Financial Performance - Net income for the three months ended September 30, 2022, was $5.6 million, a decrease from $6.6 million for the same period in 2021[141] - Net income increased to $15.7 million for the nine months ended September 30, 2022, compared to $15.4 million for the same period in 2021[156] - Operating net income available to common stockholders for Q3 2022 was $5,558 million, an increase of 4.9% from $5,295 million in Q2 2022[258] - The company reported a net income of $5,558 million for Q3 2022, compared to a net loss of $83,534 million in Q3 2021, marking a significant recovery[258] Interest Income and Margin - Net interest income increased by $3.3 million or 24.5% to $16.8 million compared to $13.5 million for the quarter ended September 30, 2021[144] - Net interest income before the provision for credit losses was $16.8 million for the three months ended September 30, 2022, an increase of $3.3 million or 24.5% from $13.5 million for the same period in 2021[167] - Net interest margin improved to 3.47% from 3.19% for the third quarter of 2021[144] - Net interest margin increased to 3.47% for the quarter ended September 30, 2022, from 3.19% for the same period in 2021[168] - The net interest spread increased to 3.23% for the three months ended September 30, 2022, from 3.03% for the same period in 2021[162] Assets and Loans - Total assets reached $2.0 billion, an increase of $183.5 million or 9.9% compared to December 31, 2021[144] - Total loans grew to $1.4 billion, an increase of $241.4 million or 20.3% compared to December 31, 2021[144] - Total loans increased by $241.4 million or 20.3% to $1,431.5 million as of September 30, 2022, compared to $1,191.7 million as of December 31, 2021[198] - The average balance of loans increased to $1,398.8 million for the three months ended September 30, 2022, compared to $1,144.3 million for the same period in 2021[162] Deposits - Total deposits increased by $206.3 million or 13.0% to $1.8 billion from $1.6 billion at December 31, 2021[144] - Customer deposits totaled $1.763 billion as of September 30, 2022, with an average rate paid of 0.34%, up from $1.477 billion and 0.22% in Q3 2021[222] - Estimated uninsured deposits increased to $1.1 billion as of September 30, 2022, from $897.8 million at December 31, 2021[222] Credit Quality - The allowance for credit losses to total loans ratio decreased to 1.16% at September 30, 2022, from 1.27% at September 30, 2021[144] - Non-performing loans to total loans remained at 0.00% at both September 30, 2022, and September 30, 2021[144] - Total non-performing loans were $0 as of September 30, 2022, down from $1.19 million as of December 31, 2021[211] - The provision for credit loss was $1.6 million for the nine months ended September 30, 2022, compared to a net recovery of $160 thousand for the same period in 2021[175] Capital Ratios - The total risk-based capital ratio for the Company was 13.65% as of September 30, 2022[151] - The Tier 1 risk-based capital for USCB Financial Holdings, Inc. was $194,036 thousand, with a ratio of 12.56%, above the minimum requirement of 6.00%[251] - The common equity tier 1 capital for USCB Financial Holdings, Inc. was $194,036 thousand, with a ratio of 12.56%, exceeding the minimum requirement of 4.50%[251] - The leverage ratio for USCB Financial Holdings, Inc. was 9.48%, significantly above the minimum requirement of 4.00%[251] Non-Interest Income and Expenses - Non-interest income for the three months ended September 30, 2022, decreased $2.4 million or 57.7% compared to the same period in 2021, primarily due to a non-recurring $2.5 million default interest recovery[178] - Non-interest income for the nine months ended September 30, 2022 decreased by $2.7 million or 33.6% compared to the same period in 2021[179] - Non-interest expense for the nine months ended September 30, 2022 increased by $2.9 million or 11.1% compared to the same period in 2021, primarily due to higher salaries and employee benefits[182] Liquidity and Risk Management - The company maintained adequate liquidity resources to fund loans and meet cash needs, with no expected compromise in liquidity resources at this time[250] - The company has established a comprehensive liquidity risk management process integrated into its risk management framework[248] - Management regularly monitors liquidity risk factors, including funding mismatches and market constraints[245] Market and Economic Factors - The impact of inflation on the company's operations is significant, as nearly all assets and liabilities are monetary in nature, affecting interest rates more than general inflation levels[253] - The company does not expect significant changes in the composition of the loan portfolio or its focus on commercial real estate lending in the foreseeable future[199] Stockholder Information - Tangible book value per common share was $8.87 as of September 30, 2022, down from $10.10 at September 30, 2021[151] - Total stockholders' equity as of September 30, 2022, was $177,417 million, down from $203,897 million a year prior, indicating a decline of 13.0%[258] - The total number of Class A common shares issued and outstanding remained stable at 20,000,753 as of September 30, 2022, unchanged from the previous quarter[258] - The company completed its initial public offering of Class A common stock on July 27, 2021, issuing 4,600,000 shares, which contributed to the increase in total shares outstanding[259] Future Outlook - The company has not provided specific guidance for future performance but continues to focus on maintaining operational efficiency and exploring market expansion opportunities[263] - The estimated net interest margin (NIM) is expected to remain stable in year one and increase in year two under static rate scenarios[242]
USCB Financial (USCB) - 2022 Q3 - Quarterly Report