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):
July 28, 2022
__________________________
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 July 28, 2022, USCB Financial
Holdings, Inc. (the “Company”), issued
a press release announcing its financial
results for
the second quarter ended June 30, 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
July 29, 2022, the
Company will hold
an earnings conference call
to discuss its
financial performance for the quarter ended June 30, 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 Exhibits
99.1 and
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
USCB Financial Holdings, Inc. Press Release, dated July 28, 2022
Earnings Presentation, dated July 29, 2022
104
Cover Page Interactive Data File (embedded within the Inline XBRL document)
3
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly
caused this report to be signed on
its behalf by the undersigned hereunto duly authorized.
USCB Financial Holdings, Inc.
By:
/s/ Robert Anderson
Name:
Robert Anderson
Title:
Chief Financial Officer
Date: July 28, 2022
exhibit991
1
Exhibit 99.1
EARNINGS RELEASE
USCB Financial Holdings, Inc. Reports Second Quarter 2022 Results
MIAMI –
July 28,
2022 –
USCB Financial
Holdings, Inc.
(the “Company”)
(NASDAQ:
USCB)
, the
holding company
for U.S.
Century Bank, reported net income of $5.3 million or $0.26 per diluted share for the three months ended
June 30, 2022, compared with
net income of $4.1 million
or $0.64 and $0.13
per diluted share for
Class A and Class
B common stock, respectively, for the same
period
in 2021.
On December
21, 2021,
the Company
agreed to
exchange all
the outstanding
shares of
Class B
common
stock for
Class
A
common stock at a ratio of 1 share of Class A common stock
for each 5 shares of Class B common stock. As of December 31, 2021,
the
Company’s only class of securities issued
and outstanding was Class A common stock.
“Second quarter results demonstrated
continued solid performance by our USCB team members.
Total assets exceeded
$2.0 billion for
the first time,
loans grew
19.9% from June
30, 2021,
our net interest
margin expanded
to 3.37%, operating
expenses remained in
line
with an efficiency ratio of 55.34%, and credit quality remains pristine. We are pleased with our profitability metrics and believe we will
be able
to continue
to successfully
execute on
our strategy
that delivers
improved performance
in the
years to
come.” 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
June 30,
2022
compared to the quarter ended June 30, 2021 and annualized where
appropriate.
Profitability
•
Annualized return on
average assets for the
quarter ended June 30,
2022 was 1.08%
compared to 0.98%
for the second
quarter of
2021.
•
Annualized
return on
average stockholders’
equity for
the quarter
ended June
30, 2022
was 11.38
%
compared to
9.74% for
the
second quarter of 2021.
•
The efficiency ratio for the quarter
ended June 30, 2022 was 55.34%
an improvement as compared to
62.00% for the second quarter
of 2021.
•
Net interest margin increased to 3.37% for the quarter ended June
30, 2022 compared to 3.14% for the second quarter of 2021.
•
Net
interest
income
before
provision
for
credit
losses
was
$15.6 million
for
the
quarter
ended
June 30,
2022,
an
increase
of
$3.2 million or
25.4% compared to
the second
quarter of 2021.
The increase was
primarily driven
by higher
loan and investment
securities income.
Balance Sheet
•
Total assets were $2.0
billion at June 30, 2022, representing an increase of $349.1 million or
20.9% from June 30, 2021.
•
Total loans were
$1.4 billion at June 30, 2022, representing an increase of $227.6 million or 19.9%
from June 30, 2021.
•
Total deposits were $1.7
billion at June 30, 2022, representing an increase of $299.9 million or 20.8%
from June 30, 2021.
•
Total
stockholders’ equity
was $180.1 million
at June 30,
2022, representing
an increase
of $13.8
million or
8.3% from
June 30,
2021.
Asset Quality
•
The allowance for credit losses increased by $938 thousand to $15.8
million at June 30, 2022 from $14.9 million at June 30, 2021.
•
The allowance for credit losses represented 1.15% of total loans at June 30, 2022
compared to 1.30% at June 30, 2021.
•
Non-performing loans to total loans was 0.00% at June 30, 2022 and
2021.
2
Non-interest Income and Non-interest Expense
•
Non-interest income was
$1.6 million for
the three months
ended June 30, 2022,
an increase of
$101 thousand or 6.7%
compared
to the same period in 2021.
•
Non-interest expense
was $9.6 million
for the three
months ended June 30,
2022 compared to
$8.7 million for
the same period
in
2021,
an increase of
$877 thousand or
10.1%. The increase
was primarily
driven by higher
salaries and employee
benefits due to
new hires and salary compensation.
Capital
•
The Company and its wholly owned subsidiary, U.S. Century
Bank (the “Bank”), exceeded all regulatory capital requirements and
remained significantly above “well-capitalized” guidelines. As
of June 30, 2022,
total risk-based capital ratios for
the Company and
the Bank were 13.74% and 13.67%, respectively.
Conference Call and Webcast
The
Company
will host
a
conference
call
on
Friday,
July
29,
2022,
at
9:00
a.m. Eastern
Time
to
discuss
the
Company’s
unaudited
financial
results
for
the
quarter
ended
June 30,
2022.
To
access
the
conference
call,
dial
(866)
374-5140
(U.S.
toll-free)
and
use
conference code 31578788.
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.
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 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;
•
the concentration of ownership of our Class A common stock;
•
fluctuations in the price of our Class A common stock;
3
•
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;
•
increased competition and its effect on the pricing of our products
and services as well as our interest rate 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.
You
should assume that all numbers 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 June 30,
Six Months Ended June 30,
2022
2021
2022
2021
Interest income:
Loans, including fees
$
14,053
$
11,538
$
27,035
$
23,406
Investment securities
2,510
1,968
4,839
3,812
Interest-bearing deposits in financial institutions
121
23
152
39
Total interest income
16,684
13,529
32,026
27,257
Interest expense:
Interest-bearing deposits
17
15
33
29
Savings and money markets accounts
615
523
1,166
1,071
Time deposits
271
379
530
933
Federal Home Loan Bank advances
139
138
276
275
Total interest expense
1,042
1,055
2,005
2,308
Net interest income before provision for credit losses
15,642
12,474
30,021
24,949
Provision for credit losses
705
-
705
(160)
Net interest income after provision for credit losses
14,937
12,474
29,316
25,109
Non-interest income:
Service fees
1,083
903
1,983
1,792
Gain (loss) on sale of securities available for sale, net
(3)
187
18
249
Gain on sale of loans held for sale, net
22
23
356
987
Loan settlement
-
-
161
-
Other non-interest income
515
403
1,044
809
Total non-interest income
1,617
1,516
3,562
3,837
Non-interest expense:
Salaries and employee benefits
5,913
5,213
11,788
10,491
Occupancy
1,251
1,411
2,521
2,798
Regulatory assessment and fees
226
195
439
373
Consulting and legal fees
398
373
915
558
Network and information technology services
448
332
835
840
Other operating expense
1,315
1,150
2,665
2,291
Total non-interest expense
9,551
8,674
19,163
17,351
Net income before income tax expense
7,003
5,316
13,715
11,595
Income tax expense
1,708
1,263
3,566
2,761
Net income
5,295
4,053
10,149
8,834
Preferred stock dividend
-
754
-
1,535
Net income available to common stockholders
$
5,295
$
3,299
$
10,149
$
7,299
Allocation of net income per common stock class:
(1)
Class A
$
5,295
$
2,509
$
10,149
$
5,551
Class B
$
-
$
790
$
-
$
1,747
Per share information:
(1)
Class A common stock
(2)
Net income per share, basic
$
0.26
$
0.65
$
0.51
$
1.43
Net income per share, diluted
$
0.26
$
0.64
$
0.50
$
1.41
Class B common stock
Net income per share, basic
$
-
$
0.13
$
-
$
0.29
Net income per share, diluted
$
-
$
0.13
$
-
$
0.29
Weighted average shares outstanding:
Class A common stock
(2)
Basic
20,000,753
3,889,469
19,997,869
3,889,469
Diluted
20,171,261
3,933,636
20,192,918
3,933,636
Class B common stock
Basic
-
6,121,052
-
6,121,052
Diluted
-
6,121,052
-
6,121,052
(1)
For the three and six months ended June 30, 2021,
the allocation of net income available to common stockholders
was based on the weighted average shares
outstanding per common share class to the total weighted
average shares outstanding during the period. The income allocation
is calculated using the weighted average
shares outstanding of Class B common stock on an as-converted
basis (20% per share equivalent to Class A common
stock).
(2)
For the three and six months ended June 30, 2021,
the common stock outstanding, weighted average shares
and net income per share for the Class A common stock
have been adjusted to reflect the 1 for 5 reverse stock split
that occurred in June 2021.
5
USCB FINANCIAL HOLDINGS, INC.
SELECTED FINANCIAL DATA (UNAUDITED)
(Dollars in thousands, except per share data)
As of or For the Three Months Ended
6/30/2022
3/31/2022
12/31/2021
9/30/2021
6/30/2021
Income statement data:
Net interest income
$
15,642
$
14,379
$
14,076
$
13,471
$
12,474
Provision for credit losses
705
-
-
-
-
Net interest income after provision for credit losses
14,937
14,379
14,076
13,471
12,474
Service fees
1,083
900
961
856
903
Gain (loss) on sale of securities available for sale, net
(3)
21
35
(70)
187
Gain on sale of loans held for sale, net
22
334
107
532
23
Gain on sale of other assets
-
-
983
-
-
Loan settlement
-
161
-
2,500
-
Other income
515
529
558
399
403
Total non-interest income
1,617
1,945
2,644
4,217
1,516
Salaries and employee benefits
5,913
5,875
5,634
5,313
5,213
Occupancy
1,251
1,270
1,267
1,192
1,411
Regulatory assessment and fees
226
213
93
317
195
Consulting and legal fees
398
517
539
357
373
Network and information technology services
448
387
268
358
332
Other operating expense
1,315
1,350
1,518
1,470
1,150
Total non-interest expenses
9,551
9,612
9,319
9,007
8,674
Net income before income tax expense
7,003
6,712
7,401
8,681
5,316
Income tax expense
1,708
1,858
1,751
2,088
1,263
Net income
5,295
4,854
5,650
6,593
4,053
Preferred stock dividend
-
-
-
542
754
Exchange and redemption of preferred shares
-
-
-
89,585
-
Net income (loss) available to common stockholders
$
5,295
$
4,854
$
5,650
$
(83,534)
$
3,299
Allocation of net income (loss) per common stock class:
(1)
Class A
$
5,295
$
4,854
$
5,650
$
(77,278)
$
2,509
Class B
$
-
$
-
$
-
$
(6,256)
$
790
Per share information:
Class A common stock
(2)
Net income (loss) per share, basic
$
0.26
$
0.24
$
0.30
$
(5.11)
$
0.65
Net income (loss) per share, diluted
$
0.26
$
0.24
$
0.30
$
(5.11)
$
0.64
Class B common stock
Net income (loss) per share, basic
$
-
$
-
$
-
$
(1.02)
$
0.13
Net income (loss) per share, diluted
$
-
$
-
$
-
$
(1.02)
$
0.13
Balance sheet data (at period-end):
Cash and cash equivalents
$
83,272
$
94,113
$
46,228
$
69,597
$
47,117
Securities available-for-sale
$
339,464
$
392,214
$
401,542
$
328,171
$
395,804
Securities held-to-maturity
$
116,671
$
122,361
$
122,658
$
99,866
$
-
Total securities
$
456,135
$
514,575
$
524,200
$
428,037
$
395,804
Loans held for investment
(3)
$
1,372,733
$
1,258,388
$
1,190,081
$
1,176,412
$
1,145,095
Allowance for credit losses
$
(15,786)
$
(15,074)
$
(15,057)
$
(14,900)
$
(14,848)
Total assets
$
2,016,086
$
1,967,252
$
1,853,939
$
1,755,011
$
1,667,005
Non-interest-bearing deposits
$
653,708
$
656,622
$
605,425
$
570,091
$
555,993
Interest-bearing deposits
$
1,085,012
$
1,056,672
$
984,954
$
914,498
$
882,783
Total deposits
$
1,738,720
$
1,713,294
$
1,590,379
$
1,484,589
$
1,438,776
Federal Home Loan Bank advances and other borrowings
$
66,000
$
36,000
$
36,000
$
36,000
$
36,000
Total liabilities
$
1,836,018
$
1,775,213
$
1,650,042
$
1,553,093
$
1,500,703
Total stockholders' equity
$
180,068
$
192,039
$
203,897
$
201,918
$
166,302
Capital ratios:
(4)
Leverage ratio
9.43%
9.47%
9.55%
9.69%
7.91%
Common equity tier 1 capital
12.65%
13.35%
13.70%
13.85%
9.24%
Tier 1 risk-based capital
12.65%
13.35%
13.70%
13.85%
11.44%
Total risk-based capital
13.74%
14.49%
14.92%
15.10%
12.69%
(1)
The allocation of net income (loss) available to common
stockholders was based on the weighted average
shares outstanding per common share class to the total
weighted average shares outstanding during each period. The
income (loss) allocation is calculated using the weighted average
shares outstanding of Class B common
stock on an as-converted basis (20% per share equivalent to
Class A common stock).
(2)
The quarter ended June 30, 2021 was adjusted for the
1 for 5 reverse stock split.
(3)
Loan amounts include deferred fees/costs.
(4)
The Company was formed during the quarter ended
December 31, 2021. As such, the capital ratios for Q2
2022, Q1 2022 and Q4 2021 are for the Company and for
Q3 2021 and prior are for the Bank. The Company, as a small bank holding company, is not subject to regulatory
capital requirements.
6
USCB FINANCIAL HOLDINGS, INC.
AVERAGE BALANCES, RATIOS, AND OTHER (UNAUDITED)
(Dollars in thousands)
As of or For the Three Months Ended
6/30/2022
3/31/2022
12/31/2021
9/30/2021
6/30/2021
Average balance sheet data:
Cash and cash equivalents
$
80,254
$
99,911
$
87,819
$
116,622
$
108,028
Securities available-for-sale
$
370,933
$
385,748
$
374,589
$
346,407
$
382,990
Securities held-to-maturity
$
120,130
$
122,381
$
114,108
$
51,238
$
-
Total securities
$
491,063
$
508,129
$
488,697
$
397,645
$
382,990
Loans held for investment
(1)
$
1,296,476
$
1,211,432
$
1,158,755
$
1,144,275
$
1,088,492
Total assets
$
1,968,381
$
1,913,484
$
1,828,037
$
1,741,423
$
1,660,060
Interest-bearing deposits
$
1,071,709
$
1,023,844
$
958,241
$
912,330
$
896,271
Non-interest-bearing deposits
$
644,975
$
626,400
$
603,735
$
564,928
$
535,894
Total deposits
$
1,716,684
$
1,650,244
$
1,561,976
$
1,477,258
$
1,432,165
Federal Home Loan Bank advances and other borrowings
$
36,330
$
36,011
$
36,000
$
36,000
$
36,000
Total liabilities
$
1,781,784
$
1,711,624
$
1,625,675
$
1,546,414
$
1,493,129
Total stockholders' equity
$
186,597
$
201,860
$
202,362
$
195,009
$
166,931
Performance ratios:
Return on average assets
(2)
1.08%
1.03%
1.23%
1.50%
0.98%
Return on average equity
(2)
11.38%
9.75%
11.08%
13.41%
9.74%
Net interest margin
(2)
3.37%
3.22%
3.19%
3.19%
3.14%
Non-interest income to average assets
(2)
0.33%
0.41%
0.57%
0.96%
0.37%
Efficiency ratio
(3)
55.34%
58.88%
55.74%
50.92%
62.00%
Loans by type (at period end):
(4)
Residential real estate
$
203,662
$
204,317
$
201,359
$
201,124
$
213,575
Commercial real estate
$
843,445
$
782,072
$
704,988
$
693,469
$
673,944
Commercial and industrial
$
131,271
$
134,832
$
146,592
$
137,486
$
155,440
Foreign banks
$
84,770
$
63,985
$
59,491
$
58,839
$
62,042
Consumer and other
$
109,250
$
73,765
$
79,229
$
87,515
$
43,979
Asset quality data:
Allowance for credit losses to total loans
1.15%
1.20%
1.27%
1.27%
1.30%
Allowance for credit losses to non-performing loans
%
%
1,265%
82,778%
74,240%
Non-accrual loans less non-accrual TDRs
-
-
1,190
-
-
Non-accrual TDRs
-
-
-
18
20
Loans- over 90 days past due and accruing
-
-
-
-
-
Total non-performing loans
(5)
-
-
1,190
18
20
Non-performing loans to total loans
%
%
0.10%
0.00%
0.00%
Non-performing assets to total assets
%
%
0.06%
0.00%
0.00%
Net charge-offs (recoveries of) to average loans
(2)
(0.00)%
(0.01)%
(0.05)%
(0.02)%
0.06%
Net charge-offs (recovery of) credit losses
(7)
(17)
(157)
(51)
160
Interest rates and yields:
(2)
Loans
4.35%
4.35%
4.32%
4.29%
4.19%
Investment securities
2.04%
1.85%
1.81%
1.86%
2.04%
Total interest-earning assets
3.60%
3.43%
3.41%
3.43%
3.41%
Deposits
0.21%
0.20%
0.21%
0.22%
0.26%
Borrowings and repurchase agreements
1.53%
1.54%
1.51%
1.52%
1.52%
Total interest-bearing liabilities
0.38%
0.37%
0.38%
0.40%
0.45%
Other information:
Full-time equivalent employees
192
190
187
184
183
(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 June 30,
2022
2021
Average
Balance
Interest
Yield/Rate
(1)
Average
Balance
Interest
Yield/Rate
(1)
Assets
Interest-earning assets:
Loans
(2)
$
1,296,476
$
14,053
4.35%
$
1,088,492
$
11,538
4.19%
Investment securities
(3)
493,352
2,510
2.04%
385,090
1,968
2.04%
Other interest-earnings assets
69,503
121
0.70%
101,134
23
0.09%
Total interest-earning assets
1,859,331
16,684
3.60%
1,574,716
13,529
3.41%
Non-interest-earning assets
109,050
85,344
Total assets
$
1,968,381
$
1,660,060
Liabilities and stockholders' equity
Interest-bearing liabilities:
Interest-bearing demand deposits
$
66,349
17
0.10%
$
52,620
15
0.11%
Saving and money market deposits
781,076
615
0.32%
607,752
523
0.35%
Time deposits
224,284
271
0.48%
235,899
379
0.65%
Total interest-bearing deposits
1,071,709
903
0.34%
896,271
917
0.41%
Borrowings and repurchase agreements
36,330
139
1.53%
36,000
138
1.52%
Total interest-bearing liabilities
1,108,039
1,042
0.38%
932,271
1,055
0.45%
Non-interest-bearing demand deposits
644,975
535,894
Other non-interest-bearing liabilities
28,770
24,964
Total
liabilities
1,781,784
1,493,129
Stockholders' equity
186,597
166,931
Total liabilities and stockholders' equity
$
1,968,381
$
1,660,060
Net interest income
$
15,642
$
12,474
Net interest spread
(4)
3.22%
2.96%
Net interest margin
(5)
3.37%
3.14%
(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
6/30/2022
3/31/2022
12/31/2021
9/30/2021
6/30/2021
Pre-tax pre-provision ("PTPP") income:
Net income
$
5,295
$
4,854
$
5,650
$
6,593
$
4,053
Plus: Provision for income taxes
1,708
1,858
1,751
2,088
1,263
Plus: Provision for credit losses
705
-
-
-
-
PTPP income
$
7,708
$
6,712
$
7,401
$
8,681
$
5,316
PTPP return on average assets:
PTPP income
$
7,708
$
6,712
$
7,401
$
8,681
$
5,316
Average assets
$
1,968,381
$
1,913,484
$
1,828,037
$
1,741,423
$
1,660,060
PTPP return on average assets
(1)
1.57%
1.42%
1.61%
1.98%
1.28%
Operating net income:
Net income
$
5,295
$
4,854
$
5,650
$
6,593
$
4,053
Less: Net gains (losses) on sale of securities
(3)
21
35
(70)
187
Less: Tax effect on sale of securities
1
(5)
(9)
17
(46)
Operating net income
$
5,297
$
4,838
$
5,624
$
6,646
$
3,912
Operating PTPP Income:
PTPP income
$
7,708
$
6,712
$
7,401
$
8,681
$
5,316
Less: Net gains (losses) on sale of securities
(3)
21
35
(70)
187
Operating PTPP income
$
7,711
$
6,691
$
7,366
$
8,751
$
5,129
Operating PTPP return on average assets:
Operating PTPP income
$
7,711
$
6,691
$
7,366
$
8,751
$
5,129
Average assets
$
1,968,381
$
1,913,484
$
1,828,037
$
1,741,423
$
1,660,060
Operating PTPP return on average assets
(1)
1.57%
1.42%
1.60%
1.99%
1.24%
Operating return on average assets:
Operating net income
$
5,297
$
4,838
$
5,624
$
6,646
$
3,912
Average assets
$
1,968,381
$
1,913,484
$
1,828,037
$
1,741,423
$
1,660,060
Operating return on average assets
(1)
1.08%
1.03%
1.22%
1.51%
0.95%
(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
6/30/2022
3/31/2022
12/31/2021
9/30/2021
6/30/2021
Tangible book value per common share (at period-end):
(1)
Total stockholders' equity (GAAP)
$
180,068
$
192,039
$
203,897
$
201,918
$
166,302
Less: Intangible assets
-
-
-
-
-
Less: Preferred stock
-
-
-
-
24,616
Tangible stockholders' equity (non-GAAP)
$
180,068
$
192,039
$
203,897
$
201,918
$
141,686
Total shares issued and outstanding (at period-end):
(2)
Class A common shares
20,000,753
20,000,753
19,991,753
18,767,541
3,889,469
Class B common shares
-
-
-
1,224,212
1,224,212
Total common shares issued and outstanding
20,000,753
20,000,753
19,991,753
19,991,753
5,113,681
Tangible book value per common share (non-GAAP)
(3)
$
9.00
$
9.60
$
10.20
$
10.10
$
27.71
Operating net income available to common stockholders:
(1)
Net income (GAAP)
$
5,295
$
4,854
$
5,650
$
6,593
$
4,053
Less: Preferred dividends
-
-
-
542
754
Less: Exchange and redemption of preferred shares
-
-
-
89,585
-
Net income (loss) available to common stockholders (GAAP)
5,295
4,854
5,650
(83,534)
3,299
Add back: Exchange and redemption of preferred shares
-
-
-
89,585
-
Operating net income avail. to common stock (non-GAAP)
$
5,295
$
4,854
$
5,650
$
6,051
$
3,299
Allocation of operating net income per common stock
class:
Class A common stock
$
5,295
$
4,854
$
5,650
$
5,598
$
2,509
Class B common stock
$
-
$
-
$
-
$
453
$
790
Weighted average shares outstanding:
Class A common stock
Basic
20,000,753
19,994,953
18,913,914
15,121,460
3,889,469
Diluted
20,171,261
20,109,783
19,023,686
15,187,729
3,933,636
Class B common stock
Basic
-
-
-
6,121,052
6,121,052
Diluted
-
-
-
6,121,052
6,121,052
Diluted EPS:
(4) (5)
Class A common stock
Net income (loss) per diluted share (GAAP)
$
0.26
$
0.24
$
0.30
$
(5.11)
$
0.64
Add back: Exchange and redemption of preferred shares
-
-
-
5.48
-
Operating net income per diluted share (non-GAAP)
$
0.26
$
0.24
$
0.30
$
0.37
$
0.64
Class B common stock
Net income (loss) per diluted share (GAAP)
$
-
$
-
$
-
$
(1.02)
$
0.13
Add back: Exchange and redemption of preferred shares
-
-
-
1.09
-
Operating net income per diluted share (non-GAAP)
$
-
$
-
$
-
$
0.07
$
0.13
(1)
The Company believes these non-GAAP measurements
are key indicators of the ongoing earnings power
of the Company.
(2)
During the quarter ended September 30, 2021, 47,473
shares of Class C preferred stock and 11,061,552 shares of Class D
preferred stock were converted into
10,278,072 shares of Class A common stock. Additionally, the Bank closed on the
initial public offering of its Class A common stock on July
27, 2021, in which it
issued 4,600,000 shares of Class A common stock. As such,
the total shares issued and outstanding of Class A common stock
was 18,767,541 shares at September 30,
2021.
(3)
Excludes the dilutive effect, if any, of shares of common stock issuable upon exercise of outstanding
stock options.
(4)
During the quarter ended September 30, 2021, basic
net loss per share is the same as diluted net loss per share
as the inclusion of all potential common shares
outstanding would have been antidilutive.
(5)
During the quarter ended December 31, 2021, the Company
entered into agreements with the Class B common
shareholders to exchange all outstanding Class B
non-voting common stock for Class A voting common stock
at a ratio of 1 share of Class A common stock for
each 5 shares of Class B non-voting common stock. In
calculating net income (loss) per diluted share for the prior
quarters presented, the allocation of operating net income available
to common stockholders was based on
the weighted average shares outstanding per common share
class to the total weighted average shares outstanding
during each period. The operating net income
allocation was calculated using the weighted average shares
outstanding of Class B common stock on an as-converted basis.
exhibit992
Exhibit 99.2 USBC FINANCIAL HOLDINGS Second Quarter
2022 Earnings Presentation July 29, 2022 1
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 identi
fy 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. 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 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; • the concentration of ownership of our
Class A common stock; • fluctuations in the price of our Class A common
stock; • our ability to fund or access the capital markets at attract
ive 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; • increased competition and its effect
on the pricing of our products and services as well as our interest rate
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
31, 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. You should assume that all
numbers are unaudited unless otherwise noted. 2
Q2 2022 Highlights Capital/Credit Credit metrics remain pristine.
There were no loans classified as nonperforming. ACL coverage
ratio was 1.15%. Tangible Book Value per Share is at $9.00,
down $0.60 from prior quarter primarily due to AOCI. No shares
repurchased during the quarter; Board approved repurchase
program in place covering 750,000 shares of Class A common stock. Profitability
Net income was $5.3 million or $0.26 per diluted share.
ROAA was 1.08% and ROAE was 11.38%. Efficiency ratio was 55.34%.
NIM was 3.37% and NII was $15.6 million, up $3.2 million or
25.4% compared to second quarter 2021. Growth Average
deposits increased by $284.5 million or 19.9% compared to second quarter
- Total average loans, excluding PPP loans, increased
$102.3 million
or 34.9% annualized compared to prior quarter and $289.9
million or 29.3% compared to second quarter 2021. 3
Historical Financial Data Total Loans (1) in Millions $735 $1,373
2016 2017 2018 2019 2020 2021 Q1 Q2 2022 2022 Total Deposit
s
in millions $782 $1,739 2016 2017 2018 2019 2020 2021 Q1 Q2
2022 2022 Total Stockholders’ Equity in millions $86 $180
2016 2017 2018 2019 2020 2021 Q1 Q2 2022 2022 ACL/Total
Loans 1.17% 1.15% 2016 2017 2018 2019 2020 2021 Q1 Q2 2022
2022 Net Charge off in thousands (1,019) $180 2016 2017
2018 2019 2020 2021 Q1 Q2 2022 2022 Nonperforming Assets/Total
Assets 1.58% 0.00% 2016 2017 2018 2019 2020 2021 Q1 Q2 2022
2022 Total Revenue in millions $37 $63 2016 2017 2018 2019
2020 2021 Efficiency ratio 94.15% 55.34% 2016 2017 2018 2019
2020 2021 Q1 Q2 2022 2022 PTPP ROAA (2) 0.24% 1.57% 2016
2017 2018 2019 2020 2021 Q1 Q2 2022 2022 (1) Loan amounts
include deferred fees/costs. (2) Non-GAAP Financial Measure.
* As of end of period for Balance Sheet amounts. 4
Financial Results In thousands (except per share data) Q2 2022 Q1 2022
Q2 2021 Balance Sheet (EOP) Total Securities $456,135
$514,575 $395,804 Total Loans (1) $1,372,733 $1,258,388
$1,145,095 Total Assets $2,016,086 $1,967,252 $1,667,005
Total Deposits $1,738,720 $1,713,294 $1,438,776 Total
Equity $180,068 $192,039 $166,302 Income Statement Net Interest
Income $15,642 $14,379 $12,474 Non-interest Income $1,617 $1,945
$1,516 Total Revenue $17,259 $16,324 $13,990 Provision for
Credit Losses $705 $0 $0 Non-interest Expense $9,551 $9,612 $8,674 Net
Income $5,295 $4,854 $4,053 Net Income available to common
stockholders (2) $5,295 $4,854 $3,299 Diluted Earning Per
Share (EPS) (3) Class A Common Stock $0.26 $0.24 $0.64 Class
B Common Stock $0.00 $0.00 $0.13 (1) Loan amounts include deferred
fees/costs. (2) No preferred stock outstanding as of Q2’22 and Q1’22. (3)
See footnote disclosure in the Non-GAAP table for common stock activity
(redemption and exchange of preferred stock, IPO, and exchange
of Class B common stock) which impacted diluted EPS for Q2’22
and Q1’22. 5
Key Performance Indicators Q2 2022 Q1 2022 Q2 2021 Capital/Credit Tangi
ble Common Equity/Tangible Assets(1) 8.93% 9.76% 8.50%
Total Risk-Based Capital (2) 13.74% 14.49% 12.69% NCO/Avg
Loans (3) 0.00% -0.01% 0.06% NPA/Assets 0.00% 0.00%
0.00% Allowance Credit Losses/Loans 1.15% 1.20% 1.30% Profitability
Return On Average Assets (ROAA) (3) 1.08% 1.03% 0.98%
Return On Average Equity (ROAE) (3) 11.38% 9.75% 9.74%
Net Interest Margin (3) 3.37% 3.22% 3.14% Efficiency Ratio 55.34%
58.88% 62.00% PTPP ROAA (1)(3) 1.57% 1.42% 1.28% Growth
In thousands (except for TBV/share) Total Assets (EOP) $2,016,086
$1,967,252 $1,667,005 Total Loans (EOP) $1,372,733 $1,258,388
$1,145,095 Total Deposits (EOP) $1,738,720 $1,713,294
$1,438,776 Tangible Book Value/Share (1) $9.00 $9.60
$27.71 (1) Non-GAAP Financial Measures. TBV/Share for Q2’22
and Q1’22, see footnote disclosure in the Non-GAAP table for
common stock activity (redemption and exchange of preferred
stock, IPO, and exchange of Class B common stock) which impacted TBV/share.
(2) The Company was established in Q4 2021. As such, the capital
ratios for Q2 2022 and Q1 2022 are for the Bank Holding Company
while Q2 2021 is for the Bank only. (3) Annualized. 6
Loan Portfolio Total Loans (AVG) in millions $1,300 $1,200
$1,100 $1,000 $900 $800 $1,088 $1,144 $1,159 $1,211 $1,296 $700
$99 $73 $51 $35 $18 $600 $989 $1,071 $1,108 $1,176 $1,278 Q2
2021 Q3 2021 Q4 2021 Q1 2022 Q2 2022 Loans (Exd PPP)
PPP Loans Loan Yields 5.00% 4.50% 4.00% 3.50% 3.00% 2.50%
2.00% 1.50% 1.00% 4.19% 4.29% 4.32% 4.35% 435.00% 0.50%
0.28% 0.32% 0.33% 0.28% 1.30% 0.00% 3.91% 3.97% 399.00% 4.07%
4.22% + 31 bps Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q2'22
vs Q2'21 Loan coupon Loan fees Commentary Total average
loans, excluding PPP loans, increased $102.3 million or 34.9% annualized
compared to prior quarter and $289.9 million or 29.3% compared
to second quarter 2021. Loan coupon increased 15 bps due to a higher
interest rate environment compared
to prior quarter and 31 bps increase compared to second quarter
- Loan fees decreased 15 bps from prior quarter as most of
the PPP loan fees have been recognized, normalizing the loan yield
composition. 7
Loan Portfolio Mix Loan Portfolio Mix Residential real estate
CRE – Non-owner occupied CRE – Owner occupied Commerical
and industrial Global Banking Consumer and other 8% 15% 51%
10% 10% 8% Commentary Total Loan balances at quarter
end was $1.373
billion. Commercial Real Estate (owner occupied and non-owner
occupied) was 61% or $843.4 million of the total loan portfolio. CRE
mix is diversified and granular. Retail makes up 30% of
total CRE or $252.6 million. Land/Construction 5% Other 4%
Retail 30% - LTV was 56.9% - Average loan size was $3.0
..million CRE - Owner occupied 17% Multifamily 16% Office
13% Hotels 8% Warehouse 7%
As of 6/30/22 8
Loan Production Net Loan Production Trend in millions $180 $160 $140
$120 $100 $80 $60 $40 $20 $144 $104 $117 $88 $119
$106 $141 $74 $169 $56 0 Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2
2022 Loan Production/Line changes Loan Amortization/payoffs
Commentary Q2 loan growth driven by increased production levels and
lower payoffs and paydowns. Payoffs and paydowns slowing with
increase in interest rates. $169 million loan production in Q2
2022 is attributable to $158 million in new loans and $11 million
in net increase
of existing lines of credit. 9
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. SBA PPP Loans In thousands (except
for ROAA) Q2 2022 Q1 2022 Q2 2021 Pre-Tax Income $7,003
$6,712 $5,316 Net Income $5,295 $4,854 $4,053 Average
Assets $1,968,381 $1,913,484 $1,660,060 ROAA (1) 1.08% 1.03% 0.98%
of which PPP Income (2) $484 $1,001 $925 Unrealized PPP
Fees EOP $149 $590 $3,169 PPP Balance EOP $13,507 $24,646 $84,240
PPP AVG. Balance $17,643 $34,901 $99,563 (1) Annualized.
(2) PPP Income includes loan fees and interest income. 10
Deposit Portfolio Deposits (AVG) in millions $2,000 $1,800
$1,600 $1,400 $1,200 $1,000 $800 $600 $1,432 $1,477 $1,562 $1,650
$1,717 $400 $236 $229 $228 $223 $224 $200 $608 $628 $674
$736 $781 $0 $52 $55 $56 $56 $67 $5,536 $5,565 $5,604 $5,626
$5,645 Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2 2022 Non-interest-bearing
deposits Money market and savings Interest-bearing demand
deposits Time deposits Deposit Cost (1) 0.26% 0.22% 0.21% 0.20%
0.21% 0.25% 0.25% 0.25% 0.50% 0.21% Q2 2021 Q3 2021 Q4
2021 Q1 2022 Q2 2022 Commentary Average deposits increased
$66.4 million or 16.1% annualized compared to prior quarter and
$284.5 million or 19.9% compared to second quarter 2021. Average
DDA deposits grew $18.6 million or 11.9% annualized compared to
prior quarter and $109.1 million or 20.4% compared to second quarter
- DDA balances comprise 37.6% of total deposits at June
30, 2022. Deposit cost increased 1bps compared to prior quarter
and decreased 5 bps compared to second quarter 2021. 11
Net Interest Margin Net Interest Income/Margin (1) in thousands
(exceptions) Net Interest Income NIM NIM excluding PPP Loans
Interest-Earning Assets Mix (AVG) Total Loans
(excluding PPP Loans) Investment Securities PPP Loans Cash
Balance & Equivalents Commentary Net interest income increased
by $1.3 million or 35.2% annualized compared to prior quarter and
$3.2 million or 25.4% compared
to second quarter 2021. NIM impacted by an increase in interest rates
and a shift in balance sheet mix. Loan production growth shifted
assets to a higher yielding asset class and was funded by cash
balances, a lower securities portfolio and growth in new deposits
.
NIM of 3.37% up 15 bps from prior quarter and up 23 bps from
second quarter 2021 demonstrating an asset sensitive balance
sheet. 12
Interest Rate Sensitivity Loan Portfolio Repricing Profile by Rate Type
Hybrid ARM 6% Variable Rate 53% Fixed Rate 41% 22%
18% 60% 22% Loan Repricing Schedule Variable/Hybrid Rate
Loans 46% 37% 6% 11% 46% 0-4-1 yrs. 1-2 yrs. 2-4 yrs
Static NII Simulation Year 1 & 2 $5,000 $4,000 $3,000 $2,000
3.3% 5.9% $1,000 $2,371 $4,178 $0 0.2% 0.1% Net interst income ($
in thousands) $138 $70 +200 +100 +200 Changes from base (%)
Years 1 Years 2 As of 6/30/22 13
Non-interest Income In thousands (except ratios) Q2 2022 Q1 2022 Q4
2021 Q3 2021 Q2 2021 Service fees $1,083 $900 $961 $856 $903
Gain (loss) on sale of securities available for sale (3) 21 35 (70)
187 Gain on sale of loans held for sale 22 334 107 532 23 Gain
on sale of other assets - - 983 - - Loan settlement - 161 - 2,500 - Other
income 515 529 558 399 403 Total non-interest income $1,617
$1,945 $2,644 $4,217 $1,516 Average total assets $1,968,381
$1,913,484 $1,828,037 $1,741,423 $1,660,060
Non-interest income / Average assets (1) 0.33% 0.41% 0.57%
0.96% 0.37% Total Revenue $17,259 $16,324 $16,720
$17,688 $13,990 Non-interest income as % of total revenue 9.37%
11.91% 15.81% 23.85% 10.84% Commentary Service fees
and other income remain consistent quarter over quarter. Fluctuation
of non-interest income primarily impacted by one-time items
in prior quarters. Prudently managing securities with minimal losses
($3 thousand) in Q2 2022 as interest rates increase. (1)
Annualized. 14
Non-interest Expense In thousands (except ratios and FTE) Q2 2022
Q1 2022 Q4 2021 Q3 2021 Q2 2021 Salaries and employee benefits
$5,913 $5,875 $5,634 $5,313 $5,213 Occupancy 1,251 1,270
1,267 1,192 1,411 Regulatory assessment and fees 226 213 93 317
195 Consulting and legal fees 398 517 539 357 373 Network and
information technology services 448 387 268 358 332 Other
operating expense 1,315 1,350 1,518 1,470 1,150 Total non-interest
expenses $9,551 $9,612 $9,319 $9,007 $8,674 Efficiency ratio 55.34%
58.88% 55.74% 50.92% 62.00% Average total assets $1,968,381
$1,913,484 $1,828,037 $1,741,423 $1,660,060 Non-interest
expense / Average assets (1) 1.95% 2.04% 2.02% 2.05% 2.10%
Full-time equivalent employees 192 190 187 184 183 Commentary
Salaries and employee benefits increased primarily due to 2 new
FTEs. Consulting and legal fees normalizing after one-time expenses
related to the holding company reorganization in Q1 2022 and Q4
- Higher revenue and slightly lower non-interest expense improved
efficiency ratio to 55.34%. (1) Annualized. 15
Asset Quality Allowance for Credit Losses In thousands except ratios 1.40%
1.33% 1.31% 1.22% 1.16% 1.30% 1.27% 1.27% 1.20% 1.15% $1,848
$14,900 $15,057 $15,074 $15,786 Q2 2021 Q3 2021 Q4 2021
Q1 2022 Q2 2022 Allowance for credit losses ACL/Total
loans ACL/Total loans excluding PPP Loans Commentary
ACL coverage ratio is at 1.15% or 1.16% excluding PPP loans,
in line with pre-pandemic levels. No loans classified as non-performing.
No OREOs. CECL modeling progressing as planned; first parallel run
was completed in Q2 2022. Non-performing Loans In thousands
(except ratios) 1400 1200 1000 800 600 400 200 0 $20 0.00% $18
0.00% $1,190 0.10% $0 0.00% $0 0.00% Q2 2021 Q3 2021 Q4
2021 Q1 2022 Q2 2022 Non-accrual TDRs Non-accrual loans
less non-accrual TDRs Non-performing loans to total loans 16
Capital Capital Ratios11*! Q2 2022 Leverage Ratio 9.43% TCE/TA{2)
8.93% Tier 1 Risk Based Capital 12.65% Total Risk Based
Capital 13.74% Q1 2022 Q2 2021 Well-
Capitalized 9.47% 7.91% 5.00% 9.76% 8.50% NA 13.35% 11.44%
8.00% 12.69% 10.00% 14.49% Commentary All capital ratios remain
significantly above “well capitalized” guidelines. Q2 2022 EOP
shares outstanding: Class A Common Stock: 20,000,753 No
shares repurchased during the quarter; Board approved repurchase
program in place covering 750,000 shares of Class A common stock. (1)
The Company was established in Q4 2021. As such, the capital ratios
for Q2 2022 and Q1 2022 are for the Company while Q2 2021
is for the Bank only. (2) Non-GAAP. 17
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 37.6% Non-Interest-Bearing
Deposits (EOP) 18
Non-GAAP Reconciliation In thousands (except ratios) 6/30/2022
Pre-Tax Pre-Provis ion f TIPP") Income: Netincora?$5.295
Rus: Provision forincone taxes 1.708 Rus: Revision for credit losses
705 PIPP incone _S 7,708 PTPP Return on Average As sets:
PIPP incone$7.708 Average assets$1,96S,3S1 PIPP return
on average assets 1.57% Oner at in g Net Inc ome: Net incone$5.295
Less: Net gains (tosses) on sale of securities (3) Less: Tax effect
on sale of securities 1_ Operating net income _S 5.297 Operating
PTPP Income: PIPP incone$7,708 Less: Net gains (tosses) on sale of
securities (3) Operating PTPP Incone _S 7.711 Operating PTPP
Return on Average Assets: Operating PIPP incone$7,711 Average
assets$1,968,381 Operating PIPP Return on average assets 1.57% Oper
at in g Return on Aver ag e Assets : Operating net income$5.297
Average assets$1,968,381 Operating return on average
assets ' ' 1.08% As of or for the three months ended 3/31/2022
12/31/2021 9/30/2021 6/30/2021 S 4.854 S 5.650 S 6.593 S 4.053
1.S58 1.751 2088 1.263 S 6.712 S 7.401 S 8.681 S 5.316 S 6.712
S 7.401 S 8.681 S 5.316 S 1,913,484$1,828,037$1,741,423$1,660,060 1.42%
1.61% 1.98% 1.28% s 4.854 S 5.650 S 6.593 S 4.053 21 35 (70) 187
ÍSL <2L 17 S 4.S3S S 5.624 $ 6.646 S 3.912 S 6,712$7,401$8,681$5,316
21 35 JTC^ 181 S 6.691$7,366$S.751$5.129 S 6,691 S 7,366
S 8,751 S 5,129 S 1,913,484$1,828,037$1,741,423$1,660,060
1.42% 1.60% 1.99% 1.24% S 4.838 S 5.624
S 6.616 S 3.912 S 1,913,484$1,828,037$1,741,423$1,660,060 1.03%
1.22% 1.51% 0.95% (1) Annualized 19
Non-GAAP Reconciliation In thousands (except per share data)
In thousands (except per A. of i»d for ike ar»ao»a-. tided fl 1 6 30.2022
3 31 2022 12 3 1 2021 9 30 2021 6 30.2021 Ti agible Bock Va
lie per Cor* noi Shire (it period-ead): loulclockholdcrc'eoas
v
(GA AP| S ISXObS s 192019 S 201 *9 7 s 201.918 S 166.102 lecc
: Inundóle jccclc ----- Less : Preferred cioc k 24016 tangible cioc (holders'equity
(non-GAA Pk S 180.068 s 192019 s 201*97 S 201.918 S 141086 Toral
iteres lifted and ontiB nding (at period-end): ('lice A commcn shares
20.0C0.TSJ 20.000.TS.1 19.991.75.1 18767041 .1*89.469 Giles (¡common
chares 1.224.2 12 1-Î24J2I2 1 oialcomm.cn chares issued and
ou island mg 200CO .75 l 20.000.7S 1 1.7SJ I.TSJ 5.1110*1
1 angible book vatac percommon chare (non-GA AP) ' ' V s s
10.20 s s yj 0 penda* Net I»coa e Available nCcauM S lock k olden
: Sel meóme (GAA P> S s 4*54 s 5/k50 s 6091 s 4.0 S.1 Lecc :
Preferred dividende - 542 754 Lecc: (-«change and red cmpu.cn of preferred
charec . . . 89085 . Sel meóme (bee) available a> common stockholders (GA
AP> SJ9S 4ÃS4 SOSO (8.10.14) 1.299 Add back: (exchange
and redemplicn ofpreferred charec 89085 Operatmg nel mcom:
avail lo comnun clock (non-GAA P| s SJ9S s 4*34 s SOSO s 6031
s 1’99 A lie cation of operating net income per comm on ¡to ci cia
n: £ « *o \ s s < V«4 s S « /-*.» s S « <ú« s s Glass (¡comm.cn
clock$ ***** 4SI 790 Weighed average liarei on a tan ding: Gla.cc
A common clock llacK 20.000.75! 19.994.95.1 I&.9I.1.9I4 IS. 12
1.460 .1*89.469 Dialed 20171.261 20.109.7* J 19.021086 15.187.729
1.911016 Glass (¡ commcn clock Hack: . . . 6.121052 6.121052 Dialed
-
-
- 6121052 6.121052 Dita ted I PS: "*"* ' (Jan \ common c
-
lock Sel income (fc>cc)perdiluted share«"; A AP)$0.26 S 0.24
S 0-10 S (5.11) S 0X4 A dd back: Met an»e and redcmptmn of pie
ferret] cha res ; ; ; • 4» • Operating nel mcom:
per dita led chare (non -<t\ Aft Class licommcn clock Nel income (toee)perdil
uted chare(GA AP)$s$S (1.02) S 0.11 Add back: (--«change
and redcmptmn ofpre ferred charec 1.09 Operating nel mcom: perditaled
chare (non-GA AP) 4 «$ (t) The Company belbves these non GAAP
measurements are key bdicaars of iie ongaing earnbgs pc» er of
the Conjjany. 2. During the quarter ended Sept entier 30. 2021.47.473
shares of Class C preferred sack and 11.061.552 shares of Class
D preferred sack * ere comer ad bto 10278.072 shares of Class A
com non stock. AcMitbnally. the Bank closed on iie initial
pubic dieting of is Cass A common sack on July 27. 2021. in which
it issued 4.600.COO shares of Class A common stock. As such,
the toal shares issued rad outstanding d Class A com non sack* as 18.767.541
shares at Scptentier 30. 2021. 3. EjcIjJcs iie dlutivc effect,
if any. of shares of com moi sack ¿suable upon eiocBc of outsanding
stock options. 4. During the quarter ended Septentier 30. 2021. basic
net loss per share is the same as dluad net bss per share
as the inebsion of all poanaal common shacs outstanding would have been
anadiuáve. 5. During the quarter ended December 31.2021.
iie Company entered into agreements * ih the Class B common shrr
ehobers a cachangc el outsanding Class B non-votbg common
stockfer Class A voting common stockât a ratio of 1 shrre of
Cbss A common stockfor each 5 shares of Class B non-votbg common
stock, h catulaang net income (Ices) per dluad share for
the prbr quarters presented., iie allocrsion of operating net income avalabfc
a common slockhobers was based on the weighad average shares
outsanding per common share class a iie aal w eithted average
shares outsand'ng djrbq each period. The operatbq net bcome albcatbn wascalcubted
usinq the weiqhad averaqe shares outsandinq of Cbss B common
stockon an as converted basis. 20
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 21