Item 9A. Controls and Procedures
Item 9A. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Under the supervision and with the participation of our management, including our Chief Executive Officer and its
Chief
Financial
Officer,
we evaluated
the
effectiveness
of
the
design
and
operation
of
the
Company’s
disclosure
controls
and
procedures
as
of
December 31,
2022.
Based
on
that
evaluation,
management
believes
that
the
Company’s
disclosure
controls
and
procedures
were
effective
to
collect,
process,
and
disclose
the
information
required
to
be
disclosed
in
the
reports filed or
submitted under
the Exchange
Act within the
required time
periods as of
the end of
the period covered
by
this Report.
Management’s Report on Internal Control
over Financial Reporting
Management is responsible for designing, implementing, documenting, and
maintaining an adequate system of internal
control over financial
reporting, as
such term
is defined in
the Exchange
Act. An
adequate system
of internal control
over
financial reporting encompasses the processes and procedures
that have been established by management to:
•
maintain records that accurately reflect the Company’s
transactions;
•
prepare
financial
statement
and
footnote
disclosures
in
accordance
with
U.S.
GAAP
that
can
be
relied
upon
by
external users; and
•
prevent and detect unauthorized acquisition, use or disposition of the Company's assets that could have a material
effect on the financial statements.
Management conducted
an evaluation
of the
effectiveness
of the
Company's
internal control
over financial
reporting
based on the criteria in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of
the
Treadway
Commission
(COSO).
Based
on
this
evaluation
under
the
criteria
in
Internal
Control-Integrated
Framework,
management concluded that
internal control over financial
reporting was effective
as of December 31,
2022. Furthermore,
during the conduct of its assessment, management identified no material weakness in
its financial reporting control system.
The Board of USCB
Financial Holdings, Inc., through its
Audit Committee, provides oversight to
management’s conduct
of
the
financial
reporting
process.
The
Audit
Committee,
which
is
composed
entirely
of
independent
directors,
is
also
responsible for the appointment of the independent registered public accounting firm. The
Audit Committee also meets with
management, the internal audit staff,
and the independent registered public accounting
firm throughout the year to provide
assurance as to the adequacy of the financial
reporting process and to monitor the overall
scope of the work performed by
the internal audit staff and the independent public accountants.
Because of its inherent limitations, the disclosure controls and
procedures may not prevent or detect misstatements.
A
control system, no matter how well conceived and operated, can only provide reasonable, not absolute, assurance that the
objectives of the control system are met. Because
of the inherent limitations in all control systems, no evaluation
of controls
can provide absolute assurance that all control issues and instances of
fraud, if any, have
been detected. Also, projections
of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of
changes in conditions or that the degree of compliance
with the policies or procedures may deteriorate.
Changes in Internal Control Over Financial Reporting
There has been
no change in
our internal control
over financial reporting
(as defined in
Rules 13a-15(f) and
15d-15(f)
under the
Exchange Act)
during our
most recent
fiscal quarter
that has
materially affected, or
is reasonably
likely to
materially
affect, our internal control over financial reporting.
Item 9B. Other Information
Not applicable.
Item 9C. Disclosure Regarding Foreign Jurisdictions
That Prevent Inspections
Not applicable.
Table of Contents
111
USCB Financial Holdings, Inc.
2022 10-K
PART III
Item 10. Directors, Executive Officers and Corporate Governance
The information required
herein is incorporated
by reference from
the sections captioned “Information
with Respect to
Nominees for
Director and Information
About Executive Officers”
and “Beneficial Ownership
of Common Stock
by Certain
Beneficial Owners and Management –
Delinquent Section 16(a) Reports”
in the Company’s Definitive
Proxy Statement for
the Annual Meeting
of Shareholders
currently expected
to be held
on May 22,
2023, is expected
to be
filed with the
SEC
within 120 days of December 31, 2021 (“2023 Definitive
Proxy Statement”).
The Company has
adopted a code
of ethics and
business conduct policy,
which applies to
all of its
directors, officers,
including its principal executive officer, principal financial officer, principal accounting officer,
and employees generally. The
Company
will provide
a copy
of its
code
of ethics
to any
person, free
of charge,
upon request.
Any requests
for a
copy
should
be
made
to
the
Corporate
Secretary,
USCB
Financial
Holdings,
Inc.,
2301
N.W.
87th
Avenue,
Doral,
Florida.
In
addition, a
copy
of the
Code of
Ethics is
available at
the Company’s
website at
www.uscentury.com
under the
“Investor
Relations” tab.
There
have
been
no
material
changes
to
the
procedures
by
which
shareholders
may
recommend
nominees
to
the
Company’s Board.
Item 11. Executive Compensation
The information
required herein
is incorporated
by reference
from
the sections
captioned "Executive
Compensation"
and “Information with Respect to
Nominees for Director and Information About
Executive Officers – Director Compensation”
in the Company’s 2023 Definitive Proxy Statement.
Item 12. Security Ownership of Certain Beneficial Owners
and Management and Related Stockholder Matters
Security Ownership of Certain Beneficial Owners and Management
. Information regarding security ownership
of certain beneficial owners and management is incorporated
by reference to “Beneficial Ownership of Common Stock
by
Certain Beneficial Owners and Management” in the 2023 Definitive
Proxy Statement.
Equity Compensation Plan Information
. Information regarding the Company’s equity
plans is incorporated from
Note 9 “Equity Based and Other Compensation Plans”
to the Consolidated Financial Statements included in
this Annual
Report on Form 10-K.
Item 13. Certain Relationships and Related Transactions,
and Director Independence
The information
required herein
is incorporated
by reference
from
the sections
captioned “Certain
Relationships and
Related
Party
Transactions”
and
“Information
with
Respect
to
Nominees
for
Director
and
Information
About
Executive
Officers” in the 2023 Definitive Proxy Statement.
Item 14. Principal Accountant Fees and Services
The information required herein is incorporated by reference
from the section captioned “Ratification of
Appointment of Independent Registered Public Accounting
Firm (Proposal Two)
– Audit Fees” in the 2023 Definitive Proxy
Statement.
Table of Contents
112
USCB Financial Holdings, Inc.
2022 10-K
PART IV
Item 15. Exhibits and Financial Statement Schedules
(a)
List of documents filed as part of this Annual Report:
1)
Financial Statements:
Report of Independent Registered Public Accounting Firm
Consolidated Balance Sheets as of December 31, 2022 and 2021
Consolidated Statements of Operations for the years ended
December 31, 2022 and 2021
Consolidated Statements of Comprehensive Income
for the years ended December 31, 2022 and 2021
Consolidated Statements of Changes in Stockholders'
Equity for the years ended December 31, 2022 and
2021
Consolidated Statements of Cash Flows for the
years ended December 31, 2022 and 2021
Notes to Consolidated Financial Statements
2)
Financial Statement Schedules:
Financial statement schedules are omitted as not required
or not applicable or because the information is
included in the Consolidated Financial Statements or
notes thereto.
(b)
List of Exhibits:
The exhibit list in the Exhibit Index is incorporated herein
by reference as the list of exhibits required as part of
this Annual Report on Form 10-K.
Table of Contents
113
USCB Financial Holdings, Inc.
2022 10-K
EXHIBIT INDEX
Exhibit
Number
Description of Exhibit
2.1
Agreement and Plan of Share Exchange, dated December 27, 2021, by and between U.S. Century Bank and USCB Financial
Holdings, Inc. (incorporated by reference to Exhibit 2.1 to the Registrant’s Current Report on Form 8-K (File No. 001-41196)
filed with the Securities and Exchange Commission on December 30, 2021).
3.1
Articles of Incorporation of USCB Financial Holdings, Inc. (incorporated by reference to Exhibit 3.1 to the Registrant’s Current
Report on Form 8-K (File No. 001-41196) filed with the Securities and Exchange Commission on December 30, 2021).
3.2
Amended and Restated Bylaws of USCB Financial Holdings, Inc. (incorporated by reference to Exhibit 3.2 to the Registrant’s
Current Report on Form 8-K (File No. 001-41196) filed with the Securities and Exchange Commission on December 30, 2021).
4.1
Side Letter Agreement, dated December 30, 2021, between USCB Financial Holdings, Inc., U.S. Century Bank, Priam Capital
Fund II, LP, Patriot Financial Partners II, L.P. and Patriot Financial Partners Parallel II, L.P. (incorporated by reference to Exhibit
4.1 to the Registrant’s Current Report on Form 8-K (File No. 001-41196) filed with the Securities and Exchange Commission
on December 30, 2021).
4.2
Registration Rights Agreement, dated March 17, 2015, between U.S. Century Bank, Priam Capital Fund II, LP, Patriot Financial
Partners II, L.P., Patriot Financial Partners Parallel II, L.P., and certain other shareholders of U.S. Century Bank (incorporated
by reference to Exhibit 4.2 to the Registrant’s Current Report on Form 8-K (File No. 001-41196) filed with the Securities and
Exchange Commission on December 30, 2021).
4.3
Assignment and Assumption of Agreement, dated December 30, 2021, between U.S. Century Bank and USCB Financial
Holdings, Inc. (incorporated by reference to Exhibit 4.3 to the Registrant’s Current Report on Form 8-K (File No. 001-41196)
filed with the Securities and Exchange Commission on December 30, 2021).
4.4
Description of USCB Financial Holdings, Inc.’s securities (incorporated by reference to Exhibit 4.4 to the
Registrant’s Annual Report on Form 10-K for the year ended December 1, 2021 (File No. 001-41196) filed with
the Securities and Exchange Commission on March 24, 2022).
10.1
U.S. Century Bank Amended and Restated 2015 Equity Incentive Plan (incorporated by reference to Exhibit 10.1 to the
Registrant’s Current Report on Form 8-K (File No. 001-41196) filed with the Securities and Exchange Commission on
December 30, 2021).
10.2
Amended and Restated Employment Agreement by and among USCB Financial Holdings, Inc., U.S. Century Bank
and Luis de la Aguilera dated as of January 29, 2023 (incorporated by reference to Exhibit 10.2 to the Registrant’s
Current Report on Form 8-K dated as of January 29, 2023 (File No. 001-41196) filed with the Securities and
Exchange Commission on February 1, 2023).*
10.3
Amended and Restated Employment Agreement by and among USCB Financial Holdings, Inc., U.S. Century Bank
and Robert Anderson dated as of January 29, 2023 (incorporated by reference to Exhibit 10.1 to the Registrant’s
Current Report on Form 8-K dated as of January 29, 2023 (File No. 001-41196) filed with the Securities and
Exchange Commission on February 1, 2023).*
10.4
Change in Control Agreement between U.S. Century Bank and Benigno Pazos dated August 2, 2019 (incorporated
by reference to Exhibit 10.6 to the Registrant’s Annual Report on Form 10-K for the year ended December 1, 2021
(File No. 001-41196) filed with the Securities and Exchange Commission on March 24, 2022).*
10.5
Employment Agreement between U.S. Century Bank and Jalal “Jay” Shehadeh dated as of September 28,
2020.
***
21.1
Subsidiaries of USCB Financial Holdings, Inc.
**
23.1
Consent of Crowe LLP, Independent Registered Public Accounting Firm.
**
31.1
Certification of Chief Executive Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934.
**
31.2
Certification of Chief Financial Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934.
**
32.1
Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350.
***
32.2
Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350.
***
101
The following financial statements from
the Company’s Annual Report on
Form 10-K for the year ended
December 31, 2021,
formatted
in
Inline
XBRL:
(i)
Consolidated
Balance
Sheets,
(ii)
Consolidated
Statements
of
Operations,
(iii)
Consolidated
Statements
of
Comprehensive Income,
(iv) Consolidated
Statements of
Changes
in
Stockholders’ Equity,
(v) Consolidated
Statements of Cash Flows, (vi) Notes to Consolidated Financial Statements.
104
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)
*
Management contract or compensatory plan or arrangement.
**
Filed herwith.
***
Furnished hereby.
Table of Contents
114
USCB Financial Holdings, Inc.
2022 10-K
SIGNATURES
Pursuant to the requirements of the Exchange
Act, the registrant has duly caused this report
to be signed on its behalf
by the undersigned thereunto duly authorized.
USCB FINANCIAL HOLDINGS, INC.
Date: March 24, 2023
By:
/s/ Luis de la Aguilera
Luis de la Aguilera
President and Chief Executive Officer
Pursuant to the requirements
of the Exchange Ac,
this report has been
signed by the following
persons in the capacities
and on the dates indicated.
Signature
Title
Date
/s/ Luis de la Aguilera
President, Chief Executive Officer,
and Director
(Principal Executive Officer)
March 24, 2023
Luis de la Aguilera
/s/ Robert Anderson
Chief Financial Officer (Principal Financial
Officer and Principal Accounting Officer)
March 24, 2023
Robert Anderson
/s/ Aida Levitan
Director
March 24, 2023
Aida Levitan
/s/ Howard Feinglass
Director
March 24, 2023
Howard Feinglass
/s/ Kirk Wycoff
Director
March 24, 2023
Kirk Wycoff
/s/ Ramon A. Abadin
Director
March 24, 2023
Ramon A. Abadin
/s/ Bernardo B. Fernandez
Director
March 24, 2023
Bernardo B. Fernandez
/s/ Ramon A. Rodriguez
Director
March 24, 2023
Ramon A. Rodriguez
/s/ Maria C. Alonso
Director
March 24, 2023
Maria C. Alonso
/s/ Robert E. Kafafian
Director
March 24, 2023
Robert E. Kafafian