What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2024-08-12 compared with 2024-05-10 · 452 added, 363 removed, 1144 unchanged (42% of the section changed)

2 unchanged sentences

understanding

condition and results

of operations of

the Company and

the Bank, its

wholly owned subsidiary,

ended March 31,

discussion and analysis

in conjunction

with the unaudited

consolidated financial

statements and related

notes included in

this Quarterly

condition and results of

operations of the

Company and the Bank,

its wholly owned subsidiary,

as of and for

the three and

six months ended June 30, 2024.

This discussion and analysis

is best read in conjunction

with the unaudited consolidated

consolidated financial statements

and related notes

included in the Annual

Report on Form

10-Q (“Form 10-Q”)

and the audited

Securities and Exchange Commission (“SEC”) for the year

ended December 31, 2023.

10-K (“2023 Form

with the Securities and Exchange Commission (“SEC”)

for the year ended December 31, 2023.

This discussion contains forward-looking statements that involve risks, uncertainties and assumptions that could cause

100 unchanged sentences

Q2 2024 Form 10-Q

unless required to do so

under the federal securities

should also review the

risk factors described

in the Annual

Report on Form 10-K and in the reports the Company

filed or will file with the SEC.

ended March 31,

2024 compared

diluted share

March 31, 2023.

On January 29, 2024, the Company’s Board of

Directors declared a cash dividend of $0.05 per

share of the Company’s

dividend was paid

2024 to shareholders

business on February

amount distributed in

connection with this

dividend was $1.0

Additionally,

the Company’s Board

of Directors declared

a cash dividend of $0.05 per share of the Company’s Class

A common stock on

April 22, 2024.

The dividend will be paid on

June 5, 2024 to shareholders of record at the close of

business on May 15, 2024.

7,100 shares of

Class A common stock were repurchased

at a weighted

average price per

share of $11.15

unless required

securities laws.

Form 10-K and in the reports the Company filed or will

file with the SEC.

On January 29, 2024, the Company’s Board of Directors announced the adoption

of a quarterly dividend program.

first quarter

the Company’s

Class A common

shareholders of record at the close of business on February 15,

The aggregate amount distributed in connection with

this dividend

second quarter

cash dividend

Company’s Class

stock was paid on June 5, 2024

to shareholders of record at the close of

business on May 15, 2024.

The aggregate amount

distributed in connection with this dividend

was $1.0 million.

Additionally,

the Company’s Board of Directors declared

September 5, 2024 to shareholders of record at the close

of business on August 15, 2024.

25,000 shares of Class A common stock were repurchased at a weighted average price per share of $12.00 during the

second quarter 2024.

These repurchases were made

pursuant to the Company’s publicly

announced repurchase program.

of March 31, 2024, 72,980 shares remained authorized

for repurchase under this program.

On April 22, 2024, the Board of Directors approved a new share repurchase

program of up to 500,000 shares of Class

approximately

repurchase program,

Class A common stock

on a discretionary

time through open market repurchases, privately negotiated transactions, or other means.

The repurchase program has no

expiration date and may

be modified, suspended,

or terminated at any

The new repurchase

program will commence

Company’s existing cash and cash equivalents or future

As of April 22, 2024, 572,980 shares remain authorized

for repurchase under the Company’s share repurchase

pursuant to the

Company’s publicly announced repurchase programs.

As of June 30, 2024, 547,980 shares remained authorized

for repurchase under the

Company’s programs.

In evaluating our financial

3 unchanged sentences

interest income, the

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

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

ended March 31,

2024 compared

annualized where appropriate:

Net interest income for the three months ended

March 31, 2024 decreased $839 thousand or 5.2% to $15.2 million

million for the quarter ended March 31, 2023.

period comparisons

bullet points

quarter ended

June 30, 2024 compared to at or for the quarter ended June 30, 2023 and as of June 30, 2024

compared to December 31,

2023, and annualized where appropriate:

Net interest income

for the three

months ended June

30, 2024 increased

$3.1 million or

22.1% to $17.3 million

from $14.2 million

for the quarter ended June 30, 2023.

margin (“NIM”)

the three months

ended March 31, 2023.

Total assets were $2.5 billion at March 31, 2024, representing an increase of $325.3 million or 15.0% from March 31, 2023 and

an increase of $150.0 million or 25.7% annualized from December 31, 2023.

Total loans were $1.8

billion at March 31, 2024,

ended June 30, 2023.

Total assets were $2.5 billion at June 30, 2024, representing an increase of $232.4 million or 10.4% from June 30, 2023

increase of $119.2 million or 10.2% annualized from December 31, 2023.

Total loans were $1.9 billion at June

30, 2024, representing an increase of $273.3

million or 15.2% from March

an increase of $40.4 million or 9.1% annualized from December 31, 2023.

Total deposits

were $2.1 billion

representing an increase

14.9% from March

and an increase of $165.7 million or 34.4% annualized from December 31, 2023.

Annualized return on average

assets for the quarter

ended March 31, 2024

was 0.76% compared

the quarter ended

March 31, 2023.

Annualized return on

average stockholders’ equity

for the quarter

9.61% compared to

quarter ended March 31, 2023.

The ACL to total loans was 1.18% at both March 31, 2024 and December 31, 2023.

Non-performing loans to total loans was 0.03% at both March 31, 2024 and December 31, 2023.

At March 31, 2024, the total risk-based capital ratios for the Company and the Bank were 12.98% and 12.89%, respectively.

USCB Financial Holdings, Inc.

Q1 2024 Form 10-Q

million or 17.1% from June 30,

increase of $88.4 million or 10.0% annualized from December 31, 2023.

Total deposits were $2.1 billion at June

30, 2024, representing an increase of

$135.4 million or 7.0% from June 30,

increase of $119.6 million or 12.4% annualized from December 31, 2023.

Annualized return on average assets for the quarter ended June 30,

2024 was 1.01% compared to 0.77% for the quarter

June 30, 2023.

Annualized return

stockholders’ equity

quarter ended

12.63% compared

quarter ended June 30, 2023.

The ACL to total loans was 1.19% at June 30, 2024 and 1.18% at December 31, 2023.

Non-performing loans to total loans was 0.04% at June 30, 2024 and 0.03% at December 31, 2023.

At June 30, 2024, the total risk-based capital ratios for the Company and the Bank were 13.12% and 13.01%, respectively.

Tangible book

financial measurement)

affected by $2.31 due to accumulated comprehensive loss of

$45.4 million at March 31, 2024.

At March 31, 2023, tangible book

affected by $2.28

due to accumulated

comprehensive loss of

$44.7 million at

June 30, 2024.

June 30, 2023,

tangible book

value of $9.40 per common

3 unchanged sentences

comprehensive loss.

“Reconciliation and

Explanation for

Non-GAAP Financial

Measures” for

“Reconciliation

this non-GAAP

financial measure.

reconciliation of this non-GAAP financial measure.

USCB Financial Holdings, Inc.

Q2 2024 Form 10-Q

Critical Accounting Policies and Estimates

62 unchanged sentences

(in thousands, except ratios):

March 31, 2024

June 30, 2024

December 31, 2023

1 unchanged sentence

stockholders' equity

Loan amounts include deferred costs.

USCB Financial Holdings, Inc.

Q1 2024 Form 10-Q

Three Months Ended March 31,

Loan amounts include deferred fees/costs.

Three Months Ended June 30,

Six Months Ended June 30,

Consolidated Statements of Operations:

5 unchanged sentences

Net interest margin

USCB Financial Holdings, Inc.

Q2 2024 Form 10-Q

The Company’s

6 unchanged sentences

expense, and the provision for income taxes.

Three months ended March 31, 2024 compared to the three

months ended March 31, 2023

million compared

this positive

million increase

interest expense

weighted average deposit

and borrowing costs.

Consequently, net income

decreased $1.2 million

Three months ended June 30, 2024 compared to the three

months ended June 30, 2023

Net income increased

to $6.2 million

the three months ended March 31, 2024 compared to the three

months ended March 31, 2023.

for the three

months ended June

from $4.2 million

income was attributable

interest income from

loan portfolio,

net interest margin expansion, and increased

activity in fee generating transactions (wire fees,

gain on sale of loans,

fees, and treasury management fees) between periods.

Six months ended June 30, 2024 compared to the six

months ended June 30, 2023

Net income increased

to $10.8 million

months ended June

from $10.0 million

$816 thousand

was attributable

interest income

portfolio and

increased activity

generating transactions

management fees) between periods.

Net Interest Income

61 unchanged sentences

costs of liabilities for the periods indicated (dollars in

Three Months Ended March 31,

Three Months Ended June 30,

Interest-earning assets:

32 unchanged sentences

income to average total interest-earning assets.

Three months ended March 31, 2024 compared to the three months

ended March 31, 2023

Net interest income before the provision for

credit losses was $15.2 million for the

three months ended March 31, 2024,

conditions which offset the increase in interest income.

in loan yields as well as yields on other interest-earning assets was offset by

higher deposit and borrowing costs.

USCB Financial Holdings, Inc.

Q2 2024 Form 10-Q

Six Months Ended June 30,

Interest-earning assets:

Investment securities

Other interest-earnings assets

Total interest-earning assets

Non-interest earning assets

Liabilities and stockholders' equity

Interest-bearing liabilities:

Interest-bearing checking

Money market and savings accounts

Time deposits

Total interest-bearing deposits

Borrowings and repurchase agreements

Total interest-bearing liabilities

Non-interest bearing demand deposits

Other non-interest-bearing liabilities

Total liabilities

Stockholders' equity

Total liabilities and stockholders' equity

Net interest income

Net interest spread

Net interest margin

Average balances - Daily average balances are used

to calculate yields/rates.

Average loan balances include non-accrual loans.

Interest income

on loans includes accretion of deferred loan fees,

net of deferred loan costs.

At fair value except for securities held to maturity.

Includes FHLB stock.

Net interest spread is the weighted average

yield on total interest-earning assets minus the weighted

average rate on total interest-bearing

Net interest margin is the ratio of net interest

income to average total interest-earning assets.

Three months ended June 30, 2024 compared to the three months

ended June 30, 2023

Net interest income before the provision

for credit losses was $17.3 million

for the three months ended June

an increase of $3.1 million

or 22.1%, from $14.2 million

for the same period in

This increase was

primarily attributable

to higher income from a larger loan portfolio combined with

an increase in the weighted average loan yield.

Net interest margin was

for the quarter ended

June 30, 2024 and 2.73%

for the same period

and rate paid on cost of funds both increased,

however loan yields grew at a higher rate

offsetting the increase in deposits

and borrowing costs.

Six months ended June 30, 2024 compared to the six months ended

June 30, 2023

Net interest income before the provision for credit losses was $32.5 million for the six months ended June 30, 2024, an

increase of $2.3 million or

7.6%, from $30.2 million for

the same period in 2023.

This increase

was primarily attributable to

higher income from a larger loan portfolio combined with

an increase in the weighted average loan yield.

Net interest margin was

2.78% for the

six months ended

June 30, 2024 and

for the same period

both increased,

higher than the increase in total interest-bearing assets.

USCB Financial Holdings, Inc.

Q2 2024 Form 10-Q

Provision for Credit Losses

15 unchanged sentences

and net charge-offs.

USCB Financial Holdings, Inc.

Q1 2024 Form 10-Q

Three months ended March 31, 2024 compared to the three months

ended March 31, 2023

The provision

$410 thousand

ended March 31, 2024

$201 thousand

Three months ended June 30, 2024 compared to the three months

ended June 30, 2023

The provision for credit loss was $786 thousand for the three months ended

June 30, 2024 compared to $38 thousand

portfolio was

provision expense

during the three months ended March 31, 2024.

during the three months ended June 30, 2024.

Six months ended June 30, 2024 compared to the six months ended

June 30, 2023

The provision for

credit loss was

$1.2 million for

the six months

ended June 30,

2024 compared to

$239 thousand for

the same period in 2023.

Growth in the loan portfolio was the primary driver of the increase

in the provision expense during

the six months ended June 30, 2024.

Non-Interest Income

9 unchanged sentences

income for the dates indicated (in thousands):

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

Gain (loss) on sale of securities available for sale, net

2 unchanged sentences

non-interest income

Three months ended March 31, 2024 compared to the three months

ended March 31, 2023

Non-interest income for the three

months ended March 31, 2024

increased $394 thousand or 19.0%,

compared to the

This increase

was primarily

larger deposit

portfolio and

increase in wire and treasury management fees.

Three months ended June 30, 2024 compared to the three months

ended June 30, 2023

primarily driven

SWAP loan fees, and treasury management fees.

Six months ended June 30, 2024 compared to the six months ended

June 30, 2023

Non-interest income

months ended June

increased $1.8

million or 44.9%,

treasury management fees.

USCB Financial Holdings, Inc.

Q2 2024 Form 10-Q

Non-Interest Expense

1 unchanged sentence

expense for the dates indicated (in thousands):

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

Salaries and employee benefits

4 unchanged sentences

non-interest expense

Three months ended March 31, 2024 compared to the three months

ended March 31, 2023

Non-interest expense for the three

months ended March 31, 2024

increased $998 thousand or 9.8%,

compared to the

same period in 2023.

The increase was

primarily driven by an increase

in other operating expenses of $578

to $199 thousand

external audit

thousand increase

in miscellaneous

Additionally, consulting and legal fees increased

$234 thousand due to legal

and regulatory assessment and fees

increased $209 thousand mostly due to FDIC deposit insurance

as our deposit portfolio grew.

Three months ended June 30, 2024 compared to the three months

ended June 30, 2023

Non-interest expense for

the three months

ended June 30, 2024

increased $1.1 million

or 10.6%, compared

period in 2023.

was primarily

compensation expense.

Six months ended June 30, 2024 compared to the six months ended

June 30, 2023

Non-interest expense for the six

months ended June 30, 2024 increased $2.1

million or 10.2%, compared to the

period in 2023.

was primarily

in salaries and

employee benefits

Other operating expenses increased due to increase of

$153 thousand in audit and tax services.

Provision for Income Tax

14 unchanged sentences

elements in determining our effective tax rate.

USCB Financial Holdings, Inc.

Q1 2024 Form 10-Q

Three months ended March 31, 2024 compared to the three months

ended March 31, 2023

Income tax expense for

the quarter ended March

31, 2024 was $1.4

million as compared to

$1.9 million for the

effective tax

March 31, 2024

same period in 2023.

Three months ended June 30, 2024 compared to the three months

ended June 30, 2023

ended June 30,

period in 2023.

The effective tax rate for the three months ended June

30, 2024 and 2023 was 24.1%.

Six months ended June 30, 2024 compared to the six months ended

June 30, 2023

Income tax expense for the six months ended June 30, 2024 was $3.4 million as compared to $3.2 million for

period in 2023.

The effective tax rate for the six months ended June

30, 2024 was 23.9% compared to 24.3% for the same

period in 2023.

Statements in Item 1 of Part I of this Form 10-Q.

Analysis of Financial Condition

Total assets at March 31, 2024 were $2.49 billion, an increase of $150.0 million, or 25.8% annualized,

assets at June 30, 2024 were

$2.46 billion, an increase

million, or 10.2% annualized,

over total assets

of $2.34 billion at December 31, 2023.

loans, net of unearned fees/cost, increased $40.4 million, or 9.1% annualized,

2024 compared

deposits increased

million, or 34.4% annualized, to $2.10 billion at March

loans, net of deferred fees/cost, increased $88.4 million, or 10.0% annualized,

million, or 12.4% annualized, to $2.06 billion at June 30,

2024 compared to $1.94 billion December 31, 2023.

USCB Financial Holdings, Inc.

Q2 2024 Form 10-Q

Investment Securities

68 unchanged sentences

holding period as

it approaches to maturity

and the Company has

the intent and ability

to hold these securities

to maturity until

a result of this evaluation, the

Company concluded that no allowance was required on AFS

securities as of March 31, 2024.

AFS and HTM investment securities increased $28.7 million,

or 28.6% annualized, to $433.0 million at March 31, 2024

from $404.3 million at December 31, 2023.

securities increased due to reinvestment of payments

it approaches to maturity and the Company

has the intent and ability to hold

these securities to maturity.

As a result of this

evaluation, the Company concluded that no allowance

was required on AFS securities as of June 30, 2024.

mortgage-backed

The remaining

in investment

corporate bonds.

The required reserve for these

holdings is determined each quarter using the model described above.

the portion of the HTM exposed to non-government

credit risk, the Company utilized the PD/LGD

methodology to estimate

a $9 thousand Allowance

for credit losses (“ACL”)

as of June 30,

The book value

for debt securities classified as

represents amortized cost less ACL.

investment securities increased $1.7 million,

or 0.9% annualized, to

$406.1 million at June 30, 2024

$404.3 million

investment of excess

3 unchanged sentences

Company’s profitability and

March 31, 2024,

of $262.6 million

5 unchanged sentences

Q2 2024 Form 10-Q

March 31, 2024

June 30, 2024

December 31, 2023

19 unchanged sentences

for investment

as of March 31, 2024 (in thousands, except ratios):

as of June 30, 2024 (in thousands,

except yields):

Within 1 year

36 unchanged sentences

as of the dates indicated (in thousands):

March 31, 2024

June 30, 2024

December 31, 2023

4 unchanged sentences

Consumer and Other

Deferred costs

Deferred fees/costs

loans net of deferred fees/costs

Allowance for credit losses

cost, increased

by $40.4 million,

annualized to

$1.82 billion,

$88.4 million,

2024 compared to December 31, 2023.

The residential real

estate loan segment had the most significant growth.

approximately 58% of the

total gross loan portfolio as

of March 31, 2024.

growth strategy since inception has

reflective of the market in which we operate and of our strategic

plan as approved by the Board.

The residential

real estate loan segment had the most significant growth.

approximately

loan portfolio

been reflective of the market in which we operate and

of our strategic plan as approved by the Board.

commercial real estate

16 unchanged sentences

or unexpected

The following table shows

maturities and sensitivity to

interest rate changes for the

loan portfolio at March 31,

The following table shows maturities and sensitivity

to interest rate changes for the loan portfolio at June 30,

2024 (in thousands):

26 unchanged sentences

/rate modifications are discussed as well.

As of March 31, 2024, approximately 58% of

the loans have adjustable/variable rates

and 42% of the loans have fixed

As of June 30,

2024, approximately

have adjustable/variable

adjustable/variable

55 unchanged sentences

as follows for the dates indicated (in thousands):

March 31, 2024

June 30, 2024

Special Mention

17 unchanged sentences

except ratios):

March 31, 2024

June 30, 2024

December 31, 2023

Non-accrual loans

Loans past due over 90 days and still accruing

non-performing loans

5 unchanged sentences

Non-performing loans to total loans

Non-performing assets include all loans categorized

as non-accrual or restructured, other real

estate owned (“OREO”)

and other repossessed assets.

Problem loans for which

the collection or

liquidation in full

is reasonably uncertain are

on a non-accrual

This determination

current existing facts

concerning collateral

values and the

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.

Non-performing

repossessed assets.

Problem loans for

which the collection or

liquidation in full is

reasonably uncertain are placed on

accrual status.

This determination is based on current existing facts concerning collateral values and the paying capacity of

overstating the Company’s income for a loan with

increased credit risk.

non-accrual status as of

24 unchanged sentences

concessions intended to minimize potential losses.

For further discussion on non-performing loans

and borrowers experiencing financial difficulties,

see Note 3 “Loans” to

For further discussion of

non-performing loans and

borrowers experiencing financial

difficulties, see

Note 3 “Loans” to

the unaudited Consolidated Financial Statements in Item

13 unchanged sentences

type for the periods indicated (in thousands):

Three Months Ended March 31, 2024

and Industrial

Three Months Ended June 30, 2024

Beginning balance

3 unchanged sentences

Net charge-offs to average loans

(1) Provision for credit losses excludes a $43 thousand charge due to unfunded commitments included in other liabilities and a $4

thousand charge related to investment securities held to maturity.

Three Months Ended March 31, 2023

Six Months Ended June 30, 2024

Beginning balance

Cumulative effect of adoption of

accounting principle

Provision for credit losses

2 unchanged sentences

Net charge-offs to average loans

(1) Provision for credit losses excludes a $15 thousand expense due to unfunded commitments included in other liabilities and a $3

thousand release related to investment securities held to maturity.

(2) Provision for credit losses excludes $58 thousand expense due to unfunded commitments included in other liabilities and $1

thousand expense due to investment securities held to maturity.

and Industrial

Three Months Ended June 30, 2023

Beginning balance

Provision for credit losses

Ending Balance

Average loans

Net charge-offs to average loans

Six Months Ended June 30, 2023

Beginning balance

Cumulative effect of adoption of accounting

Provision for credit losses

Ending Balance

Average loans

Net charge-offs to average loans

(1) Provision for credit losses excludes a $62 thousand expense due to unfunded commitments included in other liabilities and a $19

thousand expense related to investment securities held to maturity.

(2) Impact of CECL adoption on January 1, 2023.

(2) Provision for credit losses excludes a $84 thousand release due to unfunded commitments included in other liabilities

(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.

USCB Financial Holdings, Inc.

Q2 2024 Form 10-Q

Bank-Owned Life Insurance

As of March 31, 2024, the combined cash surrender value of all bank-owned life insurance (“BOLI”) policies was

As of June 30,

2024, the combined

cash surrender value

of all bank-owned

life insurance (“BOLI”)

policies was $52.6

Changes in cash surrender value are recorded to non-interest income in the unaudited Consolidated Statements of

12 unchanged sentences

relationships of the employees of these businesses.

USCB Financial Holdings, Inc.

Q1 2024 Form 10-Q

The following table

4 unchanged sentences

presented (in thousands, except ratios):

Three Months Ended March 31,

Three Months Ended June 30,

Average Balance

7 unchanged sentences

outstanding balances

32% personal deposits, 12% public funds

(which are partially collateralized)

and 4% brokered deposits.

balance at March 31, 2024 was $90.1 million and there

were no brokered deposits at March 31, 2023.

collateralized)

deposits balance at June 30, 2024 was $90.0 million

and $50.0 million at June 30, 2023.

The Company has approximately

3 unchanged sentences

13 thousand or

The estimated

average account

deposit portfolio is

approximately $103 thousand

March 31, 2024.

Sweep (“ICS”)

and Certificate

Deposit Account

Registry Service (“CDARS”) deposit products

to fully insure our clients.

deposit balance in ICS/CDARS at

was $144.1 million and $35.7 million at March 31, 2023.

estimated average

account size of

our deposit portfolio

was approximately

$101 thousand

of June 30, 2024.

accounts at the Company per account holder.

The total estimated amount of uninsured deposits was

54% at June 30, 2024

June 30, 2023.

The Company offers

Insured Cash Sweep

(“ICS”) and Certificate

Deposit Account Registry

$121.8 million at June 30, 2024 and $107.3 million at December

The following table shows scheduled maturities of uninsured

time deposits as of March 31, 2024 (in thousands):

March 31, 2024

time deposits as of June 30, 2024 (in thousands):

June 30, 2024

Three months or less

9 unchanged sentences

Escrow funds are recorded as other liabilities.

As of March 31, 2024 escrow balances totaled $7.8 million compared

to $2.3 million at December 31, 2023.

As of June 30, 2024 escrow balances totaled $14.8 million

compared to $2.3 million at December 31, 2023

USCB Financial Holdings, Inc.

Q2 2024 Form 10-Q

accessibility of additional

7 unchanged sentences

of the Company.

As of March 31, 2024, we had $82.0 million of

fixed-rate advances outstanding from the FHLB with a weighted average

As of June 30, 2024, we

had $82.0 million of fixed-rate

advances outstanding from the

FHLB with a weighted average

rate of 3.19%.

1 unchanged sentence

2024 to 2028 as detailed in the table below.

USCB Financial Holdings, Inc.

Q1 2024 Form 10-Q

The following table presents the FHLB advances as of

March 31, 2024 (in thousands):

June 30, 2024 (in thousands):

Interest Rate

5 unchanged sentences

April 25, 2028

March 31, 2024,

million fixed-rate

loan outstanding

Funding Program with an interest rate of 4.81% and

a maturity date of January 10, 2025.

also established

Federal Funds

lines of credit

upstream correspondent

outstanding balances with any of these liquidity sources.

As of June 30, 2024,

we had a $80.0

million fixed-rate loan outstanding from

the FRB issued pursuant

to the Bank Term

Funding Program with an interest rate of 4.81% and a maturity

date of January 10, 2025.

correspondent

temporary fluctuations

2024, there were no outstanding balances with any of these

liquidity sources.

Off-Balance Sheet Arrangements

23 unchanged sentences

commitments outstanding as of the dates indicated (in thousands

March 31, 2024

June 30, 2024

December 31, 2023

35 unchanged sentences

from the client

USCB Financial Holdings, Inc.

Q2 2024 Form 10-Q

the underlying collateral,

11 unchanged sentences

of authority and responsibility in a timely manner.

USCB Financial Holdings, Inc.

Q1 2024 Form 10-Q

establishment,

43 unchanged sentences

Market and Interest Rate Risk Management

According to our

ALCO model, as

an asset sensitive

balance sheet both

sensitive balance

modeling, using

5 unchanged sentences

indicates that our

liabilities generally reprice faster

than our assets,

which results in

a favorable impact

to net interest

liabilities generally reprice

faster than our

assets, which results

in a favorable

impact to net

interest income

when market interest rates decrease.

26 unchanged sentences

to increase asset sensitivity.

under interest

scenarios (an

rates increase,

NIM will increase and if rates decrease, the NIM will decrease.

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

This measures

the difference between

the economic value of

our assets and the

economic value of

our liabilities, which is

a proxy for our

According to our model, as of June 30, 2024,

our balance sheet is asset sensitive for both year

one and year two under

interest static rate scenarios

(an increase or decrease of

400 basis points).

means than if rates increase

increase and if rates decrease,

the NIM will decrease.

Additionally, utilizing an EVE approach, we analyze

the risk to capital

liquidation value.

3 unchanged sentences

interest rates will have a

negative impact on the EVE

and lower rates, a positive

negative impact on the EVE and

lower rates, a positive impact.

Results and analysis are presented

quarterly to the ALCO, and strategies are reviewed and refined.

USCB Financial Holdings, Inc.

Q2 2024 Form 10-Q

Liquidity is defined

15 unchanged sentences

Company’s obligations, and the funding

USCB Financial Holdings, Inc.

Q1 2024 Form 10-Q

significantly

49 unchanged sentences

federal funds

purchased, brokered certificates of deposit, listing services certificates of deposit, and draws

from the FRB Atlanta discount

and borrowings

our liquidity

meet other cash needs as necessary.

adequate to fund loans and meet other cash needs as

USCB Financial Holdings, Inc.

Q2 2024 Form 10-Q

Capital Adequacy

March 31, 2024,

prompt corrective

action framework.

follow the capital conservation buffer framework, and as of March 31, 2024, we exceeded the capital conversation buffer

follow the capital conservation

buffer framework,

and as of June

exceeded the capital

conversation buffer

indicated (in thousands, except ratios).

3 unchanged sentences

Action Provisions

March 31, 2024

June 30, 2024

risk-based capital

13 unchanged sentences

Company is deemed to be a small bank holding company.

USCB Financial Holdings, Inc.

Q1 2024 Form 10-Q

Impact of Inflation

24 unchanged sentences

relatively lower interest rates.

As market interest rates

rise or fall in relation

to the rates earned

on loans and investments,

respectively.

associated with delivering the Company’s services.

Recently Issued Accounting Pronouncements

85 unchanged sentences

Tangible stockholders' equity

Tangible assets

Tangible total assets

Tangible Common Equity/Tangible

4 unchanged sentences

of outstanding stock options.

(3) Since the Company has no intangible

assets, tangible total assets is the same amount

as total assets calculated under GAA

USCB Financial Holdings, Inc.

5 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-Q

Item 2. Management’s Discussion and Analysis