News Release Details

MIAMI, April 27, 2023 (GLOBE NEWSWIRE) -- 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, 2022. 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.
  
  
• 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, 2023. 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;
• 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