1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
__________________________
FORM
__________________________
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
__________________________
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of Incorporation)
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(IRS Employer
Identification No.)
,
,
(Address of Principal Executive Offices)
(Zip Code)
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)
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)
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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:
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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.
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Item 2.02. Results of Operations and Financial Condition.
On July 27, 2023, USCB Financial Holdings, Inc. (the “Company”), issued a press release announcing its financial results for
the second quarter ended June 30, 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 July 28, 2023, the Company will hold an earnings conference call to discuss its
financial performance for the quarter ended June 30, 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
99.2
104
Cover Page Interactive Data File (embedded within the Inline XBRL document)
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Exhibit 99.1
EARNINGS RELEASE
USCB Financial Holdings, Inc. Reports EPS of $0.21 for Q2 2023
MIAMI, FL – July 27, 2023 – USCB Financial Holdings, Inc. (the “Company”) (NASDAQ: USCB)
, the holding company for U.S.
Century Bank (the “Bank”), reported net income of $4.2 million or $0.21 per diluted share for the three months ended June 30, 2023,
compared with net income of $5.3 million or $0.26 per diluted share, for the same period in 2022.
The Company announced on June 28, 2023 the appointment of Luis de la Aguilera to succeed Aida Levitan, Ph.D. as Chairman of the
Board of Directors for both the Company and the Bank. Levitan had served as chairman of the Board since 2017 and will continue to
contribute as a valued member of the Board.
“I am deeply grateful for the privilege of serving as Chairman of this respected institution for the past six years. I extend my heartfelt
thanks to the Board of Directors, our dedicated employees, and supportive community for their unwavering commitment and
collaboration,” said Aida Levitan, Ph.D., who will continue as Board Director. “It is with great confidence, that our Board of Directors
passes its leadership as Chairman to Luis de La Aguilera, President and CEO, along with confirming Kirk Wycoff, Managing Partner
of Patriot Financial Partners, as Lead Independent Director.”
“As President and CEO of USCB Financial Holdings, Inc., I am honored to assume the additional responsibility of Chairman of the
Board. Our unwavering focus remains on organic and sustainable growth, ensuring that USCB Financial Holdings Inc. continues to
thrive in a sound and prudent manner. We are a leading franchise in what I feel is one of the most attractive banking markets in the
United States,” said de la Aguilera. “On behalf of the Board and the entire USCB team, I thank Aida Levitan for her leadership for the
past six years.”
“Like others in the industry today, we are navigating a challenging operational environment with an inverted yield curve, higher deposit
cost, and liquidity concerns. Despite these headwinds, we continue to execute our plans, steadily growing both loans and deposits,
underscoring our resilience and commitment to serve our customers and community. As we look forward to the third quarter, we are
encouraged by increased and diversified loan demand, which positions us well for the second half of 2023,” said Luis de la Aguilera,
Chairman, President, and CEO.
Unless otherwise stated, all percentage comparisons in the bullet points below are calculated for the quarter ended June 30, 2023
compared to the quarter ended June 30, 2022 and annualized where appropriate.
Profitability
•
Annualized return on average assets for the quarter ended June 30, 2023 was 0.77% compared to 1.08% for the second quarter of
2022.
•
Annualized return on average stockholders’ equity for the quarter ended June 30, 2023 was 9.13 % compared to 11.38% for the
second quarter of 2022.
•
The efficiency ratio for the quarter ended June 30, 2023 was 65.25% compared to 55.34% for the second quarter of 2022.
•
Net interest margin for the quarter ended June 30, 2023 was 2.73 % compared to 3.37% for the same quarter ended 2022.
•
Net interest income before provision for credit losses was $14.2 million for the quarter ended June 30, 2023, a decrease of
$1.5 million or 9.4% compared to the second quarter of 2022.
Balance Sheet
•
Total assets were $2.2 billion at June 30, 2023, representing an increase of $209.8 million or 10.4% from June 30, 2022.
•
Total loans were $1.6 billion at June 30, 2023, representing an increase of $223.2 million or 16.3% from June 30, 2022.
•
Total deposits were $1. 9 billion at June 30, 2023, representing an increase of $182.6 million or 10.5% from June 30, 2022.
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•
Total stockholders’ equity was $183.7 million at June 30, 2023, representing an increase of $3.6 million or 2.0% from June 30,
2022. Total stockholders’ equity includes after-tax unrealized security losses of $47.1 million at June 30, 2023 compared to after-
tax unrealized security losses of $36.9 million at June 30, 2022.
Asset Quality
•
Allowance for credit losses (“ACL”) was calculated under the Current Expected Credit Losses (“CECL”) standard methodology
for the first and second quarter of 2023 and the incurred loss methodology for the preceding quarters.
•
The ACL increased by $3.0 million to $18.8 million at June 30, 2023 from $15.8 million at June 30, 2022.
•
The allowance for credit losses represented 1.18% of total loans at June 30, 2023 compared to 1.15% at June 30, 2022.
•
Non-performing loans to total loans was 0.03% at June 30, 2023 compared to 0.00% at June 30, 2022.
Non-interest Income and Non-interest Expense
•
Non-interest income was $1.8 million for the three months ended June 30, 2023, an increase of $229 thousand or 14.2% compared
to $1.6 million for the same period in 2022.
•
Non-interest expense was $10.5 million for the three months ended June 30, 2023, an increase of $901 thousand or 9.4% compared
to the same period in 2022.
Capital
•
During the quarter the Company repurchased 77,603 shares of USCB Financial Holdings Inc. at a weighted average price per share
of $9.58. The aggregate purchase price for these transactions was approximately $746.9 thousand, including transaction costs. These
repurchases were made through open market pursuant to the Company’s publicly announced repurchase program. As of June 30,
2023, 172,397 shares remain authorized for repurchase under the program.
•
As of June 30, 2023,
total risk-based capital ratios for the Company and the Bank were 13.42% and 13.38%, respectively.
•
Tangible book value per common share (a non-GAAP measure) of $9.40 was negatively affected by $2.41 due to after tax unrealized
security losses of $47.1 million at June 30, 2023. At June 30, 2022, tangible book value of $9.00 was negatively affected by $1.84
due to $36.9 million after tax unrealized security losses.
Conference Call and Webcast
The Company will host a conference call on Friday, July 28, 2023, at 11:00 a.m. Eastern Time to discuss the Company’s unaudited
financial results for the quarter ended June 30, 2023. To access the conference call, dial (800) 715-9871 (U.S. toll-free) and ask to join
the USCB Financial Holdings Call or provide conference ID 6813115 .
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
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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 procedures and processes;
•
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.
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
operations and 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
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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,
2023
2022
2023
2022
Interest income:
Loans, including fees
$
20,847
$
14,053
$
40,558
$
27,035
Investment securities
2,382
2,510
4,668
4,839
Interest-bearing deposits in financial institutions
1,051
121
1,433
152
Total interest income
24,280
16,684
46,659
32,026
Interest expense:
Interest-bearing checking
200
17
243
33
Savings and money market accounts
6,968
615
11,753
1,166
Time deposits
2,145
271
3,202
530
FHLB advances and other borrowings
794
139
1,291
276
Total interest expense
10,107
1,042
16,489
2,005
Net interest income before provision for credit losses
14,173
15,642
30,170
30,021
Provision for credit losses
38
705
239
705
Net interest income after provision for credit losses
14,135
14,937
29,931
29,316
Non-interest income:
Service fees
1,173
1,083
2,378
1,983
Gain (loss) on sale of securities available for sale, net
-
(3)
(21)
18
Gain on sale of loans held for sale, net
94
22
441
356
Loan settlement
-
-
-
161
Other non-interest income
579
515
1,118
1,044
Total non-interest income
1,846
1,617
3,916
3,562
Non-interest expense:
Salaries and employee benefits
5,882
5,913
12,259
11,788
Occupancy
1,319
1,251
2,618
2,521
Regulatory assessments and fees
452
226
676
439
Consulting and legal fees
386
398
744
915
Network and information technology services
505
448
983
835
Other operating expense
1,908
1,315
3,348
2,665
Total non-interest expense
10,452
9,551
20,628
19,163
Net income before income tax expense
5,529
7,003
13,219
13,715
Income tax expense
1,333
1,708
3,214
3,566
Net income
4,196
5,295
10,005
10,149
Per share information:
Net income per common share, basic
$
0.21
$
0.26
$
0.51
$
0.51
Net income per common share, diluted
$
0.21
$
0.26
$
0.51
$
0.50
Weighted average shares outstanding:
Common shares, basic
19,590,359
20,000,753
19,722,152
19,997,869
Common shares, diluted
19,639,682
20,171,261
19,790,756
20,192,918
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USCB FINANCIAL HOLDINGS, INC.
SELECTED FINANCIAL DATA (UNAUDITED)
(Dollars in thousands, except per share data)
As of or For the Three Months Ended
6/30/2023
3/31/2023
12/31/2022
9/30/2022
6/30/2022
Income statement data:
Net interest income
$
14,173
$
15,997
$
16,866
$
16,774
$
15,642
Provision for credit losses
38
201
880
910
705
Net interest income after provision for credit losses
14,135
15,796
15,986
15,864
14,937
Service fees
1,173
1,205
1,093
934
1,083
Gain (loss) on sale of securities available for sale, net
-
(21)
(1,989)
(558)
(3)
Gain on sale of loans held for sale, net
94
347
205
330
22
Other income
579
539
568
1,083
515
Total non-interest income
1,846
2,070
(123)
1,789
1,617
Salaries and employee benefits
5,882
6,377
6,080
6,075
5,913
Occupancy
1,319
1,299
1,256
1,281
1,251
Regulatory assessments and fees
452
224
222
269
226
Consulting and legal fees
386
358
371
604
398
Network and information technology services
505
478
483
488
448
Other operating expense
1,908
1,440
1,602
1,415
1,315
Total non-interest expense
10,452
10,176
10,014
10,132
9,551
Net income before income tax expense
5,529
7,690
5,849
7,521
7,003
Income tax expense
1,333
1,881
1,415
1,963
1,708
Net income
$
4,196
$
5,809
$
4,434
$
5,558
$
5,295
Per share information:
Net income per common share, basic
$
0.21
$
0.29
$
0.22
$
0.28
$
0.26
Net income per common share, diluted
$
0.21
$
0.29
$
0.22
$
0.28
$
0.26
Balance sheet data (at period-end):
Cash and cash equivalents
$
87,280
$
63,251
$
54,168
$
73,326
$
83,272
Securities available-for-sale
$
218,442
$
229,409
$
230,140
$
248,571
$
339,464
Securities held-to-maturity
$
220,956
$
186,428
$
188,699
$
178,865
$
116,671
Total securities
$
439,398
$
415,837
$
418,839
$
427,436
$
456,135
Loans held for investment
(1)
$
1,595,959
$
1,580,394
$
1,507,338
$
1,431,513
$
1,372,733
Allowance for credit losses
$
(18,815)
$
(18,887)
$
(17,487)
$
(16,604)
$
(15,786)
Total assets
$
2,225,914
$
2,163,821
$
2,085,834
$
2,037,453
$
2,016,086
Non-interest-bearing deposits
$
572,360
$
633,606
$
629,776
$
662,808
$
653,708
Interest-bearing deposits
$
1,348,941
$
1,196,856
$
1,199,505
$
1,133,834
$
1,085,012
Total deposits
$
1,921,301
$
1,830,462
$
1,829,281
$
1,796,642
$
1,738,720
FHLB advances and other borrowings
$
87,000
$
120,000
$
46,000
$
26,000
$
66,000
Total liabilities
$
2,042,229
$
1,979,963
$
1,903,406
$
1,860,036
$
1,836,018
Total stockholders' equity
$
183,685
$
183,858
$
182,428
$
177,417
$
180,068
Capital ratios:
(2)
Leverage ratio
9.32%
9.36%
9.61%
9.48%
9.43%
Common equity tier 1 capital
12.27%
12.04%
12.53%
12.56%
12.65%
Tier 1 risk-based capital
12.27%
12.04%
12.53%
12.56%
12.65%
Total risk-based capital
13.42%
13.20%
13.65%
13.65%
13.74%
(1) Loan amounts include deferred fees/costs.
(2) Reflects the Company's regulatory capital ratios
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USCB FINANCIAL HOLDINGS, INC.
AVERAGE BALANCES, RATIOS, AND OTHER DATA (UNAUDITED)
(Dollars in thousands)
As of or For the Three Months Ended
6/30/2023
3/31/2023
12/31/2022
9/30/2022
6/30/2022
Average balance sheet data:
Cash and cash equivalents
$
94,313
$
50,822
$
61,892
$
77,887
$
80,254
Securities available-for-sale
$
224,913
$
230,336
$
242,144
$
331,206
$
370,933
Securities held-to-maturity
$
192,628
$
187,826
$
184,459
$
116,733
$
120,130
Total securities
$
417,541
$
418,162
$
426,603
$
447,939
$
491,063
Loans held for investment
(1)
$
1,569,266
$
1,547,393
$
1,456,780
$
1,398,761
$
1,296,476
Total assets
$
2,183,542
$
2,120,218
$
2,051,867
$
2,026,791
$
1,968,381
Interest-bearing deposits
$
1,270,657
$
1,179,878
$
1,150,049
$
1,107,129
$
1,071,709
Non-interest-bearing deposits
$
601,778
$
664,369
$
653,820
$
655,853
$
644,975
Total deposits
$
1,872,435
$
1,844,247
$
1,803,869
$
1,762,982
$
1,716,684
FHLB advances and other borrowings
$
93,075
$
61,600
$
37,500
$
43,935
$
36,330
Total liabilities
$
1,999,304
$
1,936,847
$
1,874,311
$
1,841,503
$
1,781,784
Total stockholders' equity
$
184,238
$
183,371
$
177,556
$
185,288
$
186,597
Performance ratios:
Return on average assets
(2)
0.77%
1.11%
0.86%
1.09%
1.08%
Return on average equity
(2)
9.13%
12.85%
9.91%
11.90%
11.38%
Net interest margin
(2)
2.73%
3.22%
3.45%
3.47%
3.37%
Non-interest income to average assets
(2)
0.34%
0.40%
(0.02)%
0.35%
0.33%
Efficiency ratio
(3)
65.25%
56.32%
59.81%
54.58%
55.34%
Loans by type (at period end):
(4)
Residential real estate
$
183,093
$
184,427
$
185,636
$
186,551
$
203,662
Commercial real estate
$
989,401
$
987,757
$
970,410
$
928,531
$
843,445
Commercial and industrial
$
169,401
$
160,947
$
126,984
$
121,145
$
131,271
Foreign banks
$
85,409
$
97,405
$
93,769
$
94,450
$
84,770
Consumer and other
$
167,845
$
149,410
$
130,429
$
100,845
$
109,250
Asset quality data:
Allowance for credit losses to total loans
1.18%
1.20%
1.16%
1.16%
1.15%
Allowance for credit losses to non-performing loans
3,871%
3,886%
- %
- %
- %
Total non-performing loans
(5)
$
486
$
486
$
-
$
-
$
-
Non-performing loans to total loans
0.03%
0.03%
- %
- %
- %
Non-performing assets to total assets
0.02%
0.02%
- %
- %
- %
Net charge-offs (recoveries of) to average loans
(2)
0.01%
(0.01)%
(0.00)%
0.03%
(0.00)%
Net charge-offs (recovery of) credit losses
$
29
$
(49)
$
(2)
$
91
$
(7)
Interest rates and yields:
(2)
Loans
5.33%
5.17%
4.86%
4.53%
4.35%
Investment securities
2.26%
2.20%
2.13%
1.94%
2.04%
Total interest-earning assets
4.68%
4.51%
4.21%
3.82%
3.60%
Deposits
1.99%
1.29%
0.77%
0.34%
0.21%
FHLB advances and other borrowings
3.42%
3.27%
2.27%
1.63%
1.53%
Total interest-bearing liabilities
2.97%
2.08%
1.25%
0.59%
0.38%
Other information:
Full-time equivalent employees
198
196
191
191
192
(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 June 30,
2023
2022
Average
Balance
Interest
Yield/Rate
(1)
Average
Balance
Interest
Yield/Rate
(1)
Assets
Interest-earning assets:
Loans
(2)
$
1,569,266
$
20,847
5.33%
$
1,296,476
$
14,053
4.35%
Investment securities
(3)
422,544
2,382
2.26%
493,352
2,510
2.04%
Other interest-earnings assets
87,536
1,051
4.82%
69,503
121
0.70%
Total interest-earning assets
2,079,346
24,280
4.68%
1,859,331
16,684
3.60%
Non-interest-earning assets
104,196
109,050
Total assets
$
2,183,542
$
1,968,381
Liabilities and stockholders' equity
Interest-bearing liabilities:
Interest-bearing checking
$
53,561
200
1.50%
$
66,349
17
0.10%
Saving and money market deposits
940,095
6,968
2.97%
781,076
615
0.32%
Time deposits
277,001
2,145
3.11%
224,284
271
0.48%
Total interest-bearing deposits
1,270,657
9,313
2.94%
1,071,709
903
0.34%
FHLB advances and other borrowings
93,075
794
3.42%
36,330
139
1.53%
Total interest-bearing liabilities
1,363,732
10,107
2.97%
1,108,039
1,042
0.38%
Non-interest-bearing demand deposits
601,778
644,975
Other non-interest-bearing liabilities
33,794
28,770
Total liabilities
1,999,304
1,781,784
Stockholders' equity
184,238
186,597
Total liabilities and stockholders' equity
$
2,183,542
$
1,968,381
Net interest income
$
14,173
$
15,642
Net interest spread
(4)
1.71%
3.22%
Net interest margin
(5)
2.73%
3.37%
(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 earned on total interest-earning assets minus the average rate paid 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
6/30/2023
3/31/2023
12/31/2022
9/30/2022
6/30/2022
Pre-tax pre-provision ("PTPP") income:
(1)
Net income
$
4,196
$
5,809
$
4,434
$
5,558
$
5,295
Plus: Provision for income taxes
1,333
1,881
1,415
1,963
1,708
Plus: Provision for credit losses
38
201
880
910
705
PTPP income
$
5,567
$
7,891
$
6,729
$
8,431
$
7,708
PTPP return on average assets:
(1)
PTPP income
$
5,567
$
7,891
$
6,729
$
8,431
$
7,708
Average assets
$
2,183,542
$
2,120,218
$
2,051,867
$
2,026,791
$
1,968,381
PTPP return on average assets
(2)
1.02%
1.51%
1.30%
1.65%
1.57%
Operating net income:
(1)
Net income
$
4,196
$
5,809
$
4,434
$
5,558
$
5,295
Less: Net gains (losses) on sale of securities
-
(21)
(1,989)
(558)
(3)
Less: Tax effect on sale of securities
-
5
504
141
1
Operating net income
$
4,196
$
5,825
$
5,919
$
5,975
$
5,297
Operating PTPP income:
(1)
PTPP income
$
5,567
$
7,891
$
6,729
$
8,431
$
7,708
Less: Net gains (losses) on sale of securities
-
(21)
(1,989)
(558)
(3)
Operating PTPP income
$
5,567
$
7,912
$
8,718
$
8,989
$
7,711
Operating PTPP return on average assets:
(1)
Operating PTPP income
$
5,567
$
7,912
$
8,718
$
8,989
$
7,711
Average assets
$
2,183,542
$
2,120,218
$
2,051,867
$
2,026,791
$
1,968,381
Operating PTPP return on average assets
(2)
1.02%
1.51%
1.69%
1.76%
1.57%
Operating return on average assets:
(1)
Operating net income
$
4,196
$
5,825
$
5,919
$
5,975
$
5,297
Average assets
$
2,183,542
$
2,120,218
$
2,051,867
$
2,026,791
$
1,968,381
Operating return on average assets
(2)
0.77%
1.11%
1.14%
1.17%
1.08%
Operating return on average equity:
(1)
Operating net income
$
4,196
$
5,825
$
5,919
$
5,975
$
5,297
Average equity
$
184,238
$
183,371
$
177,556
$
185,288
$
186,597
Operating return on average equity
(2)
9.13%
12.88%
13.23%
12.79%
11.39%
Operating Revenue:
(1)
$
14,173
$
15,997
$
16,866
$
16,774
$
15,642
1,846
2,070
(123)
1,789
1,617
-
(21)
(1,989)
(558)
(3)
$
16,019
$
18,088
$
18,732
$
19,121
$
17,262
Operating Efficiency Ratio:
(1)
$
10,452
$
10,176
$
10,014
$
10,132
$
9,551
$
16,019
$
18,088
$
18,732
$
19,121
$
17,262
65.25%
56.26%
53.46%
52.99%
55.33%
(1) The Company believes these non-GAAP measurements are key indicators of the ongoing earnings power of the Company.
(2) 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
6/30/2023
3/31/2023
12/31/2022
9/30/2022
6/30/2022
Tangible book value per common share (at period-end):
(1)
Total stockholders' equity
$
183,685
$
183,858
$
182,428
$
177,417
$
180,068
Less: Intangible assets
-
-
-
-
-
Tangible stockholders' equity
$
183,685
$
183,858
$
182,428
$
177,417
$
180,068
Total shares issued and outstanding (at period-end):
Total common shares issued and outstanding
19,544,777
19,622,380
20,000,753
20,000,753
20,000,753
Tangible book value per common share
(2)
$
9.40
$
9.37
$
9.12
$
8.87
$
9.00
Operating diluted net income per common share:
(1)
Operating net income
$
4,196
$
5,825
$
5,919
$
5,975
$
5,297
Total weighted average diluted shares of common stock
19,639,682
19,940,606
20,172,438
20,148,208
20,171,261
Operating diluted net income per common share:
$
0.21
$
0.29
0.29
0.30
0.26
Tangible Common Equity/Tangible Assets
$
183,685
$
183,858
$
182,428
$
177,417
$
180,068
$
2,225,914
2,163,821
2,085,834
2,037,453
2,016,086
Tangible Common Equity/Tangible Assets
8.25%
8.50%
8.75%
8.71%
8.93%
(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.
Exhibit 99.2
EARNINGS PRESENTATION SECOND QUARTER 2023 NASDAQ: USCB
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 procedures and processes; 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 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. 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 expectations and 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
Q2 2023 HIGLIGHTS GROWTH Average deposits increased by $155.8 million or 9.1% compared to the second quarter 2022. Liquidity sources increased to $853 million in on-balance sheet and off-balance sheet sources. Insured and collateralized deposit, increased to 51% from 43% in the second quarter 2022. Average loans, excluding PPP loans, increased $290.1 million or 22.7% compared to the second quarter 2022. Tangible Book Value per Share (1) was $9.40 includes an after-tax unrealized security loss impact of $2.41. PROFITABILITY Net income was $4.2 million or $0.21 per diluted share. ROAA was 0.77% compared to 1.08% for the second quarter 2022. ROAE was 9.13% compared to 11.38% for the second quarter 2022. Efficiency ratio was 65.25% compared to 55.34% for the second quarter 2022. CAPITAL/ CREDIT Credit metrics remain strong. One C&I loan classified as nonaccrual for a total of $486 thousand. ACL coverage ratio was 1.18%. Effective January 1, 2023, the Company adopted the CECL methodology for estimating credit losses. Repurchased 77,603 shares of common stock during the quarter at a weighted average price of $9.58. 172,397 common shares remain authorized for repurchase under the repurchase program. (1) Non-GAAP financial measure. 3
HISTORICAL FINANCIAL EOP for Balance Sheet amounts
Loans (1)
FINANCIAL RESULTS In thousands (except per share data) Q2 2023 Q1 2023 Q2 2022 Balance Sheet (EOP) Total Securities $439,398 $415,837 $456,135 Total Loans (1) $1,595,959 $1,580,394 $1,372,733 Total Assets $2,225,914 $2,163,821 $2,016,086 Total Deposits $1,921,301 $1,830,462 $1,738,720 Total Equity (2) $183,685 $183,858 $180,068 Income Statement Net Interest Income $14,173 $15,997 $15,642 Non-interest Income $1,846 $2,070 $1,617 Total Revenue $16,019 $18,067 $17,259 Provision for Credit Losses $38 $201 $705 Non-interest Expense $10,452 $10,176 $9,551 Net Income $4,196 $5,809 $5,295 Diluted Earning Per Share (EPS) $0.21 $0.29 $0.26 Weighted Average Diluted Shares 19,639,682 19,940,606 20,171,261 (1) Loan amounts include deferred fees/costs. (2) Total Equity includes after-tax unrealized security losses of $47.1 million for Q2 2023, $42.1 million for Q1 2023, and $36.9 million for Q2 2022. 5
KEY PERFORMANCE INDICATORS CAPITAL/ CREDIT PROFITABILITY GROWTH Q2 2023 Q1 2023 Q2 2022 Tangible Common Equity/Tangible Assets (1) 8.25% 8.50% 8.93% Total Risk-Based Capital (2) 13.42% 13.20% 13.74% NCO/Avg Loans (3) 0.01% (0.01%) 0.00% NPA/Assets 0.02% 0.02% 0.00% Allowance Credit Losses/Loans 1.18% 1.20% 1.15% Return On Average Assets (ROAA) (3) 0.77% 1.11% 1.08% Return On Average Equity (ROAE) (3) 9.13% 12.85% 11.38% Net Interest Margin (3) 2.73% 3.22% 3.37% Efficiency Ratio 65.25% 56.32% 55.34% Total Assets (EOP) $2,225,914 $2,163,821 $2,016,086 Total Loans (EOP) $1,595,959 $1,580,394 $1,372,733 Total Deposits (EOP) $1,921,301 $1,830,462 $1,738,720 Tangible Book Value/Share (1)(4) $9.40 $9.37 $9.00 (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 ($2.41) for Q2 2023, ($2.14) for Q1 2023 and ($1.84) for Q2 2022. 6
DEPOSIT PORTFOLIO Deposits AVG In millions $1,717 $1,763 $1,804 $1,844 $1,872 $224 $217 $217 $225 $277 $781 $823 $871 $897 $940 $67 $67 $62 $58 $53 $645 $656 $654 $664 $602 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Non-interest-bearing deposits Money market and savings Interest-bearing checking deposits Time deposits Deposit Cost "+500 bps Q2'23 vs Q4'21" 0.25% 1.75% 3.25% 4.50% 5.00% 5.25% 0.21% 0.21% 0.34% 0.77% 1.29% 1.99% Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Deposit Costs Fed Funds Rate (upper bound) Commentary Average deposits increased $28.2 million or 6.1% annualized compared to the prior quarter and $155.8 million or 9.1% compared to the second quarter 2022. Deposit composition mix shifted towards interest bearing and ICS/CDARS products. Average DDA balances comprised 32.1% of total deposits as of June 30, 2023. Deposit beta of 36% since Q4 2021. In abundance of caution given the recent bank failures, brought in $50 million of brokered CDs at a weighted average rate of 4.98% to boost liquidity. 7
DEPOSIT DISTRIBUTION EOP for Balance Sheet amounts Deposits Composition Public Funds 11% Personal 36% Broker Deposits 3% Business 50% Commentary Our deposit base reflects our business model: a commercial bank. The total amount of uninsured deposits adjusted by the collateralized portion of public funds is 49% for quarter end. Excluding the collateralized portion of Public Funds, the uninsured deposits are 53%. As of June 30, 2023, the deposit balance of ICS/CDARS was $114.3 million, increase of $78.6 million from first quarter 2023. Deposits by Customer Segment In thousands for balance sheet amounts Deposit Type Total Balance % of Total (#) Accounts Average Balance per Account Business $ 955,768 50% 6,979 $ 137 Personal $ 696,101 36% 12,686 s 55 PublicFunds $ 219,432 11% 31 $ 7,078 Brokered CDs $ 50,000 3% 2 $ 25,000 Grand Total $ 1,921,301 100% 19,698 $ 98 Uninsured Deposits to Total Deposits (1) In millions 57% 57% 59% 56% 49% $751 $765 $750 $802 $970 $988 $1,032 $1,079 $1,028 $951 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Uninsured Depositors Insured Depositors Uninsured Deposits/Deposits (1) Uninsured deposits excludes collateralized Public Funds . 8
LIQUIDITY EOP for Balance Sheet amounts Total Liquidity 29% 31% 30% 28% 38% 25% 22% 20% 19% 14% Jun-22 Sep-23 Dec-23 Mar-23 Jun-23 On Balance Sheet Liquid Assets Total Liquidity Liquid Assets: On-Balance Sheet Liquidity / Total Assets Total Liquidity: total Liquidity / Total Assets Commentary We believe we are well positioned to weather the current environment. We have ample sources of liquidity both on and off-balance sheet. Loan-to-deposits ratio negatively impacted by additional liquidity brought on balance sheet with $50 million of brokered CDs. We are enrolled in BTFP but have not drawn. Sources of Liquidity (in millions) 6/30/2023 On Balance Sheet Liquidity Cash $7 Due from banks $76 Investment securities unpledged $226 Total on balance sheet liquidity (Liquid Assets) $309 Off Balance Sheet Liquidity FHLB excess capacity $270 Bank Term Funding Program (BTFP) $137 Federal Reserve Discount Window $32 Fed Fund Lines $105 Total off balance sheet liquidity $544 Total Liquidity $853 Loan-to-Deposit Ratio 79.0% 79.7% 82.4% 86.3% 83.1% Jun-22 Sep-23 Dec-23 Mar-23 Jun-23 9
LOAN PORTFOLIO Total Loans (AVG) In millions Loans (Excl PPP) PPP Loans Loans Yields 4.35% 4.53% 4.86% 5.17% 5.33% 0.13% 0.03% 0.04% 0.03% 0.02% +109 bps 4.22% 4.50% 4.82% 5.14% 5.31% Q2'23 vs Q2'22 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Loan coupon Loan fees Commentary Average loans, excluding PPP loans, increased $22.5 million or 5.8% annualized compared to prior quarter and $290.1 million or 22.7% compared to the second quarter 2022. Loan coupon increased 17 bps compared to prior quarter and 109 bps compared to the second quarter 2022. Loan fees yield decreased 11 bps compared to second quarter 2022 primarily due to a decrease of $441 thousand in PPP loan fees. 10
LOAN PRODUCTION Net Loan Production Trend In millions 4.44% 4.85% 5.68% 6.66% 7.20% $169 $56 $130 $71 $129 $54 $94 $22 $67 $51 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Loan Production & Line Changes Loan Amortization & payoffs New loans average coupon Loan Composition Trend (1) In millions $948 $1,595 28% 12 % 63% 62% 9% 26% Jun-20 Jun-23 Residential real etate Commercial real estate Real Estate Loans Commercial and industrial, Foreign banks, and Consumer and other (1) Excludes unearned fees and PPP Loans. EOP. Commentary $88 million net growth for year -to-date 2023. Average coupon on new loans was 7.20% for second quarter 2023, 189 bps above portfolio average. Q2 2023 loan production for the quarter was well diversified; 46% C&I, 16% CRE; 31% consumer, 3% correspondent banks; and 3% residential. Loan production was impacted by recent bank failures. Loan composition shows diversification and growth in C&I and consumer loans. 11
NET INTEREST MARGIN Net Interest Income/Margin (1) In thousands (except ratios) 3.37% 3.47% 3.45% 3.22% 2.73% 3.27% 3.45% 3.45% 3.22% 2.73% $15,642 $16,774 $16,866 $15,997 $14,173 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Net Interest Income NIM NIM excluding PPP Loans Interest-Earning Assets Mix (AVG) 4% 4% 3% 2% 4% 26% 23% 22% 21% 20% 1% 0% 0% 0% 0% 69% 73% 75% 77% 76% Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Total Loans (excluding PPP Loans) Investment Securities PPP Loans Cash Balances & Equivalents Commentary Net interest income decreased by $1.8 million compared to the prior quarter predominately due to increase in deposit cost and a liability sensitive balance sheet. Held more cash in wake of recent bank failures and increased liquidity with higher priced brokered CD’s ($50 million) which negatively impacted NIM. Shift in deposit mix; out of DDA and into interest bearing deposits. Majority of Q2 loan production (higher yields) was booked at the end of the quarter, the full impact on the NIM is yet to be realized. $50 million notional pay fixed rate swap executed in Q2; $100 million pay fixed rate swap executed in early Q3 to help future NIM. Q3 loan pipeline is strong, ($200 million) and loan coupons are above 7.50%. (1) Annualized. 12
INTEREST RATE SENSITIVITY Loan Portfolio Repricing Profile By Rate Type Hybrid ARM 5% Fixed Rate 38% Variable Rate 57% 18% 15% 67% Prime CMT LIBOR/SOFR 46% 33% 8% 13% 46% yrs. 1-2 yrs 2-3 yrs. >3yrs. Static NII Simulation Year 1 & 2 Year 1 Year 2 -0.1% -0.6% 3.9% 6.7% +100 +200 +100 +200 Net interest income changes from base ($ in thousands and % change) 13
ASSET QUALITY Allowance for Credit Losses In thousands (except ratios) 1.15% 1.16% 1.16% 1.20% 1.18% $15,786 $16,604 $17,487 $18,887 $18,815 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Allowance for credit loss ACL/Total loans Commentary ACL coverage ratio is at 1.18%, slightly down from prior quarter due to improvement in economic outlook. One C&I loan for $486 thousand was classified as nonaccrual at June 30, 2023. No OREO. Improved economic forecasts drove a small reduction in expected loss rates and this was partially offset by net portfolio growth during the quarter. Non-performing Loans In thousands (except ratios) 0.00% 0.00% 0.00% 0.03% 0.03% $486 $486 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Non-accrual loans Non-performing loans to total loans Classified Loans (1) to Total Loans 0.08% 0.07% 0.26% 0.25% 0.21% (1) Loans classified as substandard at period end. No loans classified doubtful or loss at period end. 14
LOAN PORTFOLIO MIX Loan Portfolio Mix (1) Residential real estate CRE - Owner occupied CRE - Non-owner occupied Commercial and industrial Correspondent banks Consumer and other 11% 11% 10% 52% 11% 50% $1,595MM Commentary Total Loan balance at quarter end was $1,595 million (1). Commercial Real Estate (owner occupied and non-owner occupied) was 62% or $989.4 million of the total loan portfolio (1). CRE mix is diversified and granular. Retail non-owner occupied makes up 30% of total CRE or $297.4 million. CRE Loan Mix Land/Construction 5% Other 3% Retail 30% Multifamily 18% CRE - Owner Occupied 16% Office 12% Warehouse 8% Hotels 8% Land/Construction 5% CRE Loan Portfolio (non-owner occupied and owner occupied) Weighted Average Loan Type LTV»> DSCR<2> Average Loan Size (3) Retail 56% 1.63 $3.0 Multifamily 62% L41 $1.4 Office 57% 2.20 $1.5 Warehouse 58% L84 $1.2 Hotels 54% L92 $4.8 Other 57% L97 $1.8 Land/Construction 58% NA $3.1 (1) LTV - Loan to value ratio. (2) DSCR - Debt service coverage ratio. (3) Balance in millions. As of 6/30/23 Excludes unearned fees. Includes loan types: office, warehouse, gas station, retail and other. 15
CRE OFFICE PORTFOLIO Loan size 77 25 8 7 3 $32 $46 $32 $41 $25 Under $1MM "$1MM- $3MM" "$3MM- $5MM" "$5MM- $7MM" "$7MM- $10MM" Outstanding Balance as of 6/30/2023 Number of Loans Key Metrics At 6/30/2023 Avg. Loan Size in millions $ 1.5 Portfolio NCOs/ Average Loans 0.00% performing with clean Delinquencies/Loans 0.00% credit metrics Nonaccruals/Loan s 0.00% Classified Loans/Loans 0.00% Loan Maturity < 1 year 1 year to 3 3 years to 5 5 years to 10 >10 years years years years 5% 9% 14% 71% 1% Commentary Non-owner-occupied office is 8% of total loans and 70% 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 $1.5 million dollars, LTV of 57%, and DSCR of 2.20X at quarter end. 91% 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) (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. Published April 2023. 16
NON-INTEREST INCOME In thousands (except ratios) Q2 2023 Q1 2023 Q4 2022 Q3 2022 Q2 2022 Service fees $1,173 $1,205 $1,093 $934 $1,083 Gain (loss) on sale of securities available for sale - (21) (1,989) (558) (3) Gain on sale of loans held for sale 94 347 205 330 22 Other income 579 539 568 1,083 515 Total non-interest income $1,846 $2,070 ($123) $1,789 $1,617 Average total assets $2,183,542 $2,120,218 $2,051,867 $2,026,791 $1,968,381 Non-interest income / Average assets (1) 0.34% 0.40% (0.02%) 0.35% 0.33% Commentary Service fees remain substantially consistent quarter over quarter. SBA loan sales produced $94 thousand of gains in the second 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) Q2 2023 Q1 2023 Q4 2022 Q3 2022 Q2 2022 Salaries and employee benefits $5,882 $6,377 $6,080 $6,075 $5,913 Occupancy 1,319 1,299 1,256 1,281 1,251 Regulatory assessments and fees 452 224 222 269 226 Consulting and legal fees 386 358 371 604 398 Network and information technology services 505 478 483 488 448 Other operating expense 1,908 1,440 1,602 1,415 1,315 Total non-interest expense $10,452 $10,176 $10,014 $10,132 $9,551 Efficiency ratio 65.25% 56.32% 59.81% 54.58% 55.34% Average total assets $2,183,542 $2,120,218 $2,051,867 $2,026,791 $1,968,381 Non-interest expense / Average assets (1) 1.92% 1.95% 1.94% 1.98% 1.95% Full-time equivalent employees 198 196 191 191 192 Commentary Salaries and employee benefits decreased due to lower incentive accrual based on performance for the first half of 2023. Regulatory assessments and fees increased $228 thousand due to an increase in the FDIC deposit insurance assessment rate compared to first quarter 2023. Other operating expense increased $468 thousand due to increase in audit and tax services, internet banking fees, and special assets insurance expense. Efficiency ratio impacted by lower revenue and increase in non-interest expenses. (1) Annualized. 18
CAPITAL Capital Ratios Q2 2023 Q1 2023 Q2 2022 Well-Capitalized Leverage Ratio 9.32% 9.36% 9.43% 5.00% TCE/TA 8.25% 8.50% 8.93% NA Tier 1 Risk Based Capital 12.27% 12.04% 12.65% 8.00% Total Risk Based Capital 13.42% 13.20% 13.74% 10.00 AOCI In Millions ($47.1) ($42.1) ($36.9) Commentary Repurchased 77,603 shares during the quarter at a weighted average price of $9.58. 172,397 common shares remain authorized for repurchase under the repurchase program. AOCI was ($47.1) million or ($2.41) per share as of June 30, 2023. Q2 2023 EOP shares outstanding: Common Stock: 19,544,777 (1) For the Company. (2) Non-GAAP Financial Measures. 19
TAKEAWAYS Leading franchise located in one of the most attractive banking markets in Florida and the U.S. Robust organic growth Strong asset quality, with minimal charge-offs experienced since 2015 recapitalization Experienced and tested management team Strong profitability, with pathway for future enhancement identified Core funded deposit base with 32.1% Non-Interest-Bearing Deposits (AVG) 20
APPENDIX - NON-GAAP RECONCILIATION In thousand$(except ratios) A$of or for the three month$ended 6/30/2023 3/31/2023 12/31/2022 9/30/2022 6/30/2022 U/JUí _u¿o Pre-Tax Pre-Provision ("PTPP") Income: Net income $4:196 Plus: Provision for income taxe$1:333 Plus: Provision for credit losse$ 3S_ PTPP income $5.567 PTPP Return on Average Assets: PTPP income $5:567 Average asset$$2,183,542 PTPP return on average asset$1 1.02% Operating Net Income: Net income $4:196 Less: Net gain$(losses) on sale of securities Less: Tax effect on sale of securitie$ - Operating net income $4,196 Operating PTPP Income: PTPP income $5:567 Less: Net gain$(losses) on sale of securitie$ - Operating PTPP Income $ 5,567 Operating PTPP Return on Average Assets: Operating PTPP income $5,567 Average asset$$2,183,542 Operating PTPP Return on average asset$‘ 1.02% Jl J II íí! O ÍI¿.V $5,809 $4,434 $5,558 $5,295 1,881 1,415 1,963 1,708 201 880 910 705 $7,891 $6,729 $8,431 $7,708 $7,891 $2,120,218 1.51% $6,729 $2,051,867 1.3 0% $8,431 $2,026,791 1.65% $7,708 $1,968,381 1.57% $5,809 $4,434 $5,558 $5,295 (21) (1,9 89) (558) (3) 5 504 141 1_ $5,825 $5,919 $5,975 $5,297 $7,891 $6,729 $8,431 $7,708 ^211 (1Î989) (558) _Q1 $7,912 $8,718 $8,989 $7,711 $7,912 $8,718 $8,989 $7,711 $2,120,218 $2,051,867 $2,026,791 $1,968,381 1.51% 1.57% 1.69% 1.76% Operating Return on Average Assets: Operating net income $4:196 Average asset$$2,183,542 Operating return on average asset$<1J 0.77% Operating Return on Average Equity: Operating net income $4:196 Average equity $184,238 Operating return on average equity (1) 9.13% Operating Revenue: Net interest income $14,173 Non-interest income 1,846 Less: Net gain$(losses) on sale of securitie$ - Operating revenue $16,019 Operating Efficiency Ratio: Total non-interest expense $10,452 Operating revenue
$16,019 Operating efficiency ratio 65.25% (1) Annualized. $5,825 $2,120,218 1.11% $5,919 $2,051,867 1.14% $5,975 $2,026,791 1.17% $5,297 $1,968,381 1.08% $5,825 $5,919 $5,975 $5,297 $183,371 $177,556 $185,288 $186,597 12.88% 13.23% 12.79% 11.39% $15,997 $16,866 $16,774 $15,642 2,070 (123) 1,789 1,617 (21) (1:989) (558) (3) $18,088 $18,732 $19,121 $17,262 $10,176 $18,088 56.26% $10,014 $18,732 53.46% $10,132 $19,121 52.99% $9,551 $17,262 55.33% (1) Annualized 21
APPENDIX - NON-GAAP RECONCILIATION In thousands (except ratios and share data) 6/30/2023 Tangible Book Value per Common Share (at period-end): Total stockholders 'equity S 183:685 Less: Intangible assets - Tangible stockholders 'equity S 183:685 Total shares issued and outstanding (at period-end): Total common shares issued and outstanding 19:544:777 Tangible book value per common share$ 9.40 Operating diluted net income per share of common stock: Operating net income S 4:196 Weighted average shares Diluted S 19;639;682 Operating diluted net income per share of common stock 0.21 Tangible Common Equity/Tangible Assets: Tangible stockholders 'equity $ 183:685 Tangible Assets 2:225:914 Tangible Common Equity /Tangible Assets: 8.25% As of and for the three months ended 3/31/2023 12/31/2022 9/30/2022 6/30/2022 S 183,858 S 181428 S 177,417 S 180:068 S 183,858 S 181428 S 177,417 S 180,068 19,622,380 20,000,753 20,000,753 20,000,753 S 9.37 $ 9.12 S 8.87 $ 9.00 S 5,825 S 5,919 S 5,975 S 5197 S 19,940,606 S 20,172,438 S 20,148,208 S 20,171161 S 0.29 S 0.29 S 0.30 S 0.26 S 183,858 S 182,428 S 177,417 S 180,068 2,163,821 8.50% 2,085,834 8.75% 2,037,453 8.71% 2,016,086 8.93% 22
CONTACT INFORMATION LOU DE LA AGUILERA Chairman, President & CEO (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