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):
April 27, 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
,
Doral
,
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 April 27, 2023, USCB Financial Holdings, Inc. (the “Company”), issued a press release announcing its financial results for
the first quarter ended March 31, 2023. 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 11:00
a.m. ET on
April 28, 2023,
the Company will
hold an earnings
conference call to
discuss
its financial
performance
for the
quarter
ended
March 31,
2023.
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 April 27, 2023
99.2
Earnings Presentation, dated April 27, 2023
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 $0.29 and ROAA of
1.11%
for Q1 2023
MIAMI, FL
– April
27, 2023
– USCB
Financial Holdings,
Inc. (the
“Company”) (NASDAQ:
USCB)
, the
holding company
for
U.S. Century Bank
(the “Bank”), reported
net income of $5.8
million or $0.29 per
diluted share for the
three months ended March
31,
2023, compared with net income of $4.9 million or $0.24 per diluted
share, for the same period in 2022.
"The beginning
of 2023
was marked
by significant
events such
as the
sudden failure
of three
banks, prompting
heightened concerns
about the safety and
soundness of the banking industry,
and ongoing discussions of a
potential recession. Despite these
challenges, we
are pleased to announce that the USCB team delivered strong performance in the first quarter of 2023,
reflecting our ability to navigate
this challenging
operating environment
with prudent
consistency.
Our financial
results demonstrate
robust earnings,
driven by
strong
loan
production,
and
disciplined
credit
underwriting
and
risk
management
practices”
said
Luis
de
la
Aguilera,
President
and
Chief
Executive
Officer.
"Our strength
and stability
are reinforced
by our
growing core
customer relationships,
which have
enabled us
to
build a granular deposit base and diversified loan portfolio,
in one of the most vibrant markets in the United States.” Mr. de la Aguilera
went on to say,
“ our deposits are derived primarily
from our local customers and communities.
We do
not have any material exposure
to either crypto currencies or investments or to crypto-related business.”
Unless otherwise
stated,
all percentage
comparisons
in
the bullet
points
below
are
calculated
for
the
quarter
ended
March 31,
2023
compared to the quarter ended March 31, 2022 and annualized where
appropriate.
Profitability
•
Annualized return
on average
assets for
the quarter
ended March 31,
2023 was
1.11%
compared to
1.03% for
the first
quarter of
2022.
•
Annualized return
on average stockholders’
equity for the
quarter ended March
31, 2023 was
12.85%
compared to 9.75%
for the
first quarter of 2022.
•
The efficiency ratio for the quarter ended March 31, 2023
was 56.32%
compared to 58.88%
for the first quarter of 2022.
•
Net interest margin was 3.22% for both quarters ended March 31, 2023
and 2022.
•
Net
interest
income
before
provision
for
credit
losses
was
$16.0
million
for
the
quarter
ended
March 31,
2023,
an
increase
of
$1.6 million or 11.3% compared to the
first quarter of 2022.
Balance Sheet
•
Total assets were $2.2
billion at March 31, 2023, representing an increase of $196.6 million or 10.0%
from March 31, 2022.
•
Total loans were $1.6
billion at March 31, 2023, representing an increase of $322.0 million or 25.6%
from March 31, 2022.
•
Total deposits were $1.
8
billion at March 31, 2023, representing an increase of $117.2
million or 6.8% from March 31, 2022.
•
Total stockholders’
equity was $183.9 million at March 31, 2023,
representing a decrease of $8.2 million
or 4.3% from March 31,
- Total stockholders’ equity includes after-tax unrealized security losses of $42.1 million at March 31, 2023 compared to
after-
tax unrealized security losses of $19.5 million at March 31, 2022.
Asset Quality
•
Effective
January
1,
2023,
the
Company
adopted
ASU
2016-13
Current
Expected
Credit
Losses
(“CECL”)
methodology
for
estimating credit losses, which
resulted in an increase to
the allowance for credit losses
of loans of $1.1 million
and an increase to
the reserve for unfunded commitments of $259 thousand.
This one-time cumulative adjustment resulted in an after-tax
decrease of
$1.0
million in retained earnings.
2
•
The allowance for credit losses increased by
$3.8 million to $18.9 million at
March 31, 2023 from $15.1 million at
March 31, 2022.
•
The allowance for credit losses represented 1.20% of total loans at March 31, 2023
and at March 31, 2022.
•
Non-performing loans to total loans was 0.03% at March 31, 2023 compared
to 0.00% at March 31, 2022.
Non-interest Income and Non-interest Expense
•
Non-interest income was $2.1 million for the three months ended March 31, 2023, an increase of $125 thousand or 6.4% compared
to $1.9 million for the same period in 2022.
•
Non-interest expense was
$10.2
million for the
three months
ended March 31, 2023,
an increase
of $564 thousand
or 5.9%
compared
to the same period in 2022.
Capital
•
During the quarter the Company repurchased 500,000 shares
of USCB Financial Holdings Inc at
a weighted average price per
share
of $11.74.
The aggregate purchase price
for these transactions was
approximately $5.9 million,
including transaction costs.
These
repurchases were made through open market pursuant to the Company’s publicly announced
repurchase program.
As of March 31,
2023, 250,000 shares remain authorized under this program.
•
As of March 31, 2023,
total risk-based capital ratios for the Company and the Bank were 13.20% and 13.12%,
respectively.
•
Tangible
book value
per common
share of
$9.37 was
negatively affected
by $2.14
due to
after tax
unrealized security
losses of
$42.1 million at
March 31, 2023. At
March 31, 2022, tangible
book value of
$9.60 was negatively
affected by $0.97
due to $19.5
million after tax unrealized security losses.
Conference Call and Webcast
The Company
will host
a conference
call on
Friday,
April 28,
2023, at
11:00
a.m. Eastern Time
to discuss
the Company’s
unaudited
financial results for the quarter ended March 31,
- 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.
Forward-looking statements are those that are not historical facts. 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,
but are not limited
to,
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;
•
our ability to successfully manage interest rate risk, credit risk, liquidity risk,
and other risks inherent to our industry;
3
•
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;
•
adverse changes or conditions in capital and financial markets, including
actual or potential stresses in the banking industry;
•
deposit attrition and the level of our uninsured deposits;
•
legislative
or
regulatory
changes and
changes
in
accounting
principles,
policies,
practices or
guidelines,
including
the on-going
effects of the 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 statements
are 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.
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 March 31,
2023
2022
Interest income:
Loans, including fees
$
19,711
$
12,982
Investment securities
2,286
2,329
Interest-bearing deposits in financial institutions
382
31
Total interest income
22,379
15,342
Interest expense:
Interest-bearing checking
43
16
Savings and money market accounts
4,785
551
Time deposits
1,057
259
FHLB advances and other borrowings
497
137
Total interest expense
6,382
963
Net interest income before provision for credit losses
15,997
14,379
Provision for credit losses
201
-
Net interest income after provision for credit losses
15,796
14,379
Non-interest income:
Service fees
1,205
900
Gain (loss) on sale of securities available for sale, net
(21)
21
Gain on sale of loans held for sale, net
347
334
Loan settlement
-
161
Other non-interest income
539
529
Total non-interest income
2,070
1,945
Non-interest expense:
Salaries and employee benefits
6,377
5,875
Occupancy
1,299
1,270
Regulatory assessments and fees
224
213
Consulting and legal fees
358
517
Network and information technology services
478
387
Other operating expense
1,440
1,350
Total non-interest expense
10,176
9,612
Net income before income tax expense
7,690
6,712
Income tax expense
1,881
1,858
Net income
5,809
4,854
Per share information:
Net income per common share, basic
$
0.29
$
0.24
Net income per common share, diluted
$
0.29
$
0.24
Weighted average shares outstanding:
Common shares, basic
19,855,409
19,994,953
Common shares, diluted
19,940,606
20,109,783
5
USCB FINANCIAL HOLDINGS, INC.
SELECTED FINANCIAL DATA (UNAUDITED)
(Dollars in thousands, except per share data)
As of or For the Three Months Ended
3/31/2023
12/31/2022
9/30/2022
6/30/2022
3/31/2022
Income statement data:
Net interest income
$
15,997
$
16,866
$
16,774
$
15,642
$
14,379
Provision for credit losses
201
880
910
705
-
Net interest income after provision for credit losses
15,796
15,986
15,864
14,937
14,379
Service fees
1,205
1,093
934
1,083
900
Gain (loss) on sale of securities available for sale, net
(21)
(1,989)
(558)
(3)
21
Gain on sale of loans held for sale, net
347
205
330
22
334
Loan settlement
-
-
-
-
161
Other income
539
568
1,083
515
529
Total non-interest income
2,070
(123)
1,789
1,617
1,945
Salaries and employee benefits
6,377
6,080
6,075
5,913
5,875
Occupancy
1,299
1,256
1,281
1,251
1,270
Regulatory assessments and fees
224
222
269
226
213
Consulting and legal fees
358
371
604
398
517
Network and information technology services
478
483
488
448
387
Other operating expense
1,440
1,602
1,415
1,315
1,350
Total non-interest expense
10,176
10,014
10,132
9,551
9,612
Net income before income tax expense
7,690
5,849
7,521
7,003
6,712
Income tax expense
1,881
1,415
1,963
1,708
1,858
Net income
$
5,809
$
4,434
$
5,558
$
5,295
$
4,854
Per share information:
Net income per common share, basic
$
0.29
$
0.22
$
0.28
$
0.26
$
0.24
Net income per common share, diluted
$
0.29
$
0.22
$
0.28
$
0.26
$
0.24
Balance sheet data (at period-end):
Cash and cash equivalents
$
63,251
$
54,168
$
73,326
$
83,272
$
94,113
Securities available-for-sale
$
229,409
$
230,140
$
248,571
$
339,464
$
392,214
Securities held-to-maturity
$
186,428
$
188,699
$
178,865
$
116,671
$
122,361
Total securities
$
415,837
$
418,839
$
427,436
$
456,135
$
514,575
Loans held for investment
(1)
$
1,580,394
$
1,507,338
$
1,431,513
$
1,372,733
$
1,258,388
Allowance for credit losses
$
(18,887)
$
(17,487)
$
(16,604)
$
(15,786)
$
(15,074)
Total assets
$
2,163,821
$
2,085,834
$
2,037,453
$
2,016,086
$
1,967,252
Non-interest-bearing deposits
$
633,606
$
629,776
$
662,808
$
653,708
$
656,622
Interest-bearing deposits
$
1,196,856
$
1,199,505
$
1,133,834
$
1,085,012
$
1,056,672
Total deposits
$
1,830,462
$
1,829,281
$
1,796,642
$
1,738,720
$
1,713,294
FHLB advances and other borrowings
$
120,000
$
46,000
$
26,000
$
66,000
$
36,000
Total liabilities
$
1,979,963
$
1,903,406
$
1,860,036
$
1,836,018
$
1,775,213
Total stockholders' equity
$
183,858
$
182,428
$
177,417
$
180,068
$
192,039
Capital ratios:
(2)
Leverage ratio
9.36%
9.61%
9.48%
9.43%
9.47%
Common equity tier 1 capital
12.04%
12.53%
12.56%
12.65%
13.35%
Tier 1 risk-based capital
12.04%
12.53%
12.56%
12.65%
13.35%
Total risk-based capital
13.20%
13.65%
13.65%
13.74%
14.49%
(1)
Loan amounts include deferred fees/costs.
(2) Reflects the Company's capital ratios
6
USCB FINANCIAL HOLDINGS, INC.
AVERAGE BALANCES, RATIOS, AND OTHER DATA
(UNAUDITED)
(Dollars in thousands)
As of or For the Three Months Ended
3/31/2023
12/31/2022
9/30/2022
6/30/2022
3/31/2022
Average balance sheet data:
Cash and cash equivalents
$
50,822
$
61,892
$
77,887
$
80,254
$
99,911
Securities available-for-sale
$
230,336
$
242,144
$
331,206
$
370,933
$
385,748
Securities held-to-maturity
$
187,826
$
184,459
$
116,733
$
120,130
$
122,381
Total securities
$
418,162
$
426,603
$
447,939
$
491,063
$
508,129
Loans held for investment
(1)
$
1,547,393
$
1,456,780
$
1,398,761
$
1,296,476
$
1,211,432
Total assets
$
2,120,218
$
2,051,867
$
2,026,791
$
1,968,381
$
1,913,484
Interest-bearing deposits
$
1,179,878
$
1,150,049
$
1,107,129
$
1,071,709
$
1,023,844
Non-interest-bearing deposits
$
664,369
$
653,820
$
655,853
$
644,975
$
626,400
Total deposits
$
1,844,247
$
1,803,869
$
1,762,982
$
1,716,684
$
1,650,244
FHLB advances and other borrowings
$
61,600
$
37,500
$
43,935
$
36,330
$
36,011
Total liabilities
$
1,936,847
$
1,874,311
$
1,841,503
$
1,781,784
$
1,711,624
Total stockholders' equity
$
183,371
$
177,556
$
185,288
$
186,597
$
201,860
Performance ratios:
Return on average assets
(2)
1.11%
0.86%
1.09%
1.08%
1.03%
Return on average equity
(2)
12.85%
9.91%
11.90%
11.38%
9.75%
Net interest margin
(2)
3.22%
3.45%
3.47%
3.37%
3.22%
Non-interest income to average assets
(2)
0.40%
(0.02)%
0.35%
0.33%
0.41%
Efficiency ratio
(3)
56.32%
59.81%
54.58%
55.34%
58.88%
Loans by type (at period end):
(4)
Residential real estate
$
184,427
$
185,636
$
186,551
$
203,662
$
204,317
Commercial real estate
$
987,757
$
970,410
$
928,531
$
843,445
$
782,072
Commercial and industrial
$
160,947
$
126,984
$
121,145
$
131,271
$
134,832
Foreign banks
$
97,405
$
93,769
$
94,450
$
84,770
$
63,985
Consumer and other
$
149,410
$
130,429
$
100,845
$
109,250
$
73,765
Asset quality data:
Allowance for credit losses to total loans
1.20%
1.16%
1.16%
1.15%
1.20%
Allowance for credit losses to non-performing loans
3,886%
%
%
%
%
Total non-performing loans
(5)
$
486
$
-
$
-
$
-
$
-
Non-performing loans to total loans
0.03%
%
%
%
%
Non-performing assets to total assets
0.02%
%
%
%
%
Net charge-offs (recoveries of) to average loans
(2)
(0.01)%
(0.00)%
0.03%
(0.00)%
(0.01)%
Net charge-offs (recovery of) credit losses
$
(49)
$
(2)
$
91
$
(7)
$
(17)
Interest rates and yields:
(2)
Loans
5.17%
4.86%
4.53%
4.35%
4.35%
Investment securities
2.20%
2.13%
1.94%
2.04%
1.85%
Total interest-earning assets
4.51%
4.21%
3.82%
3.60%
3.43%
Deposits
1.29%
0.77%
0.34%
0.21%
0.20%
FHLB advances and other borrowings
3.27%
2.27%
1.63%
1.53%
1.54%
Total interest-bearing liabilities
2.08%
1.25%
0.59%
0.38%
0.37%
Other information:
Full-time equivalent employees
196
191
191
192
190
(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 at 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 March 31,
2023
2022
Average
Balance
Interest
Yield/Rate
(1)
Average
Balance
Interest
Yield/Rate
(1)
Assets
Interest-earning assets:
Loans
(2)
$
1,547,393
$
19,711
5.17%
$
1,211,432
$
12,982
4.35%
Investment securities
(3)
421,717
2,286
2.20%
510,257
2,329
1.85%
Other interest-earnings assets
43,084
382
3.60%
90,137
31
0.14%
Total interest-earning assets
2,012,194
22,379
4.51%
1,811,826
15,342
3.43%
Non-interest-earning assets
108,024
101,658
Total assets
$
2,120,218
$
1,913,484
Liabilities and stockholders' equity
Interest-bearing liabilities:
Interest-bearing checking
$
58,087
43
0.30%
$
64,436
16
0.10%
Saving and money market deposits
897,061
4,785
2.16%
736,134
551
0.30%
Time deposits
224,730
1,057
1.91%
223,274
259
0.47%
Total interest-bearing deposits
1,179,878
5,885
2.02%
1,023,844
826
0.33%
FHLB advances and other borrowings
61,600
497
3.27%
36,011
137
1.54%
Total interest-bearing liabilities
1,241,478
6,382
2.08%
1,059,855
963
0.37%
Non-interest-bearing demand deposits
664,369
626,400
Other non-interest-bearing liabilities
31,000
25,369
Total
liabilities
1,936,847
1,711,624
Stockholders' equity
183,371
201,860
Total liabilities and stockholders' equity
$
2,120,218
$
1,913,484
Net interest income
$
15,997
$
14,379
Net interest spread
(4)
2.43%
3.07%
Net interest margin
(5)
3.22%
3.22%
(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
3/31/2023
12/31/2022
9/30/2022
6/30/2022
3/31/2022
Pre-tax pre-provision ("PTPP") income:
Net income
$
5,809
$
4,434
$
5,558
$
5,295
$
4,854
Plus: Provision for income taxes
1,881
1,415
1,963
1,708
1,858
Plus: Provision for credit losses
201
880
910
705
-
PTPP income
$
7,891
$
6,729
$
8,431
$
7,708
$
6,712
PTPP return on average assets:
PTPP income
$
7,891
$
6,729
$
8,431
$
7,708
$
6,712
Average assets
$
2,120,218
$
2,051,867
$
2,026,791
$
1,968,381
$
1,913,484
PTPP return on average assets
(1)
1.51%
1.30%
1.65%
1.57%
1.42%
Operating net income:
Net income
$
5,809
$
4,434
$
5,558
$
5,295
$
4,854
Less: Net gains (losses) on sale of securities
(21)
(1,989)
(558)
(3)
21
Less: Tax effect on sale of securities
5
504
141
1
(5)
Operating net income
$
5,825
$
5,919
$
5,975
$
5,297
$
4,838
Operating PTPP income:
PTPP income
$
7,891
$
6,729
$
8,431
$
7,708
$
6,712
Less: Net gains (losses) on sale of securities
(21)
(1,989)
(558)
(3)
21
Operating PTPP income
$
7,912
$
8,718
$
8,989
$
7,711
$
6,691
Operating PTPP return on average assets:
Operating PTPP income
$
7,912
$
8,718
$
8,989
$
7,711
$
6,691
Average assets
$
2,120,218
$
2,051,867
$
2,026,791
$
1,968,381
$
1,913,484
Operating PTPP return on average assets
(1)
1.51%
1.69%
1.76%
1.57%
1.42%
Operating return on average assets:
Operating net income
$
5,825
$
5,919
$
5,975
$
5,297
$
4,838
Average assets
$
2,120,218
$
2,051,867
$
2,026,791
$
1,968,381
$
1,913,484
Operating return on average assets
(1)
1.11%
1.14%
1.17%
1.08%
1.03%
Operating return on average equity:
Operating net income
$
5,825
$
5,919
$
5,975
$
5,297
$
4,838
Average equity
$
183,371
$
177,556
$
185,288
$
186,597
$
201,860
Operating return on average equity
12.88%
13.23%
12.79%
11.39%
9.72%
Operating Revenue:
Net interest income
$
15,997
$
16,866
$
16,774
$
15,642
$
14,379
Non-interest income
2,070
(123)
1,789
1,617
1,945
Less: Net gains (losses) on sale of securities
(21)
(1,989)
(558)
(3)
21
Operating revenue
$
18,088
$
18,732
$
19,121
$
17,262
$
16,303
Operating Efficiency Ratio:
Total non-interest expense
$
10,176
$
10,014
$
10,132
$
9,551
$
9,612
Operating revenue
$
18,088
$
18,732
$
19,121
$
17,262
$
16,303
Operating efficiency ratio
56.26%
53.46%
52.99%
55.33%
58.96%
(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
3/31/2023
12/31/2022
9/30/2022
6/30/2022
3/31/2022
Tangible book value per common share (at period-end):
(1)
Total stockholders' equity
$
183,858
$
182,428
$
177,417
$
180,068
$
192,039
Less: Intangible assets
-
-
-
-
-
Tangible stockholders' equity
$
183,858
$
182,428
$
177,417
$
180,068
$
192,039
Total shares issued and outstanding (at period-end):
Total common shares issued and outstanding
19,622,380
20,000,753
20,000,753
20,000,753
20,000,753
Tangible book value per common share
(2)
$
9.37
$
9.12
$
8.87
$
9.00
$
9.60
Operating diluted net income per common share:
(1)
Operating net income
$
5,825
$
5,919
$
5,975
$
5,297
$
4,838
Total weighted average diluted shares of common stock
19,940,606
20,172,438
20,148,208
20,171,261
20,109,783
Operating diluted net income per common share:
$
0.29
$
0.29
$
0.30
$
0.26
$
0.24
Tangible Common Equity/Tangible Assets
Tangible stockholders' equity
$
183,858
$
182,428
$
177,417
$
180,068
$
192,039
Tangible assets
$
2,163,821
$
2,085,834
$
2,037,453
$
2,016,086
$
1,967,252
Tangible Common Equity/Tangible Assets
8.50%
8.75%
8.71%
8.93%
9.76%
(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
Exhibit 99.2 EARNINGS PRESENTATION FIRST QUARTER
2023 NASDAQ: USCB USBC FINANCIAL HOLDINGS
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. Forward-looking statements
are those that are not historical facts. 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, but are not limited to, 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; • 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; • adverse changes or conditions in capital and financial
markets, including actual or potential stresses in the banking industry;
deposit attrition and the level of our uninsured deposits; legislative
or regulatory changes and changes in accounting principles,
policies, practices or guidelines, including the on-going effects
of the 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 statements to reflect events or circumstances after
the date on which the statements are made or to reflect the occur
rence 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. 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
Q1 2023 HIGLIGHTS GROWTH Average deposits increased
by $194.0 million or 11.8% compared to first quarter 2022. Average
loans, excluding PPP loans, increased $370.0 million or 31.4% compared
to first quarter 2022. Tangible Book Value per Share
(1) was $9.37 includes an after-tax unrealized security losses impact of
$2.14. PROFITABILITY Net income was $5.8 million
or $0.29 per diluted share, an increase of $1.0 million or 19.7% compared
to the first quarter 2022. ROAA was 1.11% compared to 1.03% for the
first quarter 2022. ROAE was 12.85% compared to 9.75% for the first
quarter 2022. Efficiency ratio was 56.32% compared to 58.88%
for the first quarter 2022. CAPITAL/ CREDIT Credit metrics
remain strong. One loan classified as nonaccrual for
a total of $486 thousand. ACL coverage ratio was 1.20%. Effective
January 1, 2023, the Company adopted the CECL methodology for
estimating credit losses. Repurchased 500,000 shares during the quarter
at an average weighted price of $11.74 prior to recent events impacting
liquidity in the sector. 250,000 common shares remain authorized
under the repurchase program. (1) Non-GAAP financial measure.
3
HISTORICAL FINANCIAL EOP for Balance Sheet amounts Loans
(1) In millions $735 $1,580 Deposits In millions $782 $1,830 Total
stockholders’ equity In millions $86 $184 ACL/Total Loans
1.17% 1.20% Net Charge off In thousands (1,019)
(49) Nonperforming Assets/Total Assets 1.58% 0.02% Total
Revenue In millions $37 $69 Efficiency ratio 94.15% 56.32%
PTPP ROAA (2) 0.24% 1.51% (1) Loan amounts include deferred
fees/costs. (2) Non-GAAP financial measure. Annualized. 4
FINANCIAL RESULTS Balance Sheet (EOP) In thousands (except
per share data) Q1 2023 Q4 2022 Q1 2022 Total Securities $415,837
$418,839 $514,575
Total Loans (1) $1,580,394 $1,507,338 $1,258,388 Total
Assets $2,163,821 $2,085,834 $1,967,252 Total Deposits
$1,830,462 $1,829,281 $1,713,294 Total Equity (2) $183,858
$182,428 $192,039 Income Statement Net Interest Income $15,997
$16,866 $14,379 Non-interest Income $2,070 ($123) $1,945
Total Revenue $18,067 $16,743 $16,324 Provision for Credit
Losses $201 $880 $0 Non-interest Expense $10,176 $10,014 $9,612
Net Income $5,809 $4,434 $4,854 Diluted Earning Per
Share (EPS) $0.29 $0.22 $0.24 (1) Loan amounts include deferred
fees/costs. (2) Total Equity includes after-tax unrealized security losses of
$42.1 million for Q1 2023, $44.8 million for Q4 2022, and $19.5
million for Q1 2022. 5
KEY PERFORMANCE INDICATORS CAPITAL/
CREDIT PROFITABILITY GROWTH Q1 2023 Q4 2022 Q1 2022
Tangible Common Equity/Tangible Assets(1) 8.50% 8.75%
9.76% Total Risk-Based Capital (2) 13.20% 13.65% 14.49%
NCO/Avg Loans (3) (0.01%) (0.00%) (0.01%) NPA/Assets
0.02% 0.00% 0.00% Allowance Credit Losses/Loans 1.20% 1.16%
1.20% Return On Average Assets (ROAA) (3) 1.11%
0.86% 1.03% Return On Average Equity (ROAE) (3) 12.85%
9.91% 9.75% Net Interest Margin(3) 3.22% 3.45% 3.22% Efficiency
Ratio 56.32% 59.81% 58.88% Total Assets (EOP) $2,163,821
$2,085,834 $1,967,252 Total Loans (EOP) $1,580,394
$1,507,338 $1,258,388 Total Deposits (EOP) $1,830,462 $1,829,281
$1,713,294 Tangible Book Value/Share (1)(4)
$9.37 $9.12 $9.60 (1) Non-GAAP Financial Measures. (2) For the Company
(3) Annualized. (4) After tax unrealized security loss effect
on tangible book value per share was ($2.14) for Q1 2023, ($2.24)
for Q4 2022 and ($0.97) for Q1 2022. 6
LIQUIDITY Total Liquidity 36% 29% 31% 30% 28% 30% 25%
22% 20% 19% Liquid Assets Total Liquidity Commentary
We believe we are well positioned to weather the current environment.
We have ample sources of liquidity both on and off-balance
sheet. We are enrolled in BTFP but have not drawn. Total liquid
assets represents 19% of our assets and our loan-to-deposits ratio
has remained stable. Post Q1 2023 we have expanded pledging at
both BTFP and discount window. Liquid Assets: On-Balance
Sheet Liquidity / Total Assets Total Liquidity: Total
Liquidity / Total Assets Sources of Liquidity (in millions)
Mar-23 On Balance Sheet Liquidity Cash Due from banks Investment
securities unpledged Total on balance sheet liquidity (Liquid Assets)
Off Balance Sheet Liquidity FHLB excess capacity Bank Term
Funding Program (BTFP) Federal Reserve Discount Window
Fed Fund Lines Total off balance sheet liquidity $641 Total
Liquidity Loan to Deposit Ratio 73.4% 79.0% 79.7% 82.4% 86.3%
7
DEPOSIT PORTFOLIO Deposits AVG In millions $1,650
$1,717 $1,763 $1,804 $1,844 $223 $224 $217 $217 $225 $736
$781 $823 $871 $897 $65 $67 $67 $62 $58 $625 $645 $656 $654
$664 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Non-interest-bearing
deposits Interest-bearing checking deposits Money market
and savings Time deposits Deposit Cost 0.25% 0.50% 1.75% 3.25%
4.50% 4.75% 0.21% 0.20% 0.21% 0.34% 0.77% 1.29% Q4 2021 Q1
2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Deposit Cost Fed Fund
Rate (upper bound) Commentary Average deposits increased
$40.4 million or 9.1% annualized compared to prior quarter and
$194.0 million or 11.8% compared to first quarter 2022. Average
DDA deposits increased $10.5 million or 6.5% annualized compared
to prior quarter and increased $38.0 million or 6.1% compared to first
quarter 2022. Average DDA balances comprised 36.0% of
total deposits on March 31, 2023. Deposit cost increased 52 bps compared
to prior quarter and increased 109 bps compared to first quarter
- Deposit beta of 24% since Q4 2021. 8
DEPOSIT DISTRIBUTION EOP for Balance Sheet amounts Uninsured
Deposits to Total Deposits Personal Business Public Funds
11% 35% 54% Deposits by Customer Segment In thousands
for balance sheet amounts Deposit Type Total Balance
% of Total (#) Accounts Average Balance per Account
Business $ 985,380 54% 6,814 $ 144,611 CDS $ 70,050 4% 202
$ 346,780 Demand Deposits $ 510,620 28% 5,358 $ 95,300 MM $
353,784 19% 1,040 $ 340,177 Now $ 34,395 2% 144 $ 238,855
Saving $ 16,532 1% 70 $ 236,167 Personal $ 638,797 35% 12,355 $
51,704 CDS $ 162,704 9% 1,333 $ 122,059 Demand Deposits $ 123,5
41 7% 7,480 $ 16,516 MM $ 304,649 17% 1,952 $ 156,070
Now $ 15,658 1% 292 $ 53,623 Saving $ 32,245 2% 1,298 $ 24,842
Public Funds $ 206,285 11% 29 $ 7,113,275 CDS $ 13,161 1%
5 $ 2,632,224 MM $ 192,604 11% 20 $ 9,630,217 Now $ 520 0%
4 $ 129,880 Grand
Total $ 1,830,462 100% 19,198 $ 95,347 Commentary Our deposit
base reflects our business model: a commercial bank. 54%
of our deposits are commercial accounts, 35% personal accounts
and 11% public fund accounts, which are partially collateralized.
The Bank has 19 thousand deposits accounts with the majority
in personal accounts, 12 thousand or 64.4% The total amount of uninsured
deposits adjusted by the collateralized portion of public funds
is 56% for quarter end. A decrease of 3% compared to fourth
quarter 2022 and below the 2022 average. As of March 31, 2023,
the deposit balance of ICS/CDARS was $35.7 million, increase
of $19.7 million from fourth quarter 2022. Uninsured Deposits to Total
Deposits In millions 58% 57% 57% $725 $751 $765 $988 $988
$1,032 Q1 2022 Q2 2022 Q3 2022 Uninsured Depositors Insured
Depositors 59% 56% $1,079 $1,028 Q4 2022 Q1 2023 Uninsured
deposits / Deposits 9
LOAN PORTFOLIO Total Loans (AVG) In millions
$1,211 $1,296 $1,399 $1,457 $1,547 $35 $18 $7 $1 $1 $1,176 $1,278
$1,392 $1,455 $1,546 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1
2023 Loans (Exd PPP) PPP Loans Loan Yields 4.35%
4.35% 4.53% 4.86% 5.17% 0.28% 0.13% 0.03% 0.04% 0.03%
4.07% 4.22% 4.50% 4.82% 4.14% Q1 2022 Q2 2022 Q3 2022 Q4
2022 Q1 2023 Loan coupon Loan fees Commentary Average
loans, excluding PPP loans, increased $90.6 million or 25.2% annualized
compared to prior quarter and $370.0 million or 31.4% compared
to first quarter 2022. Loan coupon increased 32 bps compared
to prior quarter and 107 bps compared to first quarter 2022. Loan fees
yield decreased 25 bps compared to first quarter 2022 primarily due
to a decrease of $917 thousand in PPP loan fees. 10
LOAN PRODUCTION Net Loan Production Trend In millions
4.02% 4.44% 4.85% 5.68% 6.66 $141 $74 $169 $56 $130 $71
$129 $54 $94 $22 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Loan
Production/Lien changes Loan Amortization/payoffs New loans average
coupon Commentary 2023 payoffs slowing with increase in interest rates.
$72 million net growth for first quarter 2023. Average
coupon on new loans was 6.66% for first quarter 2023, 152 bps above portfolio
average. The loan production of $94 million for the quarter
was well diversified; 43% C&I, 28% CRE; 21% consumer.
11
LOAN PORTFOLIO MIX Loan Portfolio Mix (1)
Residential real estate -1- CRE - Owner occupied ! I !
CRE - Non-owner occupied
Commercial and Industrial Correspondent banks
Consumer and other 10% 6% 9% 12% 10% 53% $1,580MM Commentary
Total Loan balance at quarter end was $1,580 million.
Commercial Real Estate (owner occupied and non-owner occupied)
was 63% or $987.8 million of the total loan portfolio net of unearned
fees. CRE mix is diversified and granular. Retail makes up 30%
of total CRE or $298.1 million. CRE Loan Mix Land/Construction
5% Other 3% Retail 30% Multifamily 18% CRE - Owner
Occupied 15% Office 13% Warehouse 8% Hotels 8% CRE
Loan Portfolio ) ► Weighted Average Loan Type
LTV DSCR C2) Average Loan Size ™ Retail 57% 1.59 $3.0
Multifamily 62% 1.40 $1.4 CRE - Owner Occupied 62% 2.62
$1.0 Office 54% 1.63 $2.2 Warehouse 56% 1.64 $1.8 Hotels
55% 1.57 $4.6 Other 54% 1.80 $1.6 Land/Construction 60% NA
$2.8 . : : O LTV - Loan to value ratio. '2! DSCR - Debt
service coverage ratio. Balance in millions. (1) LTV - Loan
to value ratio. (2) DSCR - Debt service coverage ratio. (3) Balance
in millions. As of 3/31/23 (1) (Excludes unearned fees)
(2) Includes loan types: office, warehouse, gas station, retail and other
12
CRE OFFICE PORTFOLIO Loan size 77 $47 $31 Under SIMM
SIMM - $3MM - $5MM _ $7MM - $3MM $5MM $7MM $10MM Outstanding
Balance as of 3/31/2023 Number of Loans Key Metrics At 3/31/2023
Avg. Loan Size in millions $ 1.4 NCOs / Average
Loans 0.00% Delinquencies / Loans 0.00% Nonaccruals / Loans 0.00%
Classified Loans / Loans 0.00% Portfolio performing with clean
credit metrics Commentary Non-owner-occupied office is 8% of
total loans and 69% have recourse to a guarantor. Owner
occupied office is 3% of the loan portfolio and 99% have recourse
to a guarantor. Total office loan portfolio (owner occupied and
non-owner occupied) had 120 notes with an average balance
of $1.4 million dollars, LTV of 57.3%, DSCR of 2.11X at quarter
end. 92% of outstanding loan balances are within the USCB primary
market. Miami’s office sector outperforms the national average
with a lower vacancy rate of 9.4% and availability rate of 11.8%, compared
to the estimated national average of 13% and 16.5% respectively.
(1) Loan Maturity < 1 year 1 year to 3 3 years to 5 5 years to
10 >10 years years years years 4% 10% 12% 69% 5% (1) Data points
source: CoStar Group, a NASDAQ company and world
leader in commercial real estate information with a comprehensive
database of real estate data throughout the US, Canada, UK
and France 13
ASSET QUALITY Allowance for Credit Losses In thousands (except
ratios) 1.22% 1.16% 1.16% 1.16% 1.20% 1.20% 1.15% 1.16% 1.16%
1.20% $15,074 $15,786 $16,604 $17,487 $18,887 Q1 2022
Q2 2022 Q3 2022 Q4 2022 Q1 2023 Allowance for credit
losses ACL/Total loans ACL/Total loans excluding PPP loans
Commentary ACL coverage ratio is at 1.20%. One loan for $486
thousand was classified as nonaccrual during the first quarter
of 2023. No OREO. The adoption of the CECL methodology for
estimating credit losses generated an initial increase to the allowance
for credit losses of loans of $1.1 million and an increase to the reserve
for unfunded commitments of $259 thousand. Non-performing Loans
In th 0.00% 0.00% 0.00% 0.00% 0.03% $0 $0 $0 $0 $486 Q1
2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023ousands (except ratios) Nin0accrual
loans less non-accrual TDRs Non-performing loans to total loans
Classified Loans M to Total Loans 0.34% 0.08% 0.07% 0.26%
0.25% Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 (1) Loans
classified as substandard at period end. No loans classified doubtful
or loss at period end. 14
NET INTEREST MARGIN Net Interest Income/Margin (1) In thousands
(except ratios) Ql 2022 Q2 2022 Q3 2022 3.22% ^,1 3.45%
3.22% $16,866 $15,997 Q4 2022 Ql 2023 Net Interest Income A—
NIM NIM excluding PPP Loans Interest-Earning Assets
Mix (AVG) 5% 4% 4% 3% 2% 28% 26% 23% 22% 21%
2% 1% 0% 0% 0% 65% 69% 73% 75% 77% Q1 2022 Q2 2022
Q3 2022 Q4 2022 Q1 2023 Total Loans (excluding PPP Loans)
Investment Securities ■PPP Loans Cash Balances & Equivalent
s
Commentary Net interest income decreased by $0.9 million compared
to prior quarter predominately due to increase in deposit cost. Interest
-earning asset mix continues to improve towards higher earning assets
(loans). Given the uncertainty in the banking industry, we
held higher levels of cash and increased FHLB advances at quarter
end. (1) Annualized. 15
INTEREST RATE SENSITIVITY Loan Portfolio Repricing
Profile by Rate Type Hybrid ARM 5% Fixed Rate 39% Variable
Rate 56% 17% 16% 67% Prime CMT LIBOR/SOFRA Loan Repricing Schedule
Variable/Hybrid Rate Loans 30% 10% 10% 50% yrs. 1-2 yrs.
2-3 yrs >3 yrs Static NII Simulation Year 1 & 2 100 200
100 200 -1.1% -2.6% 2.0% 2.9% Net Interest Income change
from base ($ in thousands and % change) 16
NON-INTEREST INCOME In thousands (except ratios) Q1 2023 Q4
2022 Q3 2022 Q2 2022 Q1 2022 Service fees $1,025 $1,093 $934
$1,083 $900 Gain (loss) on sale of securities available for
sale (21) (1,989) (558) (3) 21 Gain on sale of loans held for sale 347
205 330 22 334 Loan settlement - - - - 161 Other income 539 568 1,083
515 529 Total non-interest income $2,070 ($123) $1,789
$1,617 $1,945 Average total assets $2,120,218 $2,051,867
$2,026,791 $1,968,381 $1,913,484
Non-interest income / Average assets (1) 0.40% (0.02%)
0.35% 0.33% 0.41% Commentary Service fees remain substantially
consistent quarter over quarter. SBA loan sales produced $347 thousand
of gains in the first quarter 2023. Fluctuation of non-interest income
primarily impacted by one-time items in other income and loss on
sale of securities in prior quarters. (1) Annualized. 17
NON-INTEREST EXPENSE In thousands (except ratios) Q1 2023 Q4
2022 Q3 2022 Q2 2022 Q1 2022 Salaries and employee benefits
$6,377 $6,080 $6,075 $5,913 $5,875 Occupancy 1,299 1,256 1,28
1
1,251 1,270 Regulatory assessments and fees 224 222 269
226 213 Consulting and legal fees 358 371 604 398 517 Network and
information technology services 478 483 488 448 387 Other operating
expense 1,440 1,602 1,415 1,315 1,350 Total non-interest
expense $10,176 $10,014 $10,132 $9,551 $9,612 Efficiency ratio
56.32% 59.81% 54.58% 55.34% 58.88% Average total assets $2,120,218
$2,051,867 $2,026,791 $1,968,381 $1,913,484 Non-interest expense
/ Average assets (1) 1.95% 1.94% 1.98% 1.95% 2.04%
Full-time equivalent employees 196 191 191 192 190 Commentary Non-interest
expense to average assets remains below 2.0%. Salaries and employee
benefits increased primarily due to 5 net new FTEs. Efficiency ratio
improved 256 bps from first quarter 2022 due to higher revenue.
(1) Annualized. 18
CAPITAL capital Ratios w 1 Q12023 1 Leverage Ratio 9.36% TCE/TA
<2> 8.50% Tier 1 Risk Based Capital 12.04% Total Risk Based
Capital 13.20% AOCI In Millions ($42.1) 042022 9.61% 8.75% 12.53%
13.65% ($44.8) WpII- IIUH Capitalized 9.47% 5.00% 9.76% NA
13.35% 8.00% 14.49% 10.00% ($19.5) Commentary 500,000 shares
repurchased during the quarter at an average weighted price
of $11.74. 250,000 common shares remain authorized under the repurchase
program. AOCI improved by $2.7 million compared to fourth quarter 2022.
Q1 2023 EOP shares outstanding: Common Stock: 19,622,380
(1) For the Company (2) Non-GAAP Financial Measures
19
TAKEAWAYS Leading franchise located in
one of the most attractive Robust organic growth banking markets
in Florida and the U.S. Strong asset quality, with minimal charge
-
offs experienced since 2015 recapitalization Experienced and tested
management team Strong profitability, with pathway for future
enhancement identified Core funded deposit base with 34.6% Non
-
Interest-Bearing Deposits (EOP) 20
NON-GAAP RECONCILIATION In thousands (except
ratios) 3/31/2023 Pre-Tax Pre-Provision (PTPP") Bicorne: Net income
$ 5,809 Plus: Provision for income taxes 1,881 Plus: Provision for
credit losses 201 PTPP income $ 7,891 PTPP Return ou Average
Assets: PTPP income $ 7,891 Average assets $ 2,120,218 PTPP return
on average assets(1) 1.51% Operating Net Income: Net income
$ 5,809 Less: Net gains (losses) on sale of securities (21) Less:
Tax effect on sale of securities 5_ Operating net income $
5,825 Operating PTPP Bicorne: PTPP income $ 7,891 Less: Net gains
(losses) on sale of securities (21) Operating PTPP Income $
7,912 Operating PTPP Return on Average Assets: Operating
PTPP income $ 7,912 Average assets $ 2,120,218 Operating
PTPP Return on average assets(1; 1.51% As of or for the three
months ended 12/31/2022 9/30/2022 6/30/2022 3/31/2022 $ 4,434
$ 5,558 $ 5295 $ 4,854 1,415 1,963 1,708 1,858 880 910 705 -
$ 6,729 $ S,431 $ 7,708 $ 6,712 $ 6,729 $ 8,431 $ 7,708 $ 6,712
$ 2,051,867 $ 2,026,791 $ 1,968381 $ 1,913,484 130% 1.65%
1.57% 1.42% $ 4,434 $ 5,558 $ 5295 $ 4,854 (1,989) (558) (3)
21 504 141 1 (5)_ $ 5,919 $ 5,975 S 5297 S 4,838 $ 6,729 $ 8,431
$ 7,708 $ 6,712 (1,989) (558) ßl 21 $ 8.7 IS $ S.9S9 $ 7,711
$ 6,691 $ 8,718 $ 8,989 $ 7,711 $ 6,691 $ 2,051,867 $ 2,026,791
$ 1,968381 $ 1,913,484 1.69% 1.76% 1.57% 1.42% Oper a till 2
Return ou .Average Assets : Operating net income Average
assets Operating return on average assets £ 5,825 £ 2,120,218 1.11%
Operating Return on Au?rage Equity: Operating net
income Average equity Operating return on average equity (1)
£ 5,825 £ 183371 12.88% Operating Revenue: net interest income
non-interest income Less: Net gains (losses) on sale of securities Operating
revenue £ 15,997 2,070 1211 £ 18,088 Operating Efficiency
Ratio: Total non-interest expense Operating revenue Operating
efficiency ratio £ 10,176 £ 18,088 56.26% $ 5,919 $ 5,975 $ 5,297 $
4,838 $ 2,051,867 $ 2,026,791 $ 1,968381 $ 1,913,484 1.14%
1.17% 1.08% 1.03% $ 5,919 $ 5,975 $ 5,297 $ 4,838 $ 177,556 $
185288 $ 1S6,597 $ 201,860 1323% 12.79% 1139% 9.72% $ 16,866
$ 16,774 $ 15,642 $ 14379 (123) 1,789 1,617 1,945 (1,989) (558) (31
21_ £ 1S,732 £ 19,121 S 17262 S 16303 £ 10,014 £ 10,132 £ 9,551
£ 9,612 £ 18,732 £ 19,121 £ 17262 £ 16303 53.46% 52.99%
5533% 58.96% (1) Annualized 21
NON-GAAP RECONCILIATION In thousands (except
ratios and share data) As of and for the three months ended Tangible
Book Value per Common Share (at period-end): 3/31/2023
12/31/2022 9/30/2022 6/30/2022 3/31/2022 Total stockholders'
equity S 1S3,S5S S 1S2,42S S 177,417 S ISO,06$ S 192,039
Less: Intangible assets _ _ _ _ _ Tangible
stockholders' equity S 1S3,S5S S 1S2.428 S 177,417 S 180,06S
S 192.039 Total shares issued and outstanding (at period-end):
Total common shares issued and outstanding 19,622,3S0
20,000,753 20,000,753 20,000,753 20,000,753 Tangible book
value per common share w s 9.37 s 9.12 s S.87 s 9.00 s 9.60 Operating
diluted net income per share of common stock: Operating net
income s 5.S25 s 5,919 s 5,975 s 5,297 s 4.S3S Weighted average
shares Diluted S 19.940,606 S 20,172,438 S 20,148,208 S 20,171,261
S 20:109.7S3 Operating diluted net income per share of common stock
0.29 S 0.29 S 0.30 S 0.26 S 0.24 Tangible Common Equity/Tangible
Assets Tangible stockholders’ equity S 1S3,S5S S 181428
S 177,417 S 180,06S S 192,039 Tangible Assets 2,163,821 2,085,834
2,037,453 2,016,0S6 1,967,252 Tangible Common Equity
Tangible Assets S.50% S.75% 8.71% 8.93% 9.76% 22
CONTACT INFORMATION LOU DE LA AGUILERA
President, CEO & Director (305) 715-5186 laguilera@uscentury.com
ROB ANDERSON EVP, CHIEF FINANCIAL OFFICER (305)
715-5393 rob.anderson@uscentury.com INVESTOR RELATIONS
InvestorRelations@uscentury.com 23