What changed in this filing

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Item 1. Business

2024-03-22 compared with 2023-03-24 · 1170 added, 819 removed, 958 unchanged (67% of the section changed)

1 unchanged sentence

a Florida corporation (the “Company”), was formed on December 17, 2021, to serve as

the holding company for U.S.

Century Bank, a Florida state-chartered bank (the “Bank”), and is a bank holding company (a

state-chartered

registered with

Reserve System

(the “Federal

Holding Company Act

amended (the “BHC Act”).

The Company is

headquartered in Miami, Florida,

the Bank, its sole

subsidiary, operates 10 banking centers in South Florida providing a wide

range of personal and business

banking products and services.

As of December 31, 2022,

the Company had total consolidated assets of $2.1 billion.

headquartered

Florida, and,

banking products

The Bank commenced operations

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Over the course

of 2021, the Bank

simplified its capitalization structure

by exchanging and/or repurchasing

of 2021, the Bank simplified

its capitalization structure by

exchanging and/or repurchasing

and outstanding

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Bank reached agreements

common stock, to

outstanding Class B

stock for Class A common stock in a 1-for-5 stock

with holders of

stock, to exchange

all outstanding

Class B common

stock for Class A common stock in a 1-for-5 stock exchange

2021, the Bank

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shares of its

Class A common stock.

of the Bank’s Class A

common stock were sold

at a price to

the public of $10.00

per share and began

trading on the Nasdaq

Class A common

of the Bank’s Class

A common stock were

sold at a price

to the public

of $10.00 per share

and began trading on

Stock Market under ticker symbol “USCB”.

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in accordance

Agreement and Plan

of Share Exchange

dated December 27,

2021 between the

an Agreement and

Share Exchange dated

December 27, 2021

between the Bank

(the “Share Exchange Agreement”).

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Agreement, on the Effective

Date each issued and

outstanding share of the

Bank’s Class A common

stock was converted

Date each issued and outstanding

share of the Bank’s

Class A common stock was

into and exchanged

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A common stock.

the Bank became the

the Bank became

the wholly owned

became stockholders of the Company.

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the information requirements of the Exchange

accordance with Section

12(i) thereof, filed

quarterly reports, proxy

statements and other

information with the

Deposit Insurance Corporation

As a result of the Reorg

anization, pursuant to Rule

12g-3(a) under the Exchange

Act, the Company became the successor registrant to the Bank, the Company’s Class A common stock was deemed to be

registered under Section 12(b)

of the Exchange Act,

and the Company became

subject to the information

requirements of

the Exchange Act and

is now required to

file reports, proxy statements

and other information with

Exchange Commission

and, in accordance with Section 12(i) thereof, filed quarterly reports, proxy statements and other information with the FDIC.

As a result of the Reorganization, pursuant to Rule 12g-3(a) under the Exchange Act, the Company became the successor

Exchange Act, and the Company became subject to the information requirements of the Exchange Act and is now required

reports, proxy

statements and

other information with

the Company’s Class

Stock is “USCB”, which is the same as the Bank’s former

trading symbol.

same as the Bank’s former trading symbol.

the Reorganization,

had no material

had not conducted

material assets

not conducted

or operations

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traded company

was to continue

pursuing organic

continue pursuing

organic growth

well as strategic acquisitions if the opportunity arises,

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Lending Services

value, relationship-based

banking products,

value, relationship

-based banking

products, services

and solutions

clients in the

markets we serve.

serving small-to-medium sized businesses (“SMBs”) and

on serving small-to-medium sized businesses (“SMBs”) and

catering to the needs

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to SMBs to also secure the personal

retail deposit relationships of the

retail deposit relationships of the owners,

operators, and employees of our commercial lending clients, which has

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loan program,

includes financial

program, includes

help for small businesses

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while the 504 loan program

provides long-term, fixed

promote business

job creation.

an opportunity

commercial and

industrial loans,

provides long-term, fixed rate

major fixed assets

business growth

and job creation.

platform serves

opportunity to

generate commercial

and industrial

loans, and to diversify our revenue stream through originating and

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As of December 31,

2022, the Bank is a Preferred Lending Partner with the SBA

which allows us to offer the full range of SBA loan

2023, the Bank is a Preferred Lending Partner with the SBA which

allows us to offer the full range of SBA loan

lending authority

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provides yacht financing for

larger vessels, transactions range

larger vessels;

transactions range

$750 thousand to $7.5 million.

We target high

net-worth clients, in one

of the most active

yacht markets in the

two portfolios

our strategic

initiative to

new business vertical and diversify our portfolio.

We target high net-worth

clients, in one of the

most active yacht markets

Homeowner Association (“HOA”)

We provide banking

services to HOAs and

property managers,

We provide banking services

to HOAs and property

including deposit collection,

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banking solutions

partners, assoc

iates, staff,

their partners,

associates, staff,

worth clients.

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banking clients for

compliance team is

Our compliance

experienced in issues

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that encourages prudent lending.

We believe our

strong asset quality

to our understanding

of and experience

with businesses within

understanding of and

experience with businesses

within Florida,

in particular South

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loan portfolio

our assessment

various industry

aggregate exposure to any given borrower relationship, we undertake

a scaled review of loan originations that may involve

aggregate exposure to any given borrower relationship, we undertake a scaled review

of loan originations that may involve

senior credit officers, our Chief Credit Officer,

our Credit Committee or, ultimately,

our Credit Committee or,

our Board of Directors (“Board”).

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products, including

checking accounts,

accounts, savings accounts and certificates of deposit with a

variety of terms and rates as well

as a robust suite of treasury,

commercial payments and cash

commercial and

consumer checking

accounts, money

market deposit

accounts, savings accounts, and

certificates of deposit

variety of terms

and rates, as

robust suite of

commercial payments,

management services.

Additionally,

we offer deposit products

for municipalities and other

public entities.

Our deposit products are mainly offered

across our primary geographic footprint.

CDARS deposit

products that

FDIC-insured for our clients.

Furthermore, we offer deposit products for municipalities and other public entities.

products are mainly offered across our primary

geographic footprint.

Title Services

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operations to South Florida.

believe this trend is further demonstrated

by recent relocation

believe this trend is further

demonstrated by recent relocation

initiatives undertaken by large financial institutions such as Blackstone Group Inc., Goldman Sachs Group Inc., and Citadel

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According to the

United States Census Bureau,

Florida was the third most

populous state in the country

According to estimates

United States Census

2010 to 2021,

United States

Census Bureau’s

the third most

populous state in

the country in

2023 and the three largest population

centers were in Miami-Dade, Broward, and Palm

Beach counties (all located in South

United States

Census Bureau,

increased to 22.6 million residents, an increase of 1.0 million new residents.

The percentage change in

Florida’s population

increased to 21.8

million residents

The percentage

population between

2020 and July 2021 alone was 1.1% according to the

United States Census Bureau.

between April 2020 and July 2023 alone was 5.0% according

to the United States Census Bureau.

Our markets are highly competitive,

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We are an “emerging growth

“EGC”, as defined in the Jumpstart

or “EGC”, as defined in the Jumpstart

Our Business Startups Act of 2012 (the

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new or revised accounting standards.

words, an EGC can delay the adoption of

certain accounting standards until

words, an EGC can delay the adoption

of certain accounting standards until

those standards would otherwise apply to private

We intend to take

advantage of the benefits of this extended

We intend to take advantage

of the benefits of this extended

transition period, for as long as it is available.

following the

fifth anniversary

completion of the Bank’s initial public offering in 2021,

(ii) the last day of the first fiscal year in

which the Company's annual

gross revenues exceed $1.24 billion, (iii)

the date that the Company becomes

a “large accelerated filer” as defined

12b-2 under the Exchange Act which would

occur if the market value of the

Company's common stock that is held

affiliates exceeds $700 million as of the last business day

of the Company’s most recently completed second

fiscal quarter

(June 30th for the

Company), or (iv) the date on

which the Company has issued more

than $1 billion in non-convertible debt

during the preceding three-year period.

USCB Financial Holdings, Inc.

Human Capital Resources

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our organization’s

seek the active

engagement and

participation of

diverse backgrounds

active engagement

and participation

contributions of each individual in our Company is

recognized and supported.

Each team member is to be

treated fairly with

Each team member is to

be treated fairly with

equal access to opportunities and resources for success.

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workshops in an effort

to reach the financing

sectors of our

financing needs of

the sectors of our

communities in which

these workshops are

USCB Financial Holdings, Inc.

Our human capital

objectives include attracting,

developing and retaining

the best available

talent from a

Additionally,

opportunities

promotion within.

The Company recognizes that the skills and knowledge of its employees

are critical to the success of the

organization, and promotes training and continuing education

as an ongoing function for employees.

the importance

benefits such

retirement savings plan and make both matching and profit-sharing contributions to that plan.

Benefit programs available to

holidays and other benefits.

promote diversity and

inclusion in every

aspect of our

business and at

every level within

We recruit, hire, and promote

employees based on their individual

ability and experience and in

accordance with Affirmative

Action and Equal

Employment Opportunity

laws and regulations.

Our policy is

do not discriminate

religion, sex,

sexual orientation,

medical condition,

status, national

origin, citizenship status, disability veteran status, gender identity, genetic information, or any other status protected by law.

At December 31, 2023,

we had 191 full

-time equivalent employees.

full-time equivalent employees.

employees are parties

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candidate for each position, without regard to

age, gender, ethnicity, or other protected class status,

including an array of benefit plans and programs

that we believe is attractive to our current and prospective employees.

age, gender, ethnicity,

or other protected class status,

including an array of benefit plans and programs that

we believe is attractive to our current and prospective

Regulation and Supervision

regulations have a material

effect on the operations

of USCB Financial Holdings,

direct and indirect subsidiaries,

including U.S.

companies, banks, and

their affiliates are

extensively regulated under

and regulation.

and regulations

material effect

operations of

USCB Financial

Holdings, Inc.

indirect subsidiaries, including U.S.

Century Bank.

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the activities in

may engage and

the conduct of

our permitted

engage and the

conduct of our

activities and establish capital requirements with which we must comply.

The regulatory framework

is intended primarily for

insurance funds

banking system

the protection

shareholders or

cases, the applicable regulatory

authorities have broad enforcement

power over bank holding

companies, banks and their

subsidiaries, including the power to impose substantial fines

and other penalties for violations of laws and regulations.

The regulatory framework is intended primarily for

whole, and not for the protection of our shareholders or creditors.

In many cases, the applicable regulatory authorities have

subsidiaries,

substantial fines and other penalties for violations of laws

and regulations.

regulations are subject

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are unable to predict these future changes or the effects, if any, that these changes could have on the business, prospects,

revenues, and results of operations of our Bank and Company.

revenues, and results of operations of the Bank and Company.

statutory and

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The description

intended to summarize

regulations applicable to us.

These summary descriptions are

not complete,

and you should refer to the full text of the statutes, regulations,

and corresponding guidance for more information.

below is not intended to summarize all laws

and regulations applicable to us.

These summary descriptions are not

and regulations

USCB Financial

Century Bank and are qualified

in their entirety by reference

to the actual laws and

should refer to the full

text of the statutes, regulations, and corresponding guidance

for more information.

USCB Financial Holdings, Inc.

2018 Regulatory Reform

Growth, Regulatory

Consumer Protection

Act (the “2018

modify or remove

certain financial reform

rules and regulations, including

some of those

implemented under the

Wall Street Reform

and Consumer Protection

Act (“Dodd-Frank Act”) enacted

While the 2018

Act maintains most

structure established

Dodd-Frank Act,

certain aspects

regulatory framework

small depository

Many of these changes resulted in meaningful regulatory

relief for community banks such as U.S.

Century Bank.

The 2018 Act, among other matters, expanded

the definition of “qualified mortgages”

which may be held by a financial

consolidated assets of less

than $10 billion by instructing

(as described below) the

federal banking regulators to

a single “Community Bank Leverage Ratio” of between 8 and 10 percent to

replace the leverage and risk-based regulatory

capital ratios.

holding companies

Company and Savings and Loan Holding Company Policy Statement” (the “SBHC Policy”) by raising the maximum amount

qualifying holding company may

have from $1.0

billion to $3.0

This expansion also

excluded such holding

the Dodd-Frank

prohibitions), mortgage disclosures and risk weights for certain

high-risk commercial real estate loans.

Bank and Bank Holding Company Regulation

comprehensive

As a Florida-chartered state bank, U.S.

is subject to ongoing and comprehensive supervision, regulation,

examination, and enforcement by the FDIC and the Florida Office

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Insurance Fund

administered by the FDIC to the maximum extent permitted by law, and the FDIC has certain supervisory

and enforcement

powers over us.

that directly

or indirectly

Federal Reserve

Reserve Board's jurisdiction also extends to any company

that is directly or indirectly controlled by a BHC.

USCB Financial

comprehensive supervision, regulation, examination and

enforcement by the Federal Reserve Board.

administered by

extent permitted

supervisory and

enforcement powers over us.

Any entity that directly or

indirectly controls a bank

must be approved by the

Federal Reserve under the

regulation, inspection, examination, supervision and enforcement

by the Federal Reserve under the BHC Act.

Reserve's jurisdiction also extends to any company that is directly

or indirectly controlled by a bank holding company.

USCB Financial Holdings, Inc.,

which controls U.S.

Bank, is a bank holding

company and, as such,

to ongoing and comprehensive supervision, regulation,

examination and enforcement by the Federal Reserve.

Notice and Approval Requirements Related to Control

any shareholder

seeks to acquire direct

or indirect "control"

of an FDIC-insured

depository institution.

laws include the

the Change in Bank Control Act.

seeks to acquire

direct or indirect

“control” of an

FDIC-insured depository

include the BHC

the Change in Bank

Among other things,

these laws require regulatory filings by individuals

or companies that

acquire direct or

indirect "control" of

an FDIC-insured depository

The determination

of whether an

these laws require regulatory filings

by individuals or entities that

an FDIC-insured

determination

"controls" a depository

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the investment.

matter, a party

is deemed to control

a depository institution or

other company if the

party owns or controls

25% or more of

any class of voting stock.

Subject to rebuttal, a party may be presumed

to control a depository institution or other company

if the investor owns or controls 10%

or more of any class of voting

stock (and the entity’s securities are registered under the

shareholder).

circumstances,

prohibited from acquiring, without prior approval,

control of any other bank

or BHC or substantially all the assets

more than 5% of the voting shares of a bank or BHC

which is not already a subsidiary.

USCB Financial Holdings, Inc.

matter, a party is deemed to conclusively control a depository institution or other

company if the party owns or controls 25%

or more of any class of

voting stock.

Subject to rebuttal, a party may

be presumed to control a depository institution or

company if the investor owns or controls 10% or more of any class

of voting stock (and the entity’s securities are registered

under the Exchange Act or, if not, the investor would be

the largest shareholder).

Except under limited circumstances, bank

holding companies are prohibited from acquiring, without prior

approval, control of any other bank or

bank holding company

or substantially all the assets thereof or more than 5% of the voting shares of a bank or bank holding company which is not

already a subsidiary.

Source of Strength

All companies, including BHCs, that directly

or indirectly control an insured depository

institution, are required to serve

All companies, including bank holding companies, that directly or indirectly control an insured depository institution, are

required to serve as a source

of strength for the institution.

the Federal Reserve policy

is that a bank holding

company should stand ready

to use available resources

to provide adequate capital

to its subsidiary banks

during periods

adversity and

should maintain

the financial

flexibility and

capital-raising capacity

resources for

assisting its subsidiary

this requirement,

USCB Financial

Holdings, Inc.

in the future

required to provide financial assistance

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Such support may be

required at times when,

absent this statutory and

Federal Reserve Policy

requirement, a BHC

inclined to provide

USCB Financial Holdings, Inc.

required at times when, absent this statutory and Federal Reserve policy requirement, a bank holding company may not be

holding company’s failure

its obligations

its subsidiary

banks will generally be considered

by the Federal Reserve to

be an unsafe and unsound

banking practice or a violation

the Federal Reserve’s regulations, or both.

Safety and Soundness Regulation

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is subject to examination

necessary or appropriate.

quarterly consolidated

condition and income,

or call reports,

file quarterly

consolidated reports

and income, or

call reports,

the FDIC and FOFR.

3 unchanged sentences

and soundness standards for

depository institutions including

and soundness guidelines

relate to, among other

things, our internal

controls, information systems, internal audit systems, loan underwriting and documentation, anti-money laundering policies

compensation,

depository institutions including U.S.

Century Bank.

safety and soundness guidelines relate to,

among other things, our

cybersecurity,

documentation,

money laundering policies and procedures, transactions

with insiders, risk management, compensation, asset

identification

depository institutions.

otherwise comply

these standards, the

FDIC could require

compliance plan, or fails

in any material respect

to implement a compliance

plan that has been

accepted by the FDIC,

order directing

problems at insured depository

institutions.

to fail to meet or

otherwise comply with any

of these standards, the

FDIC could require us to submit a

plan for achieving and maintaining compliance.

If a financial institution fails to

acceptable compliance plan, or fails in any material respect to implement a compliance plan that has been accepted by the

FDIC, the FDIC is

required to issue an

order directing the

institution to cure the

Until the deficiency cited

order is cured, the

FDIC may restrict

the financial institution’s

rate of growth, require

the financial institution to

capital, restrict

the institution

the deficiency.

deficiency cited

cured, the FDIC

may restrict the

financial institution’s

rate of growth,

require the financial

institution to increase

restrict the rates the institution pays on

deposits or require the institution to take any

action the regulator deems appropriate

under the circumstances.

Noncompliance with the standards established by the safety and soundness guidelines may also

constitute grounds

enforcement action,

institution to

regulator deems

circumstances.

Noncompliance

guidelines may

also constitute

including cease

orders and civil

money penalty

unsound or that we engaged in unsafe or unsound practices that violated applicable rules, regulations, orders or conditions

enacted or imposed on us by our regulators.

management processes and

strong internal

controls when

evaluating the

activities of

the financial

institutions they

penalty assessments.

the FDIC could terminate

our deposit insurance if

it determines that

our financial condition

was unsafe or

unsound or that

we engaged in unsafe

or unsound practices that

violated applicable rules, regulations,

or conditions enacted or imposed on us by our regulators.

management processes

internal controls

when evaluating

the activities

financial institutions they

Properly managing risks has been identified as critical to the conduct of safe and sound banking activities and has become

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agencies have identified

of risks facing

a banking institution

including, but

a spectrum of

risks facing a

banking institution including,

market, liquidity, interest rate,

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on operational

the potential that

inadequate information

the potential

that inadequate

operational problems,

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current environment.

senior management

information systems;

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Permissible Activities and Investments

determined by the

Federal Reserve Board

related to banking

a proper incident

Leach-Bliley Act (the “GLB Act”) expanded the scope of permissible activities for a BHC that qualifies as a financial holding

Under the regulations implementing the GLB Act, a financial

holding company may engage in additional

or incidental

or complementary

Reserve has determined

by regulation that

certain activities are

closely related to

banking including operating

finance company,

an insurance agent

for certain types

of credit-related insurance;

leasing personal property

non-operating basis;

tax planning and

preparation services;

a collection agency;

and providing certain

courier services.

addition, the Gramm

-Leach-Bliley Act (the

“GLB Act”) expanded

permissible activities for

a bank holding company that

qualifies as a financial holding company.

Under the regulations implementing

the GLB Act, a

financial holding company may engage

in additional activities that are financial

in nature or incidental or complementary

a financial activity

such as securities

underwriting, insurance underwriting and

merchant banking.

USCB Financial

financial holding company.

In addition, as

a general matter, the establishment or

acquisition by USCB Financial

Holdings, Inc., of a

non-bank entity,

activities, the Federal Reserve Board considers, among other things, whether the acquisition or the additional activities can

is not a financial holding company.

In addition, as a general matter, the establishment or acquisition

by USCB Financial Holdings, Inc.

a non-bank entity,

USCB Financial Holdings, Inc.

reasonably be expected

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competition, conflicts of interest or unsound banking practices.

USCB Financial Holdings, Inc.

Regulatory Capital Requirements

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bank holding companies

their subsidiary banks and

banks without bank holding

companies based on the

Basel III standards.

their subsidiary banks

and banks without bank

holding companies based on

the Basel III

Under these guidelines,

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companies, to account for off-balance sheet

exposure, to minimize disincentives for holding

exposure, to minimize disincentives for

liquid assets, and

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consistency in

evaluating the

capital adequacy

banks throughout the

evaluating the capital

major banks throughout

The resulting

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given risk-weights

credit conversion

similar credit

them to asset

equivalent amounts

appropriate risk-weight

amounts to which

an appropriate risk-weight

Most loans will

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contingencies

(including commercial

unconditionally cancelable commitments have a 0% factor.

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framework, the rules include a new

minimum ratio of Common

Equity Tier 1 Capital to Risk

-Weighted Assets of 4.5%.

minimum ratio of Common Equity

Tier 1 Capital to Risk-Weighted

Assets of 4.5%.

rules also create a Common Equity Tier 1 Capital conservation

buffer of 2.5% of risk-weighted assets.

buffer is added

to each of the three risk-based capital

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the institution’s

Common Equity

distributions

discretionary

institution’s

bonus payments will

be limited or

prohibited based on

the institution’s conservation buffer.

subject to this limitation include

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capital, however, community banks

and their holding companies (if any) were allowed to make a

one-time irrevocable opt-out election to continue to treat AOCI

and their holding companies (if any) were allowed to make

a one-time irrevocable opt-out election to continue to treat AOCI

regulations for

8 unchanged sentences

certain non-qualifying

capital instruments

issued prior to

capital instruments issued

19, 2010 as Tier 1 capital, including trust preferred securities

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capital treatment.

On September 17, 2019, the

federal banking agencies jointly finalized

a rule intended to simplify

the regulatory capital

amendments to the

Federal Reserve’s SBHC Policy

became effective which increased

the asset threshold

the provisions

$1.0 billion.

Subsequently,

holding companies

subject to compliance with

the regulatory capital requirements

described above until they

exceed $3.0 billion in

a consequence, as of December

31, 2023, USCB Financial Holdings, Inc.

was not required to

comply with the requirements

set forth above

be subject to

such requirements

until such time

consolidated total

assets exceed

USCB Financial Holdings, Inc.

the Federal Reserve

determines that USCB

Financial Holdings, Inc.

longer deemed to

requirements,

compliance with such requirements.

requirements described above for qualifying community banking organizations

3 unchanged sentences

available for

community banking

organization opts

CBLR framework

use beginning

banking organization

framework and

requirements under the

1 unchanged sentence

be considered to

well-capitalized ratio requirements

corrective action regulations described elsewhere

in this Form 10-K

and will not be

required to report or

calculate risk-based

the well-capitalized ratio

requirements under the

corrective action

described below

qualify for the CBLR

1 unchanged sentence

banking organization must

have a tier 1 leverage

USCB Financial Holdings, Inc.

consolidated assets, and trading assets and

liabilities of 5% or less of total consolidated

However, Section

the Coronavirus Aid,

Relief and Economic

Security Act (the

“CARES Act”) required

that the CBLR

be temporarily lowered

The federal regulators issued a

rule implementing the lower CBLR effective April 23, 2020.

rule also established

a two-quarter grace period for a qualifying institution whose leverage ratio falls below the 8% CBLR requirement so long as

increasing the ratio to 8.5%

for calendar year 2021 and

9% thereafter.

Although the Bank is a

qualifying community banking

organization, the Bank has elected

not to opt in to the CBLR framework

at this time and will continue to follow

the Basel III

capital requirements as described above.

have a tier 1

leverage ratio of

Bank is a qualifying

community banking organization,

Century Bank has

elected not to opt

in to the CBLR

at this time and will continue to follow the Basel III capital

requirements as described above.

Bank qualified

“well capitalized”

Matters” of the Consolidated Financial Statements

included in this Annual Report Form 10-K for further details.

“Regulatory Matters” of the Consolidated Financial Statements

included in Item 8 of this Form 10-K for further details.

Prompt Corrective Action

3 unchanged sentences

federal bank regulatory

agencies must

take "prompt corrective

agencies must take

"prompt corrective

undercapitalized

8 unchanged sentences

undercapitalized,"

regulation corresponding to the capital category within which the

institution falls.

As of December

depository institution

was deemed to

be "well capitalized"

if the banking

institution had

regulation corresponding to the capital category within

which the institution falls.

An insured depository

institution is deemed

capitalized" if

total risk-based

capital ratio

tier 1 risk-based

capital ratio of 8.0%

a Common Equity

risk-based capital ratio

of 6.5% and a

leverage ratio of 5.0%

or greater, and the institution is

not subject to

an order, written agreement, capital directive, or

corrective action

specific level

capital measure.

Under certain

circumstances,

well-capitalized, adequately

capitalized or

undercapitalized institution

institution were

lower capital category if it is determined that the institution is in an unsafe or unsound condition or is engaging in an unsafe

or unsound practice.

The degree of

regulatory scrutiny

of a financial

institution will increase,

and the permissible

circumstances,

“well-capitalized”

adequately capitalized institution or an

undercapitalized institution to comply with

supervisory actions as if

significantly

undercapitalized

institution were

capital category

institution is

unsound condition or

is engaging in

unsound practice.

degree of regulatory

scrutiny of a

financial institution

undercapitalized).

capital restoration

capital guidelines

could subject

the institution

regulatory agencies,

of deposit insurance

restrictions on certain

business activities, and

appointment of

FDIC as conservator or receiver.

institution that

is undercapitalized

appointment of the FDIC as conservator or receiver.

At December 31, 2023, U.S.

Century Bank was deemed to be a “well-capitalized” institution for purposes of the prompt

corrective action regulations and as such is not subject

to the above mentioned restrictions.

Commercial Real Estate Concentration Guidelines

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institution’s

portfolio has

commercial real

estate portfolio

has increased

identified for

further supervisory analysis of a potential concentration

further supervisory analysis of a potential concentration risk.

As of December

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risk-based capital

therefore, we

and therefore,

paragraph above, as

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commercial real

risk-based capital

to total risk-based

USCB Financial Holdings, Inc.

384% and the outstanding balance of

the institution’s commercial real estate portfolio increased by 50%

or more in the prior

the institution’s commercial real estate portfolio increased by 50% or

more in the prior

a concentration

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of underwriting

assessment and

risk assessment

and monitoring

market analysis

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commercial real

To address the commercial real estate lending concentration,

USCB Financial Holdings has

previously established

lending framework

specific exposures

commercial real

the commercial

concentration,

appropriate actions, as necessary.

USCB Financial Holdings, Inc.

Payment of Dividends

Payment of Dividends and Share Repurchases

The ability of

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or other distribution

with respect to capital

is subject to statutory

and regulatory restrictions

that limit the

amount available for

such distribution

Insured depository institutions are also prohibited from

paying management fees to any controlling persons

or, with certain

limited exceptions,

capital distributions,

including dividends,

such transaction

the institution

preceding two years, but we must, before the declaration of a dividend on our common stock, under applicable Florida law,

carry 20% of our net profits for such preceding period as is

covered by the dividend to our surplus fund, until the same shall

at least equal the amount of our common stock and preferred stock, if

any, then issued and outstanding.

Under Florida law,

we are prohibited

from declaring

year combined

the preceding

minimum amount required by law,

regulation, order, or

any written agreement with a state or federal regulatory agency.

source of funds

to pay dividends

in the future,

other payments.

is the policy

of the Federal

Board that BHCs

should pay cash

dividends on common

stock only out

of income available

over the past

year and only

prospective earnings retention

is consistent with

the organization’s expected future

financial condition.

provides that BHCs should not maintain a level of cash dividends that undermines the BHC’s ability to serve as a source of

strength to its banking subsidiaries.

with respect to capital is subject

to federal and state statutory

and regulatory restrictions that

limit the amount available for

earnings, and cash needs of the institution,

as well as general business conditions.

Insured depository institutions are also

distributions, including dividends, if after such transaction the institution would be

less than adequately capitalized.

generally declare a dividend

from retained net profits

which accrued prior to

the preceding two

years, but we must,

preceding period

surplus fund,

common stock and preferred stock,

if any, then issued and outstanding.

Under Florida law, we are

prohibited from declaring

preceding two years is a loss or which would cause our capital accounts to

fall below the minimum amount required by law,

regulation, order,

or any written agreement

with a state or

federal regulatory agency.

Furthermore, under applicable

regulations and policy,

Century Bank has

negative retained earnings, it must obtain the

prior approval of the

FDIC before effecting a cash dividend or other capital

distribution.

A Federal Reserve policy statement on the payment

of cash dividends states that a bank holding

company should pay

cash dividends only to the

extent that the holding company’s net

income for the past year

is sufficient to cover both the

dividends and

retention that

is consistent

holding company’s

capital needs,

asset quality

inappropriate

company experiencing serious financial problems to borrow funds to pay dividends.

Furthermore, under the federal prompt

corrective action

regulations, the

Federal Reserve

holding company

any dividends

holding company’s bank subsidiary is classified

as “undercapitalized.” See “ - Prompt Corrective Action”

Section 225.4(b)(1) of Regulation Y promulgated

by the Federal Reserve requires that

a bank holding company that is

not “well-capitalized” or “well-managed”,

or that is subject to any

unresolved supervisory issues, provide

prior notice to the

Federal Reserve for

any repurchase or

redemption of

its equity securities

other value that

would reduce by

percent or more the bank

holding company’s consolidated

net worth aggregated over

the preceding 12-month period.

unsound practice

regulation, Federal

Reserve order

condition imposed

written agreement

with, the Federal Reserve.

of December 31, 2023, USCB

Financial Holdings, Inc.

not subject to

provide prior notification to the Federal Reserve prior to

effecting proposed share repurchases.

Incentive Compensation

Guidelines adopted by

the federal banking

agencies pursuant to

prohibit excessive compensation

banking agencies pursuant

FDIA prohibit

excessive compensation as

disproportionate to the services performed by an executive

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Incentive Compensation

The GSICP intended to

ensure that banking organizations

do not undermine the

safety and soundness of

organizations

individually or

The GSICP was

intended to ensure

that banking organizations

do not undermine

the safety and

such organizations

by encouraging

excessive risk-taking.

This guidance,

all employees

to expose the organization

to material amounts

of risk, either

individually or as

part of a group,

is based upon a

principles relating to

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incentive compensation

USCB Financial Holdings, Inc.

arrangements should (i)

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organizations to imprudent risk,

(ii) be compatible with effective

controls and risk management,

and (iii) be supported by

strong corporate governance,

(ii) be compatible with

effective controls and risk

and (iii) be supported

by strong corporate governance,

including active and effective

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of directors.

Any deficiencies in our compensation practices

could lead to supervisory or enforcement actions

Any deficiencies in our compensation

practices could lead to supervisory or enforcement

actions by the FDIC.

compensation arrangements or related risk-management control or governance processes pose a risk to the

organization’s

safety and soundness and the organization is not taking prompt and

effective measures to correct the deficiencies.

prohibiting incentive-based

payment arrangements

at specified regulated

entities, such

having at least

$1 billion in

regulated entities,

us, having at

inappropriate

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proposed rule

would apply to

institutions, with

least $1 billion in average total

consolidated assets.

Final regulations have not been adopted as

of the date of this Form 10-

compensation for our executives and other

employees that go beyond the requirements

other institutions,

least $1.0 billion in average

total consolidated assets.

Final regulations have not

been adopted as of the

date of this Form

compensation for our executives and other employees

that go beyond the requirements of GSICP.

The scope and content

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Limits on Transactions with Affiliates and

Insured depository institutions are subject to restrictions

on their ability to conduct transactions

with affiliates and other

related parties.

Section 23A of the Federal Reserve Act imposes quantitative limits, qualitative requirements,

and collateral

requirements on certain transactions by

an insured depository institution with,

or for the benefit

of, its affiliates.

covered by Section 23A include loans,

extensions of credit, investment

in securities issued by an affiliate,

and acquisitions

of assets from

an affiliate.

Federal Reserve Act.

of an insured financial institution

is any company or entity which

controls, is controlled by

holding company

are affiliates of

financial institution.

Generally, Section 23A limits

financial institution or its

subsidiaries may engage in

“covered transactions” with any one

affiliate to an amount equal

of such institution’s

capital stock

and surplus, and

aggregate limit

transactions with

all affiliates

an amount equal to 20% of such capital stock and surplus.

Section 23B applies to “covered transactions” as well as certain

substantially

insured financial institution, as

those provided to

a non-affiliate.

The term “covered

transaction” includes the making

to, purchase of

and issuance of

a guarantee to

transactions.

23B transactions

also include the provision of services and the sale of assets

by an insured financial institution to an affiliate.

Sections 22(g)

Federal Reserve

Act requires that

most types of

transactions by

institution as if the transaction were conducted with an

unaffiliated third party.

USCB Financial Holdings, Inc.

An affiliate of a bank

is any company or entity

that controls, is controlled by

or is under common

control with the bank.

companies that are

controlled by such

parent holding company

(excluding subsidiaries of the

bank) are affiliates of

Loans to executive officers and directors of an insured depository institution or any of its affiliates or to any person who

directly or indirectly, or acting through or in concert with one or more persons,

owns, controls or has the power to vote

than 10% of any class of voting securities of a bank, which we

refer to as 10% shareholders, or to any political or campaign

committee the

benefit those

restrictions on

executive officers, directors

and principal

stockholders.

Section 22(h),

loans to such

affiliated interests,

the insured financial

institution’s loans

to one borrower

limit (generally

institution’s

unimpaired capital

to directors,

officers and principal stockholders be made on terms substantially the same as offered in comparable transactions to other

persons unless the loans are made pursuant to a benefit or compensation program that (i) is widely available to employees

institution and

preference to

any director, executive

principal stockholder, or

certain affiliated

interests thereof, over other employees

of the insured financial institution.

Section 22(h) also requires prior board

for the issuance of certain loans.

In addition, the aggregate amount of

extensions of credit by an insured financial institution

to all insiders cannot

exceed the institution’s

unimpaired capital and

Furthermore, Section

22(g) places additional

restrictions on

executive officers.

directors, or

10% shareholders

controlled by those executive officers, directors

or 10% shareholders, are subject to

Sections 22(g) and 22(h) of

corresponding

restrictions of Section 22(h) of the Federal Reserve Act).

in compliance

restrictions.

FDIC Deposit Insurance

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insurance amount is $250 thousand per depositor.

Additionally, FDIC

-insured depository institutions are required

to pay deposit insurance assessments

Additionally,

FDIC-insured depository institutions are

required to pay deposit insurance

assessments to the FDIC.

institution's deposit

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of supervisory concern the institution poses to the regulators.

USCB Financial Holdings, Inc.

Under the current

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assessment base,

which is defined

as average total assets minus

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and then applies

a pricing multiplier that

a pricing multiplier

that is the same

all institutions.

institution’s rate must

certain minimum and

a certain maximum,

and the range varies

institution’s rate

must be within

a certain minimum

and a certain

maximum, and the

range varies based

institution’s

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by multiplying

assessment base by the total base assessment

FDIC finalized

deposit insurance

assessment rates

basis points, beginning

with the first quarterly

assessment period of

2023 (January 1,

2023 through March

FDIC, as required

under the Federal

Deposit Insurance

Act, established

September 2020 to

restore the Deposit

Insurance Fund (“DIF”) reserve ratio to meet or exceed

the statutory minimum of 1.35 percent within eight

assessment base by the total base assessment rate.

In October 2022, the FDIC finalized a

rule that increased the initial base deposit insurance

assessment rates by 2 basis

points, beginning with the first

quarterly assessment period of 2023

(January 1, 2023 through

March 31, 2023).

as required under the FDIA, established a plan in

September 2020 (the “Restoration Plan”) to restore the DIF

reserve ratio

to meet or exceed

the statutory minimum

of 1.35% within eight

The Restoration

include an increase

insurance assessment

FDIC’s recent

projections, however,

the FDIC determined that the DIF reserve

ratio is at risk of not reaching

the statutory minimum by the statutory

September 30, 2028 without increasing

the deposit insurance assessment rates.

increased assessment would improve

the likelihood

required minimum

statutory deadline,

determined that

DIF reserve ratio

of not reaching the

statutory minimum by

the statutory deadline

of September 30,

increasing the

deposit insurance

assessment rates.

The increased

assessment would

likelihood that

reserve ratio would reach the required minimum by the statutory deadline, consistent with the

FDIC’s amended Restoration

The FDIC also

concurrently maintained the

Designated Reserve Ratio

(“DDR”) for the

DIF at 2 percent for 2023.

The new assessment rate

schedules will remain in effect unless and until the reserve ratio meets

or exceeds 2 percent

in order to support

growth in the DIF

in progressing toward

the FDIC’s long-term

goal of a 2 percent

Progressively lower assessment

rate schedules will take effect

when the reserve ratio reaches

2 percent, and again

when it reaches

revised assessment

rate schedule will remain

in effect unless

and until the

also concurrently maintained

the Designated Reserve

Ratio (“DDR”) for

assessment rate schedules will remain

in effect unless and until the reserve

ratio meets or exceeds 2% in order to support

Progressively

schedules will

reserve ratio

meets or exceeds 2 percent, absent further action by the FDIC.

reaches 2.5%.

rate schedule will

remain in effect unless

and until the

reserve ratio meets

or exceeds 2%,

absent further action by

terminate deposit

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insured depositors)

and certain claims

administrative

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depository institution.

USCB Financial Holdings, Inc.

Overdraft Fee Regulation

The Electronic Fund Transfer Act prohibits

financial institutions from charging consumers

fees for paying overdrafts on

financial institutions from charging consumers fees

for paying overdrafts on

automated teller machines, or

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of transactions.

If a consumer does

not opt in, any

ATM transaction or debit that overdraws

the consumer’s

on the payment

and regular electronic

bill payments

If a consumer

does not opt in,

any ATM transaction or debit that overdraws

the consumer’s account

will be denied.

Overdrafts on

electronic bill

institution’s

provide consumers

pricing) that they provide to consumers who do opt in.

Federal Reserve System and Federal Home Loan

regional FHLBs.

We are a member of the Federal Home Loan Bank (“FHLB”) of Atlanta, which is one of 11 regional FHLBs.

a quasi-reserve

proceeds from the sale of consolidated obligations

of the FHLB system.

loans to members (i.e., advances)

in accordance with policies and procedures established by

the Board of Trustees of the FHLB.

assigned region.

funded primarily

member institutions

from the sale

of consolidated

obligations of

members (i.e., advances) in accordance with policies

and procedures established by the Board of Trustees

of Atlanta, we are

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under the activity-based stock ownership requirement.

USCB Financial Holdings, Inc.

Anti-Money Laundering Regulation

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internal policies,

program by an independent audit function in accordance

with the Bank Secrecy Act of 1970, as amended (“BSA”), and the

program by an independent audit function in accordance with the

Bank Secrecy Act of 1970, as amended (“BSA”), and the

regulations issued

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diligence and

“knowing your customer” in

their dealings with

foreign financial institutions, foreign

customers and other

“knowing your customer”

in their dealings

with foreign financial institutions,

foreign customers and other

high risk customers.

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transactions.

the USA PATRIOT Act, enacted in

2001 and renewed

through 2019, as

described below,

provide law enforcement authorities with increased access

to financial information maintained by banks.

Recent laws, such as the USA PATRIOT

Act, enacted in 2001, as described below,

provide law enforcement

authorities with increased access to financial information maintained

Anti-money laundering

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The regulators and other

governmental authorities have

been active in imposing

“cease and desist” orders

governmental authorities have been

active in imposing “cease

and desist” orders and

significant money penalty sanctions against institutions

found to be in violation of the anti-money laundering regulations.

The USA PATRIOT Act became effective on October 26, 2001 and amended

The USA PATRIOT Act requires

banks to establish anti-money laundering programs

that include, at a minimum:

that contains

banks to establish anti-money laundering programs that

include, at a minimum:

bank’s compliance

requirements of

and regulations;

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relationships;

USCB Financial Holdings, Inc.

required reports to law enforcement and/or financial regulators to assist in the deterrence and prevention of money

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laundering program.

components of the

CIP are identification

verification, government

key components of

identification verification, government

list comparison,

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This information must

reasonable time.

all customers

against any CIP-related government lists of known or suspected terrorists or other “sanctioned” persons.

On May 11, 2018,

Financial Crimes Enforcement

Network, or FinCEN, issued

a final rule under

the BSA requiring

to identify and verify the

identity of the natural persons behind

their customers that are legal entities—the beneficial owners.

be verified within

a reasonable time.

Furthermore, all customers

against any CIP-related government

lists of known or suspected

terrorists or other “sanctioned”

In May 2018, the

Financial Crimes

Enforcement Network,

BSA requiring

identify and verify

the identity of

the natural persons

behind their customers

that are legal

entities—the beneficial

was enacted in

January 2021.

intended to be

a comprehensive

reform and modernization

laundering compliance

for financial

institutions;

development of

standards for evaluating

technology and

and investigation

whistleblower

uniform beneficial

ownership reporting

requirements for

corporations, limited

liability companies,

and other similar

registered to

do business in

CTA authorizes U.S.

Treasury’s Financial Crimes

Network (“FinCEN”) to collect that information and share it with authorized government authorities and

financial institutions,

controls designed to comply with the BSA, the AML Act, the

CTA and the USA

USCB Financial Holdings, Inc.

The Office of Foreign Assets Control

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as defined by

various Executive Orders

various Executive

Orders and Acts

publishes lists of

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“sanctioned” persons.

finds a name on

If a bank finds

any transaction, account

or wire transfer

that is on an

it must freeze

list, it must

freeze the account

and/or block the transaction or wire transfer.

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Our activities

state statutes

and regulations

protect consumers

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basis of race,

color, religion,

or other prohibited factors in extending credit;

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collected by collection agencies;

the Real Estate Settlement Procedures Act, or RESPA, and Regulation X, which governs aspects of the settlement

the Real Estate Settlement Procedures Act,

(“RESPA”), and Regulation X, which governs aspects of the settlement

process for residential mortgage loans.

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which imposes a

maintain the confidentiality

of consumer financial

duty to maintain

the confidentiality of

consumer financial records

and prescribes procedures for complying with administrative subpoenas

of financial records;

Check Clearing for

the 21st Century

Act (also known

as “Check 21”),

which gives “substitute

checks,” such as

check images and copies made from that image, the

same legal standing as the original paper check;

the Electronic

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which governs

and withdrawals

automatic deposits

deposit accounts

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liabilities arising

USCB Financial Holdings, Inc.

electronic banking

Regulation DD,

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governing the

Gramm-Leach-Bliley

related regulations,

about consumers

to nonaffiliated

These limitations require disclosure of privacy policies to

consumers and, in some circumstances, allow consumers

to prevent disclosure

of certain personal

information to a

nonaffiliated third

Federal banking agencies,

including the

FDIC, have adopted

guidelines for establishing information

security standards and cybersecurity

programs for implementing

processes related to information technology and the use

of third parties in the provision of financial services.

protection of customer information.

Under the privacy protection

provisions of the GLB

Act and related regulations,

USCB Financial Holdings, Inc.

nonaffiliated

require disclosure of

privacy policies to consumers

and, in some circumstances,

allow consumers to

prevent disclosure of

nonaffiliated

guidelines for establishing information security standards

and cybersecurity programs for implementing safeguards.

information technology and the use of third parties in the

provision of financial services.

computer-security

organizations

required to notify their primary

federal regulators within 36 hours

of any incident that has materially

disrupted or degraded,

materially disrupt

organization’s

deliver banking

material portion of

its client base,

jeopardize the

viability of key

operations, or

impact the financial

the financial

The rule also imposes

certain notification requirements on third-party bank

service providers when they experience

a computer-security

incident that

material service

disruption or

degradation for

In such case, the service provider is required to notify its bank-designated point of contact as soon as possible

upon discovery of the incident.

In addition to federal laws and regulations, we are subject

to state laws governing customer privacy and cybersecurity.

The Florida Information Protection Act of 2014 (“Florida Act”) requires notification of the

Florida Department of Legal Affairs

The Florida Information Protection Act of 2014 (“Florida Act”) requires notification of

the Florida Department of Legal Affairs

of any breach involving

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requires us to

take reasonable measures

take reasonable

measures to protect

form containing personal information and take all reasonable measures to dispose, or arrange for the disposal, of

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The Consumer Financial Protection Bureau (“CFPB”) is

an independent regulatory authority housed within the Federal

an independent regulatory authority housed within the

Reserve Board.

The CFPB has broad authority to regulate the offering and provision of consumer

financial products and to

The CFPB has broad authority to regulate the offering and provision of consumer financial products and to

prevent institutions subject to its authority from engaging in “unfair

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compliance with federal consumer

The authority to supervise

examine depository

institutions with

$10 billion or

less in assets,

compliance with federal

laws remains largely with those institutions’ primary

federal regulators.

However, the CFPB may participate in examinations

of these smaller institutions

on a “sampling basis”

and may refer potential

enforcement actions against

such institutions to

their primary regulators.

CFPB may participate

in examinations of

addition, states are

to adopt consumer

protection laws and

regulations that are stricter

than the regulations promulgated

attorneys general are permitted to enforce consumer

protection rules adopted by the CFPB against certain institutions.

The authority to

supervise and

examine depository institutions with

$10.0 billion or less in assets,

Century Bank,

for compliance with federal

consumer laws

remains largely

institutions’

primary federal

may participate

examinations of these smaller

institutions on a “sampling

basis” and may refer

potential enforcement actions

institutions to their

primary regulators.

participate in examinations of

Century Bank.

adopt consumer

protection laws

and regulations

stricter than

the regulations

by the CFPB, and state attorneys general are permitted to

enforce consumer protection rules adopted by the CFPB against

certain institutions.

The Volcker Rule

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in short term

trading in securities and derivatives and from

investing in and sponsoring certain investment companies defined

trading in securities and derivatives and from investing

in and sponsoring certain investment companies defined

funds” (including

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size, which is below

the $10.0 billion Volcker

Rule threshold.

the $10.0 billion Volcker Rule

Community Reinvestment Act and Fair Lending Requirements

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the communities they serve,

including low-

and moderate-income neighborhoods,

consistent with

including low- and moderate

-income neighborhoods, consistent with

safe and sound banking practices.

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further requires

into account our

USCB Financial Holdings, Inc.

4 unchanged sentences

“satisfactory,”

noncompliance.” We

“satisfactory” CRA

both regulatory

examinations.

to substantive

and corrective

measures that may

be required for

a violation of

certain fair lending

laws, the federal

banking agencies may

take compliance

regulating and

supervising other

activities of

expansionary proposals such as when a bank submits

an application to establish bank branches, merge with

noncompliance.”

a “satisfactory”

CRA Assessment

corrective measures that may be required for a violation of certain fair lending laws, the federal banking agencies may take

compliance with such laws and CRA

into account when regulating and supervising

other activities of the bank, including

another bank,

the liabilities

unsatisfactory

substantially delay

regulatory agency's

of another bank.

An unsatisfactory

substantially delay or

such transaction.

The regulatory agency's

assessment of

the institution's

available to the

www.ffiec.gov/craratings.

Following its most

recent CRA performance

evaluation in March

Century Bank received an overall rating of "Satisfactory."

October 2022, U.S.

Century Bank received an overall

rating of "Satisfactory."

In October 2023, the

federal banking agencies jointly issued

a final rule to

revise the regulations implementing the

The final rule takes effect

on April 1, 2024, with

staggered compliance dates;

the applicability date

for most of the provisions

expand access

services in low and moderate income

communities, adapt to changes in

the banking industry including mobile

banking, provide

greater clarity and

consistency in

the application

regulations and

tailor CRA evaluations

framework, is based on

bank asset size and

business model.

final rule, a new

“Retail Lending Test” is established

have the option to maintain

the current CRA evaluation

framework, referred to in

the final rule as the

“Small Bank Lending

the Retail Lending

The Retail Lending

evaluates a bank’s

record of helping

its community

origination and

mortgage, multi

small business,

cases, automobile

strategic plan

for obtaining

rule continues

“facility-based

around a bank’s main office, branches, and deposit-taking remote service facilities (e.g., ATMs).

The final rule allows

to receive CRA credit for any qualified community development

activity, regardless

Call Reports and Examination Cycle

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risk profile of individual institutions

and the industry as a

and the industry as a whole.

In June 2019, the

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the monetary policies

Federal Reserve

bank borrowing,

availability of

operations, changes

interest rate,

imposition of

reserve requirements

against certain

borrowings by

influence overall growth and distributions of bank loans, investments and deposits,

which may affect interest rates charged

operating results

of commercial

Reserve Board’s

policies are primarily influenced by the dual mandate of price stability and

full employment, and to a lesser degree by short-

international

changes in monetary policy and the effect of such changes on our business and earnings in the future cannot be

of the Federal Reserve.

Changes in the discount rate

on member bank borrowing, availability of borrowing

at the “discount

requirements against member banks’ deposits

and assets of foreign banking centers

and the imposition of and changes in

reserve requirements against certain

borrowings by banks and

their affiliates are

instruments of monetary

available to the Federal Reserve.

monetary policies are used in

varying combinations to influence overall growth and

distributions of bank loans, investments and deposits, which may affect interest rates charged

on loans or paid on deposits.

had a significant

the operating

commercial banks

international trade

fiscal policies

Future changes

effect of such changes on our business and earnings

in the future cannot be predicted.

Future Legislation and Regulation

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processes, require us to

increase our regulatory capital

or modify our

increase our regulatory

capital or modify our

USCB Financial Holdings, Inc.

opportunities

4 unchanged sentences

legislation or regulations.

The CARES Act and Initiatives Related to COVID-19

On March 27, 2020, the CARES Act was signed into law and provided for approximately $2.2 trillion in direct economic

economic impacts

Act’s programs

remain, dependent

direct involvement

institutions like

through rules and guidance adopted by federal

departments and agencies, including the U.S.

Department of Treasury,

Federal Reserve and

other federal bank

regulatory authorities, including

those with direct

supervisory jurisdiction

Furthermore, as the COVID-19 pandemic

evolves, federal regulatory authorities continue

to issue additional guidance with

implementation,

industry-specific

supplementary

COVID-19 response legislation, including

amendments to the CARES

Act or new bills comparable

in scope to the CARES

Appropriations

Federal Securities Laws and the Sarbanes-Oxley Act

Exchange Act of 1934.

USCB Financial

Holdings, Inc.

is subject to the

proxy and tender offer rules, insider trading reporting

requirements and restrictions, and certain other requirements

under the Securities Exchange Act of 1934.

As a public company,

USCB Financial Holdings, Inc.

program, the Paycheck Protection

Program, or PPP, to fund operational costs

of eligible businesses, organizations

employed persons impacted by COVID-19.

These loans are eligible to be forgiven if

certain conditions are satisfied and are

fully guaranteed by the SBA.

Additionally,

loan payments will also be deferred

for the first six months of the

PPP commenced on

available to qualified

borrowers through August

No collateral

guarantees were required.

On December 27, 2020,

President Trump signed the Consolidated Appropriations Act, 2021 into

law which included the Economic Aid to Hard-Hit Small Businesses,

Nonprofits, and Venues Act, or

the HHSB Act.

other things, the HHSB Act renewed the

allocating $284.45 billion for both new first time PPP

loans under the existing

the expansion

qualified, existing

PPP borrowers.

amending the PPP,

the HHSB Act also creates

a new grant program

for “shuttered venue operators.”

As of December 31,

2022, we had 6 active PPP loans remaining totaling $1.3

Appropriations

modifications

characterized as troubled

debt restructurings and

suspend any determination

related thereto if (i)

the borrower was

modifications are

COVID-19, and

occurs between March 1, 2020 and

the earlier of 60 days after the

date of termination of the national emergency or

modifications

borrowers affected by

December 31, 2022, there

our portfolio

status associated

with the COVID-19 pandemic.

is also subject to

the Sarbanes-Oxley Act of 2002 (“SOA”), which

is applicable to all companies, both U.S.

and non-U.S., that file periodic reports

under the Securities Exchange Act of 1934.

The stated goals of

the SOA were to increase

corporate responsibility, to provide for enhanced penalties for accounting and

improprieties

corporate disclosures

the securities

responsible for

establishing rules

provisions of

includes specific

disclosure requirements

and corporate

governance rules,

SEC and securities exchanges to adopt

extensive additional disclosure, corporate

governance and other related rules

profession and

corporate governance

practices, such

directors and

and between a board of directors and its committees.

Financial Holdings,

Inc.’s principal

executive officer

and principal

financial officer

required to certify that the Corporation’s quarterly and

annual reports do not contain any untrue

statement of a material fact.

The rules adopted by

the SEC under the

SOA have several requirements,

including having these

officers certify that:

are responsible for establishing, maintaining and regularly evaluating the effectiveness

of our internal control over financial

certain disclosures

Financial Holdings,

Inc.’s auditors

and the audit

Board of Directors

Financial Holdings,

Inc.’s internal

financial reporting;

have included

information in USCB Financial Holdings,

Inc.’s quarterly and annual

reports about their evaluation

and whether there have

materially affect USCB Financial Holdings, Inc.’s

internal control over financial reporting.

In March 2020, the SEC issued

a final rule, effective

April 27, 2020, under the

SOA – Amendments to the Accelerated

Large Accelerated

Filer Definitions.

the amendments,

revenue and/or

filers, while they remained obligated to provide a

report by management assessing the effectiveness of their internal control

over financial reporting (“ICFR”), were

not required to provide

an attestation report from

their independent auditor assessing

the effectiveness of their ICFR.

USCB Financial Holdings,

meets the amended definition and is not required to provide

an attestation report from its independent

auditor assessing the effectiveness of its ICFR.

addition, as long it is

emerging growth company,

such auditor attestation

requirement will not

apply to USCB

Financial Holdings, Inc.

remains subject to

independent auditor attestation required

under FDIC regulations

Available Information

www.uscentury.com.

Reports on Form 10-K,

Quarterly Reports on

Form 10-Q, Current

Reports on Form

10-K, Quarterly Reports

on Form 10-Q,

Current Reports on Form

8-K, and if applicable,

8 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business