USCB filing — read by section

Item 7. Management’s Discussion and Analysis

Item 7. 
Management's Discussion and Analysis of Financial Condition 
and Results of Operations 

 Management’s 
discussion 
and 
analysis 
of 
financial 
condition 
and 
results 
of 
operations 
analyzes 
the 
consolidated 
 financial condition and results of operations of the Company and the 
Bank, its wholly owned subsidiary, for the years ended 
 December 31, 2022 
and 2021. 
This discussion 
and analysis 
are best 
read in 
conjunction with 
the Consolidated 
Financial 
 Statements and related footnotes 
of our Company presented 
in Item 8 “Financial 
Statements and Supplementary 
Data” of 
 this Annual Report on Form 
10-K. In addition to 
historical information, this 
discussion contains forward-looking 
statements 
 that 
involve 
risks, 
uncertainties 
and 
assumptions 
that 
could 
cause 
actual 
results 
to 
differ 
materially 
from 
management's 
 expectations. 
Factors 
that 
could 
cause 
such 
differences 
are 
discussed 
in 
the 
sections 
entitled 
"Forward-Looking 
 Statements" and Item 1A “Risk Factors" of this Annual Report. 
 In this Annual Report on Form 10-K, unless the context indicated otherwise, references to “we,” 
“us,”, and “our” refer to 
 the Company and the Bank, as 
the contest dictates. However, if 
the discussion relates to a period 
before the Effective Date, 
 the terms refer only to the Bank. 
 Forward-Looking Statements 
 This 
Annual 
Report 
on 
Form 
10-K 
contains 
statements 
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,” 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 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 implementation of the Current Expected 
Credit Losses (“CECL”) standard on January 1, 2023; 
 • 
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 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 potential 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 Annual Report and other 
filings we make with the 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 
Annual Report 
on Form 
10-K 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 herein and in 

 
 
 Table of Contents 
 

 

 45 
USCB Financial Holdings, Inc. 
2022 10-K 
 

 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 Annual Report on Form 10-K 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 this annual report.
 Overview 
 For the year ended December 31, 2022, the Company reported net income of 
$20.1 million compared with net income 
 of 
$21.1 million for the year ended December 31, 2021. 

 In 
evaluating 
our 
financial 
performance, 
we consider 
the 
level 
of 
and 
trends 
in 
net 
interest 
income, 
the 
net 
interest 
 margin, the cost of deposits, 
levels and composition of 
non-interest income and non-interest 
expense, performance ratios, 
 asset quality ratios, 
regulatory capital ratios, and any significant event or transaction 
. 
 The following significant highlights are of note for the 
year ended December 31, 2022: 
 • 
Net interest 
income before 
provision for 
credit losses 
totaled $63.7 million, 
an increase 
of $11.2 
million or 
21.3%, 
 compared to $52.5 million for the year ended December 
31, 2021. 

 • 
Net interest margin (“NIM”) was 3.38% for the year ended 
December 31, 2022 and 3.26% for the year ended 2021. 
 The yield on earning assets increased to 3.78% for 2022, compared 
to 3.52% for 2021. 

 • 
Total 
assets 
grew 
to 
$2.1 
billion 
at 
December 
31, 
2022, 
an 
increase 
of 
$231.9 
million 
or 
12.5%, 
compared 
to 
 December 31, 2021. 
 • 
Total 
loans 
grew 
to 
$1.5 
billion 
at 
December 
31, 
2022, 
an 
increase 
of 
$317.3 
million 
or 
26.7%, 
compared 
to 
 December 31, 2021. 
 • 
The cost 
of interest-bearing 
liabilities 
increased to 
0.66% for 
the 
year ended 
December 
31, 2022 
from 
0.45% 
in 
 December 31, 2021 as a result of the increase in market 
interest rates. 

 • 
Return on average assets for the year ended December 
31, 2022 was 1.01% compared to 1.24% in 2021. 
 • 
Return on average 
stockholders’ 
equity for the 
year ended December 31, 
2022 was 
10.73% compared to 
11.45% 
 in 2021. 
 • 
Nonperforming assets was $0.0 for the year ended December 
31, 2022 compared to $1.2 million at December 
31, 
 2021. 

 • 
The Company maintained its strong capital position. As of December 31, 2022, the Bank was well-capitalized, with 
 a total risk-based capital ratio of 13.65%, 
a tier 1 risk-based capital ratio of 
12.53%, a common equity tier 1 capital 
 ratio of 
12.53%, and 
a leverage 
ratio of 
9.61%. As 
of December 
31, 2022 
and 2021, 
all of 
our regulatory 
capital 
 ratios exceeded the thresholds to be well-capitalized under the 
applicable bank regulatory requirements. 
 • 
The Company became the parent bank 
holding company of the Bank effective 
December 30, 2021. Each share of 
 the 
Bank 
was 
exchanged 
for 
one 
share 
of 
the 
Company, 
making 
the 
Bank 
a 
wholly 
owned 
subsidiary 
of 
the 
 Company. Shares 
of the Company trade under ticker symbol “USCB” on the Nasdaq 
Stock Market. 

 
 
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 46 
USCB Financial Holdings, Inc. 
2022 10-K 
 

 Critical Accounting Policies and Estimates 
 The 
consolidated 
financial 
statements 
are 
prepared 
based 
on 
the 
application 
of 
U.S. 
GAAP, 
the 
most 
significant 
of 
 which are described 
in Note 1 “Summary 
of Significant Accounting 
Policies” to our 
Consolidated Financial Statements 
. 
To 
 prepare financial statements in conformity with GAAP, 
management makes estimates, assumptions, 
and judgments based 
 on 
available 
information. 
These 
estimates, 
assumptions, 
and 
judgments 
affect 
the 
amounts 
reported 
in 
the 
financial 
 statements and accompanying notes. These estimates, assumptions, and judgments are based on 
information available as 
 of 
the 
date 
of 
the 
financial 
statements 
and, 
as 
this 
information 
changes, 
actual 
results 
could 
differ 
from 
the 
estimates, 
 assumptions 
and 
judgments 
reflected 
in 
the 
financial 
statements. 
In 
particular, 
management 
has 
identified 
accounting 
 policies that, due to 
the estimates, assumptions 
and judgments inherent 
in those policies, are 
critical in understanding 
our 
 financial statements. 
Management 
has presented 
the application 
of these 
policies to 
the audit 
and risk 
committee of 
our 
 Board. 

 Allowance for Credit Losses 
 The allowance for credit 
losses (“ACL”) is 
a valuation allowance that 
is established through charges 
to earnings in the 
 form of a 
provision for credit 
losses. The amount 
of the ACL 
is affected by 
the following: (i) 
charge-offs of loans 
that decrease 
 the allowance; 
(ii) subsequent 
recoveries on 
loans previously 
charged off 
that increase 
the allowance; 
and (iii) 
provisions 
 for credit losses charged to income that increase or decrease the allowance. Management considers the policies related to 
 the ACL 
as the 
most critical 
to the 
financial statement 
presentation. The 
total ACL 
includes activity 
related to 
allowances 
 calculated in accordance with Accounting Standards Codification (“ASC”) 
310, Receivables, and ASC 450, Contingencies. 
 Throughout the year, 
management estimates the probable 
incurred losses in the loan portfolio 
to determine if the ACL 
 is adequate to absorb such losses. The ACL 
consists of specific and general components. 
The specific component relates 
 to loans that are 
individually classified as 
impaired. We follow 
a loan review program 
to evaluate the credit 
risk in the loan 
 portfolio. Loans 
that have 
been identified 
as impaired 
are reviewed 
on a 
quarterly basis 
in order 
to determine 
whether a 
 specific reserve is 
required. The 
general component covers 
non-impaired loans 
and is based 
on industry and 
our specific 
 historical loan 
loss experience, 
volume, growth 
and composition 
of the 
loan portfolio, 
the evaluation 
of our 
loan portfolio 
 through our 
internal 
loan review 
process, general 
current 
economic 
conditions both 
internal and 
external 
to 
us that 
may 
 affect the borrower’s ability to pay, 
value of collateral and other qualitative relevant risk factors. Based on a review 
of these 
 estimates, we 
adjust the ACL 
to a 
level determined by 
management to be 
adequate. Estimates of 
credit losses 
are inherently 
 subjective as they involve an exercise of judgment. 
 The 
CARES 
Act, 
as 
amended 
by 
the 
Consolidated 
Appropriations 
Act, 
2021, 
specified 
that 
COVID-19 
related 
loan 
 modifications executed 
between March 1, 
2020 and 
the earlier 
of (i) 
60 days 
after the 
date of 
termination of 
the national 
 emergency declared by President Trump and (ii) January 1, 2022, on loans 
that were current as of December 31, 2019, 
are 
 not TDRs. Additionally, 
under guidance from the federal banking agencies, 
other short-term modifications made on a good 
 faith basis 
in response 
to COVID-19 
to borrowers 
that were 
current prior 
to any 
relief are 
not TDRs 
under ASC 
Subtopic 
 310-40, 
“Troubled 
Debt 
Restructurings 
by 
Creditors.” 
These 
modifications 
include 
short-term 
(i.e., 
up 
to 
six 
months) 
 modifications 
such 
as 
payment 
deferrals, 
fee 
waivers, 
extensions 
of 
repayment 
terms, 
or 
delays 
in 
payment 
that 
are 
 insignificant. The Company’s charge-off 
policy is to continuously review all impaired loans to monitor the Company’s ability 
 to collect them in full at the applicable maturity date and/or in 
accordance with terms of any restructurings. For loans 
which 
 are collateral dependent, 
or deemed to 
be uncollectible, any 
shortfall in the 
fair value of 
the collateral relative 
to the recorded 
 investment 
in the loan is charged off. The amount charged-off 
conforms to the amount necessary to comply with GAAP. 
 Income Taxes 
 Deferred tax 
assets and 
liabilities are 
recognized for 
the future 
tax consequences 
attributable to 
differences 
between 
 the financial statement carrying amounts of 
existing assets and liabilities and their 
respective tax bases and operating loss 
 and tax credit carryforwards. Deferred 
tax assets and liabilities are measured 
using enacted tax rates expected to 
apply to 
 taxable income 
in the 
years in 
which those 
temporary differences 
are expected 
to be 
recovered or 
settled. The 
effect 
on 
 deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment 
 date. 

 Management is required to assess whether a valuation allowance should be established on the net deferred tax assets 
 based on the 
consideration of 
all available evidence 
using a more 
likely than not 
standard. In its 
evaluation, management 
 considers taxable loss 
carry-back availability, expectation of sufficient taxable 
income, trends in 
earnings, the future 
reversal 
 of temporary differences, and available tax planning 
strategies. 

 
 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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 47 
USCB Financial Holdings, Inc. 
2022 10-K 
 

 The Company recognizes positions taken 
or expected to be 
taken in a tax 
return in accordance with existing accounting 
 guidance on 
income taxes 
which prescribes 
a recognition threshold 
and measurement 
process. Interest 
and penalties on 
 tax liabilities, if any, 
would be recorded in interest expense and other operating 
non-interest expense, respectively. 
 Other than temporary impairment 
 The 
Company 
reviews 
investments 
quarterly 
for 
other 
than 
temporary 
impairment 
(“OTTI”). 
The 
following 
primary 
 factors 
are 
considered 
for 
securities 
identified 
for 
OTTI 
testing: 
percent 
decline 
in 
fair 
value, 
rating 
downgrades, 
 subordination, duration, the Company's ability to hold the debt security, and the ability of the issuers to pay all amounts 
due 
 in 
accordance 
with 
the 
contractual 
terms. 
Prices 
obtained 
from 
pricing 
services 
are 
usually 
not 
adjusted. 
Based 
on 
our 
 internal review procedures 
and the fair values 
provided by the pricing 
services, we believe that 
the fair values provided 
by 
 the pricing 
services are 
consistent with 
the principles 
of ASC 
Topic 
820, Fair 
Value 
Measurement. The 
Company may 
at 
 times validate the 
observed prices using 
the observed prices 
for similar securities 
to determine the 
fair value of 
its securities. 
 Changes in the fair values, as 
a result of deteriorating economic conditions 
and credit spread changes, should only 
be 
 temporary. 
Further, 
management 
believes 
that 
the 
Company’s 
other 
sources 
of 
liquidity, 
as 
well 
as 
the 
cash 
flow 
from 
 principal and interest 
payments from 
its securities portfolio, 
reduces the 
risk that losses 
would be realized 
as a result 
of a 
 need to sell securities to obtain liquidity. 
 Segment Reporting 
 Management monitors the revenue streams for 
all its various products and services. The identifiable segments 
are not 
 material 
and 
operations 
are 
managed 
and 
financial 
performance 
is 
evaluated 
on 
an 
overall 
Company-wide 
basis. 
 Accordingly, all 
the financial service 
operations are 
considered by 
management to be 
aggregated in one 
reportable operating 
 segment.
 Results of Operations 
 General 
 The following 
tables present 
selected balance 
sheet, income 
statement, and 
profitability ratios 
for the 
dates indicated 
 (in thousands, except ratios): 
 As of December 31, 
 2022 
 2021 
 Consolidated Balance Sheets: 
 Total 
assets 
 $ 
 2,085,834 
 $ 
 1,853,939 
 Total 
loans 
 (1)
 $ 
 1,507,338 
 $ 
 1,190,081 
 Total 
deposits 
 $ 
 1,829,281 
 $ 
 1,590,379 
 Total 
stockholders' equity 
 $ 
 182,428 
 $ 
 203,897 
 (1) 
Loan amounts include deferred fees/costs. 
 Years Ended December 31, 
 2022 
 2021 
 Consolidated Statements of Operations: 
 Net interest income before provision for credit losses 
 $ 
 63,661 
 $ 
 52,496 
 Total 
non-interest income 
 $ 
 5,228 
 $ 
 10,698 
 Total 
non-interest expense 
 $ 
 39,309 
 $ 
 35,677 
 Net income 

 $ 
 20,141 
 $ 
 21,077 
 Net income (loss) available to common stockholders 
 $ 
 20,141 
 $ 
 (70,585) 
 Profitability: 
 Efficiency ratio 
 57.06% 
 56.31% 
 Net interest margin 

 3.38% 
 3.26% 
 The Company’s results 
of operations depend 
substantially on net 
interest income and 
non-interest income. Other 
factors 
 contributing to the 
results of operations 
include our provision 
for credit losses, 
non-interest expense, and 
the provision for 
 income taxes. 

 
 
 Table of Contents 
 

 

 48 
USCB Financial Holdings, Inc. 
2022 10-K 
 

 Net income 
for the 
year ended 
December 31, 2022 
was $20.1 million, 
compared with 
net income 
of $21.1 million 
for 
 the same 
period in 
2021. The Company 
reported net 
income per 
diluted share 
for the 
year ended 
December 31, 2022 
of 
 $1.00 compared 
to net 
loss per diluted 
share for 
the same 
period in 2021 
of $6.72. The 
net loss per 
diluted share 
for the 
 year ended 2021 was 
attributable to the one-time 
reduction in net income 
available to common stockholders 
reflecting the 
 exchange and 
redemption 
of the 
Class 
C and 
Class 
D preferred 
shares. During 
the third 
quarter of 
2021, 
the Company 
 completed 
an 
exchange 
of 
the 
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. 
At December 31, 2022, 
there were no 
issued and outstanding 
 preferred shares. 

 Adjusted 
diluted 
net 
income 
per 
common 
share 
(non-GAAP) 
for 
the 
year 
ended 
December 31, 
2022 
was 
$1.00 
 compared to adjusted net income per diluted share (non-GAAP) for the same period in 2021 of $1.81. Adjusted net income 
 per 
diluted 
share 
(non-GAAP) 
for 
the 
year 
ended 
2021 
excludes 
the 
$89.6 million 
one-time 
accounting 
impact 
of 
the 
 exchange and redemption of the 
preferred shares. To see 
a reconciliation of non-GAAP 
measures, 
to GAAP measures refer 
 to section below “Reconciliation and Management Explanatio 
n 
of Non-GAAP Financial Measures”. 

 Net Interest Income 
 Net interest 
income is 
the difference 
between interest 
earned on 
interest earning 
assets and 
interest incurred 
on interest-
 bearing liabilities 
and is 
the primary 
driver of 
core earnings. 
Interest 
income is 
generated from 
interest and 
dividends on 
 interest-earning 
assets, 
including 
loans, 
investment 
securities 
and 
other 
short-term 
investments. 
Interest 
expense 
is 
 incurred 
from 
interest 
paid 
on 
interest-bearing 
liabilities, 
including 
interest-bearing 
deposits, 
FHLB 
advances 
and 
other 
 borrowings. 
 To evaluate net 
interest income, we 
measure and monitor 
(i) yields on 
loans and other 
interest-earning assets, (ii) 
the 
 costs of deposits 
and other funding 
sources, (iii) net 
interest spread, and 
(iv) net interest margin. 
Net interest spread is 
equal 
 to the difference between yields earned on interest-earning assets and rates paid on interest-bearing liabilities. Net interest 
 margin is 
equal to 
the annualized 
net interest 
income 
divided by 
average interest 
-earning assets. 
Because 
non-interest-
 bearing sources of funds, such as non-interest-bearing deposits 
and stockholders’ 
equity, also fund interest-earning assets, 
 net interest margin includes the benefit of these non-interest-bearing 
sources. 
 Changes in 
the market 
interest rates and 
interest rates 
we earn on 
interest-earning assets 
or pay on 
interest-bearing 
 liabilities, as well 
as the volume and 
types of interest-earning 
assets and interest-bearing and 
non-interest-bearing liabilities, 
 are usually the 
largest drivers of 
periodic changes in 
net interest spread, 
net interest margin 
and net interest 
income. The 
 ALCO has in place 
asset-liability management techniques 
to manage major 
factors that affect 
net interest income 
and net 
 interest margin. 

 
 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Table of Contents 
 

 

 49 
USCB Financial Holdings, Inc. 
2022 10-K 
 

 The following table contains information related 
to average balance sheet, average yields 
on assets, and average costs 
 of liabilities for the periods indicated (in thousands): 
 Years Ended December 31, 
 2022 
 2021 
 Average 
 Balance 
 Interest 
 Yield/Rate 

 Average 
 Balance 
 Interest 
 Yield/Rate 

 Assets 
 Interest-earning assets: 
 Loans 
 (1)
 $ 
 1,341,693 
 $ 
 60,825 
 4.53 
 % 
 $ 
 1,116,142 
 $ 
 48,730 
 4.37 
 % 
 Investment securities 
 (2)
 470,508 
 9,346 
 1.99 
 % 
 403,677 
 7,886 
 1.95 
 % 
 Other interest earnings assets 
 70,873 
 929 
 1.31 
 % 
 92,430 
 106 
 0.11 
 % 
 Total 
interest-earning assets 
 1,883,074 
 71,100 
 3.78 
 % 
 1,612,249 
 56,722 
 3.52 
 % 
 Non-interest earning assets 
 107,536 
 

 

 89,409 
 

 

 Total 
assets 
 $ 
 1,990,610 
 

 

 $ 
 1,701,658 
 

 

 Liabilities and stockholders' equity 
 

 

 

 

 

 

 Interest-bearing liabilities: 
 

 

 

 

 

 

 Interest-bearing demand deposits 
 $ 
 64,835 
 86 
 0.13 
 % 
 $ 
 52,379 
 59 
 0.11 
 % 
 Saving and money market deposits 
 803,426 
 5,173 
 0.64 
 % 
 619,810 
 2,082 
 0.34 
 % 
 Time deposits 
 220,319 
 1,509 
 0.68 
 % 
 235,127 
 1,531 
 0.65 
 % 
 Total 
interest-bearing deposits 
 1,088,580 
 6,768 
 0.62 
 % 
 907,316 
 3,672 
 0.40 
 % 
 Borrowings and repurchase agreements 
 38,463 
 671 
 1.74 
 % 
 36,000 
 554 
 1.54 
 % 
 Total 
interest-bearing liabilities 
 1,127,043 
 7,439 
 0.66 
 % 
 943,316 
 4,226 
 0.45 
 % 
 Non-interest bearing demand deposits 
 645,366 
 

 

 547,116 
 

 

 Other non-interest-bearing liabilities 
 30,449 
 

 

 27,142 
 

 

 Total 
liabilities 
 1,802,858 
 

 

 1,517,574 
 

 

 Stockholders' equity 
 187,752 
 

 

 184,084 
 

 

 Total 
liabilities and stockholders' equity 
 $ 
 1,990,610 
 

 

 $ 
 1,701,658 
 

 

 Net interest income 
 $ 
 63,661 
 

 $ 
 52,496 
 

 Net interest spread 
 (3)
 

 3.12 
 % 
 3.07 
 % 
 Net interest margin 
 (4)
 

 

 3.38 
 % 
 3.26 
 % 
 (1) 
Average loan balances include non-accrual loans. Interest income 
on loans includes accretion of deferred 
loan fees, net of deferred loan costs. 
 (2) 
At fair value except for securities held to maturity. This amount includes 
FHLB stock. 
 (3) 
Net interest spread is the average yield on 
total interest-earning assets minus the average 
rate on total interest-bearing liabilities. 
 (4) 
Net interest margin is the ratio of net interest 
income to total interest-earning assets. 
 Net interest income before the provision 
for credit losses was $63.7 
million for the year ended December 
31, 2022, an 
 increase of $11.2 million 
or 21.3%, from 
$52.5 million for the 
year ended December 31, 
2021. This increase 
was primarily 
 attributable to higher income from a larger loan portfolio and 
higher yield on earning assets. 

 Included with loan interest income are PPP fees totaling $1.6 million and $4.5 million for the 
year ended December 31, 
 2022 and 2021, respectively. 
PPP loan fees are fully recognized upon forgiveness. As of December 31, 2022, we had 
$1.3 
 million of PPP loans remaining in our portfolio. 
 The net 
interest margin 
was 3.38% 
for the 
year ended 
December 31, 2022 
and 3.26% 
for the 
year ended 
2021. The 
 overall and individual 
yields for interest-bearing 
assets and interest 
-bearing liabilities 
both increased in 
2022 compared to 
 2021 due primarily to increases 
in market rates of interest. 
 Provision for Credit Losses 
 ACL represents 
probable 
incurred 
losses 
in 
our 
portfolio. We 
maintain 
an 
adequate ACL 
that 
can 
mitigate 
probable 
 losses incurred 
in the 
loan portfolio. 
The ACL is increased 
by the 
provision for 
credit losses 
and is 
decreased by 
charge-
 offs, 
net 
of 
recoveries 
on 
prior 
loan 
charge-offs. 
There 
are 
multiple 
credit 
quality 
metrics 
that 
we 
use 
to 
base 
our 
 determination of 
the amount 
of the ACL 
and corresponding 
provision for 
credit losses. 
These credit 
metrics 
evaluate the 
 credit 
quality 
and 
level 
of 
credit 
risk 
inherent 
in 
our 
loan 
portfolio, 
assess 
non-performing 
loans 
and 
charge-offs 
levels, 
 considers statistical trends and economic conditions and other 
applicable factors. 

 
 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Table of Contents 
 

 

 50 
USCB Financial Holdings, Inc. 
2022 10-K 
 

 Provision for credit loss 
for the year ended 
December 31, 2022, was 
$2.5 million compared to 
a net reduction of 
$160 
 thousand in provision 
expense for 
the same period 
in 2021. The 
primary driver of 
the increase was 
loan growth. The ACL 
 as a percentage of total loans was 1.16% 
at December 31, 2022 compared to 1.27% at December 
31, 2021. 
 See “Allowance 
for Credit 
Losses” 
below for 
further discussion on 
how the 
ACL was 
calculated for 
the periods 
presented. 

 Non-Interest Income 
 Net interest income 
and other types of 
recurring non-interest 
income are generated 
from our operations. 
Our services 
 and products generate service charges and fees, mainly from our depository accounts. 
We also generate income from gain 
 on sale of 
loans though 
our swap and 
SBA programs. In addition, 
we own insurance 
on several employees 
and generate 
 income reflecting the increase in the cash surrender value 
of these policies. 
 The following table presents the components of non-interest 
income for the dates indicated (in thousands): 
 Years Ended December 31, 
 2022 
 2021 
 Service fees 
 $ 
 4,010 
 $ 
 3,609 
 Gain (loss) on sale of securities available for sale, net 
 (2,529) 
 214 
 Gain on sale of loans held for sale, net 
 891 
 1,626 
 Gain on sale of premises and equipment, net 
 - 
 983 
 Loan settlement 
 161 
 2,500 
 Other non-interest income 
 2,695 
 1,766 
 Total 
non-interest income 
 $ 
 5,228 
 $ 
 10,698 
 Non-interest income 
for the 
year ended 
December 31, 2022 
was $5.2 
million compared 
to $10.7 
million for 
the same 
 period in 2021. This decrease was primarily driven by $2.5 
million loss on sale of securities in 2022 and one-time items that 
 generated income in 2021 but not in 2022. One-time items in 2021 include a $2.5 million interest recovery related to a prior 
 lending customer 
and a gain 
on the 
sale of 
a previously 
owned building 
for $983 
thousand. In 
the fourth 
quarter of 
2022, 
 the 
Company 
executed 
a 
portfolio 
restructuring 
strategy 
which 
resulted 
in 
a 
sale 
of 
$17.0 
million 
of 
its 
lower-yielding 
 available-for-sale 
securities 
for 
a 
loss 
of 
$2.0 
million. 
Proceeds 
from 
the 
sale 
will 
be 
reinvested 
in 
securities 
and 
loans 
 currently yielding higher than the securities that were sold. 
 Non-Interest Expense 
 The following table presents the components of non-interest 
expense for the dates indicated (in thousands):
 Years Ended December 31, 
 2022 
 2021 
 Salaries and employee benefits 
 $ 
 23,943 
 $ 
 21,438 
 Occupancy 
 5,058 
 5,257 
 Regulatory assessment and fees 
 930 
 783 
 Consulting and legal fees 
 1,890 
 1,454 
 Network and information technology services 
 1,806 
 1,466 
 Other operating 
 5,682 
 5,279 
 Total 
non-interest expense 
 $ 
 39,309 
 $ 
 35,677 
 Non-interest expense for 
the year ended 
December 31, 2022 
increased $3.6 million 
or 10.2%, compared 
to the same 
 period in 
2021. The 
increase is 
primarily due 
to an 
increase in 
salaries and 
employee benefit 
costs of 
$2.5 million for 
the 
 year ended 
December 31, 2022, 
compared to 
the same 
period in 2021. 
The headcount 
of full-time 
equivalent employees 
 increased 
from 
187 
at 
December 31, 
2021 
to 
191 
at 
December 31, 
2022. 
Further, 
consulting 
and 
legal 
fees 
and 
other 
 operating expenses 
increased $436 
thousand or 
30.0% and 
$403 thousand 
or 7.6%, 
respectively, during 
the year 
ended 
 December 31, 
2022 compared 
to the 
same 
period in 
2021 
due to 
our first 
full 
year of 
operations 
as a 
publicly 
reporting 
 company. 
The increase in salaries and employee 
benefits, consulting and legal fees, 
and other operating costs has 
enabled 
 us to support recent growth 
and has provided us 
with the necessary technology and 
required professionals to execute 
our 
 growth strategy. 

 
 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Table of Contents 
 

 

 51 
USCB Financial Holdings, Inc. 
2022 10-K 
 

 Provision for Income Tax 
 Fluctuations in the effective tax rate reflect the effect of the differences in the inclusion or deductibility of certain income 
 and expense for income tax purposes. 
Therefore, future decisions on the investments we 
choose will affect our effective tax 
 rate. Changes in the 
cash surrender 
value of bank-owned 
life insurance policies 
for key employees, 
purchasing municipal 
 bonds, and overall taxable income will be important elements 
in determining our effective tax rate. 
 Income 
tax expense 
for the 
year ended 
December 31, 
2022 was 
$6.9 million, 
compared 
to $6.6 million 
for 
the 
year 
 ended December 31, 2021. The effective 
tax rate for the year 
ended December 31, 2022 was 25.6% 
and for the year 
ended 
 December 31, 2021 was 23.8%. 
 For a further discussion 
on income taxes, see 
Note 6 “Income Taxes” 
to the Consolidated Financial 
Statements in this 
 Annual Report on Form 10-K. 
 Rate/Volume Analysis 
 The 
table 
below 
sets 
forth 
information 
regarding 
changes 
in 
interest 
income 
and 
interest 
expense 
for 
the 
periods 
 indicated (in thousands). 
For each category of 
interest-earning assets and interest-bearing liabilities, 
information is provided 
 on changes attributable to (i) changes in rate (changes in rate multiplied by old volume); (ii) changes in volume (changes in 
 volume multiplied by old rate); and (iii) changes in rate-volume (change in 
rate multiplied by change in volume). Changes in 
 rate-volume are proportionately allocated between rate and volume 
variance. 
 Years Ended 2022 vs. 2021 
 Years Ended 2021 vs. 2020 
 Increase (decrease) due to change in 
 Increase (decrease) due to change in 
 Volume 
 Rate 
 Net 
 Change 
 Volume 
 Rate 
 Net 
 Change 
 Interest-earning assets: 
 Loans 
 (1)
 $ 
 9,847 
 $ 
 2,248 
 $ 
 12,095 
 $ 
 4,091 
 $ 
 (2,439) 
 $ 
 1,652 
 Investment securities 
 (2)
 1,306 
 154 
 1,460 
 5,288 
 (2,650) 
 2,638 
 Other interest earnings assets 
 (25) 
 848 
 823 
 (51) 
 (150) 
 (201) 
 Total increase (decrease) in interest income 
 $ 
 11,128 
 $ 
 3,250 
 $ 
 14,378 
 $ 
 9,328 
 $ 
 (5,239) 
 $ 
 4,089 
 Interest-bearing liabilities: 
 Interest-bearing demand deposits 
 $ 
 14 
 $ 
 13 
 $ 
 27 
 $ 
 $19 
 $ 
 (118) 
 $ 
 (99) 
 Saving and money market deposits 
 617 
 2,474 
 3,091 
 960 
 (1,973) 
 (1,013) 
 Time deposits 
 (96) 
 74 
 (22) 
 (704) 
 (2,474) 
 (3,178) 
 Borrowings and repurchase agreements 
 38 
 79 
 117 
 (321) 
 (199) 
 (520) 
 Total increase (decrease) in interest expense 
 572 
 2,641 
 3,213 
 (46) 
 (4,764) 
 (4,810) 
 Increase (decrease) in net interest income 
 $ 
 10,556 
 $ 
 609 
 $ 
 11,165 
 $ 
 9,374 
 $ 
 (475) 
 $ 
 8,899 
 (1) 
Average loan balances include non-accrual loans. Interest income 
on loans includes accretion of deferred 
loan fees, net of deferred loan costs. 
 (2) 
At fair value except for securities held to maturity. This amount includes FHLB 
stock. 
 Both average yields on 
interest earning assets 
and average rates 
paid on interest 
bearing liabilities increased 
in 2022 
 as a compared to 2021, reflecting the changes in the 
macro interest rate environment. 
 Analysis of Financial Condition 
 Total 
assets at December 31, 2022, were $2.1 billion, an increase of $231.9 million, or 12.5%, over total assets of $1.9 
 billion at 
December 31, 2021. Total loans increased 
$317.3 million, 
or 26.7%, 
to $1.5 
billion at 
December 31, 2022 compared 
 to 
$1.2 
billion 
at 
December 31, 
2021. 
The 
increase 
in 
loans 
includes 
purchased 
loans 
totaling 
$70.2 
million 
including 
 deferred fees. Total deposits 
increased by $238.9 million, or 15.0%, to $1.8 billion at December 31, 2022 compared to $1.6 
 billion at December 31, 2021. 
 Investment Securities 
 The investment portfolio 
is used and 
managed to provide 
liquidity through cash 
flows, marketability 
and, if necessary, 
 collateral for 
borrowings. The 
investment portfolio 
is also 
used as 
a tool 
to manage 
interest rate 
risk and 
the Company’s 
 capital market risk exposure. The 
operating philosophy of the portfolio is 
to maximize the Company’s profitability, 
taking into 
 consideration the Company’s risk appetite and tolerance, manage the assets composition 
and diversification, and maintain 
 adequate risk-based capital ratios. 

 
 
 Table of Contents 
 

 

 52 
USCB Financial Holdings, Inc. 
2022 10-K 
 

 The 
investment 
portfolio 
is 
managed 
in 
accordance 
with 
the 
Asset 
and 
Liability 
Management 
(“ALM”) 
policy, 
which 
 includes an 
investment guideline, 
approved by 
the Board. 
Such policy 
is reviewed 
at least 
annually or 
more frequently 
if 
 deemed 
necessary, 
depending 
on market 
conditions and/or 
unexpected 
events. 
The 
investment 
portfolio composition 
is 
 subject to change 
depending on the 
funding and liquidity 
needs of the 
Company, and the interest risk 
management objective 
 directed by the ALCO. The portfolio of investments can be used to modify the duration of 
the balance sheet. The allocation 
 of cash into 
securities takes 
into consideration 
anticipated future cash 
flows (uses 
and sources) and 
all available sources 
 of credit. 
 Our 
investment 
portfolio 
consists 
primarily 
of 
securities 
issued 
by 
U.S. 
government-sponsored 
agencies, 
agency 
 mortgage-backed securities, 
collateralized mortgage 
obligation securities, 
municipal securities, 
and other 
debt securities, 
 all with varying contractual maturities and coupons. Due to the optionality embedded in these securities, the final maturities 
 do not 
necessarily represent the 
expected life of 
the portfolio. Some 
of these 
securities will be 
called or paid 
down depending 
 on capital market conditions and expectations. The investment portfolio is regularly reviewed by the Chief Financial Officer, 
 Treasurer, 
or the 
ALCO of 
the Company 
to ensure 
an appropriate 
risk and 
return profile 
as well 
as for 
adherence to 
the 
 investment policy. 
 As of December 
31, 2022, the investment portfolio consisted of available-for-sale (“AFS”) and held-to-maturity 
(“HTM”) 
 debt securities. 
During the third quarter of 2022, there were 26 investment securities that was 
transferred from AFS to HTM 
 with an amortized cost basis and fair value amount 
of $74.4 million and $63.8 million, respectively. 
On the date of transfer, 
 these securities 
had a 
total net 
unrealized loss 
of $10.6 
million. The 
transfer of 
the debt 
securities from 
the AFS 
to HTM 
 category was 
made at 
fair value 
at the 
date of 
transfer. 
The unrealized 
gain or 
loss 
at the 
date of 
transfer is 
retained in 
 accumulated other 
comprehensive income 
and in 
the carrying 
value of 
the HTM 
securities. Such 
amounts are 
amortized 
 over the remaining life of the security. 
There was no impact to net income on the date of transfer. 
 The book value of the AFS securities is adjusted monthly 
for unrealized gain or loss as a valuation allowance, 
and any 
 gain 
or 
loss 
is 
reported 
on 
an 
after-tax 
basis 
as 
a 
component 
of 
other 
comprehensive 
income 
in 
stockholders’ 
equity. 
 Periodically, 
we 
may 
need 
to 
assess 
whether 
there 
have 
been 
any 
events 
or 
unexpected 
economic 
circumstances 
to 
 indicate that 
a security 
on which 
there is 
an unrealized 
loss is 
impaired on 
an other-than-temporary 
basis (“OTTI”). 
If the 
 impairment is 
deemed to 
be permanent, 
an analysis 
would be made 
considering many 
factors, including 
the severity 
and 
 duration of the impairment, the severity 
of the event, our intent and 
ability to hold the security for 
a period of time sufficient 
 for a 
recovery in 
value, recent 
events specific 
to the 
issuer or 
industry, 
any related 
credit events, 
and for 
debt securities, 
 external 
credit 
ratings 
and 
recent 
downgrades 
related 
to 
deterioration 
of 
credit 
quality. 
Securities 
on 
which 
there 
is 
an 
 unrealized loss 
that is 
deemed to 
be OTTI 
are written 
down to fair 
value, with 
the write-down 
recorded as 
a realized 
loss 
 under line item 
“Gain (loss) on 
sale of securities 
available-for-sale, net” of 
the Consolidated Statements 
of Operations. As 
 of 
December 31, 
2022, there 
are no 
securities 
which 
management 
has classified 
as 
OTTI. 
For further 
discussion 
of 
our 
 analysis 
on 
impaired 
investment 
securities 
for 
OTTI, 
see 
Note 2 
“Investment 
Securities” 
to 
the 
Consolidated 
Financial 
 Statements in this Annual Report on Form 10-K. 
 AFS and HTM investment securities 
in aggregate decreased $105.4 million or 20.1% 
to $418.8 million at December 31, 
 2022 from $524.2 
million at 
December 31, 2021. 
Investment securities 
decreased over the 
past year as 
repayments from 
 securities were 
allocated to 
fund loan 
growth. 
Management reinvested 
the repayments 
of securities 
and income 
from the 
 sale of securities into higher 
yielding loans. As of December 
31, 2022, securities with a 
market value of $49.0 million 
were 
 pledged to secure 
public deposits. 
As of December 
31, 2022, the 
Company did 
not have any 
tax-exempt securities 
in the 
 portfolio. 

 
 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Table of Contents 
 

 

 53 
USCB Financial Holdings, Inc. 
2022 10-K 
 

 The 
following 
table 
presents 
the 
amortized 
cost 
and 
fair 
value 
of 
investment 
securities 
for 
the 
dates 
indicated 
(in 
 thousands): 
 December 31, 2022 
 December 31, 2021 
 Available-for-sale: 
 Amortized 
 Cost 
 Fair Value 
 Amortized 
 Cost 
 Fair Value 
 U.S. Government Agency 
 $ 
 10,177 
 $ 
 8,655 
 $ 
 10,564 
 $ 
 10,520 
 Collateralized mortgage obligations 
 118,951 
 95,541 
 160,506 
 156,829 
 Mortgage-backed securities - Residential 
 73,838 
 60,879 
 120,643 
 118,842 
 Mortgage-backed securities - Commercial 
 32,244 
 27,954 
 49,905 
 50,117 
 Municipal securities 
 25,084 
 18,483 
 25,164 
 24,276 
 Bank subordinated debt securities 
 15,964 
 14,919 
 27,003 
 28,408 
 Corporate bonds 
 4,037 
 3,709 
 12,068 
 12,550 
 $ 
 280,295 
 $ 
 230,140 
 $ 
 405,853 
 $ 
 401,542 
 Held-to-maturity: 
 U.S. Government Agency 
 $ 
 44,914 
 $ 
 39,062 
 $ 
 34,505 
 $ 
 33,904 
 U.S. Treasury 
 9,841 
 9,828 
 - 
 - 
 Collateralized mortgage obligations 
 68,727 
 60,925 
 44,820 
 43,799 
 Mortgage-backed securities - Residential 
 42,685 
 38,483 
 26,920 
 26,352 
 Mortgage-backed securities - Commercial 
 11,442 
 10,777 
 3,103 
 3,013 
 Corporate bonds 
 11,090 
 10,013 
 13,310 
 13,089 
 $ 
 188,699 
 $ 
 169,088 
 $ 
 122,658 
 $ 
 120,157 
 The following 
table shows 
the weighted 
average yields, 
categorized by 
contractual maturity, 
for investment 
securities 
 as of December 31, 2022 (in thousands, except ratios): 

 Within 1 year 
 After 1 year through 
 5 years 
 After 5 years through 
 10 years 
 After 10 years 
 Total 
 Amortized 
 Cost 
 Yield 
 Amortized 
 Cost 
 Yield 
 Amortized 
 Cost 
 Yield 
 Amortized 
 Cost 
 Yield 
 Amortized 
 Cost 
 Yield 
 Available-for-sale: 
 U.S. Government Agency 
 $ 
 - 
 - 
 $ 
 - 
 - 
 $ 
 - 
 - 
 $ 
 10,177 
 2.31% 
 $ 
 10,177 
 2.31% 
 Collateralized mortgage obligations 
 - 
 - 
 - 
 - 
 - 
 - 
 118,951 
 1.57% 
 118,951 
 1.57% 
 MBS - Residential 
 - 
 - 
 - 
 - 
 - 
 - 
 73,838 
 1.65% 
 73,838 
 1.65% 
 MBS - Commercial 
 - 
 - 
 - 
 - 
 - 
 - 
 32,244 
 2.01% 
 32,244 
 2.01% 
 Municipal securities 

 - 
 - 
 - 
 - 
 1,000 
 2.05% 
 24,084 
 1.72% 
 25,084 
 1.74% 
 Bank subordinated debt securities 
 - 
 - 
 - 
 - 
 15,964 
 4.76% 
 - 
 - 
 15,964 
 4.76% 
 Corporate bonds 
 - 
 - 
 4,037 
 2.50% 
 - 
 - 
 - 
 - 
 4,037 
 2.50% 
 $ 
 - 
 - 
 $ 
 4,037 
 2.50% 
 $ 
 16,964 
 4.60% 
 $ 
 259,294 
 1.69% 
 $ 
 280,295 
 1.88% 
 Held-to-maturity: 
 U.S. Government Agency 

 $ 
 - 
 - 
 7,902 
 1.03% 
 20,354 
 1.46% 
 16,658 
 1.85% 
 44,914 
 1.53% 
 U.S. Treasury 
 9,841 
 4.49% 
 - 
 - 
 - 
 - 
 - 
 - 
 9,841 
 4.49% 
 Collateralized mortgage obligations 
 - 
 - 
 - 
 - 
 - 
 - 
 68,727 
 1.66% 
 68,727 
 1.66% 
 MBS - Residential 
 - 
 - 
 4,554 
 1.84% 
 5,950 
 1.74% 
 32,181 
 2.12% 
 42,685 
 2.04% 
 MBS - Commercial 
 - 
 - 
 - 
 - 
 3,088 
 1.62% 
 8,354 
 1.69% 
 11,442 
 1.67% 
 Corporate bonds 
 1,515 
 2.25% 
 9,575 
 2.79% 
 - 
 - 
 - 
 - 
 11,090 
 2.71% 
 $ 
 11,356 
 4.19% 
 $ 
 22,031 
 1.96% 
 $ 
 29,392 
 1.53% 
 $ 
 125,920 
 1.81% 
 $ 
 188,699 
 1.92% 
 Loans 
 Loans are 
the largest 
category of 
interest-earning assets 
on the 
Consolidated 
Balance Sheets, 
and usually 
provides 
 higher yields than the remainder of the Company’s 
interest-earning assets. Higher yields typically carry 
inherent credit and 
 liquidity risks in 
comparison to lower 
yielding assets. The 
Company manages and 
mitigates such risks 
in accordance with 
 the credit and ALM policies, risk tolerance and balance 
sheet composition. 

 
 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Table of Contents 
 

 

 54 
USCB Financial Holdings, Inc. 
2022 10-K 
 

 The following table shows the loan portfolio composition 
as of the dates indicated (in thousands): 
 

 December 31, 2022 
 December 31, 2021 
 Total 
 Percent of 
 Total 
 Total 
 Percent of 
 Total 
 Residential Real Estate 
 $ 
 185,636 
 12.3 
 % 
 $ 
 201,359 
 16.9 
 % 
 Commercial Real Estate 
 970,410 
 64.4 
 % 
 704,988 
 59.2 
 % 
 Commercial and Industrial 
 126,984 
 8.4 
 % 
 146,592 
 12.3 
 % 
 Foreign Banks 
 93,769 
 6.2 
 % 
 59,491 
 5.0 
 % 
 Consumer and Other 

 130,429 
 8.7 
 % 
 79,229 
 6.6 
 % 
 Total 
gross loans 
 1,507,228 
 100.0 
 % 
 1,191,659 
 100.0 
 % 
 Less: Unearned income 
 (110) 
 1,578 
 Total 
loans net of unearned income 
 1,507,338 
 1,190,081 
 Less: Allowance for credit losses 
 17,487 
 15,057 
 Total 
net loans 
 $ 
 1,489,851 
 

 $ 
 1,175,024 
 Tot 
al gross loans increased by $315.6 million or 26.5% at December 
31, 2022 compared to December 31, 20211. 
The 
 most significant 
growth was 
in the 
commercial real 
estate and 
consumer 
and other 
loan pools, 
offset 
by a 
decline in 
the 
 residential real estate and commercial and industrial loan pools. Consumer 
and other loans increased primarily as result of 
 organic 
growth 
from 
our 
yacht 
lending 
business 
vertical 
created 
in 
January 
2022. 
Commercial 
and 
industrial 
loans 
 decreased primarily because of continuing PPP loan forgiveness 
as expected. 
 Other 
than 
the 
shifts 
note 
above, 
we 
do 
not 
expect 
any 
significant 
changes 
over 
the 
foreseeable 
future 
in 
the 
 composition 
of 
our 
loan 
portfolio 
or 
in 
our 
emphasis 
on 
commercial 
real 
estate 
lending. 
Our 
loan 
growth 
strategy 
since 
 inception has been reflective of the market in which we 
operate and of our strategic plan as approved by the 
Board. 
 The 
growth 
experienced 
over 
the 
last 
couple 
of 
years 
is 
primarily 
due 
to 
implementation 
of 
our 
relationship-based 
 banking 
model 
and 
the 
success 
of 
our 
relationship 
managers 
in 
competing 
for 
new 
business 
in 
a 
highly 
competitive 
 metropolitan area. Many of our 
larger loan clients have lengthy 
relationships with members of our senior 
management team 
 or our relationship managers that date back to former 
institutions. 

 From a 
liquidity perspective, 
our loan 
portfolio provides 
us with 
additional 
liquidity due 
to repayments 
or unexpected 
 prepayments. 
The 
following 
table 
shows 
maturities 
and 
sensitivity 
to 
interest 
rate 
changes 
for 
the 
loan 
portfolio 
at 
 December 31, 2022 (in thousands): 
 Due in 1 year or 
 less 
 Due in 1 to 5 
 years 
 Due after 5 to 15 
 years 
 Due after 15 
 years 
 Total 
 Residential Real Estate 
 $ 
 16,199 
 $ 
 9,411 
 $ 
 81,858 
 $ 
 78,168 
 $ 
 185,636 
 Commercial Real Estate 
 69,565 
 166,885 
 724,288 
 9,672 
 970,410 
 Commercial and Industrial 
 9,000 
 29,688 
 47,480 
 40,816 
 126,984 
 Foreign Banks 
 93,769 
 - 
 - 
 - 
 93,769 
 Consumer and Other 
 2,553 
 2,527 
 9,060 
 116,289 
 130,429 
 Total 
gross loans 
 $ 
 191,086 
 $ 
 208,511 
 $ 
 862,686 
 $ 
 244,945 
 $ 
 1,507,228 
 Interest rate sensitivity: 
 Fixed interest rates 
 $ 
 160,781 
 $ 
 127,603 
 $ 
 144,441 
 $ 
 142,813 
 $ 
 575,638 
 Floating or adjustable rates 
 30,305 
 80,908 
 718,245 
 102,132 
 931,590 
 Total 
gross loans 
 $ 
 191,086 
 $ 
 208,511 
 $ 
 862,686 
 $ 
 244,945 
 $ 
 1,507,228 
 The information 
presented 
in the 
table above 
is based 
upon the 
contractual maturities 
of the 
individual 
loans, which 
 may be 
subject to 
renewal at 
their contractual 
maturity. 
Renewals will 
depend on 
approval by 
our credit 
department 
and 
 balance sheet 
composition at the 
time of the 
analysis, as 
well as 
any modification of 
terms at 
the loan’s maturity. Additionally, 
 maturity 
concentrations, 
loan 
duration, 
prepayment 
speeds 
and 
other 
interest 
rate 
sensitivity 
measures 
are 
discussed, 
 reviewed, and analyzed by the ALCO. Decisions on term 
rate modifications are discussed as well. 

 As of 
December 31, 
2022, approximately 
61.8% 
of 
the loans 
have adjustable/variable 
rates 
and 
38.2% 
of 
the loans 
 have fixed rates. 
The adjustable/variable 
loans re-price to 
different benchmarks 
and tenors in different 
periods of time. 
By 
 contractual characteristics, there are no 
material concentrations on anniversary repricing. Additionally, it is 
important to note 

 
 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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 55 
USCB Financial Holdings, Inc. 
2022 10-K 
 

 that most 
of our 
loans have 
interest rate 
floors. This 
embedded option 
protects the 
Company from 
a decrease 
in interest 
 rates and positions us to gain in the scenario of higher interest 
rates.
 Asset Quality 

 Our asset quality grading 
analysis estimates the capability of 
the borrower to 
repay the contractual obligation of 
the loan 
 agreement as scheduled or at all. The Company’s internal credit risk grading system is based on experiences with similarly 
 graded loans. Internal 
credit risk 
grades are evaluated 
at least annually, 
or more frequently 
if deemed necessary. 
Internal 
 credit 
risk 
ratings 
may 
change 
based 
on 
management’s 
assessment 
of 
the 
results 
from 
the 
annual 
review, 
portfolio 
 monitoring and other developments observed with borrowers. 

 The internal credit risk grades used by the Company to 
assess the credit worthiness of a loan are shown below: 
 Pass 
 – Loans indicate different levels of satisfactory financial 
condition and performance. 

 Special Mention
 
– Loans classified as special mention have a potential weakness 
that deserves management’s 
 close attention. If left uncorrected, these potential weaknesses 
may result in deterioration of the repayment 
 prospects for the loan or of the institution’s 
credit position at some future date. 

 Substandard 
 – Loans classified as substandard are inadequately protected 
by the current net worth and paying 
 capacity of the obligator or of the collateral pledged, if 
any. Loans so classified 
have a well-defined weakness or 
 weaknesses that jeopardize the liquidation of the debt. 
They are characterized by the distinct possibility that the 
 institution will sustain some loss if the deficiencies are 
not corrected. 

 Doubtful
 
– Loans classified as doubtful have all the weaknesses 
inherent in those classified at substandard, with 
 the added characteristic that the weaknesses make collection or 
liquidation in full on the basis of currently existing 
 facts, conditions, and values, highly questionable and improbable. 

 Loss 
 – Loans classified as loss are considered uncollectible. 
 Loan credit exposures by internally assigned grades are 
as follows for the dates indicated (in thousands): 

 December 31, 2022 
 Pass 
 Special Mention 
 Substandard 
 Doubtful 
 Total 
 Residential Real Estate 
 $ 
 185,636 
 $ 
 - 
 $ 
 - 
 $ 
 - 
 $ 
 185,636 
 Commercial Real Estate 
 967,465 
 - 
 2,945 
 - 
 970,410 
 Commercial and Industrial 
 126,177 
 - 
 807 
 - 
 126,984 
 Foreign Banks 
 93,769 
 - 
 - 
 - 
 93,769 
 Consumer and Other 

 130,233 
 - 
 196 
 - 
 130,429 
 $ 
 1,503,280 
 $ 
 - 
 $ 
 3,948 
 $ 
 - 
 $ 
 1,507,228 
 December 31, 2021 
 Pass 
 Special Mention 
 Substandard 
 Doubtful 
 Total 
 Residential Real Estate 
 $ 
 196,778 
 $ 
 - 
 $ 
 4,581 
 $ 
 - 
 $ 
 201,359 
 Commercial Real Estate 
 703,349 
 1,222 
 417 
 - 
 704,988 
 Commercial and Industrial 
 146,039 
 - 
 553 
 - 
 146,592 
 Foreign Banks 
 59,491 
 - 
 - 
 - 
 59,491 
 Consumer and Other 

 79,005 
 - 
 224 
 - 
 79,229 
 $ 
 1,184,662 
 $ 
 1,222 
 $ 
 5,775 
 $ 
 - 
 $ 
 1,191,659 

 
 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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 56 
USCB Financial Holdings, Inc. 
2022 10-K 
 

 Non-Performing Assets 
 The following table presents non-performing assets as 
of December 31, 2022 and 2021 (in thousands, except 
ratios): 
 2022 
 2021 
 Non-accrual loans, less non-accrual TDR loans 
 $ 
 - 
 $ 
 1,190 
 Non-accrual TDRs 
 - 
 - 
 Loans past due over 90 days and still accruing 
 - 
 - 
 Total 
non-performing loans 
 - 
 1,190 
 Other real estate owned 
 - 
 - 
 Total 
non-performing assets 
 $ 
 - 
 $ 
 1,190 
 Asset quality ratios: 
 - 
 - 
 Allowance for credit losses to total loans 
 1.16% 
 1.27% 
 Allowance for credit losses to non-performing loans 
 0.00% 
 1,265.00% 
 Non-performing loans to total loans 
 0.00% 
 0.10% 
 Non-performing 
assets include 
all loans 
categorized as 
non-accrual or 
restructured, 
impaired securities, 
non-accrual 
 troubled 
debt 
restructurings 
(‘TDRs”), 
OREO 
and 
other 
repossessed 
assets. 
Problem 
loans 
for 
which 
the 
collection 
or 
 liquidation in full is reasonably uncertain 
are placed on a non-accrual status. This 
determination is based on current existing 
 facts concerning 
collateral values and 
the paying 
capacity of the 
borrower. When the collection 
of the 
full contractual balance 
 is unlikely, 
the loan 
is placed 
on non-accrual 
to avoid 
overstating the 
Company’s 
income for 
a loan 
with increased 
credit 
 risk. 

 If the 
principal or 
interest on 
a commercial 
loan becomes 
due and 
unpaid for 
90 days 
or more, 
the loan 
is placed 
on 
 non-accrual status as of 
the date it becomes 
90 days past due and 
remains in non-accrual 
status until it meets 
the criteria 
 for restoration to accrual status. 
Residential loans, on 
the other hand, are placed 
on non-accrual status when 
the principal 
 or interest 
becomes due 
and unpaid 
for 120 
days or 
more and 
remains in 
non-accrual status 
until it meets 
the criteria 
for 
 restoration 
to 
accrual 
status. 
Restoring 
a 
loan 
to 
accrual 
status 
is 
possible 
when 
the 
borrower 
resumes 
payment 
of 
all 
 principal and interest 
payments for a period 
of six months 
and the Company 
has a documented 
expectation of repayment 
 of the remaining contractual principal and interest or the 
loan becomes secured and in the process of collection. 
 A TDR is 
a debtor that 
is experiencing financial 
difficulties and 
the Company grants 
a concession. This 
determination 
 is performed during the annual review process or whenever problems 
are surfacing regarding the client’s ability to repay in 
 accordance with 
the original 
terms of 
the loan 
or line 
of credit. 
In general, 
a borrower 
that can 
obtain funds 
from sources 
 other than 
the Company 
at market 
interest rates 
at or 
near those 
for non-troubled 
debt is 
not involved 
in a 
troubled debt 
 restructuring. 
The 
concessions 
are 
given 
to 
the 
debtor 
in 
various 
forms, 
including 
interest 
rate 
reductions, 
principal 
 forgiveness, 
extension 
of 
maturity 
date, 
waiver, 
or 
deferral 
of 
payments 
and 
other 
concessions 
intended 
to 
minimize 
 potential losses. 
 The following tables present performing and non-performing 
TDRs for the dates indicated (in thousands): 
 December 31, 2022 
 Accruing 
 Non-Accruing 
 Total 
 Residential Real Estate 
 $ 
 7,206 
 $ 
 - 
 $ 
 7,206 
 Commercial Real Estate 
 393 
 - 
 393 
 Commercial and Industrial 
 82 
 - 
 82 
 Consumer and Other 

 196 
 - 
 196 
 $ 
 7,877 
 $ 
 - 
 $ 
 7,877 
 December 31, 2021 
 Accruing 
 Non-Accruing 
 Total 
 Residential Real Estate 
 $ 
 7,815 
 $ 
 - 
 $ 
 7,815 
 Commercial Real Estate 
 696 
 - 
 696 
 Commercial and Industrial 
 141 
 - 
 141 
 Consumer and Other 

 224 
 - 
 224 
 $ 
 8,876 
 $ 
 - 
 $ 
 8,876 
 The Company had allocated $294 thousand and $360 thousand of specific allowances 
for TDR loans at December 31, 
 2022 and 2021, respectively. 
There was no commitment to lend additional funds to 
these TDR customers. 

 
 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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 57 
USCB Financial Holdings, Inc. 
2022 10-K 
 

 Charge-offs on TDR loans for the years ended December 31, 
2022 and 2021 were $0 and $18 thousand, respectively. 
 There were 
no defaults 
on TDR 
loans at December 
31, 2022 
and 2021 
within the 
prior 12 months 
. 
The Company 
did not 
 have any new TDR loans for the year ended December 
31, 2022. 
 There were no TDRs or modifications due to COVID-19 
as of December 31, 2022. 

 For further 
discussion on 
non-performing loans, 
see Note 
3 “Loans” 
to the 
Consolidated Financial 
Statements in 
this 
 Annual Report on Form 10-K. 
 Allowance for Credit Losses 
 In 
determining 
the 
balance 
of 
the 
allowance 
account, 
loans 
are 
pooled 
by 
product 
segments 
with 
similar 
risk 
 characteristics and management 
evaluates the ACL on 
each segment and on 
a regular basis to maintain 
the allowance at 
 an 
adequate 
level 
based 
on 
factors 
which, 
in 
management’s 
judgment, 
deserve 
current 
recognition 
in 
estimating 
credit 
 losses. 
Such 
factors 
include 
changes 
in 
prevailing 
economic 
conditions, 
historical 
loss 
experience, 
delinquency 
trends, 
 changes in the composition and size of the loan portfolio and 
the overall credit worthiness of the borrowers. 
 Additionally, 
qualitative adjustments 
are made to the 
ACL when, based 
on management’s 
judgment, there are 
factors 
 impacting the allowance estimate not considered by the 
quantitative calculations. 

 The following table presents ACL and net charge-offs to average loans by 
type for the periods indicated (in thousands): 
 Residential 
 Real Estate 
 Commercial 
 Real Estate 
 Commercial 
 and Industrial 
 Foreign 

 Banks 
 Consumer 
 and Other 
 Total 
 December 31, 2022: 
 

 

 

 

 

 

 

 

 

 

 

 

 Beginning balance 
 $ 
 2,498 
 $ 
 8,758 
 $ 
 2,775 
 $ 
 457 
 $ 
 569 
 $ 
 15,057 
 Provision for credit losses 
 (1,179) 
 1,385 
 1,474 
 263 
 552 
 2,495 
 Recoveries 
 33 
 - 
 18 
 - 
 4 
 55 
 Charge-offs 
 - 
 - 
 (104) 
 - 
 (16) 
 (120) 
 Ending Balance 

 $ 
 1,352 
 $ 
 10,143 
 $ 
 4,163 
 $ 
 720 
 $ 
 1,109 
 $ 
 17,487 
 Average loans 
 $ 
 193,368 
 $ 
 842,914 
 $ 
 127,473 
 $ 
 81,421 
 $ 
 96,517 
 $ 
 1,341,693 
 Net charge-offs to average loans 
 

 (0.02)% 
 

 - 
 

 0.07% 
 

 - 
 

 0.01% 
 

 0.00% 
 December 31, 2021: 
 

 

 

 

 

 

 Beginning balance 
 $ 
 3,408 
 $ 
 9,453 
 $ 
 1,689 
 $ 
 348 
 $ 
 188 
 $ 
 15,086 
 Provision for credit losses 
 (919) 
 (695) 
 955 
 109 
 390 
 (160) 
 Recoveries 
 238 
 - 
 149 
 - 
 5 
 392 
 Charge-offs 
 (229) 
 - 
 (18) 
 - 
 (14) 
 (261) 
 Ending Balance 

 $ 
 2,498 
 $ 
 8,758 
 $ 
 2,775 
 $ 
 457 
 $ 
 569 
 $ 
 15,057 
 Average loans 
 $ 
 212,867 
 $ 
 654,723 
 $ 
 153,763 
 $ 
 52,187 
 $ 
 42,602 
 $ 
 1,116,142 
 Net charge-offs to average loans 
 - 
 - 
 (0.08)% 
 - 
 0.02% 
 (0.01)% 

 
 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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 58 
USCB Financial Holdings, Inc. 
2022 10-K 
 

 The 
following 
table 
presents 
ACL 
by 
type 
and 
its 
individual 
percentage 
to 
total 
loans 
for 
the 
periods 
indicated 
(in 
 thousands): 
 December 31, 

 2022 
 2021 
 Loan Category 
 Allowance 
 % of Loans in 
 Each Category to 
 Total Loans 
 Allowance 
 % of Loans in 
 Each Category to 
 Total Loans 
 Residential Real Estate 
 $ 
 1,352 
 12.3 
 % 
 $ 
 2,498 
 16.9 
 % 
 Commercial Real Estate 
 

 10,143 
 64.4 
 % 
 8,758 
 59.2 
 % 
 Commercial and Industrial 
 4,163 
 8.4 
 % 
 2,775 
 12.3 
 % 
 Foreign Banks 
 720 
 6.2 
 % 
 457 
 5.0 
 % 
 Consumer and Other 
 1,109 
 8.7 
 % 
 569 
 6.6 
 % 
 Total 
 $ 
 17,487 
 100.0 
 % 
 $ 
 15,057 
 100.0 
 % 
 Bank-Owned Life Insurance 
 At 
December 31, 
2022, 
the 
combined 
cash 
surrender 
value 
of 
all 
bank-owned 
life 
insurance 
(“BOLI”) 
policies 
was 
 $42.8 million. 
Changes 
in 
cash 
surrender 
value 
are 
recorded 
in 
non-interest 
income 
on the 
Consolidated 
Statements 
of 
 Operations. In 
2022, the Company 
maintained BOLI 
policies with 
five insurance 
carriers. The Company 
is the beneficiary 
 of these policies. 
 Deposits 
 Customer deposits are the 
primary funding source for 
the Bank’s growth. 
Through our network of 
banking centers, we 
 offer a competitive array of deposit 
accounts and treasury management services designed 
to meet our customers’ business 
 needs. Our primary 
deposit customers 
are SMBs, and 
the personal business 
of owners and 
operators of 
these SMBs, 
as 
 well as the retail/consumer relationships of the employees 
of these businesses. Our focus on quality and customer 
service 
 has created a strong brand recognition within 
our depositors, which reflects in the composition 
of our deposits; most of our 
 funding sources are core deposits. In addition to our banking centers network, 
we developed business verticals to diversify 
 our portfolio in different specialty industries and 
we offer public fund deposit products 
to municipalities and public agencies 
 in our geographical footprint. 

 Furthermore, our 
personal and 
private banking 
management 
line of 
business is 
focused on 
the needs 
of the 
owners 
 and operators of 
our business customers, 
offering a suite 
of checking, savings, 
money market and 
time deposit accounts, 
 and utilizing superior 
client service 
to build and 
expand client relationships. 
A unique aspect 
of our business 
model is our 
 ability to offer correspondent services to banks 
in Central America and the Caribbean. 
 The 
following 
table 
presents 
the 
daily 
average 
balance 
and 
average 
rate 
paid 
on 
deposits 
by 
category 
as 
of 
 December 31, 2022 and 2021 (in thousands, except ratios): 
 Twelve Months Ended December 31, 
 2022 
 2021 
 Average Balance 
 Average Rate 
 Paid 
 Average Balance 
 Average Rate 
 Paid 
 Non-interest bearing demand deposits 
 $ 
 645,366 
 0.00% 
 $ 
 547,116 
 0.00% 
 Interest-bearing demand deposits 
 64,835 
 0.13% 
 52,379 
 0.11% 
 Saving and money market deposits 
 803,426 
 0.64% 
 619,810 
 0.34% 
 Time deposits 
 220,319 
 0.68% 
 235,127 
 0.65% 
 $ 
 1,733,946 
 0.39% 
 $ 
 1,454,431 
 0.25% 
 To
 tal average deposits for the year ended December 31, 2022 was $1.7 billion, 
an increase of $279.5 million, 
or 19.2% 
 over total average 
deposits of $1.5 billion 
for the 
same period in 
2021. Our focus 
on demand deposits 
resulted in an 
increase 
 in average balances of $98.3 million, 
or 18.0%, in non-interest bearing demand deposits and an increase of $183.6 million, 
 or 29.6%, in saving and money market deposits 
when comparing the average balances for the 
years ended December 31, 
 2022 and 2021. 
 The 
uninsured 
deposits 
are 
estimated 
based 
on 
the 
FDIC 
deposit 
insurance 
limit 
of 
$250 thousand 
for 
all 
deposit 
 accounts 
at 
the 
Bank 
per 
account 
holder. 
Total 
estimated 
uninsured 
deposits 
were 
$1.1 
billion 
and 
$897.8 million 
at 

 
 
 

 

 

 

 

 

 

 

 

 

 

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 59 
USCB Financial Holdings, Inc. 
2022 10-K 
 

 December 31, 
2022 
and 
2021, 
respectively. 
U.S. 
Century 
Bank 
maintains 
a 
well-diversified 
deposit 
base. 
Our 
top 
15 
 depositors only 
hold 12% 
of our 
total portfolio. 
As of 
December 31, 
2022, 39% 
of our 
deposits are 
estimated to 
be FDIC-
 insured. Our public funds 
are 11% 
of total deposits and 
are partially collateralized. 
The estimated average account 
size of 
 our deposit 
portfolio is 
$95 thousand. 
Time 
deposits with 
balances of 
$250 thousand 
or more 
totaled $122.9 
million and 
 $119.4 million at December 
31, 2022 and 2021, respectively. 

 Critical elements of our liquidity 
risk management include: effective corporate governance consisting of 
oversight by the 
 Board and 
ALCO and 
active involvement 
by senior 
management; 
appropriate strategies, 
policies, procedures, 
and limits 
 used 
to 
identify 
and 
mitigate 
liquidity 
risk; 
comprehensive 
liquidity 
risk 
measurement 
and 
monitoring 
systems 
(including 
 assessments 
of 
the 
current 
and 
prospective 
cash 
flows 
or 
sources 
and 
uses 
of 
funds) 
that 
are 
commensurate 
with 
the 
 complexity and business activities of the Company; active management of intraday liquidity and collateral; an appropriately 
 diverse mix 
of existing 
and potential 
future funding 
sources; adequate 
levels of 
highly liquid 
marketable securities 
free of 
 legal, regulatory, or operational impediments, that 
can be used 
to meet liquidity 
needs in stressful 
situations; comprehensive 
 contingency 
funding 
plans 
that 
sufficiently 
address 
potential 
adverse 
liquidity 
events 
and 
emergency 
cash 
flow 
 requirements; 
and 
internal 
controls and 
internal 
audit 
processes 
sufficient 
to 
determine 
the 
adequacy 
of 
the 
institution’s 
 liquidity risk management process. 
 We 
expect 
funds 
to 
be 
available 
from 
several 
basic 
banking 
activity 
sources, 
including 
the 
core 
deposit 
base, 
the 
 repayment and maturity of loans and investment security 
cash flows. Other potential funding sources include 
federal funds 
 purchased, brokered 
certificates of 
deposit, listing 
certificates of 
deposit, Fed 
funds lines 
and borrowings 
from 
the FHLB 
 Atlanta. Accordingly, our liquidity resources were at sufficient levels to 
fund loans and meet other 
cash needs as necessary. 
 The following table shows scheduled maturities of uninsured 
time deposits as of December 31, 2022 (in thousands): 
 Three months or less 
 $ 
 10,669 
 Over three through six months 
 17,573 
 Over six though twelve months 
 29,891 
 Over twelve months 
 23,840 
 $ 
 81,973 
 Borrowings 
 As 
a 
member 
of 
the 
FHLB 
Atlanta, 
we 
are 
eligible 
to 
obtain 
advances 
with 
various 
terms 
and 
conditions. 
This 
 accessibility of additional 
funding allows us 
to efficiently and 
timely meet both 
expected and unexpected 
outgoing cash flows 
 and collateral needs without adversely affecting 
either daily operations or the financial condition 
of the Company. 
 Outstanding fixed-rate advances from the FHLB were at $46.0 million and $36.0 million, as of December 31, 2022, and 
 December 31, 2021, 
respectively. 
The weighted average 
rate for outstanding 
FHLB advances at 
December 31, 2022 
was 
 2.60%. Most of the advances are due in 2023. 

 
 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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 60 
USCB Financial Holdings, Inc. 
2022 10-K 
 

 The following table presents the FHLB fixed rate advances 
as of December 31, 2022 (in thousands): 
 At December 31, 2022 
 Interest Rate 
 Type of Rate 
 Maturity Date 
 Amount 
 2.05% 
 Fixed 
 March 27, 2025 
 $ 
 10,000 
 1.07% 
 Fixed 
 July 18, 2025 
 6,000 
 1.04% 
 Fixed 
 July 30, 2024 
 5,000 
 0.81% 
 Fixed 
 August 17, 2023 
 5,000 
 4.17% 
 Fixed 
 January 13, 2023 
 20,000 
 $ 
 46,000 
 At December 31, 2021 
 Interest Rate 
 Type of Rate 
 Maturity Date 
 Amount 
 0.81% 
 Fixed 
 August 17, 2023 
 $ 
 5,000 
 1.04% 
 Fixed 
 July 30, 2024 
 5,000 
 2.05% 
 Fixed 
 March 27, 2025 
 10,000 
 1.91% 
 Fixed 
 March 28, 2025 
 5,000 
 1.81% 
 Fixed 
 April 17, 2025 
 5,000 
 1.07% 
 Fixed 
 July 18, 2025 
 6,000 
 $ 
 36,000 
 We 
have 
also 
established 
Fed 
Funds 
lines 
of 
credit 
with 
our 
upstream 
correspondent 
banks 
to 
manage 
temporary 
 fluctuations in our daily 
cash balances. As of December 31, 
2022, there were no 
outstanding balances under the Fed 
Funds 
 line of credit.
 Off-Balance Sheet Arrangements 
 We engage 
in various financial 
transactions in 
our operations 
that, under GAAP, 
may not be 
included on 
the balance 
 sheet. To 
meet the financing needs 
of our customers we may 
include commitments to extend 
credit and standby letters 
of 
 credit. To 
a varying 
degree, such 
commitments 
involve elements 
of credit, 
market, 
and interest 
rate risk 
in excess 
of the 
 amount recognized 
in the 
balance sheet. 
We 
use more 
conservative credit 
and collateral 
policies in 
making these 
credit 
 commitments as we 
do for on-balance sheet 
items. We are not 
aware of any accounting 
loss to be 
incurred by funding 
these 
 commitments; however, 
we maintain an allowance for 
off-balance sheet credit risk 
which is recorded under other 
liabilities 
 on the Consolidated Balance Sheets. 
 Since commitments associated with letters of 
credit and commitments to extend 
credit may expire unused, the 
amounts 
 shown do not necessarily 
reflect the actual 
future cash funding 
requirements. 
The following table 
presents lending related 
 commitments outstanding as of December 31, 2022 and 
2021 (in thousands): 
 2022 
 2021 
 Commitments to grant loans and unfunded lines of credit 
 $ 
 95,461 
 $ 
 134,877 
 Standby and commercial letters of credit 
 4,320 
 6,420 
 Total 
 $ 
 99,781 
 $ 
 141,297 
 Commitments to extend credit are agreements to lend funds to a client, as long as there is no violation of any condition 
 established 
in 
the 
contract, 
for 
a 
specific 
purpose. 
Commitments 
generally 
have 
variable 
interest 
rates, 
fixed 
expiration 
 dates or 
other 
termination 
clauses 
and may 
require 
payment 
of 
a fee. 
Since many 
of 
the commitments 
are expected 
to 
 expire without being 
fully drawn, the 
total commitment 
amounts disclosed 
above do not 
necessarily represent 
future cash 
 requirements. 
 Unfunded lines of credit represent unused portions of credit facilities to our current borrowers that represent no change 
 in credit risk in our portfolio. Lines 
of credit generally have variable interest 
rates. The maximum potential amount 
of future 
 payments we could 
be required to 
make is represented 
by the contractual 
amount of 
the commitment, 
less the amount 
of 
 any advances made. 
 Letters of credit are 
conditional commitments 
issued by us to guarantee 
the performance of 
a client to a third 
party. In 
 the event of nonperformance by the 
client in accordance with the terms 
of the agreement with the third party, 
we would be 
 required to fund 
the commitment. 
If the commitment 
is funded, we 
would be entitled 
to seek 
recovery from 
the client from 
 the underlying collateral, 
which can include 
commercial real estate, 
physical plant and 
property, inventory, receivables, cash 
 or marketable securities. 

 
 
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 61 
USCB Financial Holdings, Inc. 
2022 10-K 
 

 Asset and Liability Management Committee 
 The asset and liability management committee of our Company, 
or ALCO, consists of members of senior management 
 and our Board. Senior management is responsible for 
ensuring in a timely manner that Board 
approved strategies, policies, 
 and procedures 
for managing 
and mitigating 
risks are 
appropriately executed 
within the 
designated lines 
of authority 
and 
 responsibility. 
 ALCO 
oversees 
the 
establishment, 
approval, 
implementation, 
and 
review 
of 
interest 
rate 
risk, 
management, 
and 
 mitigation strategies, ALM related policies, ALCO procedures 
and risk tolerances and appetite. 
 While some degree of interest 
rate risk (“IRR”) exposure is inherent 
to the banking business, our ALCO 
has established 
 sound risk management practices in place to identify, 
measure, monitor and mitigate IRR exposures. 
 When assessing 
the scope 
of IRR 
exposure 
and 
impact on 
the consolidated 
balance sheet, 
cash 
flows and 
income 
 statement, 
management 
considers 
both 
earnings 
and 
economic 
impacts. 
Asset 
price 
variations, 
deposits 
volatility 
and 
 reduced earnings or outright losses could adversely affect 
the Company’s liquidity, 
performance, and capital adequacy. 
 Income simulations 
are used 
to assess 
the impact 
of changing 
rates on 
earnings under 
different rates 
scenarios and 
 time horizons. 
These simulations 
utilize both 
instantaneous and 
parallel changes 
in the 
level of 
interest rates, 
as well 
as 
 non-parallel changes such as changing slopes (flat and steeping) and 
twists of the yield curve, Static simulation models are 
 based on current exposures and 
assume a constant balance sheet with 
no new growth. Dynamic simulation analysis is 
also 
 utilized to have a 
more comprehensive assessment 
on IRR. This simulation 
relies on detailed 
assumptions outlined in 
our 
 budget and strategic plan, and in assumptions regarding changes in 
existing lines of business, new business, management 
 strategies and client expected behavior. 
 To 
have 
a 
more 
complete 
picture 
of 
IRR, 
the 
Company 
also 
evaluates 
the 
economic 
value 
of 
equity, 
or 
EVE. 
This 
 assessment 
allows 
us 
to 
measure 
the 
degree 
to 
which 
the 
economic 
values 
will 
change 
under 
different 
interest 
rate 
 scenarios. The economic value of equity approach focuses on 
a longer-term time horizon and captures all 
future cash flows 
 expected from existing assets and liabilities. 
The economic value model utilizes a 
static approach in that the analysis does 
 not incorporate new business; rather, 
the analysis shows a snapshot in time of the risk 
inherent in the balance sheet.
 Market and Interest Rate Risk Management 
 
According to our ALCO model, as of December 31, 2022, we were a 
liability sensitive bank for year one modeling and 
 asset sensitive for year two modeling. 
Asset sensitivity indicates that our 
assets generally reprice faster than 
our liabilities, 
 which results in a favorable impact to net interest income when market interest rates increase. 
Liability sensitivity indicates 
 that our liabilities 
generally reprice faster 
than our assets, 
which results in 
a favorable impact 
to net interest 
income when 
 market interest 
rates decrease. 
Many assumptions 
are used 
to calculate 
the impact 
of interest 
rate variations 
on our 
net 
 interest 
income, 
such 
as 
asset 
prepayment 
speeds, 
non-maturity 
deposit 
price 
sensitivity, 
pricing 
correlations, 
deposit 
 truncations and decay rates, and key interest rate drivers. 
 Because of the inherent use 
of these estimates and 
assumptions in the model, 
our actual results may, 
and most likely 
 will, differ from static measures results. In addition, static measures like 
EVEs do not include actions that management may 
 undertake to manage the risks in response to anticipated changes in interest rates or client deposit behavior. As part of our 
 ALM strategy 
and 
policy, 
management 
has the 
ability to 
modify 
the 
balance sheet 
to 
either increase 
asset 
duration 
and 
 decrease liability 
duration to reduce 
asset sensitivity, 
or to decrease 
asset duration and 
increase liability duration 
in order 
 to increase asset sensitivity. 
 According to our model, as of December 31, 2022, the NIM will remain fairly stable for static rate scenarios (-400 
basis 
 points: 
+400 
basis 
points). 
For 
the 
static 
forecast 
for 
year 
one, 
the 
estimated 
NIM 
will decrease 
from 
3.38% 
base 
case 
 scenario to 3.20% 
under a +400-basis 
points scenario. Additionally, utilizing an economic 
value of equity, or EVE, 
approach, 
 we analyze the 
risk to capital 
from the 
effects of 
various interest rate 
scenarios through 
a long-term 
discounted cash flow 
 model. This 
measures the 
difference between 
the economic 
value of our 
assets and 
the economic 
value of 
our liabilities, 
 which is 
a proxy for 
our liquidation value. 
According to our 
balance sheet composition, 
and as expected, 
our model stipulates 
 that an increase 
of interest 
rates will have 
a negative impact 
on the EVE. 
Results and analysis 
are presented quarterly 
to 
 the ALCO, and strategies are reviewed and refined. 
 Additionally, in the last couple of quarters we 
have been reducing our asset 
sensitivity by extending asset duration. 
This 
 has reduced our 
NII volatility 
for the first 
and second year 
in the analysis 
and has 
helped us to 
maintain the NII 
in accordance 
 with ALCO expectations. 

 
 
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 62 
USCB Financial Holdings, Inc. 
2022 10-K 
 

 Liquidity 
 
Liquidity is 
defined as 
a Company’s capacity 
to meet 
its cash 
and collateral 
obligations at 
a reasonable 
cost. Maintaining 
 an adequate level of liquidity depends on the Company’s ability to efficiently meet both expected and 
unexpected cash flow 
 and collateral needs without adversely affecting 
either daily operations or the financial condition of 
the Company. 
 Liquidity risk 
is the 
risk that 
we will 
be unable 
to meet 
our short-term 
and long-term 
obligations as 
they become 
due 
 because of an inability to 
liquidate assets or obtain adequate funding on 
acceptable terms. The Company’s obligations, and 
 the funding sources used 
to meet them, depend 
significantly on our business mix, balance 
sheet structure and composition, 
 credit quality of our assets and the cash flow profiles of 
our on- and off-balance sheet obligations. 
 In managing 
inflows and 
outflows, 
management 
regularly monitors 
situations that 
can give 
rise to 
increased 
liquidity 
 risk. These 
include funding 
mismatches, market 
constraints on 
the ability 
to convert 
assets (particularly 
investments) into 
 cash or in 
accessing sources 
of funds (i.e., 
market liquidity), 
and contingent 
liquidity events. Management 
presents to the 
 ALCO, on a quarterly basis, liquidity stress tests foll 
owing the scenarios described in the Bank’s 
contingency funding plan. 

 Changes in macroeconomic conditions or exposure 
to credit, market, operational, legal 
and reputational risks, including 
 cybersecurity risk could also affect the Company 
’s liquidity risk profile unexpectedly 
and are considered in the assessment 
 of liquidity and ALM framework. 
 Management has established 
a comprehensive and 
holistic management process for 
identifying, measuring, monitoring 
 and 
mitigating 
liquidity 
risk. 
Due 
to 
its 
critical 
importance 
to 
the 
viability 
of 
the 
Company, 
liquidity 
risk 
management 
is 
 integrated into our risk management processes and ALM 
policy. 
 Critical elements of our liquidity 
risk management include: effective corporate governance consisting of 
oversight by the 
 Board and 
ALCO and 
active involvement 
by senior 
management; 
appropriate strategies, 
policies, procedures, 
and limits 
 used 
to 
identify 
and 
mitigate 
liquidity 
risk; 
comprehensive 
liquidity 
risk 
measurement 
and 
monitoring 
systems 
(including 
 assessments 
of 
the 
current 
and 
prospective 
cash 
flows 
or 
sources 
and 
uses 
of 
funds) 
that 
are 
commensurate 
with 
the 
 complexity and business activities of the Company; active management of intraday liquidity and collateral; an appropriately 
 diverse mix 
of existing 
and potential 
future funding 
sources; adequate 
levels of 
highly liquid 
marketable securities 
free of 
 legal, regulatory, or operational impediments, that 
can be used 
to meet liquidity 
needs in stressful 
situations; comprehensive 
 contingency 
funding 
plans 
that 
sufficiently 
address 
potential 
adverse 
liquidity 
events 
and 
emergency 
cash 
flow 
 requirements; 
and 
internal 
controls and 
internal 
audit 
processes 
sufficient 
to 
determine 
the 
adequacy 
of 
the 
institution’s 
 liquidity risk management process. 
 We 
expect 
funds 
to 
be 
available 
from 
several 
basic 
banking 
activity 
sources, 
including 
the 
core 
deposit 
base, 
the 
 repayment and maturity of loans and investment security 
cash flows. Other potential funding sources include 
federal funds 
 purchased, brokered 
certificates of 
deposit, listing 
certificates of 
deposit, Fed 
funds lines 
and borrowings 
from 
the FHLB 
 Atlanta. Accordingly, our liquidity resources were at sufficient levels to 
fund loans and meet other 
cash needs as necessary.

 
 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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 63 
USCB Financial Holdings, Inc. 
2022 10-K 
 

 Capital Adequacy 
 As 
of 
December 31, 
2022, 
the 
Bank 
was 
well 
capitalized 
under 
the 
FDIC’s 
prompt 
corrective 
action 
framework. 
 Additionally, 
we follow the capital 
conservation buffer 
framework, and according 
to our actual ratios 
the Bank exceeds 
the 
 capital conversation buffer 
in all capital ratios 
as of December 
31, 2022. The 
following table presents 
the capital ratios 
for 
 both the Bank and the Company at December 31, 2022 
and 2021 (in thousands, 
except ratios): 
 Actual 
 Minimum Capital 
 Requirements 

 To be Well Capitalized 
 Under Prompt Corrective 
 Action Provisions 
 Amount 
 Ratio 
 Amount 
 Ratio 
 Amount 
 Ratio 
 December 31, 2022: 
 Total 
risk-based capital: 
 $ 
 216,693 
 13.58 
 % 
 $ 
 127,616 
 8.00 
 % 
 $ 
 159,520 
 10.00 
 % 
 Tier 1 risk-based capital: 
 $ 
 198,909 
 12.47 
 % 
 $ 
 95,712 
 6.00 
 % 
 $ 
 127,616 
 8.00 
 % 
 Common equity tier 1 capital: 
 $ 
 198,909 
 12.47 
 % 
 $ 
 71,784 
 4.50 
 % 
 $ 
 103,688 
 6.50 
 % 
 Leverage ratio: 
 198,909 
 9.56 
 % 
 $ 
 83,210 
 4.00 
 % 
 $ 
 104,012 
 5.00 
 % 
 December 31, 2021: 
 (1)
 Total 
risk-based capital 
 $ 
 186,735 
 14.92 
 % 
 $ 
 100,125 
 8.00 
 % 
 $ 
 125,157 
 10.00 
 % 
 Tier 1 risk-based capital 
 $ 
 171,484 
 13.70 
 % 
 $ 
 75,094 
 6.00 
 % 
 $ 
 100,125 
 8.00 
 % 
 Common equity tier 1 capital 
 $ 
 171,484 
 13.70 
 % 
 $ 
 56,321 
 4.50 
 % 
 $ 
 81,352 
 6.50 
 % 
 Leverage ratio 
 $ 
 171,484 
 9.55 
 % 
 $ 
 71,825 
 4.00 
 % 
 $ 
 89,781 
 5.00 
 % 
 Impact of Inflation 
 Our Consolidated 
Financial Statements 
and related 
notes have been 
prepared in 
accordance with 
U.S. GAAP, 
which 
 requires the 
measurement of 
financial position 
and operating 
results in 
terms of 
historical dollars, 
without considering 
the 
 changes 
in 
the 
relative 
purchasing 
power 
of 
money 
over 
time 
due 
to 
inflation. 
The 
impact 
of 
inflation 
is 
reflected 
in 
the 
 increased cost of operations. 
Unlike most industrial companies, 
nearly all our assets and 
liabilities are monetary in 
nature. 
 As a result, 
interest rates have a 
greater impact on our 
performance than do the 
effects of general levels 
of inflation. Periods 
 of high inflation 
are often accompanied 
by relatively higher 
interest rates, and 
periods of low 
inflation are accompanied 
by 
 relatively lower interest rates. 
As market interest rates 
rise or fall in relation 
to the rates earned 
on loans and investments, 
 the 
value 
of 
these 
assets 
decreases 
or 
increases 
respectively. 
Inflation 
can 
also 
impact 
core 
non-interest 
expenses 
 associated with delivering the Company’s 
services. 
 Recently Issued Accounting Pronouncements
 

 Recently issued accounting 
pronouncements are discussed 
in Note 1 “Summary 
of Significant Accounting 
Policies” in 
 the Consolidated Financial Statements of this Annual Report 
on Form 10-K.

 
 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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 64 
USCB Financial Holdings, Inc. 
2022 10-K 
 

 Reconciliation and Management Explanation of Non 
-GAAP Financial 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 GA 
AP, 
and 
are 
not 
necessarily 
comparable 
to non-GAAP 
 measures 
that may 
be presented 
by other 
companies. 
The 
Company believes 
these 
non-GAAP 
measurements 
are key 
 indicators of 
the earnings power 
of the Company. 
The following 
table reconciles 
the non-GAAP 
financial measurement 
of 
 operating net income available to common stockholders 
for the periods presented (in thousands, 
except per share data):
 As of and for the years ended December 31, 
 2022 
 2021 
 Pre-Tax Pre-Provision ("PTPP") Income: 
 Net income 
 $ 
 20,141 
 $ 
 21,077 
 Plus: Provision for income taxes 
 6,944 
 6,600 
 Plus: Provision for (recovery of) credit losses 
 2,495 
 (160) 
 PTPP income 
 $ 
 29,580 
 $ 
 27,517 
 PTPP Return on Average Assets: 
 PTPP income 
 $ 
 29,580 
 $ 
 27,517 
 Average assets 
 $ 
 1,990,610 
 $ 
 1,701,658 
 PTPP return on average assets 

 1.49% 
 1.62% 
 Operating Net Income: 
 Net income 
 $ 
 20,141 
 $ 
 21,077 
 Less: Net gain (loss) on sale of securities 
 (2,529) 
 214 
 Less: Tax effect 
on sale of securities 
 641 
 (52) 
 Operating net income 
 $ 
 22,029 
 $ 
 20,915 
 Operating PTPP Income: 
 PTPP income 
 $ 
 29,580 
 $ 
 27,517 
 Less: Net gain (loss) on sale of securities 
 (2,529) 
 214 
 Operating PTPP Income 
 $ 
 32,109 
 $ 
 27,303 
 Operating PTPP Return on Average Assets: 
 Operating PTPP income 
 $ 
 32,109 
 $ 
 27,303 
 Average assets 
 $ 
 1,990,610 
 $ 
 1,701,658 
 Operating PTPP Return on average assets 

 1.61% 
 1.60% 
 Operating Return on Average Assets: 
 Operating net income 
 $ 
 22,029 
 $ 
 20,915 
 Average assets 
 $ 
 1,990,610 
 $ 
 1,701,658 
 Operating return on average assets 

 1.11% 
 1.23% 

 
 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
 Table of Contents 
 

 

 65 
USCB Financial Holdings, Inc. 
2022 10-K 
 

 Years Ended December 31, 
 2022 
 2021 
 Adjusted Net Income Available to Common Stockholders: 
 Net income (GAAP) 
 $ 
 20,141 
 $ 
 21,077 
 Less: Preferred dividends 
 - 
 2,077 
 Less: Exchange and redemption of preferred shares 
 - 
 89,585 
 Net income (loss) available to common stockholders (GAAP) 
 20,141 
 (70,585) 
 Add back: Exchange and redemption of preferred shares 
 - 
 89,585 
 Adjusted net income available to common stock (non-GAAP) 
 $ 
 20,141 
 $ 
 19,000 
 Weighted average shares outstanding: 
 Class A common stock 
 
Basic 
 19,999,323 
 10,507,530 
 
Diluted 
 20,176,838 
 10,507,530 
 

 Diluted EPS: 
 Class A common stock 
 Net income (loss) per diluted share (GAAP) 
 $ 
 1.00 
 $ 
 (6.72) 
 Add back: Exchange and redemption of preferred shares 
 - 
 8.53 
 
Adjusted net income available to common stockholders per diluted share (non-GAAP) 

 $ 
 1.00 
 $ 
 1.81 
 Item 7A. 
Quantitative and Qualitative Disclosures About Market Risk 
 As a smaller reporting company, 
we are not required to provide the information required by 
this item.

 
 
 
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 66 
USCB Financial Holdings, Inc. 
2022 10-K
USCB FINANCIAL HOLDINGS, INC. 10-K

Item 7. Management’s Discussion and Analysis
