USCB - U.S. Century Bank Reports Third Quarter 2021 Results

MIAMI, Oct. 28, 2021 (GLOBE NEWSWIRE) -- U.S. Century Bank (the “Company” or the “Bank”) (NASDAQ: USCB) reported net income of $6.6 million for the three months ended September 30, 2021, compared with net income of $3.4 million for the same period in 2020. The Company reported net loss per diluted share for the three months ended September 30, 2021 of $5.11 and $1.02 for Class A and Class B common stock, respectively, compared to net income per diluted share for the same period in 2020 of $0.51 and $0.10 for Class A and Class B common stock, respectively. In the third quarter of 2021, the Company completed an exchange of then outstanding preferred shares for Class A common shares and thereafter redeemed the remaining outstanding preferred shares, at a liquidation value that exceeded book value, causing a one-time reduction in net income available to common stockholders of $89.6 million. Additionally, the reported net income of $6.6 million for the third quarter in 2021 includes a default interest recovery of $2.5 million ($0.11 EPS impact) from a prior lending customer of the Bank. The loan was originated in 2008 and subsequently went through many iterations of credit collection. This payment reflects the final payment and settlement of lien judgments against the customer.

Operating net income per diluted share (non-GAAP) for the three months ended September 30, 2021 was $0.37 and $0.07 for Class A and Class B common stock, respectively, compared to operating net income per diluted share (non-GAAP) for the same period in 2020 of $0.51 and $0.10 for Class A and Class B, respectively. Operating net income per diluted share (non-GAAP) in the third quarter of 2021 excludes the $89.6 million one-time accounting impact of the exchange and redemption of the preferred shares. A reconciliation of non-GAAP measures to GAAP measures appears at the end of this press release.

“I am extremely proud about the milestones that we have achieved in such a short amount of time despite the many and varied challenges of the COVID-19 pandemic. During the third quarter of 2021, we issued 4,600,000 shares of Class A common stock at a price of $10.00 per share through the completion of our initial public offering. We also managed to simplify our capital structure through the exchange and redemption of the remaining Class C and Class D preferred shares.” said Luis de la Aguilera, President and Chief Executive Officer.

Profitability

• Annualized return on average assets for the quarter ended September 30, 2021 was 1.50% compared to 0.93% in the third quarter of 2020.
  
  
• Annualized return on average stockholders’ equity for the quarter ended September 30, 2021 was 13.41% compared to 8.11% in the third quarter of 2020.
  
  
• The efficiency ratio for the quarter ended September 30, 2021 decreased to 50.92% compared to 65.02% for the third quarter in 2020.
  
  
• Net interest margin (NIM) increased to 3.19% for the quarter ended September 30, 2021 compared to 3.17% for the third quarter in 2020.
  
  
• Net interest income was $13.5 million for the quarter ended September 30, 2021, an increase of $2.4 million or 21.21% compared to the third quarter in 2020. The increase was primarily driven by higher loan and investment income along with lower deposit costs.
  

Balance Sheet

• Total assets were $1.8 billion at September 30, 2021, representing an increase of $264.0 million or 17.70% from the third quarter in 2020.
  
  
• Total deposits were $1.5 billion at September 30, 2021, representing an increase of $232.0 million or 18.52%, from the third quarter in 2020.
  
  
• Total shareholders’ equity was $201.9 million at September 30, 2021, representing an increase of $33.3 million or 19.77% from the third quarter in 2020.
  
  
• Total loans were $1.2 billion at September 30, 2021, representing an increase of $134.3 million or 12.89% from the third quarter in 2020.
  
  
• The Company purchased a portfolio of yacht loans within the quarter. The portfolio includes loans that are secured by 30 vessels with an aggregate principal balance of $48.0 million.
  
  
• The Company classified $100 million of securities to held-to-maturity (HTM) for the quarter ended September 30, 2021 to protect tangible book value in a rising rate environment.
  

Asset Quality

• The allowance for credit losses was $14.9 million at September 30, 2021, down from $15.2 million at September 30, 2020.
  
  
• The allowance for credit losses represented 1.27% of total loans at September 30, 2021 compared to 1.46% at September 30, 2020.
  
  
• Non-performing loans to total loans was less than 0.01% at September 30, 2021 compared to 0.16% at September 30, 2020.
  

N on-interest Income and Non-interest Expense

• Non-interest income totaled $4.2?million for the three months ended September 30, 2021, representing an increase of $2.4 million or 137.63% compared to the same period in 2020. The increase was primarily driven by a $2.5 million in default interest from a prior lending customer of the Bank.
  
  
• Non-interest expense was $9.0 million for the three months ended September 30, 2021 compared to $8.4 million for the same period in 2020.
  

Capital

• The Company exceeded all regulatory capital requirements and remained significantly above “well-capitalized” guidelines. Total risk-based capital ratio was 15.10% at September 30, 2021 compared to 14.34% for the third quarter in 2020.
  

Conference Call and Webcast

U.S. Century Bank will host a conference call on Friday, October 29, 2021 at 9:00 a.m. Eastern Time to discuss the Company’s unaudited financial results for the quarter ended September 30, 2021. To access the conference call, dial (844) 221-2148 (domestically) or (929) 517-0937 (internationally) and use conference code 9479777.

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 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. U.S. Century is rated 4-star by BauerFinancial, the nation’s leading independent bank rating firm. U.S. Century Bank offers customers a wide range of financial products and services. U.S. Century Bank has received awards and accolades from numerous organizations for its philanthropic support and leadership, including the Beacon Council, Greater Miami Chamber of Commerce, South Florida Hispanic Chamber of Commerce and others. For more information or to find a U.S. Century branch near you, please call (305) 715-5200 or visit www.uscentury.com .

Forwa rd-Looking Statements

Statements included in this earning release that are not historical in nature 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,” “may” 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.

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 COVID-19 pandemic and its impact on us, our employees, customers and third-party service providers, and the ultimate extent of the impacts 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 forthcoming CECL implementation;
• 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;
• the concentration of ownership of our Class A 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;
• increased competition and its effect on pricing of our products and services as well as our margins;
• 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 from time to time in our filings with the FDIC.

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 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 we describe in the reports we will file from time to time with the FDIC.

Non-GAAP Financial Measures

This earning 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 earning release.

You should assume that all numbers are unaudited unless otherwise noted.

Contacts:

Investor Relations
InvestorRelations@uscentury.com

Media Relations
Martha Guerra-Kattou
(305) 715-5141
MGuerra@uscentury.com