USCB USCB Financial Holdings Inc

USCB Financial Holdings, Inc. (the “Company”) (NASDAQ: USCB), the holding company for U.S. Century Bank (the “Bank”), reported net income of $4.4 million or $0.22 per diluted share for the three months ended December 31, 2022, compared with net income of $5.7 million or $0.30 per diluted share, for the same period in 2021.

Near quarter end, the Bank executed a portfolio restructuring strategy which resulted in a sale of $17.0 million of its lower-yielding available-for-sale securities for an after-tax loss of $1.5 million or $0.07 EPS in the quarter. Proceeds from the sale will be reinvested in securities and loans currently yielding, on average, 430-460 basis points higher than the securities that were sold. The loss on sale of securities is expected to have a nominal impact on tangible book value, as such loss was previously reflected in capital through accumulated other comprehensive income (AOCI). Additionally, the reinvestment from the sale proceeds into higher yielding earning assets will have a $0.03 EPS positive impact on 2023 earnings.

Excluding gain (loss) from the sale of securities, Non-GAAP Operating net income was $5.9 million or $0.29 per diluted share for the fourth quarter ended December 31, 2022, compared to $5.6 million or $0.30 per diluted share, for the same period in 2021.

"Despite a challenging operating environment, 2022 afforded us extraordinary opportunities for growth and profitability. While a soft landing for the economy is expected in 2023, we are taking a prudent approach with our balance sheet by limiting growth in certain assets, maintaining appropriate capital and reserve levels, managing liquidity, and preparing for a range of economic scenarios,” said Luis de la Aguilera, President and Chief Executive Officer.

Unless otherwise stated, all percentage comparisons in the bullet points below are calculated for the quarter ended December 31, 2022 compared to the quarter ended December 31, 2021 and annualized where appropriate.

Profitability

• Annualized return on average assets for the quarter ended December 31, 2022 was 0.86% compared to 1.23% for the fourth quarter of 2021. Non-GAAP Operating return on assets for the quarter ended December 31, 2022 was 1.14% compared to 1.22% for the fourth quarter of 2021.
• Annualized return on average stockholders’ equity for the quarter ended December 31, 2022 was 9.91% compared to 11.08% for the fourth quarter of 2021. Non-GAAP Operating return on equity for the quarter ended December 31, 2022 was 13.23% compared to 11.03% for the fourth quarter of 2021.
• The efficiency ratio for the quarter ended December 31, 2022 was 59.81% compared to 55.74% for the fourth quarter of 2021. Non-GAAP Operating efficiency ratio for the quarter ended December 31, 2022 was 53.46% compared to 55.85% for the fourth quarter of 2021.
• Net interest margin increased to 3.45% for the quarter ended December 31, 2022 compared to 3.19% for the fourth quarter of 2021.
• Net interest income before provision for credit losses was $16.9 million for the quarter ended December 31, 2022, an increase of $2.8 million or 19.8% compared to the fourth quarter of 2021.

Balance Sheet

• Total assets were $2.1 billion at December 31, 2022, representing an increase of $231.9 million or 12.5% from December 31, 2021.
• Total loans were $1.5 billion at December 31, 2022, representing an increase of $317.3 million or 26.7% from December 31, 2021.
• Total deposits were $1.8 billion at December 31, 2022, representing an increase of $238.9 million or 15.0% from December 31, 2021.
• Total stockholders’ equity was $182.4 million at December 31, 2022, representing a decrease of $21.5 million or 10.5% from December 31, 2021. Total stockholders’ equity includes unrealized security losses of $44.8 million at December 31, 2022 compared to unrealized security loss of $2.5 million at December 31, 2021.

Asset Quality

• The allowance for credit losses increased by $2.4 million to $17.5 million at December 31, 2022 from $15.1 million at December 31, 2021.
• The allowance for credit losses represented 1.16% of total loans at December 31, 2022 compared to 1.27% at December 31, 2021.
• Non-performing loans to total loans was 0.00% at December 31, 2022 compared to 0.10% at December 31, 2021.

Non-interest Income and Non-interest Expense

• Non-interest income was negative $0.1 million for the three months ended December 31, 2022 compared to $2.6 million for the same period in 2021. Non-interest income was negative in the fourth quarter of 2022 due to a $2.0 million loss on the sale of securities.
• Non-interest expense was $10.0 million for the three months ended December 31, 2022, an increase of $0.7 million or 7.5% compared to the same period in 2021.

Capital

• As of December 31, 2022, total risk-based capital ratios for the Company and the Bank were 13.65% and 13.58%, respectively.
• Tangible book value per common share of $9.12 was negatively affected by $2.24 due to after tax unrealized security losses of $44.8 million at December 31, 2022. At December 31, 2021, tangible book value of $10.20 was negatively affected by $0.13 due to $2.5 million after tax unrealized security losses.

Conference Call and Webcast

The Company will host a conference call on Friday, January 27, 2023, at 9:00 a.m. Eastern Time to discuss the Company’s unaudited financial results for the quarter ended December 31, 2022. 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. 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 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 the 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;
• the continuation of the COVID-19 pandemic and its impact on us, our employees, customers and third-party service providers, and the ultimate extent of the impact of the pandemic and related government stimulus programs;
• 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;
• legislative or regulatory changes and changes in accounting principles, policies, practices or guidelines, including the effects of the forthcoming 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 statement is 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. To the extent applicable, 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 RelationsInvestorRelations@uscentury.com

Media RelationsMartha Guerra-Kattou MGuerra@uscentury.com

USCB FINANCIAL HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(Dollars in thousands, except per share data)
	Three Months Ended December 31,								Twelve Months Ended December 31,
	2022				2021				2022				2021
Interest income:
Loans, including fees	$	17,836			$	12,786			$	60,825			$	48,730
Investment securities		2,306				2,216				9,346				7,886
Interest-bearing deposits in financial institutions		455				29				929				106
Total interest income		20,597				15,031				71,100				56,722
Interest expense:
Interest-bearing checking		34				14				86				59
Savings and money market accounts		2,866				510				5,173				2,082
Time deposits		616				292				1,509				1,531
FHLB advances and other borrowings		215				139				671				554
Total interest expense		3,731				955				7,439				4,226
Net interest income before provision for credit losses		16,866				14,076				63,661				52,496
Provision for credit losses		880				-				2,495				(160	)
Net interest income after provision for credit losses		15,986				14,076				61,166				52,656
Non-interest income:
Service fees		1,093				961				4,010				3,609
Gain (loss) on sale of securities available for sale, net		(1,989	)			35				(2,529	)			214
Gain on sale of loans held for sale, net		205				107				891				1,626
Gain on sale of other assets		-				983				-				983
Loan settlement		-				-				161				2,500
Other non-interest income		568				558				2,695				1,766
Total non-interest income		(123	)			2,644				5,228				10,698
Non-interest expense:
Salaries and employee benefits		6,080				5,634				23,943				21,438
Occupancy		1,256				1,267				5,058				5,257
Regulatory assessments and fees		222				93				930				783
Consulting and legal fees		371				539				1,890				1,454
Network and information technology services		483				268				1,806				1,466
Other operating expense		1,602				1,518				5,682				5,279
Total non-interest expense		10,014				9,319				39,309				35,677
Net income before income tax expense		5,849				7,401				27,085				27,677
Income tax expense		1,415				1,751				6,944				6,600
Net income		4,434				5,650				20,141				21,077
Preferred stock dividend		-				-				-				2,077
Exchange and redemption of preferred shares		-				-				-				89,585
Net income (loss) available to common stockholders	$	4,434			$	5,650			$	20,141			$	(70,585	)
Per share information:
Net income (loss) per common share, basic	$	0.22			$	0.30			$	1.01			$	(6.72	)
Net income (loss) per common share, diluted	$	0.22			$	0.30			$	1.00			$	(6.72	)
Weighted average shares outstanding:
Common share, basic		20,000,753				18,913,914				19,999,323				10,507,530
Common share, diluted		20,172,438				19,023,686				20,176,838				10,507,530

USCB FINANCIAL HOLDINGS, INC.
SELECTED FINANCIAL DATA (UNAUDITED)
(Dollars in thousands, except per share data)
	As of or For the Three Months Ended
	12/31/2022				9/30/2022				6/30/2022				3/31/2022				12/31/2021
Income statement data:
Net interest income	$	16,866			$	16,774			$	15,642			$	14,379			$	14,076
Provision for credit losses		880				910				705				-				-
Net interest income after provision for credit losses		15,986				15,864				14,937				14,379				14,076
Service fees		1,093				934				1,083				900				961
Gain (loss) on sale of securities available for sale, net		(1,989	)			(558	)			(3	)			21				35
Gain on sale of loans held for sale, net		205				330				22				334				107
Gain on sale of other assets		-				-				-				-				983
Loan settlement		-				-				-				161				-
Other income		568				1,083				515				529				558
Total non-interest income		(123	)			1,789				1,617				1,945				2,644
Salaries and employee benefits		6,080				6,075				5,913				5,875				5,634
Occupancy		1,256				1,281				1,251				1,270				1,267
Regulatory assessments and fees		222				269				226				213				93
Consulting and legal fees		371				604				398				517				539
Network and information technology services		483				488				448				387				268
Other operating expense		1,602				1,415				1,315				1,350				1,518
Total non-interest expense		10,014				10,132				9,551				9,612				9,319
Net income before income tax expense		5,849				7,521				7,003				6,712				7,401
Income tax expense		1,415				1,963				1,708				1,858				1,751
Net income		4,434				5,558				5,295				4,854				5,650
Preferred stock dividend		-				-				-				-				-
Net income available to common stockholders	$	4,434			$	5,558			$	5,295			$	4,854			$	5,650
Per share information:
Net income per common share, basic	$	0.22			$	0.28			$	0.26			$	0.24			$	0.30
Net income per common share, diluted	$	0.22			$	0.28			$	0.26			$	0.24			$	0.30
Balance sheet data (at period-end):
Cash and cash equivalents	$	54,168			$	73,326			$	83,272			$	94,113			$	46,228
Securities available-for-sale	$	230,140			$	248,571			$	339,464			$	392,214			$	401,542
Securities held-to-maturity	$	188,699			$	178,865			$	116,671			$	122,361			$	122,658
Total securities	$	418,839			$	427,436			$	456,135			$	514,575			$	524,200
Loans held for investment (1)	$	1,507,338			$	1,431,513			$	1,372,733			$	1,258,388			$	1,190,081
Allowance for credit losses	$	(17,487	)		$	(16,604	)		$	(15,786	)		$	(15,074	)		$	(15,057	)
Total assets	$	2,085,834			$	2,037,453			$	2,016,086			$	1,967,252			$	1,853,939
Non-interest-bearing deposits	$	629,776			$	662,808			$	653,708			$	656,622			$	605,425
Interest-bearing deposits	$	1,199,505			$	1,133,834			$	1,085,012			$	1,056,672			$	984,954
Total deposits	$	1,829,281			$	1,796,642			$	1,738,720			$	1,713,294			$	1,590,379
FHLB advances and other borrowings	$	46,000			$	26,000			$	66,000			$	36,000			$	36,000
Total liabilities	$	1,903,406			$	1,860,036			$	1,836,018			$	1,775,213			$	1,650,042
Total stockholders' equity	$	182,428			$	177,417			$	180,068			$	192,039			$	203,897
Capital ratios:
Leverage ratio		9.61	%			9.48	%			9.43	%			9.47	%			9.55	%
Common equity tier 1 capital		12.53	%			12.56	%			12.65	%			13.35	%			13.70	%
Tier 1 risk-based capital		12.53	%			12.56	%			12.65	%			13.35	%			13.70	%
Total risk-based capital		13.65	%			13.65	%			13.74	%			14.49	%			14.92	%
(1) Loan amounts include deferred fees/costs.

USCB FINANCIAL HOLDINGS, INC.
AVERAGE BALANCES, RATIOS, AND OTHER DATA (UNAUDITED)
(Dollars in thousands)
	As of or For the Three Months Ended
	12/31/2022				9/30/2022				6/30/2022				3/31/2022				12/31/2021
Average balance sheet data:
Cash and cash equivalents	$	61,892			$	77,887			$	80,254			$	99,911			$	87,819
Securities available-for-sale	$	242,144			$	331,206			$	370,933			$	385,748			$	374,589
Securities held-to-maturity	$	184,459			$	116,733			$	120,130			$	122,381			$	114,108
Total securities	$	426,603			$	447,939			$	491,063			$	508,129			$	488,697
Loans held for investment(1)	$	1,456,780			$	1,398,761			$	1,296,476			$	1,211,432			$	1,158,755
Total assets	$	2,051,867			$	2,026,791			$	1,968,381			$	1,913,484			$	1,828,037
Interest-bearing deposits	$	1,150,049			$	1,107,129			$	1,071,709			$	1,023,844			$	958,241
Non-interest-bearing deposits	$	653,820			$	655,853			$	644,975			$	626,400			$	603,735
Total deposits	$	1,803,869			$	1,762,982			$	1,716,684			$	1,650,244			$	1,561,976
FHLB advances and other borrowings	$	37,500			$	43,935			$	36,330			$	36,011			$	36,000
Total liabilities	$	1,874,311			$	1,841,503			$	1,781,784			$	1,711,624			$	1,625,675
Total stockholders' equity	$	177,556			$	185,288			$	186,597			$	201,860			$	202,362
Performance ratios:
Return on average assets (2)		0.86	%			1.09	%			1.08	%			1.03	%			1.23	%
Return on average equity (2)		9.91	%			11.90	%			11.38	%			9.75	%			11.08	%
Net interest margin (2)		3.45	%			3.47	%			3.37	%			3.22	%			3.19	%
Non-interest income to average assets (2)		(0.02	)%			0.35	%			0.33	%			0.41	%			0.57	%
Efficiency ratio (3)		59.81	%			54.58	%			55.34	%			58.88	%			55.74	%
Loans by type (at period end): (4)
Residential real estate	$	185,636			$	186,551			$	203,662			$	204,317			$	201,359
Commercial real estate	$	970,410			$	928,531			$	843,445			$	782,072			$	704,988
Commercial and industrial	$	126,984			$	121,145			$	131,271			$	134,832			$	146,592
Foreign banks	$	93,769			$	94,450			$	84,770			$	63,985			$	59,491
Consumer and other	$	130,429			$	100,845			$	109,250			$	73,765			$	79,229
Asset quality data:
Allowance for credit losses to total loans		1.16	%			1.16	%			1.15	%			1.20	%			1.27	%
Allowance for credit losses to non-performing loans		-	%			-	%			-	%			-	%			1,265	%
Non-accrual loans less non-accrual TDRs		-				-				-				-				1,190
Non-accrual TDRs		-				-				-				-				-
Loans over 90 days past due and accruing		-				-				-				-				-
Total non-performing loans(5)		-				-				-				-				1,190
Non-performing loans to total loans		-	%			-	%			-	%			-	%			0.10	%
Non-performing assets to total assets		-	%			-	%			-	%			-	%			0.06	%
Net charge-offs (recoveries of) to average loans (2)		(0.00	)%			0.03	%			(0.00	)%			(0.01	)%			(0.05	)%
Net charge-offs (recovery of) credit losses		(2	)			91				(7	)			(17	)			(157	)
Interest rates and yields:(2)
Loans		4.86	%			4.53	%			4.35	%			4.35	%			4.32	%
Investment securities		2.13	%			1.94	%			2.04	%			1.85	%			1.81	%
Total interest-earning assets		4.21	%			3.82	%			3.60	%			3.43	%			3.41	%
Deposits		0.77	%			0.34	%			0.21	%			0.20	%			0.21	%
FHLB advances and other borrowings		2.27	%			1.63	%			1.53	%			1.54	%			1.51	%
Total interest-bearing liabilities		1.25	%			0.59	%			0.38	%			0.37	%			0.38	%
Other information:
Full-time equivalent employees		191				191				192				190				187
(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 for the dates presented since there were no impaired investments or other real estate owned (OREO) recorded.

USCB FINANCIAL HOLDINGS, INC.
NET INTEREST MARGIN (UNAUDITED)
(Dollars in thousands)
	Three Months Ended December 31,
	2022									2021
	Average Balance			Interest			Yield/Rate (1)			Average Balance			Interest			Yield/Rate (1)
Assets
Interest-earning assets:
Loans (2)	$	1,456,780		$	17,836		4.86	%		$	1,158,755		$	12,786		4.32	%
Investment securities (3)		429,020			2,306		2.13	%			490,797			2,216		1.81	%
Other interest-earnings assets		53,717			455		3.36	%			80,170			29		0.14	%
Total interest-earning assets		1,939,517			20,597		4.21	%			1,729,722			15,031		3.41	%
Non-interest-earning assets		112,350									98,315
Total assets	$	2,051,867								$	1,828,037
Liabilities and stockholders' equity
Interest-bearing liabilities:
Interest-bearing checking	$	61,976			34		0.22	%		$	56,558			14		0.10	%
Saving and money market deposits		871,269			2,866		1.31	%			673,993			510		0.30	%
Time deposits		216,804			616		1.13	%			227,690			292		0.51	%
Total interest-bearing deposits		1,150,049			3,516		1.21	%			958,241			816		0.34	%
FHLB advances and other borrowings		37,500			215		2.27	%			36,000			139		1.51	%
Total interest-bearing liabilities		1,187,549			3,731		1.25	%			994,241			955		0.38	%
Non-interest-bearing demand deposits		653,820									603,735
Other non-interest-bearing liabilities		32,942									27,699
Total liabilities		1,874,311									1,625,675
Stockholders' equity		177,556									202,362
Total liabilities and stockholders' equity	$	2,051,867								$	1,828,037
Net interest income				$	16,866								$	14,076
Net interest spread (4)							2.96	%								3.03	%
Net interest margin (5)							3.45	%								3.19	%
(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 on total interest-earning assets minus the average rate on total interest-bearing liabilities.
(5) Net interest margin is the ratio of net interest income to total interest-earning assets.

USCB FINANCIAL HOLDINGS, INC.
NON-GAAP FINANCIAL MEASURES (UNAUDITED)
(Dollars in thousands)
	As of or For the Three Months Ended
	12/31/2022				9/30/2022				6/30/2022				3/31/2022				12/31/2021
Pre-tax pre-provision ("PTPP") income:
Net income	$	4,434			$	5,558			$	5,295			$	4,854			$	5,650
Plus: Provision for income taxes		1,415				1,963				1,708				1,858				1,751
Plus: Provision for credit losses		880				910				705				-				-
PTPP income	$	6,729			$	8,431			$	7,708			$	6,712			$	7,401
PTPP return on average assets:
PTPP income	$	6,729			$	8,431			$	7,708			$	6,712			$	7,401
Average assets	$	2,051,867			$	2,026,791			$	1,968,381			$	1,913,484			$	1,828,037
PTPP return on average assets (1)		1.30	%			1.65	%			1.57	%			1.42	%			1.61	%
Operating net income:
Net income	$	4,434			$	5,558			$	5,295			$	4,854			$	5,650
Less: Net gains (losses) on sale of securities		(1,989	)			(558	)			(3	)			21				35
Less: Tax effect on sale of securities		504				141				1				(5	)			(9	)
Operating net income	$	5,919			$	5,975			$	5,297			$	4,838			$	5,624
Operating PTPP income:
PTPP income	$	6,729			$	8,431			$	7,708			$	6,712			$	7,401
Less: Net gains (losses) on sale of securities		(1,989	)			(558	)			(3	)			21				35
Operating PTPP income	$	8,718			$	8,989			$	7,711			$	6,691			$	7,366
Operating PTPP return on average assets:
Operating PTPP income	$	8,718			$	8,989			$	7,711			$	6,691			$	7,366
Average assets	$	2,051,867			$	2,026,791			$	1,968,381			$	1,913,484			$	1,828,037
Operating PTPP return on average assets (1)		1.69	%			1.76	%			1.57	%			1.42	%			1.60	%
Operating return on average assets:
Operating net income	$	5,919			$	5,975			$	5,297			$	4,838			$	5,624
Average assets	$	2,051,867			$	2,026,791			$	1,968,381			$	1,913,484			$	1,828,037
Operating return on average assets (1)		1.14	%			1.17	%			1.08	%			1.03	%			1.22	%
Operating return on average equity:
Operating net income	$	5,919			$	5,975			$	5,297			$	4,838			$	5,624
Average equity		177,556				185,288				186,597				201,860				202,362
Operating return on average equity		13.23	%			12.79	%			11.39	%			9.72	%			11.03	%
Operating Revenue:
Net interest income	$	16,866			$	16,774			$	15,642			$	14,379			$	14,076
Non-interest income		(123	)			1,789				1,617				1,945				2,644
Less: Net gains (losses) on sale of securities		(1,989	)			(558	)			(3	)			21				35
Operating revenue		18,732				19,121				17,262				16,303				16,685
Operating Efficiency Ratio:
Total non-interest expense	$	10,014			$	10,132			$	9,551			$	9,612			$	9,319
Operating revenue		18,732				19,121				17,262				16,303				16,685
Operating efficiency ratio		53.46	%			52.99	%			55.33	%			58.96	%			55.85	%
(1) Annualized.

USCB FINANCIAL HOLDINGS, INC.
NON-GAAP FINANCIAL MEASURES (UNAUDITED)
(Dollars in thousands, except per share data)
	As of or For the Three Months Ended
	12/31/2022				9/30/2022				6/30/2022				3/31/2022				12/31/2021
Tangible book value per common share (at period-end):(1)
Total stockholders' equity	$	182,428			$	177,417			$	180,068			$	192,039			$	203,897
Less: Intangible assets		-				-				-				-				-
Tangible stockholders' equity	$	182,428			$	177,417			$	180,068			$	192,039			$	203,897
Total shares issued and outstanding (at period-end):
Common shares		20,000,753				20,000,753				20,000,753				20,000,753				19,991,753
Total common shares issued and outstanding		20,000,753				20,000,753				20,000,753				20,000,753				19,991,753
Tangible book value per common share(2)	$	9.12			$	8.87			$	9.00			$	9.60			$	10.20
Operating diluted net income per common share:(1)
Operational Net Income	$	5,919			$	5,975			$	5,297			$	4,838			$	5,624
Total weighted average diluted common stock		20,172,438				20,148,208				20,171,261				20,109,783				19,023,686
Operating diluted net income per common share:	$	0.29			$	0.30			$	0.26			$	0.24			$	0.30
Tangible Common Equity/Tangible Assets
Tangible stockholders' equity		182,428				177,417				180,068				192,039				203,897
Tangible Assets		2,085,834				2,037,453				2,016,086				1,967,252				1,853,939
Tangible Common Equity/Tangible Assets		8.75	%			8.71	%			8.93	%			9.76	%			11.00	%
(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.