What changed in this filing

/stocks — the workspaceLOADING

Item 1A. Risk Factors

2025-03-14 compared with 2024-03-22 · 1009 added, 794 removed, 2418 unchanged (43% of the section changed)

25 unchanged sentences

are discussed

more fully in this Item 1A and include, without limitation, the

more fully in this Item 1A and include, without limitation,

the following:

Risks Related to our Business and Operations

2 unchanged sentences

diversified competitors.

Our concentration of real estate loans in a limited market

area exposes us to lending risks.

The small- to medium-sized businesses

5 unchanged sentences

our results of operations and financial condition.

Financial challenges

banking institutions

concerns that

spread within

industry causing disruptive deposit outflows and other destabilizing

The soundness of other financial institutions could adversely

operations, growth and prospects.

28 unchanged sentences

loans in compliance with SBA guidelines.

Global banking is an important part of our business, which creates

increased BSA/AML risk.

USCB Financial Holdings, Inc.

Correspondent banking is an important part of our business,

which creates increased BSA/AML risk.

We may not recover all amounts that are contractually

69 unchanged sentences

to invest in technological improvements.

Our current and future uses of Artificial Intelligence (AI)

and other emerging technologies may create additional

failure, interruption, or breach in the

11 unchanged sentences

banking regulations.

USCB Financial Holdings, Inc.

penalties, judgments

2 unchanged sentences

restrictions on

USCB Financial Holdings, Inc.

Certain of our

22 unchanged sentences

or estimates used in our critical accounting policies are inaccurate.

As a new public company, we may not efficiently or effectively create an effective internal control environment,

completeness of our financial

reports and our access

to the capital

markets, cause the price

of our Class A

stock to decline and subject us to regulatory penalties.

As a public company,

we may not efficiently or effectively

create an effective internal control environment,

future failure to maintain effective

internal control over financial reporting

could impair the reliability of

our financial

statements, which

in turn could

business, impair

investor confidence

in the accuracy

and completeness

decline and subject us to regulatory penalties.

We operate in a highly

11 unchanged sentences

regulations and corresponding enforcement proceedings.

Significantly heightened regulatory and

supervisory expectations and scrutiny

in the United States have

examinations,

investigations, and enforcement actions.

We are subject to capital adequacy requirements

19 unchanged sentences

may materially

Increasing scrutiny

expectations from

customers, regulators,

investors, and

other stakeholders

respect to our environmental, social

and governance practices may

impose additional costs on

us or expose us to

new or additional risks.

Risks Related to Our Class A Common Stock

7 unchanged sentences

excluding our Significant Investors.

USCB Financial Holdings, Inc.

exemptions from various reporting

17 unchanged sentences

regulatory limitations on changes of control of the Company.

USCB Financial Holdings, Inc.

Risks Related to our Business and Operations

36 unchanged sentences

our lending were more geographically diversified.

Furthermore, the economic disruption spurred

by the continuing COVID-

Additionally,

remote work options,

potentially influencing the

long-term performance of

office properties within

our commercial

real estate portfolio.

If we are required

to liquidate our real estate collateral

securing a loan during a period of

estate values

adversely affected.

large portion

our loan portfolio

is secured by

properties located in

South Florida, the occurrence

disaster, such as a hurricane,

or a man-made disaster could result in a decline in loan originations,

a decline in the value or the destruction of mortgaged

properties and an increase in

the risk of delinquencies, foreclosures

or loss on loans

originated by us.

suffer further

losses due to the decline

in the value of the

properties underlying our mortgage loans, which would

have an adverse impact

on our results of operations and financial condition.

Additionally, the COVID-19 pandemic accelerated the adoption of remote

are required to

liquidate our real

estate collateral securing

a loan during

reduced real estate

to satisfy the debt,

our earnings and capital could

be adversely affected.

Moreover, since a large portion

of our loan portfolio

is secured by properties located in South Florida, the occurrence of a natural disaster, such as a hurricane, or a man-made

disaster could result in

a decline in loan originations,

a decline in the

value or the destruction

of mortgaged properties and

an increase in the risk of delinquencies, foreclosures or loss on loans originated by us.

We may suffer further losses due to

the decline in the

value of the properties

underlying our mortgage loans, which

would have an adverse

impact on our results

of operations and financial condition.

A downturn in the local economy generally may lead to loan losses that are not offset by operations in other markets;

5 unchanged sentences

South Florida,

or prospective

South Florida,

7 unchanged sentences

of key natural resources, inflation, the potential

resurgence of economic and political tensions with China,

the continuing war in Ukraine, the

conflict in Gaza and continuing

higher oil prices due to, among other things, Russian supply disruptions resulting from

the ongoing Ukrainian conflict, each

of which may have a destabilizing effect on financial markets and economic activity.

Economic pressure on consumers and

resurgence of economic

and political tensions with

China, the continuing war

in Ukraine, the conflict

in Gaza and the

other things,

Russian supply

disruptions resulting

ongoing Ukrainian

conflict, each

a destabilizing

financial markets

Economic pressure

consumers and

overall economic

uncertainty may

business spending,

borrowing and

international

economies may significantly

affect the markets

do business, the

loans and investments,

ongoing operations, costs and profitability.

markets or economies may

significantly affect the markets in

which we do business, the

value of our loans

and investments,

and our ongoing operations, costs and profitability.

USCB Financial Holdings, Inc.

Our concentration of real estate loans in a limited

market area exposes us to lending risks.

At December 31, 2024,

approximately $1,426 million,

or 72.6%, of our

total loan portfolio, was

secured by real

in particular commercial real

estate, most of which is

located in our primary

lending market area of

the Miami metropolitan

significantly impair

particular real

estate collateral

the collateral

allowance for credit

losses to address

the decrease in

the real estate

securing our loans,

which could have

material adverse effect on our business, financial

condition, results of operations, and growth prospects.

business developments, which may impair a borrower's

40 unchanged sentences

condition and results of operations.

condition, liquidity, capital and results

of operations.

geographies in which

our customers operate.

ongoing and dynamic

nature, it is

predict the full

USCB Financial Holdings, Inc.

of the continuing

COVID-19 pandemic

on the business

of the Company,

its customers, employees

and third-party

developments,

Additionally,

responses of various governmental and non-governmental authorities

and consumers to the on-going pandemic may have

material long-term effects on

USCB Financial Holdings and our subsidiary

Century Bank and its customers

difficult to quantify in the near-term or long-term.

Inflationary pressures and rising prices may affect

our results of operations and financial condition.

Since 2021, there have been market indicators of a pronounced rise in inflation and the Federal Reserve raised certain

benchmark interest rates 11 times in

2022 and 2023 in

an effort to combat

Although the rate of

inflation moderated

in the fourth

quarter of 2023,

at levels not seen

for more than

inflation increases and

market interest

investment securities,

particularly those

maturities, decreases,

although this

pronounced for floating-rate

inflation generally increases

goods and services

we use in our business operations, such as electricity and other utilities, which increases our noninterest expenses.

prolonged period of inflation could cause wages and other of our costs to increase, which could adversely affect our results

of operations and financial condition.

Furthermore, our customers are also

affected by inflation and the

rising costs of goods

their households

and businesses,

negative impact

addition, SMBs

impacted more

during periods

inflation, as

The inflationary

States remains

was 2.9% year-over-year.

is a significant reduction to the rate of inflation experienced in 2022 and 2023, it is still

above the FRB’s targeted rate.

our business from inflation depend on the

durability of the inflationary pressures

in our markets.

the FRB has reduced

the federal funds rate

three times in 2024,

no assurance can

be given that

January 2025,

determined not

The resurgence

of elevated levels

of inflation could

to cease reducing

its benchmark rate

or potentially starting

to increase it

again which could,

in turn, increase

the borrowings costs

of our customers,

making it more

difficult for them

to repay their

other obligations.

Elevated interest

tame inflationary

price pressures,

push down asset prices, including collateral values, and weaken

economic activity.

As inflation increases and market interest

rates rise the value of

our investment securities, particularly those with longer

floating-rate

generally increases the cost of goods and services we use in

our business operations, such as electricity and other utilities,

which increases our

noninterest expenses.

a prolonged period

of inflation could

cause wages and

other of our costs

to increase, which could adversely

affect our results of

operations and financial condition.

Furthermore, our customers are

also affected by inflation

and the rising costs of

goods and services used

in their households and businesses,

have a negative impact on their ability to repay their loans with us.

In addition, SMBs may be impacted more during periods

Consequently,

deterioration

adversely impact our results of operations and financial condition.

banking industry causing disruptive deposit outflows and other

destabilizing results.

In March 2023, certain specialized banking institutions with elevated concentrations of uninsured deposits experienced

receiverships.

deposit outflows and other destabilizing results.

While the Company does not believe that the

circumstances of these bank

failures, including, in

several cases, the

elevated concentrations of uninsured

deposits, are necessarily indicators

issues for concern

with all other

banks or with

the banking system itself,

the failures are

likely to continue

effect on customer

confidence and the

availability of funding

and liquidity,

as well as possibly

lead to increased regulatory

requirements and costs

and negative reputational

ramifications for

institutions in the

banking industry,

including, possibly,

the Company and its depository subsidiary, U.S.

Century Bank.

We will continue to closely monitor the ongoing events

well-diversified

depositors only

our total portfolio.

As of December

are estimated

Our public funds

are 14% of total

deposits and are partially

collateralized.

The estimated

average account size

December 31, 2023 and 2022.

the ability of

customers to repay

may deteriorate,

this deterioration may occur quickly,

which would adversely impact our results of operations

and financial condition.

The soundness of other financial institutions could

adversely affect us.

commercial soundness

financial institutions.

Financial services

companies are

interrelated as

relationships.

counterparties,

counterparties

institutional

institutions or market utilities, or

the financial services industry generally, may lead to market-wide liquidity

problems, losses

of depositor,

other institutions.

Additionally,

competitors were

extending credit

excessive risks,

or at interest

rates which we believed

did not warrant the

credit exposure, we may not

be able to maintain

our business volume and

experience deteriorating financial performance.

USCB Financial Holdings, Inc.

Insufficient liquidity could

52 unchanged sentences

or fulfill obligations such as repaying

USCB Financial Holdings, Inc.

our borrowings or

12 unchanged sentences

trade policies,

treaties and tariffs, embargoes, sanctions and other trade restrictions.

retaliatory tariffs or other trade restrictions on

related governmental

international

customers' costs, demand

for our products,

certain sectors thereof

and, thus, could

adversely impact

our business,

financial condition

restrictions.

administration

resources, subject to a reduced 10% tariff.

The tariffs were set to take effect on February 4,

2025, but following discussions

between the United States and each

of Canada and Mexico, the U.S.

administration agreed to a pause of

at least 30 days

in the implementation of the duties.

The tariffs on China went into

effect as scheduled on February 4, 2025.

This led to 10%

Subsequently,

administration

announced the

United States would

on all imports

retaliatory tariffs

trade restrictions

and materials

that customers

other related

governmental actions

tariffs, international

trade agreements

policies or other trade restrictions have the potential to negatively impact our customers' costs, demand for our

economy or certain sectors thereof and, thus, could adversely impact

our business, financial condition and results

of operations.

Russia's invasion

and is likely to continue to impose material additional, financial and economic sanctions and export controls against certain

Russian organizations and/or individuals, with similar actions either implemented or planned by the European Union ("EU")

Russia's invasion of

Ukraine, the U.S.

imposed, and may

continue to impose

material additional,

financial and economic sanctions and export

controls against certain Russian organizations

and/or individuals, with similar

actions either implemented or

planned by the

European Union ("EU")

and the United

Kingdom (“UK”) and other

jurisdictions.

sovereign debt;

and investment,

financing to,

Moreover, actions by Russia, and any

further measures taken by the

or its allies,

could have negative impacts

on regional and global

financial markets and economic

To the extent changes in the

global political environment,

including the

continuing war

measures taken by

its allies, could

have negative impacts

on regional and

global financial markets

continued heightened

tensions between

as the conflict

in Gaza, have

a negative impact

on the markets

business, results of operations and financial condition could be

materially and adversely impacted.

condition could be materially and adversely impacted.

Our lending business is subject to credit risk, which

19 unchanged sentences

industries in

USCB Financial Holdings, Inc.

concentrations with individual borrowers

43 unchanged sentences

may result in loan

defaults, foreclosures and additional charge-offs and

may necessitate

defaults, foreclosures and additional

charge-offs and may necessitate

that we significantly increase our allowance for credit losses, each of which could adversely affect our net income.

3 unchanged sentences

and results of operations.

LIBOR was used as a reference rate for certain of the Corporation’s adjustable-rate loans and bonds.

In 2017, the U.K.

Financial Conduct

which regulates

announced that

LIBOR (the London

InterBank Offered

reference rate for

certain of the

Corporation’s adjustable-

rate loans and

Conduct Authority, which regulates LIBOR,

announced that the

of LIBOR would not be guaranteed beyond 2021.

In December 2020, the administrator of LIBOR announced its intention to

the publication

be guaranteed

In December 2020, the

administrator of LIBOR announced its intention to

(i) cease the publication of the

week and two-month

after December 31,

2021, and (ii)

cease the publication

and two-month

publication of all other

tenors of U.S.

dollar LIBOR (one, three, six and 12 month LIBOR) after

June 30, 2023.

dollar LIBOR (one, three,

after June 30,

The remaining

synthetic LIBOR was published for the last time

as of September 30, 2024.

Synthetic LIBOR was a temporary measure

allow entities to transition to alternative risk-free reference

There are ongoing efforts to establish an alternative

2 unchanged sentences

institutions,

replacing LIBOR with SOFR, a new index calculated

by short-term repurchase agreements backed by

agreements backed by

Treasury securities.

The Bank adopted SOFR as its preferred benchmark as

an alternative to LIBOR for use in new contracts in 2023.

USCB Financial Holdings, Inc.

The Bank adopted

preferred benchmark as an

alternative to LIBOR

for use in new contracts in 2023.

contracts to a new benchmark rate, the

51 unchanged sentences

our exposure to credit and liquidity risks.

USCB Financial Holdings, Inc.

Our business is subject to

29 unchanged sentences

policy determinations with respect to interest rates.

“FOMC”) increased

benchmark interest rates to reduce the rate of inflation to the extent

necessary to reduce inflation to the rate that the FOMC

believes is appropriate.

Since March 2022, the FOMC has increased the federal funds rate by

500 basis points.

increases were expressly made in response to inflationary pressures.

Recently the FOMC has paused increases in certain

benchmark interest rates and may consider decreases in such

benchmark rates at some point during 2024.

However, there

assurances as to

any future FOMC

action, including whether

During 2022 and 2023, the Federal

Open Market Committee (the “FOMC”)

increased certain benchmark interest

to reduce the rate of

inflation to the extent necessary

to reduce inflation to

the rate that the

FOMC believes is appropriate.

action, including

continues to decrease

the federal funds

rate or implements

further increases.

January 2025, the

FOMC determined to

change the federal funds rate at 4.25% to 4.5%.

While an increase in

37 unchanged sentences

0.62% for 2022

noninterest-bearing

FOMC’s actions

paid on our interest-bearing deposits.

while the overall funds increased, the cost of it

increased at a lesser pace

when compared to the

increase in cost of

deposits from 2022 to

we cannot provide

any assurances that

can maintain our current levels of noninterest-bearing deposits as

customers may seek higher-yielding products due to the

increased interest rates being paid on deposits currently,

as compared to 2023 and 2022.

quality, loan origination

1 unchanged sentence

and overall profitability.

USCB Financial Holdings, Inc.

A failure or the perceived

5 unchanged sentences

credit-rating

2023, ratings agencies have lowered or threatened to lower the long-term sovereign credit rating on the United States.

impact of this or any further

downgrades to the U.S.

sovereign credit rating or its

perceived creditworthiness

could adversely affect the U.S.

and global financial markets and economic conditions.

Absent further quantitative easing by

interest rates

and borrowing

may negatively

favorable terms.

disagreement over

caused the U.S.

federal government to shut down for periods of time.

Continued adverse

political and economic conditions

could have a material adverse effect on our business,

financial condition and results of operations.

2023, ratings agencies have lowered

or threatened to lower the long-term

sovereign credit rating on the

United States.

ceiling limit

was reinstated

January 2, 2025,

at $36.1 trillion,

a figure reflecting

the total federal

debt accumulated

by that date.

In late January

began employing

retirement funds

halting the issuance of certain securities, to continue financing government operations.

There are proposals to

debt ceiling limit by $4.0 trillion, subject to agreements on other matters including extending $4.5 trillion in tax cuts from the

Cuts and Jobs

expire in 2025)

and implementing

$2 trillion in

mandatory spending

reductions over a

creditworthiness could adversely

affect the U.S.

financial markets and

economic conditions.

could cause interest

rates and borrowing

costs to rise

(unless the Federal

Reserve re-initiates

quantitative easing),

may negatively impact our ability to access the debt markets on favorable terms.

In addition, disagreement over the federal

budget has caused the U.S.

government to shut down for periods

Continued adverse political and

conditions could have a material adverse effect

on our business, financial condition and results of operations.

Our allowance for credit losses may not be sufficient

4 unchanged sentences

evaluation of general economic

USCB Financial Holdings, Inc.

diversification

48 unchanged sentences

due to further credit deterioration or

the expectation

implementation of

financial institutions, like us, to

increase our allowances for

credit losses from levels in place

prior to the implementation of

As a result of the initial implementation of CECL,

we incurred as of January 1, 2023 a $1.1

million cumulative effect

of the adoption

the CECL model

may create more volatility

of allowance for

credit losses.

to materially

allowance for

credit losses

increase could

affect our business, prospects, cash flow,

liquidity, financial

condition and results of operations.

reflected in the periods in which the expectation

As a result of the initial

implementation of CECL, we incurred as

of January 1, 2023

a $1.1 million cumulative

effect of the

adoption of CECL.

the CECL model may

volatility in our level of allowance for credit

If we are required to materially

increase our level of allowance for credit

losses for any reason, such increase could adversely affect our business, prospects, cash flow,

liquidity, financial condition

and results of operations.

Our commercial loan portfolio may expose us to increased

39 unchanged sentences

to accurately

USCB Financial Holdings, Inc.

funds required

44 unchanged sentences

50% or more during the preceding 36

buildings, commercial real estate, and construction

and land loans represented 384% of the Bank’s

USCB Financial Holdings, Inc.

buildings, commercial real estate, and construction and

land loans represented 366% of the Bank’s

total risk-based capital

99 unchanged sentences

loan guarantees in any given fiscal

USCB Financial Holdings, Inc.

If the federal government were to reduce the amount of SBA loan guarantees, such reduction

38 unchanged sentences

obligations and

Global banking is an important part of our business, which

creates increased BSA/AML risk.

USCB Financial Holdings, Inc.

Correspondent banking is an important part of our

business, which creates increased BSA/AML risk.

correspondent

16 unchanged sentences

foreign correspondent financial institution's customers, these customers may

be able to more

easily conceal the source and

illicit funds.

be able to more easily

conceal the source and

Consequently,

of non-compliance

non-compliance

correspondent

relationships

institutions.

relationships with foreign

financial institutions.

Additionally,

international

private banking

places additional

our policies,

procedures and

complying with

as amended, or BSA,

and other anti-money laundering,

or AML, statutes

and regulations as

enacted Corporate

adhere to the

terms and requirements

correspondent

foreign financial institutions and international private banking could result

in regulatory or other actions being taken against

us, which could significantly increase our compliance costs

and materially and adversely affect our results

of operations.

international private banking

places additional pressure

policies, procedures

for complying

and regulations

Our failure to strictly adhere

to the terms and requirements

license or our failure to

BSA/AML compliance

our correspondent

banking relationship

financial institutions

and international private banking could result in regulatory

or other actions being taken against us, including the imposition

requirements could require us to incur additional significant costs in order

to bring our BSA/AML processes and procedures

into compliance, negatively

impact our reputation,

material adverse

our business, financial

and results of operations.

years, sanctions

regulators have

complied with

requirements have been

especially severe.

order to comply

with regulations, guidelines

and examination procedures

this area, we have

dedicated significant resources to our BSA/AML process

and procedures.

If our policies, procedures and

as additional

restrictions on our ability to pay

dividends and the necessity to obtain

regulatory approvals to proceed with

certain aspects

of our business plan, such as acquisitions.

We may not recover all amounts that are contractually

9 unchanged sentences

significant impact on our

to experience charge-offs and delinquencies on our loans

in the future.

Many borrowers have been negatively impacted by

the ongoing COVID-19 pandemic and

related economic consequences, and

may continue to be similarly or

more severely

affected in the future.

Our customers' actual operating

results may be worse than

our underwriting contemplated

originated the loans, and in these circumstances, we could incur substantial impairment or loss of

the value on these loans.

We may fail to identify problems

because our customer did not

to experience

and delinquencies

circumstances,

substantial impairment or loss

of the value on these

fail to identify problems

because our customer

report them in a timely manner

or, even if the

report the problem, we may fail to address it quickly enough or at all, or some loans, due to market circumstances, may not

fully rehabilitated.

customers provide

accurate disclosure

material information

concerning their businesses,

we may misinterpret

or incorrectly analyze

this information.

loans that we otherwise

would not have made or

to fund advances that we otherwise

would not have funded, either

could result in losses

on loans, or necessitate

that we significantly

increase our allowance

the customer did report the problem,

we may fail to address it

quickly enough or

at all, or some loans,

due to market circumstances,

may not be able

to be fully rehabilitated.

Even if customers provide

with full and accurate disclosure

of all material information concerning

their businesses, we may misinterpret

or incorrectly

analyze this information.

to make loans that

we otherwise would not

to fund advances

that we otherwise would not have funded, either

of which could result in losses on

loans, or necessitate that we significantly

increase our allowance for loan and

lease losses.

result, we could

losses and have

non-performing loans,

which could have

a material adverse

effect on our

earnings and results of operations and financial condition, to the extent the losses exceed our allowance for loan and lease

loans are secured

on specified collateral

of the borrower

not obtain or

properly perfect

our liens or the value of the collateral securing any particular loan may not be sufficient to protect us from suffering a partial

non-performing

As a result, we could

suffer loan losses and

have non-performing loans,

and financial

extent the losses exceed our allowance for loan and lease

perfect our liens or the value

of the collateral securing any

particular loan may not be sufficient

to protect us from suffering

a partial or complete

loss if the loan

becomes non-performing and

we proceed to foreclose

on or repossess

the collateral.

USCB Financial Holdings, Inc.

respect to loans that we originate for condominium or homeowners'

associations, these loans are primarily secured by and

rely upon the

cash flow received

by the Associations

from payments received

from their property

(“Associations”),

primarily secured by and rely

upon the cash flow received

by the Associations from

payments received from their

owners, as well

These Associations

payments received

property owners

loan collateral.

on non-performing

to Associations

dependent upon the

Association having sufficient cash on

hand for repayment of

the loan and/or having

the ability to impose

assessments on its property owners, some of whom may not have the ability to pay such assessments.

In such events, we

losses, financial condition, and results of operations.

rely upon payments

received from their

property owners in

non-performing

made to Associations

upon the Association

having sufficient

for repayment of

the loan and/or

In such events, we could suffer loan losses,

which could have a material adverse effect on our

net earnings,

allowance for loan and lease losses, financial condition,

and results of operations.

USCB Financial Holdings, Inc.

Non-performing

financial condition, and could result in further losses in

26 unchanged sentences

commitments from

management and can

be detrimental to

the performance

of their other

responsibilities.

we experience increases

non-performing

administration costs could increase, each of which could have an adverse effect on our net income and related ratios, such

as return on assets and equity.

related to OREO.

If we experience

increases in non-performing

loans and non-performing

assets, our net

interest income

may be negatively impacted and

our loan administration costs

could increase, each of which could

have an adverse effect

on our net income and related ratios, such as return

on assets and equity.

lending secured by

95 unchanged sentences

and results of operations could be adversely affecte

USCB Financial Holdings, Inc.

fraud and data processing system failures and errors.

14 unchanged sentences

to financial claims for negligence.

USCB Financial Holdings, Inc.

implemented a

105 unchanged sentences

could force us to

rely more heavily on more

expensive and

less stable funding sources.

rely more heavily on more expensive

Consequently,

the occurrence of any

of these events could

have a material adverse

our business, financial condition and results of operations.

business, financial condition and results of operations.

December 31, 2024, our top 10 depositors held

16.7% of our total

As of December

31, 2024, 45% of

our deposits are estimated

to be FDIC-insured.

date, our public funds

are 5% of total deposits and are partially collateralized.

The estimated average account size of our deposit portfolio is $105

Consequently,

the occurrence of

such event could have

a material adverse effect

on our business, financial

condition and

results of operations.

Our securities portfolio performance in difficult market conditions could have adverse effects on

7 unchanged sentences

into consideration

USCB Financial Holdings, Inc.

earnings, current

11 unchanged sentences

time, may result in significant changes

the values of these securities in future periods.

Any of these factors could require us to

recognize further impairments in the

USCB Financial Holdings, Inc.

the values of these securities in future

Any of these factors could require us

to recognize further impairments in the

value of our securities portfolio, which may have an adverse

15 unchanged sentences

economic conditions

and competition

with other financial

and competition with

other financial

institutions, may impede

2 unchanged sentences

Further, we may be unable to attract

and retain experienced bankers, which could

adversely affect our growth.

and retain experienced bankers, which could adversely

affect our growth.

of our strategy also depends on our ability to manage our growth effectively,

7 unchanged sentences

be successful in

controlling costs and maintaining

controlling costs and

maintaining asset

quality in the

our inability

to effectively

manage growth

to maintain growth

effectively manage

an adverse effect on our business, financial condition

47 unchanged sentences

growth plans.

additional capital,

equity securities,

have sufficient

that we would need to raise additional capital,

in the form of debt or equity securities,

in the future to have sufficient capital

significantly.

36 unchanged sentences

and could be dilutive to both tangible book value and our

USCB Financial Holdings, Inc.

Federal law requires that a holding company act as a source of financial and managerial strength to its subsidiary bank

8 unchanged sentences

therefore may

USCB Financial Holdings, Inc.

be required to attempt to

105 unchanged sentences

and market values and,

USCB Financial Holdings, Inc.

therefore, some

7 unchanged sentences

may incur costs

otherwise adequately address and manage

the risks associated with

such transactions could have

USCB Financial Holdings, Inc.

otherwise adequately address and

manage the risks associated

with such transactions could have

a material adverse effect

7 unchanged sentences

Our future success will, to some extent, depend on the continued service of our directors, executive officers and senior

Anderson, our Chief Financial

and William Turner,

our Chief Credit Officer,

is important to our continuing

management team,

including Mr.

assurance can

individuals will

continue to be employed by us.

The loss of any of these individuals could negatively affect our ability to achieve our growth

strategy and could have a material adverse effect

In particular,

we believe that retaining Luis de la

Aguilera, our Chairman, President,

and Chief Executive Officer,

Robert Anderson,

Financial Officer,

Credit Officer,

into employment

executive and

senior management team, including Mr.

de la Aguilera and Mr.

Anderson, no assurance can be given that these individuals

will continue

these individuals

could negatively

growth strategy and could have a material adverse effect

on our business and results of operations.

109 unchanged sentences

unable to grow or maintain

USCB Financial Holdings, Inc.

of operations

4 unchanged sentences

and future competitors.

USCB Financial Holdings, Inc.

We must respond to rapid technological changes

to remain competitive.

have to respond

technological changes,

which are occurring

financial services

emerge, and these

new technologies and business

processes may be

We will have to continue to respond

to future technological changes, which are occurring at a

rapid pace in the financial

services industry

new technologies

processes applicable

the banking industry will

continue to emerge, and

these new technologies and

business processes may be

better than those

we currently use.

of technological change

is high and our

industry is intensely

competitive, our future

success will depend,

in part, upon our

ability to address

our customers by using

technology to provide products

and services that

will satisfy customer

demands for convenience,

as well as to

create additional efficiencies

in our operations.

be able to implement

new technology-driven products

and services effectively

or be successful

in marketing these

products and services

Failure to keep pace successfully with technological change affecting the financial services industry could harm

order to remain

competitive, which may increase

our overall expenses

adverse effect on our

business, financial

condition and results of operations.

of technological

success will depend, in

part, upon our ability

to address the needs

of our customers by

using technology to provide

not be able to

implement new technology-driven

products and services effectively

or be successful in

technological

affecting the

financial services

industry could

ability to compete

effectively and

our business, financial condition and results of

As these technologies improve in the future,

we may be required

to make significant capital expenditures in order to remain competitive, which may increase our overall expenses and have

an adverse effect on our business, financial condition

and results of operations.

technological

competitors to invest in technological improvements.

The financial

services industry is

undergoing rapid technological

changes with frequent

introductions of new

driven products and

The effective use

of technology increases efficiency

and enables financial institutions

serve customers and to reduce

Our future success

will depend, in part, upon

our ability to address the

clients by using technology to

provide products and services

that will satisfy client demands

for convenience, as well

create additional

efficiencies in our operations.

Many national vendors provide turn-key services to community banks, such

as internet banking and remote deposit capture that allow smaller banks to compete

with institutions that have substantially

greater resources

in technological

technological

introductions

technology-driven

institutions to

better serve customers

reduce costs.

future success will

depend, in part,

upon our ability

convenience, as well as to create additional efficiencies in our operations.

Many national vendors provide turn-key services

institutions that have

substantially greater resources to

invest in technological

improvements.

be able, however,

to effectively

technology-driven products and services or be successful

in marketing these products and services to our customers.

implement new

technology-driven

these products

services to our customers.

Our current and

future uses of artificial

intelligence (AI) and other

emerging technologies may create additional

The increasing adoption of AI in financial services

presents significant opportunities but also introduces a range of

algorithms or

biased data could

result in inaccurate

credit decisions,

compliance violations,

or discriminatory

lending or customer

Cybersecurity

threats, such

as data breaches,

adversarial attacks,

and data poisoning,

significant challenges,

particularly as these

systems handle

large volumes of

sensitive customer

Additionally,

the opaque nature of some AI models, often referred to as "black-box" systems, raises regulatory compliance concerns, as

regulators increasingly require transparency and explainability

in AI-driven decision-making.

Operational risks also arise from potential system failures, over-reliance

on AI, and integration challenges with existing

infrastructure.

Disruptions in AI systems could impact critical functions such as fraud detection, transaction monitoring, and

customer support.

Ethical and reputational

risks, including

unintended consequences

or perceived unfairness

cybersecurity, data

privacy protections, and employee training are critical

to managing these risks.

interruption,

30 unchanged sentences

other technological difficulties or failures.

USCB Financial Holdings, Inc.

Despite efforts to

48 unchanged sentences

of applicable

USCB Financial Holdings, Inc.

laws, financial loss,

103 unchanged sentences

investigations

USCB Financial Holdings, Inc.

regarding our

36 unchanged sentences

To the extent

USCB Financial Holdings, Inc.

that any of our directors

23 unchanged sentences

entity or entities

suitable for us, he or she may not present such opportunity

suitable for us, he or she may not present such opportunity to

Pursuant to an agreement between us and each of our Significant Investors

72 unchanged sentences

utilize our net

operating loss carryforwards

and other tax

attributes pursuant

to Section 382

operating loss

carryforwards and other

tax attributes

pursuant to Section

382 and Section

of the Internal Revenue Code.

Future changes in tax law or

changes in ownership structure could

limit our ability to utilize

our recorded net deferred tax assets.

of the Internal

Revenue Code,

Future changes in

changes in ownership

structure could

limit our ability to utilize our recorded net deferred tax assets.

USCB Financial Holdings, Inc.

assumptions or estimates used in our critical accounting

24 unchanged sentences

financial statements

USCB Financial Holdings, Inc.

damage to our

5 unchanged sentences

financial condition and results of operations.

As a new public

company, we may not efficiently or effectively create an

effective internal control environment,

future failure

effective internal

financial reporting

As a public company, we may not efficiently or effectively create an effective internal control environment, and

internal control

over financial

the reliability

our financial

statements, which

in turn could

harm our business,

impair investor

confidence in the

completeness of

1 unchanged sentence

capital markets,

stock to decline and subject us to regulatory penalti

stock to decline and subject us to regulatory penalties.

Our management is responsible for establishing

6 unchanged sentences

SEC regulations, including

the Sarbanes-Oxley Act

and other rules

that govern public

companies that we

previously were

not required to comply with

as a private company.

other rules that

govern public companies

that we previously

were not required

private company.

In particular,

we are required to certify

our compliance with Section

Sarbanes-Oxley Act, which

requires us to

annually furnish

management on the

effectiveness of our

weaknesses that we may not be able to remediate in time to meet the applicable deadline imposed upon us for compliance

with the requirements of Section 404 of the Sarbanes-Oxley Act.

We periodically review our formal policies, processes and

practices related to financial reporting

and to the identification of

key financial reporting risks, assess

their potential impact

and the linkage of those risks to specific areas and controls

within our organization.

compliance with

which requires

by management

effectiveness

When evaluating our internal controls over financial reporting, we may identify material weaknesses that we may

not be able to remediate

in time to meet the applicable

deadline imposed upon us for

compliance with the requirements

We periodically

formal policies,

processes and practices

financial reporting

identification of key financial

reporting risks, assess their

potential impact and the

linkage of those

risks to specific

areas and controls within our organization.

If we fail to achieve and maintain the adequacy of

6 unchanged sentences

basis that we

Sarbanes-Oxley

cannot be certain as to the timing of completion of our evaluation, testing,

and any remediation actions or the impact of the

adequately comply

with the requirements

Sarbanes-Oxley Act,

we may be subject to adverse regulatory consequences and

there could be a negative reaction in the

financial markets due

to a loss of investor confidence in us and the

reliability of our financial statements.

we may be required to incur

have effective

internal controls

over financial

accordance with

of completion

If we fail to adequately comply with the requirements of Section 404 of the SOA, we may

be subject to adverse

regulatory consequences and there

negative reaction in

the financial markets due

of investor confidence

in us and the

reliability of our

financial statements.

addition, we may be

required to incur

costs in improving

our internal control

hiring additional

such action could

negatively affect

business, financial condition, results of operations, and the

price of our Class A common stock may decline.

While we remain an

emerging growth company or a

non-accelerated smaller reporting company, we will not be

accounting firm.

control system

additional personnel.

our business,

financial condition,

results of operations, and the price of our Class A common

stock may decline.

remain an emerging

growth company, we will

required to include

an attestation report

over financial

reporting issued

independent registered

public accounting

eventual compliance

with the auditor

attestation requirement

Oxley once we no

longer qualify as an

emerging growth company

or as a non-accelerated

smaller reporting company,

financial reporting,

In this regard, we will need to

dedicate internal resources, potentially engage

outside consultants and adopt a

improve control

processes as appropriate,

validate through testing

that controls are

functioning as documented

to refine our

reporting and improvement

internal control over

company or as a non-accelerated smaller

reporting company,

we are engaged in a process

to document and evaluate our

internal control over financial reporting, which is

both costly and challenging.

In this regard,

we will need to dedicate internal

resources, potentially engage outside consultants and adopt a detailed work plan to assess and document the adequacy of

internal control over financial

reporting, continue steps to improve

control processes as appropriate, validate

through testing

control over financial reporting.

Despite our efforts, there is a risk that we will not be able to conclude, within the prescribed

financial reporting

conclude, within

the prescribed

reporting is effective as

required by Section 404

of Sarbanes-Oxley.

If we identify one

or more material weaknesses,

result in an adverse reaction in the financial markets due to a

loss of confidence in the reliability of our financial statements.

If we identify one or

more material weaknesses, it could result in an adverse reaction in the financial markets

a loss of confidence in the reliability of our financial statements.

USCB Financial Holdings, Inc.

corporate governance,

34 unchanged sentences

capitalization

USCB Financial Holdings, Inc.

impose additional operating costs.

37 unchanged sentences

regulations and corresponding enforcement proceedings.

Strengthening

Intercept and

Obstruct Terrorism

and regulations

Act, and other

laws and regulations

require financial

institutions, among

other duties,

effective anti-money

laundering programs

file suspicious

currency transaction

federal Financial

Crimes Enforcement

established by the

Department to

administer the

Act, is authorized

to impose significant

money penalties for

violations of those

requirements and has engaged

in coordinated enforcement efforts

with the individual

institutions, among other

authorized to impose significant civil money

penalties for violations of those requirements

and has engaged in coordinated

Administration

Revenue Service.

Additionally,

South Florida has been designated as a “High Intensity Financial Crime Area” (“HIFCA”)

Intensity Drug

Intensity Financial Crime

Area” (“HIFCA”)

by FinCEN and

a “High Intensity

Drug Trafficking

Area” (“HIDTA”)

National Drug

Control Policy.

program is intended to concentrate law enforcement efforts

to combat money laundering efforts in higher-risk

is also increased scrutiny of compliance with

the rules enforced by OFAC.

Federal and state bank regulators have for many

regulations, guidelines and examination procedures in this area, we have

dedicated significant resources

to our anti-money

laundering program, especially

due to the regulatory

focus on financial

and other institutions

located in South

institutions,

international

our policies,

systems of the

financial institutions that

we may acquire

are deficient, we

would be subject

to liability,

including fines, and

regulatory actions that are

deemed necessary in order

to remediate such deficiencies

and prevent the recurrence

In recent years, sanctions that the regulators have

imposed on banks that have not complied with

all anti-money laundering

by the Office

of National Drug Control

The HIFCA program

is intended to concentrate

law enforcement efforts

to combat money

laundering efforts

in higher-risk

increased scrutiny

of compliance

rules enforced

regulators have

years focused

on compliance

anti-money laundering

guidelines and

have dedicated

significant resources

anti-money laundering

program, especially

the regulatory

financial and

institutions located in South

Our business includes

supporting our customers, including foreign

financial institutions,

with respect to their international banking needs and our policies, procedures and systems have been designed to address

state anti-money

laundering compliance.

If our policies,

procedures and

deemed deficient

prevent the recurrence

years, sanctions that

the regulators have

imposed on banks

that have not

laundering and

1 unchanged sentence

reputational consequences

adverse effect on our business, financial condition

and results of operations.

which could have a material adverse effect on

our business, financial condition and results of operations.

USCB Financial Holdings, Inc.

Significantly

examinations, investigations, and enforcement actions.

The regulatory and political environment has generally been challenging for

financial institutions, which have been

increased regulatory

of the failures

regional banks

stresses in recent periods.

general heightened scrutiny and expectations from

regulators could lead to a more

regulatory posture by the regulators, investigations and other

inquiries, as well as remediation requirements, regulatory and

restrictions,

regulatory and other risks and costs.

Our regulators have broad powers

and discretion under their supervisory

failure to comply

with regulators’ expectations and

requirements, even if inadvertent,

or to resolve

any identified deficiencies

restrictions,

distributions

enforcement proceedings;

Responding to regulatory inquiries

and proceedings can be

consuming and

divert management

attention from

business activities.

efforts and pressures,

like many other

financial institutions, from

time to time,

subject to public

and non-public

understanding

supervisory actions by our regulators.

requirements, which could adversely affect our

29 unchanged sentences

a total capital

USCB Financial Holdings, Inc.

10.5% or more;

and a leverage ratio of 4% or more.

Institutions must also maintain a capital conservation

buffer consisting

of common equity

consisting of

common equity

(which amount

reflected above

total capital

to the higher

required capital ratios

deductions and adjustments,

rules increased

certain assets,

capital against

We are also be required to hold capital against

short-term commitments that are not unconditionally cancellable.

required capital

deductions and

adjustments, the

assets, meaning

against these

required to hold capital against short-term commitments

that are not unconditionally cancellable.

While we currently meet these new

14 unchanged sentences

operations and financial condition, generally.

current economic

and regulatory

environment, including

pandemic, bank

application of more stringent capital requirements for

us could, among other things, result

in lower returns on equity, require

the raising of additional

capital, and result

in regulatory actions if

we were to be

In addition, in the current economic

and regulatory environment bank regulators

may impose capital requirements that

requirements for us could, among other things, result

in lower returns on equity, require the raising of additional capital, and

result in regulatory actions

if we were to be

unable to comply with

1 unchanged sentence

Implementation

calculations,

calculating regulatory capital or additional capital conservation buffers, could result in management modifying our business

strategy and could limit our ability to make distributions,

including paying dividends.

of changes to asset

risk weightings for risk-based capital

calculations, items included

or deducted in calculating

regulatory capital or additional

capital conservation buffers, could result in management modifying our business strategy

and could limit our ability to make

distributions, including paying

We are periodically subject

17 unchanged sentences

examination, one

USCB Financial Holdings, Inc.

concentration,

5 unchanged sentences

different remedial

include the power to prohibit the continuation

of "unsafe or unsound" practices, to require

affirmative actions to correct any

include the power to prohibit the continuation of "unsafe

or unsound" practices, to require affirmative

actions to correct any

administrative

10 unchanged sentences

an imminent risk

regulatory actions, our business, financial condition, result

regulatory actions, our business, financial condition, results

of operations and reputation may be negatively impacted.

36 unchanged sentences

regulatory agencies

USCB Financial Holdings, Inc.

propose numerous

4 unchanged sentences

including provisions

administration, including potentially increasing supervisory

expectations with respect to banks’ risk management practices,

accounting for

the effects of

climate change in

stress testing

scenarios and systemic

risk assessments, revising

for credit portfolio concentrations based on climate-related factors

and encouraging investment by banks in climate-related

initiatives and

communities disproportionately

data surrounding the

credit and other

financial risks posed

by climate change

render it difficult, or

even impossible, to

how climate change

may impact our

financial condition

and results of

change may also directly impact us.

Specifically, unpredictable and more frequent weather disasters may adversely impact

the real property, and/or the

real property, securing the loans

in our portfolios.

Additionally, if insurance obtained

disasters and

related events,

financial condition

the Inflation Reduction Act

Furthermore, additional

initiative may be undertaken

in the future, including potentially

increasing supervisory expectations with respect to banks’ risk management practices, accounting for the effects of climate

change in stress testing scenarios

and systemic risk assessments,

revising expectations for credit

portfolio concentrations

climate-related

communities disproportionately impacted by the effects of climate change.

empirical data surrounding the credit

and other financial risks posed by climate change render it difficult,

or even impossible, to predict how climate change may

impact our financial

condition and results

of operations;

climate change may negatively impact

regional and local economic activity, which could adversely affect our

customers and

the communities in which

climate change, its

effects and the

resulting, unknown impact

material adverse effect on our financial condition

and results of operations.

the physical effects

of climate change

may also directly

Specifically,

unpredictable and more frequent weather

disasters may adversely impact

the real property,

real property,

our portfolios.

Additionally,

our borrowers

insufficient to cover

any losses sustained

collateral, or if

insurance coverage is

otherwise unavailable to

our borrowers,

the collateral securing our

loans may be negatively

impacted by climate change,

natural disasters and related events,

could impact our financial condition and results of operations.

Further, the effects

of climate change may negatively impact

regional and local economic activity, which could adversely affect our customers and the communities in which we operate.

Overall, climate change, its effects

and the resulting unknown impact

could have a material adverse

effect on our financial

condition and results of operations.

Increasing scrutiny

and evolving expectations

from customers,

regulators, investors,

and other stakeholders

with respect to our environmental, social and

governance practices may impose additional

costs on us or expose

us to new or additional risks.

Companies have

increased scrutiny

from customers,

regulators, investors,

stakeholders related

environmental, social,

and governance

(“ESG”) practices

and disclosure.

Investor advocacy

compliance costs

overall operational

USCB Financial Holdings, Inc.

requirements, or

stakeholder expectations

and standards,

could negatively

reputation, ability

business with certain partners, and our stock price.

administration

emphasis on certain ESG priorities, particularly

around climate change and diversity, equity, and inclusion (“DEI”).

is leading to

the rollback of

regulations that mandate specific

disclosures and operational practices

in these areas.

conflicting environment for

regulatory enforcement of

ESG-related policies becomes

less stringent,

expectations,

especially related to DEI and environmental stewardship.

As a result, navigating this evolving regulatory and public opinion

landscape may require us to balance compliance with regulatory requirements against maintaining investor,

customer, and

stakeholder trust.

Risks Related to Our Class A Common Stock

19 unchanged sentences

the Bank's ability

to pay dividends to us and our ability to pay dividends on our

common stock.

Company without the prior

approval of the FDIC.

we have agreed to notify

the Federal Reserve before

and paying any dividends on our Class A common stock.

The market price and trading volume of our Class A

41 unchanged sentences

be costly to defend and a distraction to management.

USCB Financial Holdings, Inc.

There are significant restrictions in our Articles of Incorporation that restrict the

5 unchanged sentences

assets" depends,

shareholders owning

of our stock,

our Articles of

Incorporation, except

as otherwise may

be approved by

acquire stock to any

person who, as a

result of the transfer, would own 4.95%

or more of our

stock, as long as the

continues to have "deferred tax assets." Such restrictions may

limit the ability to transfer our stock.

shareholders owning 5% or

stock, our amended Articles

of Incorporation, except as

otherwise may be approved

by the Board or

except for transfers by

our Significant Investors, prohibits

any direct or indirect

transfer of stock

USCB Financial Holdings, Inc.

Company continues to have "deferred tax assets." Such

restrictions may limit the ability to transfer our stock.

exemptions from

13 unchanged sentences

assessment of our internal control over financial reporting

under the Sarbanes-Oxley Act;

under the SOA;

we are permitted to have less extensive disclosure about our

11 unchanged sentences

revenues exceed $1.235

billion, (ii) the date that the market value of our Class A common

stock that is held by non-affiliates exceeds $700 million as

of the last business day

in June of that year,

(iii) the date on which

we have, during the

previous three-year period, issued

more than $1 billion in non-convertible debt,

or (iv) the end of fiscal year following the fifth

anniversary of the completion of

our IPO (which will be December 31, 2026).

billion, (ii) the date that the market

value of our Class A common stock

that is held by non-affiliates

exceeds $700.0 million

last business day in

year, (iii) the date on

which we have, during

the previous three-year period, issued

more than $1.0 billion

in non-convertible debt, or

(iv) the end of fiscal

year following the fifth

anniversary of the completion

of our initial public offering (which will be December

It is possible

59 unchanged sentences

Capital Fund II,

approximately 22.82% and 22.83%,

respectively,

of our outstanding Class A

common stock.

Patriot and Priam

are each entitled to nominate a director to our Board and have certain subscription rights to purchase new equity securities

approximately 22.4% and 22.5%, respectively, of our outstanding shares of Class A common stock.

In addition, Patriot and

each entitled

subscription rights

securities that we

future, in each

as certain equity

ownership criteria

also have certain registration rights,

including demand registration rights, and information

Although Patriot and Priam

institutional

stock ownership

representation

have a greater

ability than our

other shareholders to

influence the election

and the potential

other matters

shareholders,

including mergers

transactions,

USCB Financial Holdings, Inc.

that we issue

in the future,

certain equity ownership

criteria are met.

Patriot and Priam

independent of each other, these institutional investors will continue to have a significant level of influence over us

of their level of

Class A common

stock ownership and

their right to representation

on our Board.

example, Patriot and

Priam will have a greater ability than our other shareholders to influence the election of directors and the potential outcome

of other matters submitted

our shareholders, including mergers and

other acquisition transactions, amendments

amended Articles

of Incorporation

other extraordinary

Incorporation

extraordinary

corporate matters.

The interests of these investors

could conflict with the interests of our

other shareholders, and any future transfer

investors of their shares

common stock to other

investors who have different

business objectives could adversely

affect our business, results of operations, financial condition,

prospects or the market value of our Class A common

The interests of these

investors could conflict with the interests

of our other shareholders, and any

these investors of

other investors

different business objectives

could adversely affect our business, results

of operations, financial condition, prospects

or the market value of our Class A

common stock.

anti-takeover

50 unchanged sentences

an acquisition.

and continued

availability of

our "deferred

our Articles of

Incorporation prohibits

any direct or

indirect transfer

of stock or options

to acquire stock

to any person

result of the

would own 4.95%

as long as we continue

to have "deferred tax

assets," subject to limited

exceptions as provided in

our amended Articles

Incorporation.

and continued availability of our "deferred tax assets," our amended Articles of Incorporation

prohibits any direct or indirect

transfer of stock or options to acquire stock to any person who, as a result of the transfer,

would own 4.95% or more of our

Articles of Incorporation.

Because of the requirements to overcome this restriction, this

provision of the amended Articles of

Incorporation could

3 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 1A. Risk Factors