USCB Financial (USCB) - 2025 Q2 - Quarterly Results

Executive Summary Q2 2025 Financial Highlights USCB Financial Holdings, Inc. reported record Q2 2025 net income of $8.1 million and diluted EPS of $0.40, driven by improved profitability and healthy growth - USCB Financial Holdings, Inc. reported record fully diluted EPS of $0.40 for Q2 2025, an increase from $0.31 in Q2 2024, reflecting continued improvement in profitability[1][2] Q2 2025 vs. Q2 2024 Key Financial Highlights | Metric | Q2 2025 | Q2 2024 | Change (YoY) | | :----------------------------------- | :------ | :------ | :----------- | | Net Income | $8.1 million | $6.2 million | +$1.9 million (+30.6%) | | Fully Diluted EPS | $0.40 | $0.31 | +$0.09 (+29.0%) | | ROAA (Annualized) | 1.22% | 1.01% | +0.21 pp | | ROAE (Annualized) | 14.29% | 12.63% | +1.66 pp | | Efficiency Ratio | 51.77% | 56.33% | -4.56 pp | | Net Interest Margin | 3.28% | 2.94% | +0.34 pp | | Net Interest Income (before provision) | $21.0 million | $17.3 million | +$3.7 million (+21.5%) | | Total Assets (period-end) | $2.7 billion | $2.5 billion | +$261.2 million (+10.6%) | | Total Loans (period-end) | $2.1 billion | $1.9 billion | +$244.1 million (+13.1%) | | Total Deposits (period-end) | $2.3 billion | $2.1 billion | +$279.0 million (+13.6%) | | Total Stockholders' Equity (period-end) | $231.6 million | $201.0 million | +$30.6 million (+15.2%) | Financial Performance Profitability Ratios Strong Q2 2025 profitability improvements, with significant increases in ROAA and ROAE, and a notable reduction in efficiency ratio Q2 2025 Profitability Ratios (YoY) | Metric | Q2 2025 | Q2 2024 | Change (YoY) | | :--------------------------------- | :------ | :------ | :----------- | | Annualized Return on Average Assets | 1.22% | 1.01% | +0.21 pp | | Annualized Return on Average Stockholders' Equity | 14.29% | 12.63% | +1.66 pp | | Efficiency Ratio | 51.77% | 56.33% | -4.56 pp | Net Interest Income and Margin Net interest income before provision for credit losses increased, driven by higher net interest margin, reflecting loan growth and deposit pricing Net Interest Income and Margin (YoY) | Metric | Q2 2025 | Q2 2024 | Change (YoY) | | :---------------------------------------- | :------ | :------ | :----------- | | Net Interest Income (before provision) | $21.0 million | $17.3 million | +$3.7 million (+21.5%) | | Net Interest Margin | 3.28% | 2.94% | +0.34 pp | | Net Interest Spread | 2.32% | 1.78% | +0.54 pp | - Total interest income increased to $36.154 million in Q2 2025 from $32.617 million in Q2 2024, primarily due to higher interest income from loans[18] - Total interest expense slightly decreased to $15.120 million in Q2 2025 from $15.306 million in Q2 2024, despite an increase in time deposit interest expense, due to lower costs on savings and money market deposits and FHLB advances[18] Non-Interest Income and Expense Non-interest income modestly increased, while non-interest expense grew due to higher salaries, employee benefits, and other operating expenses Non-Interest Income and Expense (YoY) | Metric | Q2 2025 | Q2 2024 | Change (YoY) | | :---------------------- | :------ | :------ | :----------- | | Total Non-Interest Income | $3.4 million | $3.2 million | +$0.2 million (+5.0%) | | Total Non-Interest Expense | $12.6 million | $11.6 million | +$1.0 million (+9.3%) | | Service Fees | $2.402 million | $1.977 million | +$0.425 million (+21.5%) | | Salaries and Employee Benefits | $7.954 million | $7.353 million | +$0.601 million (+8.2%) | - Other operating expense increased to $2.120 million in Q2 2025 from $1.723 million in Q2 2024[18] Income Statement Details Consolidated statements of income provide a detailed breakdown of revenue and expenses, showing consistent net income growth for Q2 2025 Consolidated Statements of Income (Q2 2025 vs. Q2 2024) | Item | Three Months Ended June 30, 2025 (in thousands) | Three Months Ended June 30, 2024 (in thousands) | | :----------------------------------- | :------------------------------- | :------------------------------- | | Total interest income | $36,154 | $32,617 | | Total interest expense | $15,120 | $15,306 | | Net interest income before provision for credit losses | $21,034 | $17,311 | | Provision for credit losses | $1,031 | $786 | | Total non-interest income | $3,370 | $3,211 | | Total non-interest expense | $12,634 | $11,560 | | Net income before income tax expense | $10,739 | $8,176 | | Income tax expense | $2,599 | $1,967 | | Net income | $8,140 | $6,209 | | Net income per common share, diluted | $0.40 | $0.31 | Consolidated Statements of Income (Six Months Ended June 30, 2025 vs. 2024) | Item | Six Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | | :----------------------------------- | :----------------------------- | :----------------------------- | | Total interest income | $70,132 | $63,504 | | Total interest expense | $29,983 | $31,035 | | Net interest income before provision for credit losses | $40,149 | $32,469 | | Provision for credit losses | $1,712 | $1,196 | | Total non-interest income | $7,086 | $5,675 | | Total non-interest expense | $24,686 | $22,734 | | Net income before income tax expense | $20,837 | $14,214 | | Income tax expense | $5,039 | $3,393 | | Net income | $15,798 | $10,821 | | Net income per common share, diluted | $0.78 | $0.55 | Financial Position Balance Sheet Overview Robust growth in total assets, loans, and deposits at June 30, 2025, indicates strong operational expansion for the Company Key Balance Sheet Data (YoY) | Metric | June 30, 2025 | June 30, 2024 | Change (YoY) | | :-------------------------------- | :------------ | :------------ | :----------- | | Total Assets | $2.7 billion | $2.5 billion | +$261.2 million (+10.6%) | | Total Loans Held for Investment | $2.1 billion | $1.9 billion | +$244.1 million (+13.1%) | | Total Deposits | $2.3 billion | $2.1 billion | +$279.0 million (+13.6%) | | Total Stockholders' Equity | $231.6 million | $201.0 million | +$30.6 million (+15.2%) | - Total securities increased to $444.122 million at June 30, 2025, from $406.050 million at June 30, 2024[20] - Non-interest-bearing demand deposits were $584.895 million at June 30, 2025, while interest-bearing deposits reached $1,750.766 million[20] Capital Ratios and Equity Strong capital ratios, well above regulatory requirements, demonstrate a solid capital position with significant year-over-year equity increase Capital Ratios (June 30, 2025) | Metric | Company | Bank | | :---------------------- | :------ | :------ | | Total Risk-Based Capital | 13.73% | 13.67% | | Common Equity Tier 1 Capital | 12.52% | N/A | | Tier 1 Risk-Based Capital | 12.52% | N/A | | Leverage Ratio | 9.72% | N/A | - Total stockholders' equity increased by $30.6 million or 15.2% from $201.0 million at June 30, 2024, to $231.6 million at June 30, 2025[6] - Tangible book value per common share was $11.53 at June 30, 2025, an annualized increase of 10.7% from $11.23 at March 31, 2025[12] Loans and Deposits Composition The loan portfolio is diversified, with commercial real estate as the largest segment, and deposits growing across interest-bearing categories Loans by Type (at period end, June 30, 2025) | Loan Type | Amount (in thousands) | | :---------------------- | :-------------------- | | Residential real estate | $307,020 | | Commercial real estate | $1,206,621 | | Commercial and industrial | $263,966 | | Correspondent banks | $110,155 | | Consumer and other | $218,426 | | Total Loans Held for Investment | $2,113,318 | Deposits Composition (at period end, June 30, 2025) | Deposit Type | Amount (in thousands) | | :-------------------------------- | :-------------------- | | Non-interest-bearing demand deposits | $584,895 | | Interest-bearing deposits | $1,750,766 | | Total Deposits | $2,335,661 | Asset Quality Credit Loss Provision and Non-Performing Assets Allowance for credit losses and provision for credit losses increased year-over-year, while non-performing loans and assets remained very low Asset Quality Data (YoY) | Metric | June 30, 2025 | June 30, 2024 | Change (YoY) | | :----------------------------------- | :------------ | :------------ | :----------- | | Allowance for Credit Losses (ACL) | $24.9 million | $22.2 million | +$2.7 million | | ACL as % of Total Loans | 1.18% | 1.19% | -0.01 pp | | Provision for Credit Losses (Q2) | $1.0 million | $786 thousand | +$245 thousand | | Total Non-Performing Loans | $1.4 million | $758 thousand | +$0.642 million | | Non-Performing Loans as % of Total Loans | 0.06% | 0.04% | +0.02 pp | | Non-Performing Assets as % of Total Assets | 0.05% | 0.03% | +0.02 pp | | Net Charge-offs (recoveries of) to average loans | 0.14% | (0.00)% | +0.14 pp | - The allowance for credit losses to non-performing loans ratio was 1825% at June 30, 2025, compared to 2,933% at June 30, 2024, indicating a significant coverage of non-performing loans[23] Dividend Declaration Quarterly Cash Dividend The Board of Directors declared a quarterly cash dividend of $0.10 per share, doubling the dividend from the previous year's second quarter - On July 21, 2025, the Board of Directors declared a quarterly cash dividend of $0.10 per share of Class A common stock, payable on September 5, 2025, to shareholders of record on August 15, 2025[12] Cash Dividends Declared (YoY) | Metric | Q2 2025 | Q2 2024 | | :-------------------- | :------ | :------ | | Cash dividends declared | $0.10 | $0.05 | Corporate Information About USCB Financial Holdings, Inc. USCB Financial Holdings, Inc. is the holding company for U.S. Century Bank, a prominent 5-Star rated community bank in Miami and Florida - U.S. Century Bank, established in 2002, is one of the largest community banks headquartered in Miami and in the State of Florida[10] - U.S. Century Bank is rated 5-Stars by BauerFinancial, a leading independent bank rating firm[10] - The bank offers a wide range of financial products and services and supports numerous community organizations[10] Conference Call Details Q2 2025 Earnings Conference Call USCB Financial Holdings, Inc. will host a conference call and webcast on July 25, 2025, to discuss Q2 2025 financial results - The Company will host a conference call on Friday, July 25, 2025, at 11:00 a.m. Eastern Time[8] - To access the conference call, dial (833) 816-1416 (U.S. toll-free) and ask to join the USCB Financial Holdings Call[8] - A live webcast and archived version will be available in the 'Investor Relations' section of the Company's website at www.uscentury.com[9](index=9&type=chunk) Forward-Looking Statements Disclaimer and Risk Factors This section outlines forward-looking statements, emphasizing that actual results may differ materially due to significant risks and uncertainties - The earnings release contains forward-looking statements identified by words such as 'may,' 'will,' 'anticipate,' 'expect,' and 'intend,' related to projected growth, future financial performance, and strategic goals[11] - Significant risks and uncertainties could cause actual results to differ materially, including managing interest rate, credit, and liquidity risks, economic strength, regulatory changes, and market conditions[12][16] - The Company undertakes no obligation to update or revise any forward-looking statement unless required by federal securities laws, and cautions against undue reliance on these statements[13] Non-GAAP Financial Measures Non-GAAP Reconciliations The Company provides non-GAAP financial measures like PTPP income, operating net income, and tangible book value per share to evaluate operations and performance - Management uses non-GAAP measures to evaluate the Company's business and believes they provide useful supplemental information for evaluating operations and underlying performance trends[14] Key Non-GAAP Financial Measures (Q2 2025 vs. Q2 2024) | Metric | Q2 2025 (in thousands) | Q2 2024 (in thousands) | | :----------------------------------- | :------ | :------ | | PTPP income | $11,770 | $8,962 | | PTPP return on average assets | 1.76% | 1.45% | | Operating net income | $8,140 | $6,199 | | Operating return on average assets | 1.22% | 1.01% | | Operating return on average equity | 14.29% | 12.61% | | Operating revenue | $24,404 | $20,508 | | Operating efficiency ratio | 51.77% | 56.37% | | Tangible book value per common share | $11.53 | $10.24 | | Operating diluted net income per common share | $0.40 | $0.31 | | Tangible Common Equity/Tangible Assets | 8.52% | 8.18% | - Tangible book value per common share was negatively affected by accumulated comprehensive loss of $41.8 million ($2.08 per share) at June 30, 2025, primarily due to changes in the market value of available-for-sale securities[12] Consolidated Financial Statements (Unaudited) Consolidated Statements of Income This section presents the unaudited consolidated statements of income for the three and six months ended June 30, 2025, and 2024, detailing key revenue and expense categories - The full Consolidated Statements of Income are provided on page 4, detailing all revenue and expense categories for the reported periods[17][18] Selected Financial Data This table presents a five-quarter trend of key income statement, balance sheet, and per share data, offering a comprehensive view of financial performance and position - The Selected Financial Data table on page 5 provides a quarterly breakdown of income statement, balance sheet, and per share information from Q2 2024 to Q2 2025[19][20] Average Balances, Ratios, and Other Data This section presents average balance sheet data, performance ratios, loan composition, asset quality, and interest rates over five quarters, detailing operational efficiency and portfolio characteristics - The Average Balances, Ratios, and Other Data table on page 6 includes annualized performance ratios such as Return on Average Assets (ROAA), Return on Average Equity (ROAE), and Net Interest Margin (NIM) across five quarters[22][23] - Detailed asset quality data, including Allowance for Credit Losses to total loans and non-performing loans, is presented[23] Net Interest Margin Analysis This table details average balances, interest income/expense, and annualized yields/rates for interest-earning assets and liabilities, illustrating components contributing to net interest margin and spread - The Net Interest Margin table on page 7 details average balances, interest, and annualized yields/rates for interest-earning assets and interest-bearing liabilities for Q2 2025 and Q2 2024[25][26] - It shows the calculation of net interest spread and net interest margin, highlighting the increase in both metrics year-over-year[26]