USCB Financial (USCB) - 2024 Q3 - Quarterly Results

Q3 2024 Earnings Release Financial Highlights The company achieved record-breaking Q3 2024 financial results, marked by substantial year-over-year growth in net income, earnings per share, and key profitability metrics Q3 2024 Key Financial Metrics (vs. Q3 2023) | Metric | Q3 2024 | Q3 2023 | Change | | :--- | :--- | :--- | :--- | | Net Income | $6.9 million | $3.8 million | +81.6% | | Fully Diluted EPS | $0.35 | $0.19 | +84.2% | | Return on Average Assets (ROAA) | 1.11% | 0.67% | +44 bps | | Return on Average Stockholders' Equity (ROAE) | 13.38% | 8.19% | +519 bps | | Net Interest Margin (NIM) | 3.03% | 2.60% | +43 bps | Detailed Performance Analysis The company demonstrated robust Q3 2024 performance with enhanced profitability, significant balance sheet expansion, solid asset quality, and effective capital management Profitability Profitability metrics significantly improved year-over-year, driven by increased net interest income and a notable enhancement in the efficiency ratio Profitability Metrics (Q3 2024 vs. Q3 2023) | Metric | Q3 2024 | Q3 2023 | | :--- | :--- | :--- | | Annualized ROAA | 1.11% | 0.67% | | Annualized ROAE | 13.38% | 8.19% | | Efficiency Ratio | 53.16% | 64.64% | | Net Interest Margin | 3.03% | 2.60% | | Net Interest Income | $18.1 million | $14.0 million | Balance Sheet The balance sheet demonstrated strong year-over-year growth as of September 30, 2024, with significant increases in total assets, loans, deposits, and stockholders' equity Balance Sheet Growth (as of Sep 30, 2024 vs. Sep 30, 2023) | Item | Sep 30, 2024 | Sep 30, 2023 | YoY Growth | | :--- | :--- | :--- | :--- | | Total Assets | $2.5 billion | $2.2 billion | +11.6% | | Total Loans | $1.9 billion | $1.7 billion | +15.2% | | Total Deposits | $2.1 billion | $1.9 billion | +10.7% | | Total Stockholders' Equity | $213.9 million | $182.9 million | +17.0% | Asset Quality Asset quality remained strong, characterized by an increased allowance for credit losses and a minor uptick in non-performing loans - The Allowance for Credit Losses (ACL) increased by $3.6 million to $23.1 million at September 30, 2024[8] - The ratio of non-performing loans to total loans was 0.14% at September 30, 2024, compared to 0.03% a year prior[9] - Provision for credit loss for Q3 2024 was $931 thousand, an increase of $278 thousand from Q3 2023[8] Non-interest Income and Non-interest Expense Non-interest income significantly grew year-over-year, reflecting revenue diversification, while non-interest expense saw a controlled increase - Non-interest income for Q3 2024 increased by $1.3 million (59.1%) to $3.4 million compared to Q3 2023[9] - Non-interest expense for Q3 2024 increased by $1.0 million (9.5%) to $11.5 million compared to Q3 2023[10] Capital Management The company maintained strong capital levels, declared a cash dividend, and continued its share repurchase program - A cash dividend of $0.05 per share was declared, payable on December 5, 2024[11] - The company repurchased 10,000 shares of Class A common stock at a weighted average cost of $12.03 per share[13] - Tangible book value per common share (non-GAAP) increased to $10.90 at September 30, 2024, a 25.6% annualized increase from June 30, 2024[12] Financial Statements The unaudited financial statements detail the company's performance, showing significant year-over-year net income growth, consistent quarterly trends, and an expanded net interest margin Consolidated Statements of Income For Q3 2024, total interest income grew significantly, leading to a substantial increase in net income and diluted earnings per share compared to the prior year Income Statement Summary (Three Months Ended Sep 30, in thousands, except per share data) | Metric | 2024 | 2023 | | :--- | :--- | :--- | | Total Interest Income | $33,562 | $26,382 | | Net Interest Income | $18,109 | $14,022 | | Provision for Credit Losses | $931 | $653 | | Total Non-interest Income | $3,438 | $2,161 | | Total Non-interest Expense | $11,454 | $10,461 | | Net Income | $6,949 | $3,819 | | Net Income per Share, Diluted | $0.35 | $0.19 | Selected Financial and Other Data This section presents key financial data over the past five quarters, demonstrating a positive trend in core earnings and consistent balance sheet growth Five-Quarter Financial Trend (in thousands) | Metric | Q3 2024 | Q2 2024 | Q1 2024 | Q4 2023 | Q3 2023 | | :--- | :--- | :--- | :--- | :--- | :--- | | Net Income | $6,949 | $6,209 | $4,612 | $2,721 | $3,819 | | Total Assets | $2,503,954 | $2,458,270 | $2,489,142 | $2,339,093 | $2,244,602 | | Total Loans | $1,931,362 | $1,869,249 | $1,821,196 | $1,780,827 | $1,676,520 | | Total Deposits | $2,126,617 | $2,056,702 | $2,102,794 | $1,937,139 | $1,920,922 | Average Balances, Ratios, and Other Data Performance ratios consistently improved over the past five quarters, with notable enhancements in Return on Average Assets, Net Interest Margin, and the efficiency ratio Five-Quarter Performance Ratio Trend | Ratio | Q3 2024 | Q2 2024 | Q1 2024 | Q4 2023 | Q3 2023 | | :--- | :--- | :--- | :--- | :--- | :--- | | Return on Average Assets | 1.11% | 1.01% | 0.76% | 0.48% | 0.67% | | Net Interest Margin | 3.03% | 2.94% | 2.62% | 2.65% | 2.60% | | Efficiency Ratio | 53.16% | 56.33% | 63.41% | 68.27% | 64.64% | | Non-performing Loans to Total Loans | 0.14% | 0.04% | 0.03% | 0.03% | 0.03% | Net Interest Margin Analysis The Net Interest Margin expanded significantly in Q3 2024, primarily driven by a higher yield on interest-earning assets, particularly loans, outpacing the increased cost of liabilities Net Interest Margin Components (Q3 2024 vs. Q3 2023) | Metric | Q3 2024 | Q3 2023 | | :--- | :--- | :--- | | Yield on Interest-Earning Assets | 5.61% | 4.89% | | Yield on Loans | 6.32% | 5.55% | | Rate on Interest-Bearing Liabilities | 3.79% | 3.41% | | Net Interest Spread | 1.82% | 1.48% | | Net Interest Margin | 3.03% | 2.60% | Non-GAAP Financial Measures The company presents non-GAAP measures, including pre-tax pre-provision income and tangible book value per common share, to provide supplemental insights into its core earnings power and shareholder value Key Non-GAAP Metrics (Q3 2024 vs. Q3 2023, in thousands, except per share data) | Metric | Q3 2024 | Q3 2023 | | :--- | :--- | :--- | | PTPP Income | $10,093 | $5,722 | | PTPP Return on Average Assets | 1.62% | 1.01% | | Tangible Book Value per Common Share | $10.90 | $9.36 | | Tangible Common Equity/Tangible Assets | 8.54% | 8.15% | - Management believes these non-GAAP measures are key indicators of the company's ongoing earnings power and provide useful supplemental information for evaluating operations[19][25] Corporate Information and Forward-Looking Statements This section provides details on the upcoming earnings call, a brief company description, and standard forward-looking statements cautioning about potential risks and uncertainties - A conference call to discuss Q3 2024 results is scheduled for Friday, November 1, 2024, at 11:00 a.m. Eastern Time[14] - U.S. Century Bank is one of the largest community banks headquartered in Miami, Florida, and is rated 5-Stars by BauerFinancial[16] - The earnings release contains forward-looking statements that involve significant risks and uncertainties, and readers are cautioned not to place undue reliance on them[17][18]