Share
(EPS) $0.22 $0.28 $0.30 Operating Net Income (3) $5,919 $5,975 $5,624 Operating
diluted net income per common share (3) $0.29 $0.30 $0.30 (1) Loan amounts include
deferred fees/costs. (2) Total Equity includes after tax
unrealized security losses of $44.8 million for Q4 2022, $45.2 million for Q3 2022, and
unrealized security loss of $2.5 million for Q4 2021. (3) Non-GAAP financial
measure. 6
Key Performance Indicators Capital/Credit Profitability Growth
Q4 2022 Q3 2022 Q4 2021 Tangible Common Equity/Tangible Assets(1)
8.75% 8.71% 11.00% Total
Risk-Based Capital 13.65% 13.65% 14.92% NCO/Avg Loans (2) (0.00%)
0.03% (0.05%) NPA/Assets 0.00% 0.00% 0.06% Allowance Credit
Losses/Loans 1.16% 1.16% 1.27% Return On Average Assets (ROAA)
(2) 0.86% 1.09% 1.23% Operating Return On Average Assets (1)(2) 1.14%
1.17% 1.22% Return On Average Equity (ROAE) (2) 9.91% 11.90% 11.08%
Operating Return On Average Equity (1)(2) 13.23% 12.79% 11.03% Net Interest
Margin(2) 3.45% 3.47% 3.19% Efficiency Ratio 59.81% 54.58% 55.74%
Operating Efficiency Ratio (1) 53.46% 52.99% 55.85% In thousands
(except for TBV/shares) Total Assets (EOP) $2,085,834 $2,037,453
$1,853,939 Total
Loans (EOP) $1,507,338 $1,431,513 $1,190,081 Total Deposits
(EOP) $1,829,281 $1,796,642 $1,590,379 Tangible Book Value/Share
(1)(3) $9.12 $8.87 $10.20 (1) Non-GAAP Financial Measures. (2) Annualized.
(3) After tax unrealized security (loss) effect on tangible book value per
share was ($2.24) for Q4 2022, ($2.26) for Q3 2022 and ($0.13)
for Q4 2021. 7
Loan Portfolio Total Loans (AVG) In millions $1,159 $1,211 $1,296
$1,399 $1,457 $51 $35 $18 $7 $1 $1,108 $1,176 $1,278 $1,392 $1,455 Loans (Exd
PPP) PPP Loans Loan Yields 4.32% 4.35% 435.00% 4.53% 4.86% 0.33% 0.28%
13.00% 0.03% 0.04% 3.99% 4.07% 4.22% 4.50% 4.82% Loan coupon Loan
fees + 83 bps Q4’22 vs Q4’21 Commentary Average loans, excluding PPP loans,
increased $63.3 million or 18.0% annualized compared to prior quarter
and $347.8 million or 31.4% compared to fourth quarter 2021. Loan coupon
increased 32 bps compared to prior quarter and 83 bps compared to fourth
quarter 2021. Increase due to a higher interest rate environment.
Loan fees yield decreased 29 bps compared to fourth quarter 2021 primarily
due to amortization of premium on yacht loan purchased in 2021 and subsequently
paid off in 2022. Additionally, a decrease of $847 thousand in PPP loan
fees. 8
Loan Production Net Loan Production Trend In millions $119 $106 $141
$74 $169 $56 $130 $71 $129 $54 Laon Production/Line changes Loan
Amortization/payoffs Commentary 2022 payoffs slowing with
increase in interest rates. $569 million was originated in 2022. Average
coupon on new loans was 5.68% for fourth quarter 2022, 86 bps above
portfolio average. 9
Loan Portfolio Mix Loan Portfolio Mix 9% 12% 10% 55% 8% 6% Residential real
estate CRE – Owner Occupied CRE – Non-owner occupied Commercial and
industrial Global Banking Consumer and other Commentary Total
Loan balances at quarter end was $1,507.3 million. Commercial Real Estate
(owner occupied and non-owner occupied) was 65% or $970.4 million of the total
loan portfolio. CRE mix is diversified and granular. Retail
makes up 30% of total CRE or $293.3 million. CRE Loan Portfolio Other 3%
Retail 30% Multifamily 18% CRE - Owner Occupied 15% Office 12%’ Warehouse
9% Hotels 8% Land/Construction 5% Weighted Average Loan Type
LTV(1) DSCR Average Loan Size Retail 57% 1.57 $3.0 Multifamily
62% 1.38 $1.4 CRE - Owner Occupied 62% 2.61 $1.0 Office 54% 1.66 $2.2 Warehous
e
56% 1.59 $1.8 Hotels 53% 1.53 $4.8 Other 59% 1.56 $1.6 Land/Construction 59%
N/A $2.9 (1) LTV - Loan to value ratio. (2) DSCR - Debt service coverage
ratio. (3) Balance in millions. 10
Asset Quality Allowance for Credit Losses In thousands (except ratios)
1.31% 1.22% 1.16% 1.16% 1.16% 1.27% 1.20% 1.15% 1.16% 1.16% $15,057 $15,074
$15,786 $16,604 $17,487 Allowance for credit losses ACL/Total
loans ACL/Total loans excluding PPP loans Commentary ACL coverage
ratio is at 1.16%. No loans classified as non-performing. No OREO. Company
is prepared to implement CECL. Non-performing Loans In thousands (except
ratios) 0.10% 0.00% 0.00% 0.00% 0.00% $1,190 $0 $0 $0 $0 Non-accrual
loans less non-accrual TDRs Non-performing loans to total loans Classified
Loans (1) to Total Loans 0.49% 0.40% 0.08% 0.07% 0.26% (1) Loans classified
as substandard at period end. No loans classified doubtful or loss at
period end. 11
Deposit Portfolio Deposits (AVG) In millions $1,562 $1,650 $1,717 $1,763 $1,804
$228 $223 $224 $217 $217 $674 $736 $781 $823 $871 $56 $65 $67 $67 $62 $604
$626 $645 $656 $654 Non-interest-bearing deposits Money market
and savings Interest-bearing checking deposits Time deposits Deposit
Cost (1) 0.25% 0.50% 1.75% 3.25% 4.50% 0.21% 0.20% 2.10% 0.34% 0.77% Commentary
Average deposits increased $40.9 million or 9.2% annualized compared to prior
quarter and $241.9 million or 15.5% compared to fourth quarter 2021. Average
DDA deposits decreased slightly compared to prior quarter
due to seasonal property tax payments and increased $50.1 million or 8.3% compared
to fourth quarter 2021. DDA balances comprised 36.2% of total deposits on
December 31, 2022. Deposit cost increased 43 bps compared to prior quarter
and increased 56 bps compared to fourth quarter 2021. Deposit cost lagged the Fed
Fund Rate increases with a 13.2% Deposit beta from Q4 2021. 12
Net Interest Margin Net Interest Income/Margin (1) In thousands (except
ratios) 3.19% 3.22% 3.37% 3.47% 3.45% 3.06% 3.05% 3.27% 3.45% 3.45%
$14,076 $14,379 $15,642 $16,774 $16,866 Net Interest Income NIM NIM excluding
PPP Loans Interest-Earning Assets Mix (AVG) 5% 5% 4% 4% 3% 28% 28%
26% 23% 22% 3% 2% 1% 0% 0% 64% 65% 69% 73% 75% Total Loans (excluding PPP
Loans) Investment Securities PPP Loans Cash Balances & Equivalents
Commentary
Net interest income increased by $0.1 million or 2.2% annualized
compared to prior quarter and $2.8 million or 19.8% compared to fourth
quarter 2021. NIM predominately impacted by an increase in deposit cost and
growth in loans. NIM of 3.45% up 26 bps from fourth quarter 2021. Earning Assets
Mix continues to improve towards higher
earning assets (loans). (1) Annualized. 13
Paycheck Protection Program (PPP) 3 successful rounds of PPP loans, originating
$168.4 million. Forgiveness of the last round of PPP loans is in process.
In thousands (except for ROAA) Q4 2022 Q3 2022 Q4 2021 Pre-Tax
Income $5,849 $7,521 $7,401 Net Income $4,434 $5,558 $5,650 Average
Assets $2,051,867 $2,026,791 $1,828,037 ROAA (1) 0.86% 1.09% 1.23% of
which PPP Income (2) $10 $145 $978 Unrealized PPP Fees EOP $13 $19 $1,506
PPP Balance EOP $1,304 $1,362 $42,424 PPP AVG. Balance $1,320
$6,620 $51,098 PPP Loans (1) Annualized. (2) PPP Income includes loan
fees and interest income. 14
Interest Rate Sensitivity Loan Portfolio Repricing Profile by Rate Type
Hybrid ARM 5% Variable Rate 57% Fixed Rate 38% 17% 16% 67% Prime
CMT LIBOR 31% 6% 10%53% yrs 1-2 yrs. 2-3 yrs >3 yrs Static NII Simulation Year
1 & 2 Year 1 Years 2 -$6.74 -$16.00 $11.91 $16.44 -1.0% -2.3% 1.6%
2.2% Net Interest Income change from base ($ in thousands and % change) As
of 12/31/22 15
Non-interest Income In thousands (except ratios) Q4 2022 Q3 2022
Q2 2022 Q1 2022 Q4 2021 Service fees $1,093 $934 $1,083 $900 $961 Gain (loss)
on sale of securities available for sale (1,989) (558) (3) 21 35 Gain on sale of
loans held for sale 205 330 22 334 107 Gain on sale of other assets - - - - 983
Loan settlement - - - 161 - Other income 568 1,083 515 529 558 Total non-interest
income ($123) $1,789 $1,617 $1,945 $2,644 Average total assets $2,051,867
$2,026,791 $1,968,381 $1,913,484 $1,828,037 Non-interest income
/ Average assets (1) (0.02%) 0.35% 0.33% 0.41% 0.57% Commentary
Service fees remain substantially consistent quarter over quarter.
Loss on sale of securities of $2.0 million due to portfolio restructuring strateg
y
which resulted in the sale of $17.0 million of lower-yielding securities with an
after-tax loss of $1.5 million in the fourth quarter 2022. SBA loan sales produced
$205K of gains in the fourth quarter 2022. Fluctuation of non-interest
income primarily impacted by one-time items in prior quarters.
(1) Annualized. 16
Non-interest Expense In thousands (except ratios and FTE) Q4 2022
Q3 2022 Q2 2022 Q1 2022 Q4 2021 Salaries and employee benefits $6,080 $6,075
$5,913 $5,875 $5,634 Occupancy 1,256 1,281 1,251 1,270 1,267 Regulatory
assessments and fees 222 269 226 213 93 Consulting and legal fees 371
604 398 517 539 Network and information technology services 483 488 448 387 268
Other operating expense 1,602 1,415 1,315 1,350 1,518 Total
non-interest expenses $10,014 $10,132 $9,551 $9,612 $9,319 Efficiency
ratio 59.81% 54.58% 55.34% 58.88% 55.74% Operating Efficiency Ratio
(1) 53.46% 52.99% 55.33% 58.96% 55.85% Average total assets $2,051,867
$2,026,791 $1,968,381 $1,913,484 $1,828,037
Non-interest expense / Average assets (2) 1.94% 1.98% 1.95% 2.04%
2.02% Full-time equivalent employees 191 191 192 190 187 Commentary
Non-interest expense to average assets remains below 2021 levels. Salaries
and employee benefits increased primarily due to 4 net new FTEs,
merit increases, and bonus and sales incentive expense based on bank performance.
Operating efficiency ratio down 239 bps from forth quarter 2021 due
to higher revenue. (1) Non-GAAP financial measures. (2) Annualized.
17
Capital Capital Ratios Q4 2022 Q3 2022 Q4 2021 Well-Capitalized Leverage
Ratio 9.61% 9.48% 9.55% 5.00% TCE/TA (1) 8.75% 8.71% 11.00% NA Tier 1
Risk Based Capital 12.53% 12.56% 13.70% 8.00% Total Risk Based Capital
13.65% 13.65% 14.92% 10.00% Commentary All capital ratios remain significantly
above “well capitalized” guidelines. Q4 2022 EOP shares outstanding: Common
Stock: 20,000,753 No shares repurchased during the quarter; Board
approved repurchase program in place covering 750,000 shares of
common stock. (1) Non-GAAP Financial Measures 18
Takeaways Leading Franchise Located in one of the Most Attractive
Banking Markets in Florida and the U.S. Experienced and Tested Management
Team Robust Organic Growth Strong Asset Quality,
with Minimal Charge-offs Experienced Since Recapitalization Strong
Profitability, with Pathway For Future Enhancement Identified
Core Funded Deposit Base with 36.2% Non-Interest-Bearing Deposits
(EOP) 19
Non-GAAP Reconciliation In thousands (except ratios) 7 As of or for the three
mouths ended 12/31/2022 44834 6/30/2022 3/31/2022 12/31/2021 Pre-Tax
Pre-Provision ("PTPP") Income: Net income $ 4.434 $ 5.558 $ 5.295
$ 4.854 $ 5.650 Plus: Provision for income taxes 1,415 1.963 1.708
1.858 1.751 Plus: Provision for credit losses 880 910 705 - - PTPP income $ 6.729
$ 8.431 $ 7.708 $ 6.712 $ 7.401 PTPP Return on Average Assets: PTPP income $
6.729 $ 8.431 $ 7.708 $ 6.712 $ 7.401 Average assets $ 2.051.867 $ 2.026.791
$ 1.968.381 $ 1.913.484 $ 1.828.037 PTPP return on average assets
'1' 1.30% 1.65% 1.57% 1.42% 1.61% Operating Net Income: Net income $ 4.434
$ 5.558 $ 5.295 $ 4.854 $ 5.650 Less: Net gains (losses) on sale of securities (1.989)
(558) (3) 21 35 Less: Tax effect on sale of securities 504 141 1 (5) (9) Operating
net income $ 5.919 $ 5.975 $ 5.297 $ 4.838 $ 5.624 Operating PTPP Income: PTPP income
$ 6.729 $ 8.431 $ 7.708 $ 6.712 $ 7.401 Less: Net gains (losses) on sale of securities
(1.989) (558) (3) 21 35 Operating PTPP Income $ 8.718 $ 8.989 $ 7.711 $ 6.691 $ 7.366
Operating PTPP Return ou Average Assets: Operating PTPP income
Average assets Operating PTPP Return on average
assets 'lj $ 8.718 $ 2.051.867 1.69% Operating Return ou Average Assets: Operating
net income Average assets Operating return on average assets
(1) $ 5.919 $ 2.051.867 1.14% Operating Return ou Average Equity’ Operating
net income Average equity Operating return on average
equity (1) $ 5.919 177.556 13.23% Operating Revenue Net interest income
Non-interest income Less: Net gains (losses) on sale of securities
Operating revenue $ 16.866 (123) (1.989) $ 18.732 Operating Efficiency Ratio:
Total non-interest expense Operating revenue Operating
efficiency ratio $ 10.014 18.732 53.46% $ 8.989 $ 7.711 $ 6.691 $ 7.366 9 $ 2.026.791
$ 1.968.381 $ 1.913.484 $ 1.828.037 1.76%
1.57% 1.42% 1.60% $ 5.975 $ 5.297 $ 4.838 $ 5.624 $ 2.026.791 $ 1.968.381 $ 1.913.484 $ 1.828.037
1.17% 1.08% 1.03% 1.22% $ 5.975 $ 5.297 $ 4.838 $ 5.624 185.288 186.597 201.860
202.362 12.79% 11.39% 9.72% 11.03% $ 16.774 $ 15.642 $ 14.379 $ 14.076 1.789
1.617 1.945 2.644 (558) (3) 21 35 $ 19.121 $ 17.262 $ 16.303 $ 16.685
■
i i i 9.319 16.685 55.85% $ 10.132 $ 19.121 52.99% 9.551 $ 17.262 55.33% 9.612 $ 16.303
58.96% (1) Annualized 20
Non-GAAP Reconciliation In thousands (except per share data) As of and for
the three months ended 12/31/2022 9/30/2022 6/30/2022 3/31/2022 12/31/2021
tangible Book Value per Common Share (at period-end):11 ' Total
stockholders' equity S 182.428 s 177.417 s 180.06S S 192.039 S 203.897 Less:
Intangible assets ..... Less: Preferred stock - - - - - Tangible stockholders'
equity Total shares issued and outstanding (at period-end): s 181428
s 177.417 s 180.06S s 192.039 S 203.897 Class A common shares 20.000.753 Vi
AM 1C 20.000.753 Vt /V\A If 20.000.753 yA AAA 20.(0X3.753 AA iVW If? 19.991.753
t A fWt If? total common shares issued and outstanding Tangible book value
per common share ' s 2U.OOU. /5 b 9.12 s 2U.UUO. /5o 8.S7 s 2U.UW.
/5b 9. CO s 2U.UUU. /5b 9.60 S i9.yyi./5b 10.20 Operational diluted net income
per share of common stock: Operating net income s 5.919 s 5.975 s
5297 S 4.838 S 5.624 Weighted average shares Diluted s 20.17243S s 20.14S.20S
s 20.171.261 s 20.109.7S3 s 19.023.686 Operating diluted net income
per share of common stock s 029 s 030 s 0.26 s 0.24 s 0.30 fnnoihli1 fVminifin Fmiin/TmoiKlo
Tangible stockholders’ equity s 181428 s 177.417 s 180.06S s 192.039 s 203.897
Tangible Assets 2.0S5.S34 1037,453 2,016,086 1,967252 LS53539
Tangible Common Equity.
Tangible Assets 8.75% 8.71% 8.93% 9.76% 11.00% 1. The Carpark believes these
non-GAAP treasurer 3rekey in caters of the ongoing earnings
paver of the Company. 2. Precludes the dilutive effect, if any. of shares
of common stock issuable upon exercise of outstanding stock options.
21
Contact Information Lou de la Aguilera President,
CEO & Director (305) 715-5186 laguilera@uscentury.com
Rob Anderson Chief Financial Officer (305) 715-5393 rob.anderson@uscentury.com
Investor Relations InvestorRelations@uscentury.com 22