USCB filing — read by section

Item 2. Management’s Discussion and Analysis

Item 2. 
Management's Discussion and Analysis of Financial Condition 
and Results of Operations 

 The 
following 
discussion 
and 
analysis 
is 
designed 
to 
provide 
a 
better 
understanding 
of 
the 
consolidated 
financial 
 condition and results 
of operations of 
the Company and 
the Bank, its 
wholly owned subsidiary, 
for the quarter 
and six months 
 ended June 
30, 2023. 
This discussion 
and analysis 
is best 
read in 
conjunction 
with the 
unaudited consolidated 
financial 
 statements 
and 
related 
footnotes 
included 
in 
this 
quarterly 
report 
on 
Form 
10-Q 
and 
the 
audited 
consolidated 
financial 
 statements 
and 
related 
footnotes 
included 
in 
the 
Annual 
Report 
on 
Form 
10-K/A 
(“2022 
Form 
10-K/A”) 
filed 
with 
the 
 Securities and Exchange Commission (“SEC”) for the year ended 
December 31, 2022. 
 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" below and in the 2022 Form 10-K/A filed 
 with the SEC which is available at the SEC’s website 
www.sec.gov. 
 Throughout 
this 
document, 
references 
to 
“we,” 
“us,” 
“our,” 
and 
“the 
Company” 
generally 
refer 
to 
USCB 
Financial 
 Holdings, Inc. 
 Forward-Looking Statements 
 This Quarterly Report 
on Form 10-Q 
(“Form 10-Q”) contains 
statements that are 
not historical in 
nature and 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 (Exchange Act”). 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, 
 but 
are 
not 
limited 
to, 
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 and balance sheet restructuring. 

 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; 
 • 
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 procedures and processes; 
 • 
our ability 
to comply 
with the 
extensive laws 
and regulations 
to which 
we are subject, 
including the 
laws for 
each 
 jurisdiction where we operate; 
 • 
adverse changes or conditions in capital and financial markets, including actual or potential stresses in 
the banking 
 industry; 
 • 
deposit attrition and the level of our uninsured deposits; 
 • 
legislative or regulatory 
changes and 
changes in accounting 
principles, policies, 
practices or guidelines, 
including 
 the on-going effects of the implementation of the 
Current Expected Credit Losses (“CECL”) standard; 
 • 
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 common stock; 
 • 
our ability to fund or access the capital markets at attractive rates 
and terms and manage our growth, both organic 
 growth as well as growth through other means, such as 
future acquisitions; 
 • 
inflation, interest rate, unemployment rate, market 
and monetary fluctuations; 
 • 
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 
Form 10-Q, 
the 2022 Form 
10-K/A and other 
filings we 
make with the 
Securities and 
 Exchange Commission (“SEC”). 
 

 
 
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 34 
USCB Financial Holdings, Inc. 
Q2 2023 Form 10-Q 
 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 
Form 10-Q 
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 statements are 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 in the reports 
the Company filed 
or 
 will file with the SEC. 
 Overview 
 The Company 
reported 
net 
income 
of $4.2 
million or 
$0.21 per 
diluted 
share of 
common 
stock for 
the three 
months 
 ended June 30, 2023 compared 
to $5.3 million or 
$0.26 per diluted share 
of common stock for 
the three months ended 
June 
 30, 2022. Net income 
for the six months 
ended June 30, 2023 
was $10.0 million or 
$0.51 per diluted share 
of common stock 
 compared to $10.1 million or $0.50 per diluted share of 
common stock for the same period in 2022. 
 During the second quarter 
of 2023, the Company 
repurchased 77,603 shares 
of Class A common stock at a 
weighted 
 average price per share of $9.58. The aggregate 
purchase price for these transactions 
was approximately $747 thousand, 
 including transaction costs. 
Year-to-date, the Company 
has repurchased 
577,603 shares 
at a 
weighted average 
price per 
 share 
of 
$11.41. 
These 
repurchases 
were 
made 
through 
open 
market 
purchase 
pursuant 
to 
the 
Company’s 
publicly 
 announced repurchase 
program. As 
of June 
30, 2023, 
172,397 shares 
remain authorized for 
repurchase under 
this program. 
 In evaluating our financial 
performance, the Company 
considers 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 
. 
 Unless otherwise stated, all period comparisons in the 
bullet points below are calculated for the 
quarter ended June 30, 
 2023 compared to the quarter ended June 30, 
2022 and to December 31, 2022, 
comparison annualized where appropriate: 
 • 
Net interest income for the three months ended 
June 30, 2023 decreased $1.5 million or 9.4% to 
$14.2 million from 
 $15.6 million for 
the quarter ended 
June 30, 2022. Net 
interest income for 
the six months 
ended in June 30, 
2023 
 increased $149 thousand or 0.5% compared to the same 
period ended June 30, 2022. 
 • 
Net interest margin (“NIM”) was 2.73% for the three months ended June 30, 2023 compared to 3.37% for the three 
 months ended June 30, 
2022. NIM was 2.97% for 
the six months ended 
in June 30, 2023 
compared to 3.30% for 
 the same period in 2022. 

 • 
Total assets were $2.2 billion at June 
30, 2023, representing an increase of $209.8 
million or 10.4% from June 30, 
 2022 and an increase of $140.1 million or 13.5% annualized 
from December 31, 2022. 
 

 • 
Total loans were 
$1.6 billion at 
June 30, 2023, 
representing an increase 
of $223.2 million 
or 16.3% from 
June 30, 
 2022 and an increase of $88.6 million or 11.9% annualized 
from December 31, 2022. 
 • 
Total deposits 
were $1.9 
billion at 
June 30, 
2023, representing 
an increase 
of $182.6 
million or 
10.5% from 
June 
 30, 2022 and an increase of $92.0 million or 10.1% annualized 
from December 31, 2022. 

 • 
Annualized return on 
average assets for 
the quarter ended 
June 30, 2023 
was 0.77% compared 
to 1.08% for 
the 
 quarter ended June 30, 2022. Annualized return 
on average assets was 
0.94% for the six months 
ended June 30, 
 2023 compared to 1.05% for the same period in 2022. 

 • 
Annualized return 
on average 
stockholders’ 
equity for 
the quarter 
ended June 
30, 2023 
was 9.13% 
compared to 
 11.38% for 
quarter ended 
June 30, 2022. 
Annualized return on 
average equity was 
10.98% for 
the six 
months ended 
 June 30, 2023 compared to 10.54% for the same period 
in 2022. 
 • 
The ACL to total loans was 1.18% 
at June 30, 2023 and 
1.16% at December 
31, 2022. ACL was calculated under 
 the CECL methodology 
for three 
and six 
months ended 
June 30, 
2023 and 
the incurred 
loss methodology 
for all 
 periods in 2022. 
 • 
Non-performing loans to total loans was 0.03% at June 
30, 2023 compared to 0.0% at December 31, 2022. 

 
 
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 35 
USCB Financial Holdings, Inc. 
Q2 2023 Form 10-Q 
 • 
At 
June 30, 
2023, 
the 
total 
risk-based 
capital 
ratios 
for 
the 
Company 
and 
the 
Bank 
were 
13.42% 
and 
13.37%, 
 respectively. 
 • 
Tangible 
book 
value 
per 
common 
share 
(non-GAAP 
financial 
measurement) 
of 
$9.40 
as 
of 
June 
30, 
2023 
was 
 negatively affected 
by $2.41 
due to 
after tax 
unrealized security 
losses on 
securities of 
$47.1 million 
at June 
30, 
 2023. At June 30, 2022, 
tangible book value 
of $9.00 per 
common share was 
negatively affected 
by $1.84 due 
to 
 $36.9 million after tax unrealized security losses. See “Reconciliation and Management Explanation for Non-GAAP 
 Financial Measures” 
for a reconciliation of this non-GAAP financial measure. 
 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” 
in the 
Company’s 2022 Form 
10-K/A. To prepare 
 financial statements 
in conformity 
with US 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 
 On 
January 
1, 
2023, 
the 
Company 
adopted 
ASU 
2016-13 
Financial 
Instruments 
- 
Credit 
Losses 
(Topic 
326): 
 Measurement of Credit Losses 
on Financial Instruments, 
as amended, which replaces 
the incurred loss methodology 
with 
 an 
expected 
loss 
methodology 
that 
is 
referred 
to 
as 
the 
current 
expected 
credit 
loss 
(CECL) 
methodology. 
See 
Note 
1 
 “Summary of Significant 
Accounting Policies” Item 
1 of Part I 
of this Form 
10-Q for more information 
on the adoption 
ASC 
 326 and the allowance of credit losses. 

 Our ACL 
included residential 
loans. To 
assess the 
potential impact 
of changes 
in qualitative 
factors related 
to these 
 loans, 
management 
performed 
a sensitivity 
analysis. 
The 
Company evaluated 
the 
impact 
of 
the HPI 
used 
in calculating 
 expected losses on the residential loan segment. As of June 30, 
2023, for every 100 basis points increase in the 
HPI index, 
 the forecast 
reduces 
reserves 
by 
approximately 
$240 
thousand 
and 
about 
2 basis 
points 
to 
the 
reserve 
coverage 
ratio, 
 everything else being 
constant. This 
sensitivity analysis provides 
a hypothetical result 
to assess the 
sensitivity of the 
ACL 
 and does not represent a change in management’s 
judgement. 
 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. 
 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. 
 Non-GAAP Financial Measures 
 This Form 10-Q 
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 

 
 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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 36 
USCB Financial Holdings, Inc. 
Q2 2023 Form 10-Q 
 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 
section 
“Reconciliation 
and 
Management 
Explanation 
of 
Non-GAAP 
Financial 
 Measures” included in this Form 10-Q.
 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): 
 June 30, 2023 
 December 31, 2022 
 Consolidated Balance Sheets: 
 Total 
assets 
 $ 
 2,225,914 
 $ 
 2,085,834 
 Total 
loans 
 (1)
 $ 
 1,595,959 
 $ 
 1,507,338 
 Total 
deposits 
 $ 
 1,921,301 
 $ 
 1,829,281 
 Total 
stockholders' equity 
 $ 
 183,685 
 $ 
 182,428 
 (1) 
Loan amounts include deferred fees/costs. 
 Three Months Ended June 30, 
 Six Months Ended June 30, 
 2023 
 2022 
 2023 
 2022 
 Consolidated Statements of Operations: 
 Net interest income before provision for credit losses 
 $ 
 14,173 
 $ 
 15,642 
 $ 
 30,170 
 $ 
 30,021 
 Total 
non-interest income 
 $ 
 1,846 
 $ 
 1,617 
 $ 
 3,916 
 $ 
 3,562 
 Total 
non-interest expense 
 $ 
 10,452 
 $ 
 9,551 
 $ 
 20,628 
 $ 
 19,163 
 Net income 

 $ 
 4,196 
 $ 
 5,295 
 $ 
 10,005 
 $ 
 10,149 
 Profitability: 
 Efficiency ratio 
 65.25% 
 55.34% 
 60.52% 
 57.06% 
 Net interest margin 

 2.73% 
 3.37% 
 2.97% 
 3.30% 
 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 expenses, 
and the provision for 
 income taxes. 
 Three months ended June 30, 2023 compared to the three 
months ended June 30, 2022 

 Net income decreased to 
$4.2 million for the 
three months ended June 
30, 2023 from $5.3 million 
for the same period 
 in 2022 mainly due to higher weighted average deposit 
costs. 

 Six months ended June 30, 2023 compared to six months 
ended June 30, 2022 

 Net income slightly decreased to $10.0 million for the six months 
ended June 30, 2023 from $10.1 million for the same 
 period 
in 
2022. 
The 
main 
drivers 
of 
the 
slight 
decrease 
of 
net 
income 
were 
a 
$14.6 
million 
increase 
in 
interest 
income 
 generated from higher loan 
yields and a bigger loan 
portfolio, offset by a 
$14.5 million increase in 
interest expense mainly 
 due to increases in deposit cost, combined with a $1.5 
million increase in non-interest expense. 

 
 
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 37 
USCB Financial Holdings, Inc. 
Q2 2023 Form 10-Q 
 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 indirect benefit of these 
non-interest-bearing funding 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. 
Our 
 asset liability committee (ALCO) has in 
place asset-liability management techniques to manage major factors that 
affect net 
 interest income and net interest margin. 

 
 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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 38 
USCB Financial Holdings, Inc. 
Q2 2023 Form 10-Q 
 The following 
table contains 
information related 
to average 
balances, average 
yields earned 
on assets, 
and average 
 costs of liabilities for the periods indicated (dollars in 
thousands): 
 Three Months Ended June 30, 
 2023 
 2022 
 Average 
 (1)
 Balance 
 Interest 
 Yield/Rate 
 (2)
 Average 
 (1)
 Balance 
 Interest 
 Yield/Rate 
 (2)
 Assets 
 Interest-earning assets: 
 Loans 
 (3)
 $ 
 1,569,266 
 $ 
 20,847 
 5.33% 
 $ 
 1,296,476 
 $ 
 14,053 
 4.35% 
 Investment securities 
 (4)
 422,544 
 2,382 
 2.26% 
 493,352 
 2,510 
 2.04% 
 Other interest-earnings assets 
 87,536 
 1,051 
 4.82% 
 69,503 
 121 
 0.70% 
 Total interest-earning assets 
 2,079,346 
 24,280 
 4.68% 
 1,859,331 
 16,684 
 3.60% 
 Non-interest-earning assets 
 104,196 
 

 

 109,050 
 

 

 Total assets 
 $ 
 2,183,542 
 $ 
 1,968,381 
 Liabilities and stockholders' equity 
 

 

 

 

 

 

 Interest-bearing liabilities: 
 Interest-bearing checking 
 $ 
 53,561 
 200 
 1.50% 
 $ 
 66,349 
 17 
 0.10% 
 Saving and money market deposits 
 940,095 
 6,968 
 2.97% 
 781,076 
 615 
 0.32% 
 Time deposits 
 277,001 
 2,145 
 3.11% 
 224,284 
 271 
 0.48% 
 Total interest-bearing deposits 
 1,270,657 
 9,313 
 2.94% 
 1,071,709 
 903 
 0.34% 
 FHLB advances and other borrowings 
 93,075 
 794 
 3.42% 
 36,330 
 139 
 1.53% 
 Total interest-bearing liabilities 
 1,363,732 
 10,107 
 2.97% 
 1,108,039 
 1,042 
 0.38% 
 Non-interest-bearing demand deposits 
 601,778 
 

 

 644,975 
 

 

 Other non-interest-bearing liabilities 
 33,794 
 28,770 
 Total liabilities 
 1,999,304 
 

 

 1,781,784 
 

 

 Stockholders' equity 
 184,238 
 186,597 
 Total liabilities and stockholders' equity 
 $ 
 2,183,542 
 

 

 $ 
 1,968,381 
 

 

 Net interest income 
 $ 
 14,173 
 $ 
 15,642 
 Net interest spread 
 (5)
 1.71% 
 3.22% 
 Net interest margin 
 (6)
 2.73% 
 3.37% 
 (1) 
Average balances - Daily average balances are used 
to calculate yields/rates. 
 (2) 
Annualized. 
 (3) 
Average loan balances include non-accrual loans. Interest income 
on loans includes accretion of deferred loan 
fees, net of deferred loan costs. 
 (4) 
At fair value except for securities held to maturity. This amount includes 
FHLB stock. 
 (5) 
Net interest spread is the weighted average 
yield on total interest-earning assets minus the weighted 
average rate on total interest-bearing liabilities. 
 (6) 
Net interest margin is the ratio of net interest 
income to average total interest-earning assets. 

 
 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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 39 
USCB Financial Holdings, Inc. 
Q2 2023 Form 10-Q 
 Six Months Ended June 30, 
 2023 
 2022 
 Average 
 Balance 
 (1)
 Interest 
 Yield/Rate 
 (2)
 Average 
 Balance 
 (1)
 Interest 
 Yield/Rate 
 (2)
 Assets 
 Interest-earning assets: 
 Loans 
 (3)
 $ 
 1,558,390 
 $ 
 40,558 
 5.25 
 % 
 $ 
 1,254,189 
 $ 
 27,035 
 4.35 
 % 
 Investment securities 
 (4)
 422,132 
 4,668 
 2.23 
 % 
 501,758 
 4,839 
 1.94 
 % 
 Other interest-earnings assets 
 65,433 
 1,433 
 4.42 
 % 
 79,763 
 152 
 0.38 
 % 
 Total interest-earning assets 
 2,045,955 
 46,659 
 4.60 
 % 
 1,835,710 
 32,026 
 3.52 
 % 
 Non-interest earning assets 
 106,100 
 105,374 
 Total assets 
 $ 
 2,152,055 
 $ 
 1,941,084 
 Liabilities and stockholders' equity 
 Interest-bearing liabilities: 
 Interest-bearing checking 
 $ 
 55,812 
 243 
 0.88 
 % 
 $ 
 65,398 
 33 
 0.10 
 % 
 Money market and savings accounts 
 918,697 
 11,753 
 2.58 
 % 
 758,729 
 1,166 
 0.31 
 % 
 Time deposits 
 251,009 
 3,202 
 2.57 
 % 
 223,781 
 530 
 0.48 
 % 
 Total interest-bearing deposits 
 1,225,518 
 15,198 
 2.50 
 % 
 1,047,908 
 1,729 
 0.33 
 % 
 Borrowings and repurchase agreements 
 77,425 
 1,291 
 3.36 
 % 
 36,171 
 276 
 1.54 
 % 
 Total interest-bearing liabilities 
 1,302,943 
 16,489 
 2.55 
 % 
 1,084,079 
 2,005 
 0.37 
 % 
 Non-interest bearing demand deposits 
 632,901 
 635,740 
 Other non-interest-bearing liabilities 
 32,404 
 27,079 
 Total liabilities 
 1,968,248 
 1,746,898 
 Stockholders' equity 
 183,807 
 194,186 
 Total liabilities and stockholders' equity 
 $ 
 2,152,055 
 $ 
 1,941,084 
 Net interest income 
 $ 
 30,170 
 $ 
 30,021 
 Net interest spread 
 (5)
 2.05 
 % 
 3.15 
 % 
 Net interest margin 
 (6)
 2.97 
 % 
 3.30 
 % 
 (1) 
Average balances - Daily average balances are used 
to calculate yields/rates. 
 (2) 
Annualized. 
 (3) 
Average loan balances include non-accrual loans. Interest income 
on loans includes accretion of deferred loan fees, 
net of deferred loan costs. 
 (4) 
At fair value except for securities held to maturity. Includes FHLB stock. 
 (5) 
Net interest spread is the weighted average 
yield on total interest-earning assets minus the weighted 
average rate on total interest-bearing 
 liabilities. 
 (6) 
Net interest margin is the ratio of net interest 
income to average total interest-earning assets. 
 Three months ended June 30, 2023 compared to the three 
months ended June 30, 2022 

 Net interest income before the provision 
for credit losses was $14.2 million for 
the three months ended June 30, 
2023, 
 a decrease of 
$1.5 million or 
9.4%, from 
$15.6 million 
for the same 
period in 2022. 
The decrease can 
be attributed to 
the 
 impact of higher deposit costs, which was a result to 
the prevailing market interest rate conditions. 
 Net interest 
margin was 
at 2.73% 
for the 
quarter ended 
June 30, 2023 
and 3.37% 
for the 
same period 
in 2022. 
The 
 increase in loan yields as well as yields on other interest 
-earning assets was offset by higher deposit and borrowing 
costs. 

 Six months ended June 30, 2023 compared to six months 
ended June 30, 2022 
 Net interest income before the provision for credit losses was $30.2 million for the six months ended June 30, 2023, an 
 increase of $149 thousand or 0.5%, from $30.0 million for 
the same period in 2022. 

 Net interest 
margin 
decreased 
to 2.97% 
for the 
six 
months 
ended June 
30, 
2023 from 
3.30% in 
the same 
period in 
 2022. Overall interest-bearing asset yields grew but were outpaced 
by the increase in cost of funds. 

 Provision for Credit Losses 
 The provision 
for credit 
losses represents 
a charge 
to earnings 
necessary to 
maintain an 
allowance for 
credit losses 
 that, in 
management's evaluation, 
is adequate 
to provide 
coverage for 
all expected 
credit losses. 
The provision 
for credit 
 losses is 
impacted by 
variations in 
our loan 
and debt 
securities portfolio, 
recent historical 
and projected 
future economic 

 
 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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 40 
USCB Financial Holdings, Inc. 
Q2 2023 Form 10-Q 
 conditions, our internal assessment of the credit quality of 
the loan and debt securities portfolios 
and net charge-offs. 
 Three months ended June 30, 2023 compared to the three 
months ended June 30, 2022 

 The provision for credit loss was $38 thousand for the three months 
ended June 30, 2023 compared to $705 thousand 
 for the same period 
in 2022. 
Growth in unfunded commitments 
was the primary driver 
of the provision expense 
during the 
 three months ended June 
30, 2023 period. The 
decrease in provision for 
credit losses in the 
2023 period compared to 
the 
 June 30, 2022 quarter was due to greater loan growth 
in second quarter 2022. 

 Six months ended June 30, 2023 compared to six months 
ended June 30, 2022 
 The provision for credit 
loss was $239 
thousand for the six 
months ended June 
30, 2023 compared 
to $705 thousand 
 for the same period in 2022. Decrease of $466 thousand due to higher loan growth in the six months ended 
June 30, 2022. 
 The ACL as a percentage of total loans increased to 1.18% at June 30, 2023 compared to 1.15% at June 30, 
2022. 
 ACL for the 
three and six months ended 
June 30 2023, was estimated under 
the CECL methodology, and for 
all periods 
 in 2022, it was estimated under the incurred loss model 
. 
See “Allowance for Credit Losses” 
below for further discussion on 
 how the ACL is calculated. 

 Non-Interest Income 
 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 and are beneficiaries of the life 
 insurance policies 
on some 
of our 
employees and 
generate income 
on 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): 
 Three Months Ended June 30, 
 Six Months Ended June 30, 
 2023 
 2022 
 2023 
 2022 
 Service fees 
 $ 
 1,173 
 $ 
 1,083 
 $ 
 2,378 
 $ 
 1,983 
 Gain (loss) on sale of securities available for sale, net 
 - 
 (3) 
 (21) 
 18 
 Gain on sale of loans held for sale, net 
 94 
 22 
 441 
 356 
 Loan settlement 
 - 
 - 
 - 
 161 
 Other non-interest income 
 579 
 515 
 1,118 
 1,044 
 Total 
non-interest income 
 $ 
 1,846 
 $ 
 1,617 
 $ 
 3,916 
 $ 
 3,562 
 Three months ended June 30, 2023 compared to the three 
months ended June 30, 2022 

 Non-interest income 
for the 
three months 
ended June 30, 
2023 increased 
$229 thousand 
or 14.2%, 
compared to 
the 
 same period in 
2022. This increase 
was primarily driven 
by an increase 
in service fees 
from a larger 
deposit portfolio and 
 $72 increase in gain on sale of loans due to higher sales 
of SBA 
7a loans. 

 Six months ended June 30, 2023 compared to the six 
months ended June 30, 2022 
 Non-interest income for the six months ended June 30, 2023 increased $354 thousand or 9.9%, 
compared to the same 
 period in 
2022. This 
increase was 
primarily 
driven by 
an increase 
in service 
fees 
from a 
larger deposit 
portfolio. 
For the 
 period ended 
June 30, 
2022, 
the Company 
recognized $161 
thousand interest 
recovery from 
a prior 
lending customer 
of 
 the Bank. This payment reflected the final payment and settlement 
of lien judgements against the customer. 

 
 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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 41 
USCB Financial Holdings, Inc. 
Q2 2023 Form 10-Q 
 Non-Interest Expense 
 The following table presents the components of non-interest 
expense for the dates indicated (in thousands):
 Three Months Ended June 30, 
 Six Months Ended June 30, 
 2023 
 2022 
 2023 
 2022 
 Salaries and employee benefits 
 $ 
 5,882 
 $ 
 5,913 
 $ 
 12,259 
 $ 
 11,788 
 Occupancy 
 1,319 
 1,251 
 2,618 
 2,521 
 Regulatory assessment and fees 
 452 
 226 
 676 
 439 
 Consulting and legal fees 
 386 
 398 
 744 
 915 
 Network and information technology services 
 505 
 448 
 983 
 835 
 Other operating 
 1,908 
 1,315 
 3,348 
 2,665 
 Total 
non-interest expense 
 $ 
 10,452 
 $ 
 9,551 
 $ 
 20,628 
 $ 
 19,163 
 Three months ended June 30, 2023 compared to the three 
months ended June 30, 2022 

 Non-interest expense 
for the 
three months 
ended June 30, 
2023 increased 
$901 thousand 
or 9.4%, 
compared to 
the 
 same period in 2022. The increase was primarily driven by an increase in the FDIC deposit insurance assessment rate and 
 audit 
and 
tax 
services 
expenses 
and 
was 
partially 
offset 
by 
a 
decrease 
in 
the 
incentive 
compensation 
accrual 
which 
is 
 included in salary and employee benefits expense. 
 Six months ended June 30, 2023 compared to the six 
months ended June 30, 2022 
 Non-interest expense 
for the six 
months ended June 
30, 2023 increased 
$1.5 million or 
7.6%, compared 
to the same 
 period 
in 
2022. The 
increase 
was 
primarily 
driven 
by 
higher 
salaries 
and 
employee 
benefits 
expense 
due 
to new 
hires, 
 increased salary compensation and seasonal payroll taxes as well as increases 
in the FDIC deposit insurance assessment 
 rate, and audit and tax services expense. 

 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 expenses for 
income tax purposes. 
Therefore, future 
decisions on the 
investments we choose 
will affect our 
effective 
 tax rate. 
The cash 
surrender value 
of bank-owned 
life insurance 
policies covering 
key employees, 
purchasing municipal 
 bonds, and overall levels of taxable income will be important 
elements in determining our effective tax rate. 
 Three months ended June 30, 2023 compared to the three 
months ended June 30, 2022 

 Income tax 
expense for 
the quarter 
ended June 30, 
2023 was 
$1.3 million 
as compared 
to $1.7 
million for 
the same 
 period in 
2022. The 
effective tax 
rate for 
the three 
months ended 
June 30, 
2023 
was 24.1% 
compared 
to 
24.4% for 
the 
 same period in 2022. 

 Six months ended June 30, 2023 compared to the six 
months ended June 30, 2022 
 Income tax expense 
for the six 
months ended June 
30, 2023 decreased 
to $3.2 million 
from $3.6 million 
for the same 
 period in 2022. The Company’s effective tax rate was 24.3% for the 2023 period compared to 26.0% for the same period in 
 2022. The 
Company’s 
effective 
tax rate 
in 
the 
period 
ended June 
30, 
2022 
was 
higher primarily 
because 
the 
Company 
 recorded a one-time adjustment of $300 thousand to deferred 
tax assets which increased the income tax provision. 
 For 
a 
further 
discussion 
of 
income 
taxes, 
see 
Note 
4 
“Income 
Taxes” 
to 
the 
unaudited 
Consolidated 
Financial 
 Statements in Item 1 of Part I of this Form 10-Q. 
 Analysis of Financial Condition 
 Total 
assets at June 30, 2023 were $2.2 billion, an increase of $140.1 million, or 13.5% 
annualized, over total assets of 
 $2.1 billion at December 31, 2022. Total 
loans, net of unearned fees/cost, increased $88.6 million, or 11.9 
% 
annualized, to 
 $1.6 billion at June 30, 
2023 compared to $1.5 
billion at December 
31, 2022. Total 
deposits increased by $92.0 
million, or 
 10.1% annualized, to $1.9 billion at June 30, 2023 compared 
to December 31, 2022. 

 
 
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 42 
USCB Financial Holdings, Inc. 
Q2 2023 Form 10-Q 
 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 
philosophy 
of 
the 
portfolio 
is 
to 
maximize 
the 
Company’s 
profitability 
taking 
into 
 consideration the Company’s 
risk appetite and 
tolerance, manage 
the asset composition 
and diversification, 
and maintain 
 adequate risk-based capital ratios. 
 The 
investment 
portfolio 
is 
managed 
in 
accordance 
with 
the 
Asset 
and 
Liability 
Management 
(“ALM”) 
policy, 
which 
 includes 
investment 
guidelines, 
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 
also 
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, 
U.S. 
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, 
and the ALCO 
of the Company 
to ensure an 
appropriate risk 
and return profile 
as well as 
for adherence to 
the 
 investment policy. 
 ASC Topic 
326 amended 
the 
existing 
other-than-temporary-impairment 
guidance 
for AFS 
securities, 
requiring 
credit 
 losses to be recorded as 
an allowance rather than 
through a permanent write-down. 
When evaluating AFS 
debt securities 
 under ASC 
Topic 
326, the 
Company has 
evaluated whether 
the decline 
in fair 
value is 
attributed to 
credit losses 
or other 
 factors 
like 
interest 
rate 
risk, 
using 
both 
quantitative 
and 
qualitative 
analyses, 
including 
company 
performance 
analysis, 
 review of credit 
ratings, remaining 
payment terms, 
prepayment speeds 
and analysis 
of macro-economic 
conditions. Each 
 investment is expected 
to recover 
its price depreciations 
over its holding 
period as 
it moves to 
maturity and the 
Company 
 has 
the 
intent 
and 
ability 
to 
hold 
these 
securities 
to 
maturity 
if 
necessary. 
As 
a 
result 
of 
this 
evaluation, 
the 
Company 
 concluded that no allowance was required on AFS securities. 
 AFS and 
HTM investment 
securities increased 
$20.6 million, or 
9.9% annualized, 
to $439.4 million 
at June 30, 
2023 
 from $418.8 million at December 31, 2022. Investment 
securities increased due to reinvestment of payments 
received and 
 investment of excess 
in cash 
balances into high 
credit quality investments 
to increase the 
Company’s profitability and 
modify 
 the 
Company’s 
balance 
sheet 
duration 
according 
to 
the 
ALM 
policy. 
As 
of 
June 30, 
2023, 
investment 
securities 
with 
a 
 market value of 
$223.2 million were 
pledged to secure 
public deposits and 
BTFP. 
The investment portfolio 
does not have 
 any tax-exempt securities. 

 
 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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 43 
USCB Financial Holdings, Inc. 
Q2 2023 Form 10-Q 
 The 
following 
table 
presents 
the 
amortized 
cost 
and 
fair 
value 
of 
investment 
securities 
for 
the 
dates 
indicated 
(in 
 thousands): 
 June 30, 2023 
 December 31, 2022 
 Available-for-sale: 
 Amortized 
 Cost 
 Fair Value 
 Amortized 
 Cost 
 Fair Value 
 U.S. Government Agency 
 $ 
 9,906 
 $ 
 8,334 
 $ 
 10,177 
 $ 
 8,655 
 Collateralized mortgage obligations 
 107,991 
 83,883 
 118,951 
 95,541 
 Mortgage-backed securities - residential 
 71,279 
 58,099 
 73,838 
 60,879 
 Mortgage-backed securities - commercial 
 36,775 
 30,852 
 32,244 
 27,954 
 Municipal securities 
 25,044 
 19,091 
 25,084 
 18,483 
 Bank subordinated debt securities 
 16,836 
 14,468 
 15,964 
 14,919 
 Corporate bonds 
 4,033 
 3,715 
 4,037 
 3,709 
 $ 
 271,864 
 $ 
 218,442 
 $ 
 280,295 
 $ 
 230,140 
 Held-to-maturity: 
 U.S. Government Agency 
 $ 
 44,404 
 $ 
 38,230 
 $ 
 44,914 
 $ 
 39,062 
 U.S. Treasury 
 39,414 
 39,400 
 9,841 
 9,828 
 Collateralized mortgage obligations 
 65,844 
 57,030 
 68,727 
 60,925 
 Mortgage-backed securities - residential 
 44,834 
 40,213 
 42,685 
 38,483 
 Mortgage-backed securities - commercial 
 15,491 
 14,409 
 11,442 
 10,777 
 Corporate bonds 
 10,988 
 10,047 
 11,090 
 10,013 
 $ 
 220,975 
 $ 
 199,329 
 $ 
 188,699 
 $ 
 169,088 
 Allowance for credit losses - securities held-to-maturity 
 (19) 
 Securities held-to maturity, net of allowance for credit losses 
 $ 
 220,956 
 The following 
table shows 
the weighted 
average yields, 
categorized by 
contractual maturity, 
for investment 
securities 
 as of June 30, 2023 (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 
 $ 
 - 
 0.00% 
 $ 
 - 
 0.00% 
 $ 
 2,356 
 3.17% 
 $ 
 7,550 
 2.29% 
 $ 
 9,906 
 2.50% 
 Collateralized mortgage obligations 
 - 
 0.00% 
 - 
 0.00% 
 - 
 0.00% 
 107,991 
 1.40% 
 107,991 
 1.40% 
 MBS - residential 
 - 
 0.00% 
 - 
 0.00% 
 - 
 0.00% 
 71,279 
 1.62% 
 71,279 
 1.62% 
 MBS - commercial 
 - 
 0.00% 
 - 
 0.00% 
 - 
 0.00% 
 36,775 
 2.17% 
 36,775 
 2.17% 
 Municipal securities 

 - 
 0.00% 
 - 
 0.00% 
 1,000 
 2.05% 
 24,044 
 1.73% 
 25,044 
 1.74% 
 Bank subordinated debt securities 
 - 
 0.00% 
 - 
 0.00% 
 16,836 
 4.83% 
 - 
 0.00% 
 16,836 
 4.83% 
 Corporate bonds 
 - 
 0.00% 
 4,033 
 2.50% 
 - 
 0.00% 
 - 
 0.00% 
 4,033 
 2.50% 
 $ 
 - 
 $ 
 4,033 
 $ 
 20,192 
 $ 
 247,639 
 $ 
 271,864 
 1.86% 
 Held-to-maturity: 
 U.S. Government Agency 
 $ 
 - 
 0.00% 
 $ 
 7,915 
 1.03% 
 $ 
 20,358 
 1.46% 
 $ 
 16,131 
 1.85% 
 $ 
 44,404 
 1.52% 
 U.S. Treasury 
 39,414 
 5.25% 
 - 
 0.00% 
 - 
 0.00% 
 - 
 0.00% 
 39,414 
 5.25% 
 Collateralized mortgage obligations 
 - 
 0.00% 
 - 
 0.00% 
 - 
 0.00% 
 65,844 
 1.66% 
 65,844 
 1.66% 
 MBS - residential 
 - 
 0.00% 
 4,497 
 1.85% 
 5,933 
 1.75% 
 34,404 
 2.40% 
 44,834 
 2.26% 
 MBS - commercial 
 - 
 0.00% 
 - 
 0.00% 
 3,080 
 1.62% 
 12,411 
 2.12% 
 15,491 
 2.02% 
 Corporate bonds 
 1,502 
 2.25% 
 9,486 
 2.79% 
 - 
 0.00% 
 - 
 0.00% 
 10,988 
 2.72% 
 $ 
 40,916 
 $ 
 21,898 
 $ 
 29,371 
 $ 
 128,790 
 $ 
 220,975 
 2.13% 
 Loans 
 Loans are the 
largest category of 
interest-earning assets 
on the unaudited 
Consolidated Balance 
Sheets, and usually 
 provide 
higher 
yields 
than 
the 
remainder 
of 
the 
interest-earning 
assets. 
Higher 
yields 
typically 
carry 
inherent 
credit 
and 
 liquidity risks in comparison to lower 
yield assets. The Company manages 
and mitigates such risks in accordance 
with the 
 credit and ALM policies, risk tolerance and balance sheet composition. 

 
 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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 44 
USCB Financial Holdings, Inc. 
Q2 2023 Form 10-Q 
 The following table shows the loan portfolio composition 
as of the dates indicated (in thousands): 
 

 June 30, 2023 
 December 31, 2022 
 Total 
 Percent of 
 Total 
 Total 
 Percent of 
 Total 
 Residential Real Estate 
 $ 
 183,093 
 11.5 
 % 
 $ 
 185,636 
 12.3 
 % 
 Commercial Real Estate 
 989,401 
 62.0 
 % 
 970,410 
 64.4 
 % 
 Commercial and Industrial 
 169,401 
 10.6 
 % 
 126,984 
 8.4 
 % 
 Foreign Banks 
 85,409 
 5.4 
 % 
 93,769 
 6.2 
 % 
 Consumer and Other 

 167,845 
 10.5 
 % 
 130,429 
 8.7 
 % 
 Total 
gross loans 
 1,595,149 
 100.0 
 % 
 1,507,228 
 100.0 
 % 
 Less: Deferred fees (cost) 
 (810) 
 

 (110) 
 Total 
loans net of deferred fees (cost) 
 1,595,959 
 1,507,338 
 Less: Allowance for credit losses 
 18,815 
 17,487 
 Total 
net loans 
 $ 
 1,577,144 
 $ 
 1,489,851 
 Total 
loans, net of unearned fees/cost, increased by $88.6 million, 
or 11.9% 
annualized, at June 30, 2023 compared to 
 December 31, 2022. The commercial and industrial, and 
to a lesser extent, consumer and 
other and commercial real estate 
 segments had the 
most significant growth partially 
offset by modest declines 
in the residential 
real estate and 
correspondent 
 bank loan segments. 

 Our 
loan 
portfolio 
continues 
to 
grow, 
with 
commercial 
real 
estate 
lending 
as 
the 
primary 
focus 
which 
represented 
 approximately 
62.0% 
of 
the total 
gross 
loan portfolio 
as of 
June 30, 2023. 
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. 
 Most of the 
commercial real estate 
exposure represents 
loans to commercial 
businesses secured 
by owner-occupied 
 real estate. 
The growth 
experienced in 
recent 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 
long-term 
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 June 30, 
 2023 (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 
 $ 
 9,924 
 $ 
 15,866 
 $ 
 83,937 
 $ 
 73,366 
 $ 
 183,093 
 Commercial Real Estate 
 79,586 
 167,334 
 732,553 
 9,928 
 989,401 
 Commercial and Industrial 
 5,304 
 36,175 
 87,463 
 40,459 
 169,401 
 Foreign Banks 
 85,409 
 - 
 - 
 - 
 85,409 
 Consumer and Other 
 3,037 
 1,888 
 11,612 
 151,308 
 167,845 
 Total 
gross loans 
 $ 
 183,260 
 $ 
 221,263 
 $ 
 915,565 
 $ 
 275,061 
 $ 
 1,595,149 
 Interest rate sensitivity: 
 Fixed interest rates 
 $ 
 161,350 
 $ 
 122,412 
 $ 
 162,484 
 $ 
 164,385 
 $ 
 610,631 
 Floating or adjustable rates 
 21,910 
 98,851 
 753,081 
 110,676 
 984,518 
 Total 
gross loans 
 $ 
 183,260 
 $ 
 221,263 
 $ 
 915,565 
 $ 
 275,061 
 $ 
 1,595,149 
 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 
June 30, 
2023, approximately 
61.7% of 
the loans 
have adjustable/variable 
rates and 
38.3% of 
the loans 
have 
 fixed rates. 
The adjustable/variable 
rate 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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 45 
USCB Financial Holdings, Inc. 
Q2 2023 Form 10-Q 
 that most 
of our 
loans have 
interest rate 
floors. This 
embedded option 
protects the 
Company from 
a decrease 
in interest 
 rates below the floor 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 reviewed 
at least once a 
year, and 
more frequently as 
needed. 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): 

 June 30, 2023 
 Pass 
 Special Mention 
 Substandard 
 Doubtful 
 Total 
 Residential Real Estate 
 $ 
 183,093 
 $ 
 - 
 $ 
 - 
 $ 
 - 
 $ 
 183,093 
 Commercial Real Estate 
 986,874 
 - 
 2,527 
 - 
 989,401 
 Commercial and Industrial 
 168,565 
 - 
 836 
 - 
 169,401 
 Foreign Banks 
 85,409 
 - 
 - 
 - 
 85,409 
 Consumer and Other 

 167,845 
 - 
 - 
 - 
 167,845 
 $ 
 1,591,786 
 $ 
 - 
 $ 
 3,363 
 $ 
 - 
 $ 
 1,595,149 
 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 

 
 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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 46 
USCB Financial Holdings, Inc. 
Q2 2023 Form 10-Q 
 Non-Performing Assets 
 The following table presents non-performing assets 
as of the dates shown (in thousands, 
except ratios): 
 June 30, 2023 
 December 31, 2022 
 Total 
non-performing loans 
 $ 
 486 
 $ 
 - 
 Other real estate owned 
 - 
 - 
 Total 
non-performing assets 
 $ 
 486 
 $ 
 - 
 Asset quality ratios: 
 (1)
 Allowance for credit losses to total loans 
 1.18% 
 1.16% 
 Allowance for credit losses to non-performing loans 
 3871% 
 - % 
 Non-performing loans to total loans 
 0.03% 
 - % 
 (1) 
 ACL was calculated under CECL methodology for 2023, and incurred loss methodology for 2022 
 Non-performing 
assets 
include 
all 
loans 
categorized 
as 
non-accrual 
or 
restructured, 
impaired 
securities, 
other 
real 
 estate 
owned 
(“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. 
 The 
Company 
may 
grant 
a 
loan 
concession 
to 
a 
borrower 
experiencing 
financial 
difficulties. 
This 
determination 
is 
 performed 
during 
the 
annual 
review 
process 
or 
whenever 
problems 
surface 
regarding 
the 
client’s 
ability 
to 
repay 
in 
 accordance with 
the original 
terms of 
the loan 
or line 
of credit. 
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. 
 For further discussion on non-performing loans 
and borrowers experiencing financial difficulties, 
see Note 3 “Loans” to 
 the unaudited Consolidated Financial Statements of this 
Form 10-Q. 
 Allowance for Credit Losses 
 On January 1, 
2023, the Company 
adopted FASB 
ASU 2016-13, 
which introduced the 
current expected 
credit losses 
 (CECL) methodology 
and 
required 
us to 
estimate 
all expected 
credit 
losses over 
the remaining 
life of 
our loan 
portfolio. 
 Accordingly, 
the 
ACL 
represents 
an 
amount 
that, 
in 
management's 
evaluation, 
is 
adequate 
to 
provide 
coverage 
for 
all 
 expected future credit losses on outstanding loans. 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. 
See 
Note 
3 “Loans” 
in Item 
1 of 
Part 1 
of 
this Form 
10-Q 
for more 
information 
on 
the 
allowance 
for 
credit 
 losses. 

 
 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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 47 
USCB Financial Holdings, Inc. 
Q2 2023 Form 10-Q 
 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 
 Three Months Ended June 30, 2023 
 

 

 

 

 

 

 

 

 

 

 

 

 Beginning balance 
 $ 
 2,819 
 $ 
 10,453 
 $ 
 2,367 
 $ 
 772 
 $ 
 2,476 
 $ 
 18,887 
 Provision for credit losses 
 (1)
 (148) 
 (270) 
 125 
 (95) 
 345 
 (43) 
 Recoveries 
 2 
 - 
 8 
 - 
 1 
 11 
 Charge-offs 
 - 
 - 
 - 
 - 
 (40) 
 (40) 
 Ending Balance 

 $ 
 2,673 
 $ 
 10,183 
 $ 
 2,500 
 $ 
 677 
 $ 
 2,782 
 $ 
 18,815 
 Average loans 
 $ 
 180,945 
 983,926 
 155,241 
 96,399 
 152,755 
 1,569,266 
 Net charge-offs to average loans 
 

 0.00% 
 - 
 -0.02% 
 - 
 0.10% 
 0.01% 
 Six Months Ended June 30, 2023 
 

 

 

 

 

 

 Beginning balance 
 $ 
 1,352 
 $ 
 10,143 
 $ 
 4,163 
 $ 
 720 
 $ 
 1,109 
 $ 
 17,487 
 Cumulative effect of adoption of accounting 
 principle 
 (2)
 1,238 
 1,105 
 (2,158) 
 23 
 858 
 1,066 
 Provision for credit losses 
 (3)
 73 
 (1,065) 
 443 
 (66) 
 857 
 242 
 Recoveries 
 10 
 - 
 52 
 - 
 3 
 65 
 Charge-offs 
 - 
 - 
 - 
 - 
 (45) 
 (45) 
 Ending Balance 

 $ 
 2,673 
 $ 
 10,183 
 $ 
 2,500 
 $ 
 677 
 $ 
 2,782 
 $ 
 18,815 
 Average loans 
 $ 
 188,630 
 974,149 
 156,883 
 92,238 
 146,490 
 1,558,390 
 Net charge-offs to average loans 
 -0.01% 
 - 
 -0.07% 
 - 
 0.06% 
 0.00% 
 (1) Provision for credit losses excludes $62 thousand expense due to unfunded commitments included in other liabilities and $19 
 thousand expense due to investment securities held to maturity. 
 (2) Impact of CECL adoption on January 1, 2023 
 (3) Provision for credit losses excludes $22 thousand release due to unfunded commitments included in other liabilities and $19 
 thousand expense due to investment securities held to maturity. 

 

 

 

 Residential 
 Real Estate 
 Commercial 
 Real Estate 
 Commercial 
 and Industrial 
 Foreign 

 Banks 
 Consumer 
 and Other 
 Total 
 Three Months Ended June 30, 2022 
 

 

 

 

 

 

 

 

 

 

 

 

 Beginning balance 
 $ 
 2,357 
 $ 
 9,183 
 $ 
 2,355 
 $ 
 491 
 $ 
 688 
 $ 
 15,074 
 Provision for credit losses 
 9 
 107 
 311 
 160 
 118 
 705 
 Recoveries 
 - 
 - 
 5 
 - 
 3 
 8 
 Charge-offs 
 - 
 - 
 - 
 - 
 (1) 
 (1) 
 Ending Balance 

 $ 
 2,366 
 $ 
 9,290 
 $ 
 2,671 
 $ 
 651 
 $ 
 808 
 $ 
 15,786 
 Average loans 
 $ 
 198,812 
 $ 
 799,846 
 $ 
 126,434 
 $ 
 76,968 
 $ 
 94,416 
 $ 
 1,296,476 
 Net charge-offs to average loans 
 

 - 
 - 
 -0.02% 
 - 
 -0.01% 
 0.00% 
 Six Months Ended June 30, 2022 
 

 

 

 

 

 

 Beginning balance 
 $ 
 2,498 
 $ 
 8,758 
 $ 
 2,775 
 $ 
 457 
 $ 
 569 
 $ 
 15,057 
 Provision for credit losses 
 (148) 
 532 
 (115) 
 194 
 242 
 705 
 Recoveries 
 32 
 - 
 11 
 - 
 3 
 46 
 Charge-offs 
 (16) 
 - 
 - 
 - 
 (6) 
 (22) 
 Ending Balance 

 $ 
 2,366 
 $ 
 9,290 
 $ 
 2,671 
 $ 
 651 
 $ 
 808 
 $ 
 15,786 
 

 Average loans 
 $ 
 198,453 
 $ 
 769,978 
 $ 
 133,009 
 $ 
 68,400 
 $ 
 84,349 
 $ 
 1,254,189 
 Net charge-offs to average loans 
 -0.02% 
 - 
 -0.02% 
 - 
 0.01% 
 0.00% 
 

 
 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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 48 
USCB Financial Holdings, Inc. 
Q2 2023 Form 10-Q 
 Bank-Owned Life Insurance 
 As of June 30, 
2023, the combined 
cash surrender 
value of all bank-owned 
life insurance (“BOLI”) 
policies was $43.3 
 million. Changes in cash surrender value are recorded to non-interest income in the unaudited Consolidated Statements of 
 Operations. The Company had 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 
small-to-medium 
sized 
businesses 
(“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. 

 The following table 
presents the daily 
average balance 
and average rate 
paid on deposits 
by category for 
the periods 
 presented (in thousands, except ratios): 
 Three Months Ended June 30, 
 2023 
 2022 
 Average Balance 
 Average Rate 
 Paid 
 Average Balance 
 Average Rate 
 Paid 
 Non-interest-bearing checking 
 $ 
 601,778 
 0.00% 
 $ 
 644,975 
 0.00% 
 Interest-bearing checking 
 53,561 
 1.50% 
 66,349 
 0.10% 
 Money market and savings deposits 
 940,095 
 2.97% 
 781,076 
 0.32% 
 Time deposits 
 277,001 
 3.11% 
 224,284 
 0.48% 
 Total 
 $ 
 1,872,435 
 1.99% 
 $ 
 1,716,684 
 0.21% 
 The Company 
has a 
granular deposit 
portfolio 
with outstanding 
balances comprised 
of 50% 
in commercial 
deposits, 
 36% personal 
deposits, 11% 
public funds 
which are 
partially collateralized 
and 3% 
brokered deposits. 
During the 
second 
 quarter ended June 30, 2023, the Company acquired 
$50 million in brokered deposits to boost liquidity. 
The Company has 
 approximately 20 thousand deposits accounts with the majority in personal 
accounts, 
approximately 13 thousand or 64.4%. 
 The 
estimated 
average 
account 
size 
of 
our 
deposit 
portfolio 
is 
approximately 
$98 
thousand 
as 
of 
June 
30, 
2023. 
The 
 Company also offers 
Insured Cash Sweep (“ICS”) and Certificate 
of
 Deposit Account Registry Service (“CDARS”) 
deposit 
 products to fully insure our clients. 

 The 
uninsured 
deposits 
are 
estimated 
based 
on 
the 
FDIC 
deposit 
insurance 
limit 
of 
$250 
thousand 
for 
all 
deposit 
 accounts at the Company per 
account holder. The 
total estimated amount of uninsured 
deposits is 53.2% or $1.0 billion 
at 
 June 30, 2023. 

 The following table shows scheduled maturities of uninsured 
time deposits as of June 30, 2023 (in thousands): 
 June 30, 2023 
 Three months or less 
 $ 
 30,409 
 Over three through six months 
 17,692 
 Over six though twelve months 
 31,672 
 Over twelve months 
 11,696 
 $ 
 91,469 
 

 Other Liabilities 
 The Company collects from commercial loan customers 
funds which are held in escrow for future payment of 
real 
 estate taxes and insurance. These escrow funds are disbursed 
by the Company directly to the insurance companies 
and 
 taxing authority of the borrower. 
Escrow funds are recorded as other liabilities. 

 As of June 30, 2023 escrow balances totaled $12.1 million 
compared to $3.5 million at December 31, 2022 
. 

 
 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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 49 
USCB Financial Holdings, Inc. 
Q2 2023 Form 10-Q 
 Borrowings 
 As a member 
of the FHLB, 
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 operation 
s 
or the financial condition of the Company. 
 As of June 30, 2023, we 
had $87.0 million of fixed-rate 
advances outstanding from 
the FHLB with a weighted average 
 rate of 3.06%. Maturity dates for the advances range between 
2023 to 2028 detailed in the table below. 

 The following table presents the FHLB fixed rate advances 
as of June 30, 2023 (in thousands): 
 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 
 1.07% 
 Fixed 
 July 18, 2025 
 6,000 
 3.76% 
 Fixed 
 January 24, 2028 
 11,000 
 3.77% 
 Fixed 
 April 25, 2028 
 50,000 
 $ 
 87,000 
 We 
have also 
established 
Federal Funds 
lines of 
credit with 
our upstream 
correspondent banks, 
the BTFP, 
and the 
 FRB Atlanta 
Discount Window 
to manage 
temporary 
fluctuations in 
our daily 
cash 
balances. 
As of 
June 30, 2023, 
there 
 were no outstanding balances with any of these sources.
 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 than 
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 unaudited 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 
actual 
future 
cash 
funding 
requirements. 
The 
following 
table 
presents 
lending 
related 
 commitments outstanding as of the dates indicated (in thousands 
): 
 June 30, 2023 
 December 31, 2022 
 Commitments to grant loans and unfunded lines of credit 
 $ 
 92,910 
 $ 
 95,461 
 Standby and commercial letters of credit 
 8,344 
 4,320 
 Total 
 $ 
 101,254 
 $ 
 99,781 
 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. 

 
 
 Table of Contents 
 

 

 50 
USCB Financial Holdings, Inc. 
Q2 2023 Form 10-Q 
 Asset and Liability Management Committee 
 Members 
of 
senior 
management 
and 
our 
Board 
make 
up 
the 
asset 
and 
liability 
management 
committee, 
or 
ALCO. 
 Senior management is responsible for ensuring that Board 
approved strategies, policies, and procedures for managing and 
 mitigating risks are appropriately executed within the designated 
lines of authority and responsibility in a timely manner. 
 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 IRR 
(“Interest Rate Risk”) 
is inherent to the 
banking business, 
we believe our 
ALCO has put 
in 
 place sound risk management practices to identify, 
quantify, monitor, 
and limit 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, 
deposit 
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 steepening) 
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 
(“EVE”). 
This 
 assessment 
allows 
us 
to 
measure 
the 
degree 
to 
which 
the 
economic 
values 
will 
change 
under 
different 
interest 
rate 
 scenarios (parallel and non-parallel). The economic value 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 June 
30, 2023, we had 
a neutral balance sheet 
for year one modeling 
and an asset 
 sensitive balance 
sheet 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 EVE 
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 
June 30, 2023, 
NIM most likely 
will remain neutral 
for year one 
and should increase 
for 
 year two under static 
rate scenarios (an 
increase or decrease 
of 400 basis 
points). For the 
static forecast in 
year one, the 
 estimated NIM 
will decrease 
from the 
base case scenario 
to 
a +400 basis 
points scenario. 
Additionally, 
utilizing an 
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 
in rates will have a 
negative impact on the EVE 
and lower rates, a 
positive impact. Results and 
 analysis are presented quarterly to the ALCO, and strategies 
are defined. 

 
 
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 51 
USCB Financial Holdings, Inc. 
Q2 2023 Form 10-Q 
 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 relatively adequate funding. 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. 
 Changes in macroeconomic conditions, as well as exposure 
to credit, market, operational, legal and reputational 
risks, 
 such as 
cybersecurity risk, 
could have 
an unexpected 
impact on 
the Company’s 
liquidity risk 
profile and 
are factored 
into 
 the assessment of liquidity and the 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, 
Contingency Funding Plan and ALM policy. 
 Critical elements of our liquidity 
risk management include: effective corporate governance consisting of 
oversight by the 
 Board and active 
involvement of 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 services 
certificate 
of deposit, 
the Bank 
Term 
Funding Program, 
FRB 
 Atlanta discount 
window, 
and borrowings 
from the 
FHLB. Accordingly, 
we believe 
our liquidity 
resources are 
adequate to 
 fund loans and meet other cash needs as necessary. 

 
 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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 52 
USCB Financial Holdings, Inc. 
Q2 2023 Form 10-Q 
 Capital Adequacy 
 As 
of 
June 30, 
2023, 
the 
Bank 
was 
well capitalized 
under 
the 
FDIC’s 
prompt 
corrective 
action 
framework. 
We 
also 
 follow the capital conservation 
buffer framework, 
and as of June 
30, 2023, we 
exceeded the capital 
conversation buffer 
in 
 all capital 
ratios, 
according 
to 
our actual 
ratios. 
The 
following 
table 
presents 
the 
capital 
ratios 
for 
the 
Bank 
at the 
dates 
 indicated (in thousands, except ratios). 
 Actual 
 Minimum Capital 
 Requirements 

 To be Well Capitalized 
 Under Prompt Corrective 
 Action Provisions 
 Amount 
 Ratio 
 Amount 
 Ratio 
 Amount 
 Ratio 
 June 30, 2023 
 Total 
risk-based capital 
 $ 
 224,719 
 13.37 
 % 
 $ 
 134,413 
 8.00 
 % 
 $ 
 168,017 
 10.00 
 % 
 Tier 1 risk-based capital 
 $ 
 205,391 
 12.22 
 % 
 $ 
 100,810 
 6.00 
 % 
 $ 
 134,413 
 8.00 
 % 
 Common equity tier 1 capital 
 $ 
 205,391 
 12.22 
 % 
 $ 
 75,607 
 4.50 
 % 
 $ 
 109,211 
 6.50 
 % 
 Leverage ratio 
 $ 
 205,391 
 9.30 
 % 
 $ 
 88,361 
 4.00 
 % 
 $ 
 110,451 
 5.00 
 % 
 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 
 % 
 The Company is not subject to capital ratios imposed by Basel III on bank holding companies because the Company is 
 deemed to be a small bank holding company. 
 Impact of Inflation 
 Our 
Consolidated 
Financial 
Statements 
and 
related 
notes 
have 
been 
prepared 
in 
accordance 
with 
U.S. 
GAAP, 
 which require 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” to 
 the unaudited Consolidated Financial Statements in this 
Form 10-Q.

 
 
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 53 
USCB Financial Holdings, Inc. 
Q2 2023 Form 10-Q 
 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 GAAP, 
and 
are 
not 
necessarily 
comparable 
to non-GAAP 
 measures that may be presented by other 
companies. 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):

 
 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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 54 
USCB Financial Holdings, Inc. 
Q2 2023 Form 10-Q 
 USCB FINANCIAL HOLDINGS, INC. 
 NON-GAAP FINANCIAL MEASURES (UNAUDITED) 
 (Dollars in thousands) 
 As of or For the Three Months Ended 
 6/30/2023 
 3/31/2023 
 12/31/2022 
 9/30/2022 
 6/30/2022 
 Pre-tax pre-provision ("PTPP") income:
 (1)
 Net income 
 $ 
 4,196 
 $ 
 5,809 
 $ 
 4,434 
 $ 
 5,558 
 $ 
 5,295 
 Plus: Provision for income taxes 
 1,333 
 1,881 
 1,415 
 1,963 
 1,708 
 Plus: Provision for credit losses 
 38 
 201 
 880 
 910 
 705 
 PTPP income 
 $ 
 5,567 
 $ 
 7,891 
 $ 
 6,729 
 $ 
 8,431 
 $ 
 7,708 
 

 

 PTPP return on average assets:
 (1)
 

 

 PTPP income 
 $ 
 5,567 
 $ 
 7,891 
 $ 
 6,729 
 $ 
 8,431 
 $ 
 7,708 
 Average assets 
 $ 
 2,183,542 
 $ 
 2,120,218 
 $ 
 2,051,867 
 $ 
 2,026,791 
 $ 
 1,968,381 
 PTPP return on average assets 
 (2)
 1.02% 
 1.51% 
 1.30% 
 1.65% 
 1.57% 
 

 

 Operating net income:
 (1)
 

 

 Net income 
 $ 
 4,196 
 $ 
 5,809 
 $ 
 4,434 
 $ 
 5,558 
 $ 
 5,295 
 Less: Net gains (losses) on sale of securities 
 - 
 (21) 
 (1,989) 
 (558) 
 (3) 
 Less: Tax effect on sale of securities 
 - 
 5 
 504 
 141 
 1 
 Operating net income 
 $ 
 4,196 
 $ 
 5,825 
 $ 
 5,919 
 $ 
 5,975 
 $ 
 5,297 
 

 

 Operating PTPP income:
 (1)
 

 

 PTPP income 
 $ 
 5,567 
 $ 
 7,891 
 $ 
 6,729 
 $ 
 8,431 
 $ 
 7,708 
 Less: Net gains (losses) on sale of securities 
 - 
 (21) 
 (1,989) 
 (558) 
 (3) 
 Operating PTPP income 
 $ 
 5,567 
 $ 
 7,912 
 $ 
 8,718 
 $ 
 8,989 
 $ 
 7,711 
 

 

 Operating PTPP return on average assets:
 (1)
 

 

 Operating PTPP income 
 $ 
 5,567 
 $ 
 7,912 
 $ 
 8,718 
 $ 
 8,989 
 $ 
 7,711 
 Average assets 
 $ 
 2,183,542 
 $ 
 2,120,218 
 $ 
 2,051,867 
 $ 
 2,026,791 
 $ 
 1,968,381 
 Operating PTPP return on average assets 
 (2)
 1.02% 
 1.51% 
 1.69% 
 1.76% 
 1.57% 
 

 

 Operating return on average assets:
 (1)
 

 

 Operating net income 
 $ 
 4,196 
 $ 
 5,825 
 $ 
 5,919 
 $ 
 5,975 
 $ 
 5,297 
 Average assets 
 $ 
 2,183,542 
 $ 
 2,120,218 
 $ 
 2,051,867 
 $ 
 2,026,791 
 $ 
 1,968,381 
 Operating return on average assets 
 (2)
 0.77% 
 1.11% 
 1.14% 
 1.17% 
 1.08% 
 

 

 Operating return on average equity:
 (1)
 

 

 Operating net income 
 $ 
 4,196 
 $ 
 5,825 
 $ 
 5,919 
 $ 
 5,975 
 $ 
 5,297 
 Average equity 
 $ 
 184,238 
 $ 
 183,371 
 $ 
 177,556 
 $ 
 185,288 
 $ 
 186,597 
 Operating return on average equity 
 (2)
 9.13% 
 12.88% 
 13.23% 
 12.79% 
 11.39% 
 

 Operating Revenue:
 (1)
 

 
Net interest income 
 $ 
 14,173 
 

 $ 
 15,997 
 

 $ 
 16,866 
 

 $ 
 16,774 
 

 $ 
 15,642 
 
Plus: Non-interest income 
 

 1,846 
 2,070 
 (123) 
 

 1,789 
 

 1,617 
 
Less: Net gains (losses) on sale of 
securities
 - 
 (21) 
 (1,989) 
 (558) 
 (3) 
 
Operating revenue 
 $ 
 16,019 
 $ 
 18,088 
 $ 
 18,732 
 $ 
 19,121 
 $ 
 17,262 
 

 Operating Efficiency Ratio:
 (1)
 

 
Total non-interest expense 
 $ 
 10,452 
 

 $ 
 10,176 
 

 $ 
 10,014 
 

 $ 
 10,132 
 

 $ 
 9,551 
 
Operating revenue 
 $ 
 16,019 
 $ 
 18,088 
 $ 
 18,732 
 $ 
 19,121 
 $ 
 17,262 
 
Operating efficiency ratio 
 65.25% 
 56.26% 
 53.46% 
 52.99% 
 55.33% 
 (1) 
The Company believes these non-GAAP measurements are 
key indicators of the ongoing earnings power 
of the Company. 
 (2) 
Annualized. 

 
 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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 55 
USCB Financial Holdings, Inc. 
Q2 2023 Form 10-Q 
 USCB FINANCIAL HOLDINGS, INC. 
 NON-GAAP FINANCIAL MEASURES (UNAUDITED) 
 (Dollars in thousands, except per share data) 
 As of or For the Three Months Ended 
 6/30/2023 
 3/31/2023 
 12/31/2022 
 9/30/2022 
 6/30/2022 
 Tangible book value per common share (at period-end):
 (1)
 Total stockholders' equity 
 $ 
 183,685 
 $ 
 183,858 
 $ 
 182,428 
 $ 
 177,417 
 $ 
 180,068 
 Less: Intangible assets 
 - 
 - 
 - 
 - 
 - 
 Tangible stockholders' equity 
 $ 
 183,685 
 $ 
 183,858 
 $ 
 182,428 
 $ 
 177,417 
 $ 
 180,068 
 Total shares issued and outstanding (at period-end):
 Total common shares issued and outstanding 
 19,544,777 
 19,622,380 
 20,000,753 
 20,000,753 
 20,000,753 
 Tangible book value per common share
 (2)
 $ 
 9.40 
 $ 
 9.37 
 $ 
 9.12 
 $ 
 8.87 
 $ 
 9.00 
 Operating diluted net income per common share:
 (1)
 Operating net income 
 $ 
 4,196 
 $ 
 5,825 
 $ 
 5,919 
 $ 
 5,975 
 $ 
 5,297 
 Total weighted average diluted shares of common stock 
 19,639,682 
 19,940,606 
 20,172,438 
 20,148,208 
 20,171,261 
 Operating diluted net income per common share: 
 $ 
 0.21 
 $ 
 0.29 
 $ 
 0.29 
 $ 
 0.30 
 $ 
 0.26 
 Tangible Common Equity/Tangible Assets
 (1)
 
Tangible stockholders' equity 
 $ 
 183,685 
 $ 
 183,858 
 $ 
 182,428 
 $ 
 177,417 
 $ 
 180,068 
 
Tangible assets 
 $ 
 2,225,914 
 $ 
 2,163,821 
 

 $ 
 2,085,834 
 $ 
 2,037,453 
 $ 
 2,016,086 
 Tangible Common Equity/Tangible 
Assets 
 8.25% 
 8.50% 
 8.75% 
 8.71% 
 8.93% 
 (1) 
The Company believes these non-GAAP measurements are 
key indicators of the ongoing earnings power 
of the Company. 
 (2) 
Excludes the dilutive effect, if any, of shares of common stock issuable upon exercise 
of outstanding stock options. 

 
 
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 56 
USCB Financial Holdings, Inc. 
Q2 2023 Form 10-Q 
 Item 3. 
Quantitative and Qualitative Disclosures About Market Risk 
 As a smaller reporting company, 
we are not required to provide the information required by 
this item.
Text extracted from the filing as submitted to EDGAR. Formatting, tables and exhibits are simplified for reading; the original document is authoritative for anything you rely on.
USCB FINANCIAL HOLDINGS, INC. 10-Q

Item 2. Management’s Discussion and Analysis
