MIAMI - USCB Financial Holdings, Inc. (NASDAQ: USCB), the parent company of U.S. Century Bank, announced its financial results for the first quarter ended March 31, 2024. The bank reported a net income of $4.6 million, or $0.23 per diluted share, a decrease from $5.8 million, or $0.29 per diluted share, for the same period last year.
Despite the decline in net income, the bank achieved a significant increase in deposits, with a $165.7 million rise since the end of 2023. This growth supports USCB's strategy focused on organic expansion through business and retail banking initiatives, new hires, and innovative deposit-aggregating business verticals.
Luis de la Aguilera, Chairman, President, and CEO, highlighted the bank's commitment to shareholder value, citing the initiation of a dividend program at $0.05 per share. He also expressed optimism about the potential for diversified sustainable growth in loans and deposits, given the strong economic climate in Florida.
Key financial metrics showed a mixed picture, with the annualized return on average assets for the quarter at 0.76%, down from 1.11% in the first quarter of 2023. Similarly, the annualized return on average stockholders' equity decreased to 9.61% from 12.85%. The bank's efficiency ratio worsened to 63.41% from 56.32%, and the net interest margin contracted to 2.62% from 3.22%.
Total assets grew to $2.5 billion, marking a 15.0% increase year-over-year. The bank's loan portfolio expanded to $1.8 billion, a 15.2% rise, while total deposits reached $2.1 billion, up by 14.9%. Stockholders' equity also saw an increase of 6.1% to $195.0 million.
Asset quality remained stable, with the allowance for credit losses at 1.18% of total loans, and non-performing loans to total loans at a low 0.03%. Non-interest income for the quarter increased by 19.0% to $2.5 million, while non-interest expense rose by 9.8% to $11.2 million.
The bank declared a cash dividend of $0.05 per share on April 22, 2024, to be paid on June 5, 2024, to shareholders of record as of May 15, 2024. Furthermore, the board approved a new share repurchase program for up to 500,000 shares of Class A common stock.
USCB Financial Holdings will hold a conference call to discuss the financial results on Friday, April 26, 2024. The information in this article is based on a press release statement.
InvestingPro Insights
USCB Financial Holdings, Inc. (NASDAQ: USCB), despite a dip in net income, has a few notable strengths and challenges as highlighted by recent data and analysis. With a market capitalization of $204.36 million and a Price to Earnings (P/E) ratio standing at 13.33, the bank's valuation reflects a market sentiment that aligns with the company's profitability over the last twelve months.
An important metric to consider is the bank's P/E ratio adjusted for the last twelve months as of Q4 2023, which sits at a slightly lower 12.17. This adjustment indicates a modest improvement in earnings valuation over the recent period.
On the operational front, USCB has demonstrated a strong operating income margin of 36.55% in the same timeframe, showcasing efficient management and the potential for sustained profitability.
Still, it is not all sunny in Florida for USCB. According to InvestingPro Tips, the bank suffers from weak gross profit margins and has seen a decline in revenue growth, with a -4.2% change over the last twelve months as of Q4 2023.
This is compounded by a more significant quarterly revenue decline of -10.31% in Q1 2024. Analysts have also revised their earnings downwards for the upcoming period, suggesting that investors should brace for potential headwinds. Yet, it's not all negative, as analysts predict USCB will be profitable this year, and the bank has been profitable over the last twelve months.
For those looking to delve deeper into USCB's financial health, InvestingPro offers additional insights. There are more InvestingPro Tips available that can provide further guidance on whether USCB's current financial trajectory aligns with your investment strategy. To access these insights, visit https://www.investing.com/pro/USCB and remember to use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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