KBRA assigned a senior unsecured debt rating of BBB, a subordinated debt rating of BBB-, and a short-term debt rating of K3 to USCB Financial Holdings, Inc. For its subsidiary, U.S. Century Bank, KBRA assigned deposit and senior unsecured debt ratings of BBB+, a subordinated debt rating of BBB, and short-term deposit and debt ratings of K2. The Outlook for all long-term ratings is Stable.
The ratings are supported by USCB’s solid earnings profile, evidenced by a return on average assets (ROA) that has tracked above 1% in recent quarters, upheld by minimal credit costs. The company's branch-lite model contributes to a lower-cost operating model, with noninterest expenses tracking between 1.7% and 1.8% of average assets in recent quarters. A core deposit franchise represents 82% of its total funding at Q1 2025.
KBRA noted that the bank's footprint resulted in above-average deposit costs of 2.45% at Q1 2025, which is 23 basis points above peers, partly due to its various specialty segments. The net interest margin (NIM) of 3.01% at Q1 2025 tracked approximately 40 basis points below the rated peer average. Regulatory capital protection, with a Common Equity Tier 1 (CET1) ratio of 12.5% and a Loan Loss Reserve (LLR) of 1.22% at Q1 2025, is considered sufficient for its risk profile.
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