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Item 8. Financial Statements and Supplementary Data

2025-03-14 compared with 2024-03-22 · 888 added, 795 removed, 2281 unchanged (42% of the section changed)

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Opinion on the Financial Statements

balance sheets

comprehensive income

(loss), changes

in stockholders’

(collectively

"financial statements").

We have audited the accompanying consolidated

balance sheets of USCB Financial Holdings, Inc.

“Company”) as of December 31, 2024 and 2023, the related consolidated

statements of operations,

comprehensive income (loss), changes in stockholders’ equity,

and cash flows for the years then ended,

and the related notes (collectively referred to as the “financial statements”).

In our opinion, the financial

statements present fairly, in all material respects, the

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as of December 31,

2023 and 2022, and the results

of its operations and its cash

flows for the years then ended, in conformity

2024 and 2023, and the results of its operations and its

cash flows for the years then ended, in conformity

with accounting principles generally accepted in the United

States of America.

Explanatory Paragraph - Change in Accounting Principle

As discussed in Note 1 to the financial

statements, the Company has changed its method of accounting for

credit losses effective January 1, 2023 due to the adoption

of ASU 2016-13 Financial Instruments – Credit

retrospective

accordance with previously applicable generally accepted accounting

Basis for Opinion

These financial

statements are

the responsibility

Company's management.

Our responsibility

These financial statements are the responsibility of the Company’s

Our responsibility is to

express an opinion

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public accounting

firm registered

Public Company

Accounting Oversight

Board (United

States) ("PCAOB")

firm registered with the Public Company Accounting Oversight

Board (United States) (“PCAOB”) and are

required to be

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and Exchange Commission and the PCAOB.

in accordance

Those standards

we plan and perform the

audit to obtain reasonable

assurance about whether the

financial statements are

We conducted our audits in accordance with the

standards of the PCAOB.

Those standards require that

we plan and perform the audit to obtain reasonable assurance

about whether the financial statements are

free of material misstatement, whether due to error or fraud.

statements, whether

performing procedures

included examining,

regarding the

and disclosures

Our audits included performing procedures to assess

the risks of material misstatement of the financial

statements, whether due to error or fraud, and performing

procedures that respond to those risks.

procedures included examining, on a test basis, evidence

regarding the amounts and disclosures in the

financial statements.

Our audits also included evaluating the accounting

principles used and significant

estimates made by management, as well as evaluating the

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Investment securities held to maturity net allowance of

and $0, respectively (fair value $

, respectively (fair value $

, respectively)

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Lease right-of-use asset

Money market and savings accounts

Interest-bearing checking accounts

Non-interest bearing demand deposits

Savings and money market deposits

Interest-bearing demand deposits

Time deposits

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Accumulated deficit

Accumulated other comprehensive income (loss)

Accumulated other comprehensive loss

Total stockholders' equity

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Gain on sale of loans held for sale, net

Loan settlement

Other non-interest income

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Network and information technology services

Audit and tax services fees

Other operating

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Net income per share, diluted

Weighted average shares outstanding:

Class A common stock

The accompanying notes are an integral part of

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Other comprehensive income (loss):

Unrealized gain (loss) on investment securities

Amortization of net unrealized gains on securities

transferred from available-for-sale to held-to-maturity

Unrealized loss on investment securities

Amortization of net unrealized losses on securities transferred

from available-for-sale to held-to-maturity

Reclassification adjustment on sale of available

for sale securities for loss included in net income

Unrealized gain on cash flow hedge

for sale securities for (income) loss included in net

Unrealized (loss) gain on cash flow hedge

Total other comprehensive income (loss), net of tax

Total comprehensive income (loss)

Total comprehensive income

The accompanying notes are an integral part of

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Balance at January 1, 2024

After tax cumulative effect of adoption of accounting principle

Adjusted beginning balance after cumulative effect adjustment

Other comprehensive income

Other comprehensive loss

Repurchase of Class A common stock

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Exercise of stock options

Dividend payment

Stock-based compensation

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Balance at January 1, 2023

Other comprehensive loss

Issuance of common stock - exercised options

After tax cumulative effect of adoption of accounting principle

Adjusted beginning balance after cumulative effect adjustment

Other comprehensive income

Repurchase of Class A common stock

Restricted stock issued

Restricted stock forfeiture

Exercise of stock options

Stock-based compensation

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Depreciation and amortization

(Accretion) amortization of premiums on securities,

Accretion of deferred loan fees, net

Accretion of premiums on securities, net

Amortization (accretion) of deferred loan fees, net

Stock-based compensation

Loss on sale of available for sale securities

(Gain) loss on sale of available for sale securities

Gain on sale of loans held for sale

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Additions to premises and equipment

Proceeds from the sale of loans held for sale

Proceeds from the sale of loans held for

Purchase of Bank owned life insurance, net

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Proceeds from exercise of Class A common stock

Cash dividends paid

Repurchase of Class A common stock

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Proceeds from Federal Home Loan Bank advances

and other borrowings

Repayments on Federal Home Loan Bank advances

and other borrowings

Net cash provided by financing activities

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SUMMARY OF SIGNIFICANT ACCOUNTING

USCB Financial Holdings, Inc., a

Florida corporation incorporated

in 2021, is a bank holding

company with one wholly

owned subsidiary,

Century Bank (the

“Bank”), together referred to

as “the Company”.

Bank, established in 2002,

state-chartered, non-member financial institution providing financial

services through its banking

centers located

in South Florida.

USCB Financial Holdings,

Inc., a Florida

corporation incorporated

a bank holding

company with one

wholly owned subsidiary,

Century Bank (the “Bank”), together referred to as “the Company”.

The Bank, established in

2002, is a Florida state-chartered,

non-member financial institution providing

financial services through its

banking centers

located in South Florida.

In December 2021, USCB Financial

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company structure.

common stock,

formerly held

stockholders were

converted into

shares of the Bank’s

common stock, par

per share, formerly

stockholders were converted

exchanged for one newly issued share of the Company’s

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been prepared in accordance with GAAP.

Risk and Uncertainties

Banking Environment

Industry events

transpiring early

including bank

failures, have

uncertainty and

concerns regarding

liquidity positions

banking sector.

The Company’s

a combination

funds deposits.

The Company’s

largest depositors

government-related

organizations and

commercial clients without a high level of industry concentration.

Department, the

Federal Reserve

jointly announced

Funding Program

liquidity by allowing institutions to pledge

certain securities at the par value

of the securities, and at a

borrowing rate of ten

depository institutions, with

advances having a

term of up to

no prepayment penalties.

In January 2024,

million in the

draws in 2023.

No further draws

were permitted

after March 11,

All advances must be paid by January 2025.

Market conditions and external factors may unpredictably impact the competitive landscape for deposits in the banking

Additionally,

liquidity and the premium at

which liquidity is available to

meet funding needs.

believes its sources of liquidity

are sufficient to meet its needs as of the balance sheet

An unexpected influx

of withdrawals of

deposits could adversely

impact the Company's

rely on organic

operations, potentially

requiring greater

secondary sources

demands or to fund continuing operations.

These sources may include proceeds from FHLB advances, sales of

securities and loans, federal funds lines of credit from correspondent

banks, and out-of-market time deposits.

Such reliance on secondary funding sources could increase the Company's

overall cost of funding and thereby reduce

guarantee they

may necessitate

or discontinuing

capital expenditures, or other investments, or liquidating assets.

Use of Estimates

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materially affect

USCB FINANCIAL HOLDINGS, INC.

Notes to the Consolidated Financial Statements

USCB Financial Holdings, Inc.

the reported amounts of

certain assets, liabilities, revenues

and expenses, are based

on information available as

certain assets, liabilities, revenues and

expenses, are based on

information available as of

financial statements,

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the terms of a loan participation agreement.

The Company reports restricted cash

within cash and cash equivalents.

At the years ended December

31, 2023 and 2022

the company had $

The Company reports

restricted cash within

cash equivalents.

both December

in restricted cash.

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Interest-bearing deposits in other financial institutions consist

of Federal Reserve Bank, Federal Home Loan

other accounts.

of Federal Reserve Bank of Atlanta, Federal

Bank of Atlanta and other accounts.

Investment Securities

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positive intent

ability to hold to

Management determines the appropriate classification of its securities at

the time of purchase

accounts for them on a trade date basis.

generally determines

the appropriate

classification

purchase and accounts for them on a trade date basis.

Debt securities that

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included in earnings.

USCB FINANCIAL HOLDINGS, INC.

Notes to the Consolidated Financial Statements

USCB Financial Holdings, Inc.

Purchase premiums and discounts are amortized or accreted over

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Agency issued bonds

the explicit and/or

implicit guarantee of the

US Government is sufficient to

conclude that a

credit loss reserve is

not required.

requirement is for

three primary assets

municipal bonds,

corporate bonds, and

securitizations.

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the expected loss if a borrower were to default.

USCB FINANCIAL HOLDINGS, INC.

Notes to the Consolidated Financial Statements

USCB Financial Holdings, Inc.

Federal Home Loan Bank (FHLB) Stock

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Loans Held for Investment and Allowance for Credit

Losses (“ACL”)

Loans held for investment (“loans”) are reported at their outstanding principal

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90 days past due

and remains in non

-accrual status until it

meets the criteria

and remains in non-accrual

status until it meets

for restoration to accrual status.

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in non-accrual

principal and interest

payments for a period

of six months

and the Company

has a documented

expectation of repayment

of the remaining contractual principal and interest or the loan becomes secured and in the process of collection.

accrued but not

collected for

loans that are

principal and interest payments for a period of six consecutive months and the Company

has a documented expectation of

repayment of the remaining contractual principal and interest or the loan becomes secured and in the process of collection.

All interest accrued but not

collected for loans that are

placed on nonaccrual status is

reversed against interest income.

these loans is

accounted for on

the cash-basis or

cost-recovery method, under

which cash collections

to unpaid principal, which may change as conditions

The Company has determined

that the entire

loan is contractually delinquent

categories if the

accrue on past due loans until the date the loan goes into

nonaccrual status.

against interest

accounted for

or cost-recovery

method, under

collections are

unpaid principal, which may change as conditions dictate.

The Company has determined that the entire balance of

a loan is contractually delinquent for all

classes if the minimum

payment is not received by

the specified due date on

the borrower's statement.

Interest and fees

continue to accrue on past

due loans until the date the loan goes into nonaccrual

The Company provides for loan losses through a provision for credit losses charged to operations.

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are credited to the ACL.

USCB FINANCIAL HOLDINGS, INC.

Notes to the Consolidated Financial Statements

USCB Financial Holdings, Inc.

Management uses a disciplined

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Commercial and industrial

Foreign banks

Correspondent banks

Other loans (secured and unsecured consumer loans)

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are diverse in type, location, and loan structure.

USCB FINANCIAL HOLDINGS, INC.

Notes to the Consolidated Financial Statements

USCB Financial Holdings, Inc.

inventory, and receivables.

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other sources

of repayment and

and collateral.

The Company mitigates the risk in the commercial portfolio

through industry diversification.

Foreign banks

international

correspondent

Latin America.

Most of these loans are for trade capital and have a

life of less than one year.

The Company’s

credit review

Correspondent bank loans are

short-term loans with international

correspondent banking institutions primarily domiciled

in Latin America.

Most of these

loans are for

trade capital and

The Company’s credit

includes a credit analysis, peer comparison and current

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and are geographically dispersed.

Other loans are secured and

unsecured consumer loans including

yacht loans, personal loans, overdrafts

account collateralized loans.

Repayment of these loans are primarily from the personal income of the borrowers.

underwritten based on the credit worthiness of the borrower.

The risk on these loans is mitigated by small loan balances.

and unsecured

loans including

personal loans,

collateralized

income of the borrowers.

Loans are underwritten based on the credit worthiness of the borrower.

The risk on these loans is

mitigated by small loan balances.

provide the basis for estimation of expected credit losses.

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the measurement date.

USCB FINANCIAL HOLDINGS, INC.

Notes to the Consolidated Financial Statements

USCB Financial Holdings, Inc.

long-term average

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• Changes in lending policies, procedures, and strategies

• Changes in international, national, regional, and local conditions

USCB FINANCIAL HOLDINGS, INC.

Notes to the Consolidated Financial Statements

USCB Financial Holdings, Inc.

• Changes in international, national, regional, and local

• Changes in nature and volume of portfolio

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• Changes in lending management, among others

credit losses within

other liabilities.

reserve is based

upon the same

quantitative and qualitative

factors applied to

collectively evaluated loan portfolio.

Management evaluates

on an individual

basis collateral

dependent loans

using the fair

collateral method

the difference

collateral and

recorded investment

reserve amount

is calculated.

recorded investment of the loan, no reserve is determined.

The Company estimates a

reserve for unfunded commitments,

which is reported separately

from the ACL within

The reserve is based upon the same quantitative and qualitative factors applied to the collectively evaluated loan

Concentration of Credit Risks

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the Company's loan

USCB FINANCIAL HOLDINGS, INC.

Notes to the Consolidated Financial Statements

USCB Financial Holdings, Inc.

At December 31,

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concentration represented

outstanding, respectively.

periods ended

2023 and December 31, 2022, the largest commercial real estate loan note

outside Florida was

commercial real estate

loan with an outstanding balance of $

million collateralized by a 1

lien commercial property located in New York

At December 31, 2023,

the Company had

a concentration of

risk with loans

outstanding totaling $

million to foreign

banks located in Ecuador, Dominican Republic, Honduras, and El Salvador.

At December 31, 2022, the Company also had

a concentration of risk

with loans outstanding totaling

million to foreign banks

located in Ecuador,

Honduras, and El

2023 and 2022, respectively.

loans outstanding,

respectively.

outstanding balance of $

million and $

million, respectively, collateralized

lien commercial property located

concentration

correspondent

Company also had a concentration

of risk with loans outstanding

million to correspondent banks

Republic, Honduras,

million and $

million at December 31, 2024 and 2023, respectively.

At various times during

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of the respective

institutions.

Premises and Equipment, net

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are credited or charged to income.

USCB FINANCIAL HOLDINGS, INC.

Notes to the Consolidated Financial Statements

USCB Financial Holdings, Inc.

Other Real Estate Owned

OREO consists of real estate

property acquired through, or

in lieu of, foreclosure that

are held for sale and are

OREO consists of real estate properties acquired through,

or in lieu of, foreclosure that are

held for sale and are initially

less estimated

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These policies cover certain present and former executives

and officers, the Company is the beneficiary

and officers;

the Company is the beneficiary

of these policies.

Employee 401(k) Plan

substantially

expense is the amount of matching contributions.

has an 401(k)

plan covering substantially

amount of matching contributions.

USCB FINANCIAL HOLDINGS, INC.

Notes to the Consolidated Financial Statements

USCB Financial Holdings, Inc.

Income taxes are accounted for under the

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it from taking

USCB FINANCIAL HOLDINGS, INC.

Notes to the Consolidated Financial Statements

USCB Financial Holdings, Inc.

the transferred

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the stockholders’

equity section of the Consolidated

Balance Sheets, such items,

along with net income, are

components of comprehensive

equity section of the Consolidated Balance

Such items, along with net

income, are components of comprehensive

income (loss).

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common stockholders

additional potential

common shares

issuable under

unvested restricted

additional information

“Stockholders’ Equity”

for further discussion

additional potential common shares issuable under vested

stock options and unvested shares of

restricted stock.

diluted earnings per

share are updated

to reflect the

stock splits as

USCB FINANCIAL HOLDINGS, INC.

Notes to the Consolidated Financial Statements

USCB Financial Holdings, Inc.

for additional information on

earnings per common share.

“Stockholders’ Equity” for further discussion

Interest Income

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awards be calculated

and recognized

employees' service period,

generally defined as

awards with graded-vesting,

and recognized over

the employees' service

period, generally defined

as the vesting

with graded vesting,

compensation cost

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See Note 19 “Loss Contingencies” for further details.

USCB FINANCIAL HOLDINGS, INC.

Notes to the Consolidated Financial Statements

USCB Financial Holdings, Inc.

Dividend Restrictions

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Interest Rate Swaps Designated as Fair Value

USCB FINANCIAL HOLDINGS, INC.

Notes to the Consolidated Financial Statements

USCB Financial Holdings, Inc.

corresponding recognition in the assets being hedged.

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proceeds from the issuance of Class A common shares.

USCB FINANCIAL HOLDINGS, INC.

Notes to the Consolidated Financial Statements

USCB Financial Holdings, Inc.

Reclassifications

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Guidance on Accounting for Credit Losses on Financial Instruments

On January 1, 2023, the Company implemented Accounting Standard Update (“ASU”)

Financial Instruments -

On January 1, 2023, the Company implemented Accounting Standard Update (“ASU”) 2016-13 Financial Instruments -

Credit Losses (Topic 326):

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Furthermore, ASC 326 amended the accounting treatment for available-for-sale debt

the requirement for

change is the

requirement for

credit losses to

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rather than as

down on available-for-sale debt securities that management does not intend to

sell or believes it is more likely than

down on available-for-sale debt securities that management does not intend

to sell or believes it is

more likely than not they

will not need

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reflect historical credit performance as well as the impact

of projected economic

of projected economic forecast.

loan receivables

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were individually evaluated.

USCB FINANCIAL HOLDINGS, INC.

Notes to the Consolidated Financial Statements

USCB Financial Holdings, Inc.

The impact of

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loans receivables of

unfunded commitments

million and an

increase to the

reserve for unfunded

commitments of

one-time, net

of tax, cumulative

adjustment resulted in

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impact of adopting

CECL on the Company’s consolidated balance sheet

(in thousands):

CECL on the Company’s Consolidated Balance

Sheet (in thousands):

January 1, 2023

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Debt Restructuring and Vintage Disclosures

In March 2022, the

FASB issued ASU 2022-02, which eliminates creditor accounting guidance for

TDRs for entities that

have adopted ASU 2016-13, Financial Instruments

-Credit Losses (Topic

326) and enhances Vintage Disclosures

eliminates Subtopic

310-40 guidance

loan refinancing

and restructuring

Subtopic 310-20

when evaluating

modifications granted

experiencing financial

difficulty to determine

whether the modification is

considered a continuation

of an existing loan

or a new loan.

disclosure component of

the ASU requires

entities to disclose

current-period gross write-offs by

origination year for

restructurings (“TDR”)

2016-13, Financial

Instruments-Credit

Losses (Topic

enhances Vintage Disclosures

of Gross Write-offs.

This ASU eliminates

Subtopic 310-40 guidance

creditors to apply

the loan refinancing and

restructuring guidance in Subtopic

310-20 when evaluating modifications granted

existing loan or a new loan.

The vintage disclosure component of the ASU

requires entities to disclose current-period gross

Company adopted ASU 2022-02 concurrently with the

adoption of ASU 2016-13.

848), aiming to facilitate the impacts

of reference rate reform on financial reporting.

This initiative was subsequently

or acknowledging

of, reference

discretionary

associated with reference rate reform in financial reporting.

expedients and exceptions provided by these amendments

applicable to

contract modifications

hedging relationships

reviewed after

relationships

optional expedients, and which

are retained until the conclusion

of the hedging relationship.

Additionally,

the amendments

permit entities to make a one-time choice to divest, transfer,

or both divest and transfer debt securities categorized as held

to maturity, referencing a rate impacted by reference rate reform,

and classified as held to maturity

prior to January 1, 2020.

In December 2022, the

FASB issued new guidance extending the

expiration date of this

guidance from December 31,

entities will

be authorized

provided under

this guidance.

Before this recent guidance, these amendments

were effective for all

entities from March 12, 2020 to

December 31, 2022.

(“LIBOR”) and the adjustment of

its existing financial instruments affecte

by LIBOR, whether directly or

based originations were ceased as of June 30, 2023, and for existing LIBOR-based transactions,

the Company substituted

Secured Overnight

Financing Rate

completed its

transition away

its loan and other financial instruments.

Improvements to Reportable Segment Disclosures

Segment Reporting

requirements,

Additionally,

USCB FINANCIAL HOLDINGS, INC.

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USCB Financial Holdings, Inc.

receivables and investment leases within the scope of Subtopic 326-20.

The Company adopted ASU 2022-02 concurrently

with the adoption of ASU 2016-13.

requirements,

requirements.

consolidated financial statements.

Issued and Not Yet

Guidance on Reference Rate Reform

Reference Rate Reform

on Financial Reporting.

In January 2021,

clarified the scope

of this guidance

2021-01 which provides

optional guidance for

a limited period of

time to ease the

burden in accounting for

(or recognizing

of) reference

evaluating the

determined whether

LIBOR transition

ASU will have material effects on our business

operations and consolidated financial statements.

Improvements to Income Tax

This ASU pertains to

disclosures regarding effective

tax rates and cash income

taxes paid with the goal of providing stakeholders with more transparent

and relevant information.

This ASU is effective for

public business

annual periods

beginning after

assessing the

potential impact of this

ASU on its financial

reporting and has

not yet concluded whether

the changes will materially

its business operations or consolidated financial statements.

INVESTMENT SECURITIES

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Bank subordinated debt securities

Corporate bonds

Held-to-maturity:

4 unchanged sentences

Corporate bonds

For the year ended December 31, 2023, there were

investment securities that were transferred from

ended December 31,

investment securities

transferred from

with an amortized cost basis and fair value amount

million and $

million, respectively.

On the date of transfer,

these securities had a total net unrealized loss of $

million which was included in AOCI.

Transfers of debt securities into the HTM category from the AFS category are made at fair value at the date of transfer.

held-to-maturity

Allowance for credit losses - securities held-to-maturity

Securities held-to maturity, net of allowance for credit losses

investment securities that

were transferred from

AFS to HTM for

the years ended December

maturity securities.

There was no impact to net income.

are amortized over the remaining life of the security.

transferred from

these securities,

net unrealized losses retained in AOCI was $

million at December 31, 2023 and $

million at December 31, 2022.

Such amounts are

amortized over the remaining life of the security.

For the years

ended December 31, 2024 and

2023, total amortization out

of AOCI for the

net unrealized losses on

transferred from AFS to HTM in 2022 was $

thousand and $

thousand, respectively.

In addition for these securities,

December 31, 2023.

The following

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sponsored entities at December 31, 2024 and

Information pertaining

to investment

securities with

gross unrealized

losses, aggregated

by investment

individual securities

loss position,

are presented

the following

dates (in thousands):

presented as of the following dates (in thousands):

December 31, 2024

3 unchanged sentences

Collateralized mortgage obligations

Mortgage-backed securities -

Mortgage-backed securities - residential

Mortgage-backed securities - commercial

Municipal securities

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Mortgage-backed securities - residential

Mortgage-backed securities -

Mortgage-backed securities - commercial

Municipal securities

3 unchanged sentences

with changes in the cost basis upon transfer between portfolios.

USCB FINANCIAL HOLDINGS, INC.

Notes to the Consolidated Financial Statements

USCB Financial Holdings, Inc.

Measurement of Credit Losses

11 unchanged sentences

held-to-maturity

USCB FINANCIAL HOLDINGS, INC.

Notes to the Consolidated Financial Statements

USCB Financial Holdings, Inc.

debt securities.

In addition, ASC 326 amended the accou

nting for available-for-sale debt securities.

available-for-sale

management does not intend to sell or believes that

it is more likely than not they will be required to sell.

In addition, ASC 326 amended the accounting

for available-for-sale debt securities.

One such change

require credit losses to be presented as an allowance

rather than as a write-down on available-for-sale debt

CECL requires a loss reserve for securities

2 unchanged sentences

historical credit performance

as well as the impact

of projected economic forecast.

Government bonds

Agency issued bonds

the explicit guarantee of the US Government is sufficient

to conclude that a credit loss reserve is not required.

as well as the impact of projected economic forecast.

Government bonds and U.S.

Agency issued

bonds in HTM,

the explicit guarantee of the U.S.

Government is sufficient to conclude that a

credit loss reserve is not required.

securitizations.

6 unchanged sentences

represents the

borrower will

is determined

using historical

default data,

economic environment.

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debt security holdings

investment spreads

rate movements and

expects to recover the entire amortized cost basis of these securities.

At December 31, 2023, the

Company does not intend to

sell debt securities that are

in an unrealized loss position and

it is not more than likely than not that the Company will be required to sell

these securities before recovery of the amortized

As of December 31, 2023, the Company maintains a master repurchase agreement with a public banking institution for

variable interest rate

based on prevailing

time funding is

December 31, 2023, the

t have any securities pledged under this agreement.

In 2018, the Company became a Qualified Public Depositor (“QPD”) with the State of Florida.

As a QPD, the Company

are a function of changes in investment spreads and interest

rate movements and not changes in credit quality.

In 2018, the Company

became a Qualified Public Depository

(“QPD”) with the State

QPD, the Company

legally maintain public

1 unchanged sentence

municipalities, and the

are secured by

securities pledged to

average outstanding uninsured

The Company must also maintain a minimum amount

of pledged securities to be in the program.

At December 31, 2023, the Company had

securities with a fair value of $

million pledged to the State

USCB FINANCIAL HOLDINGS, INC.

Notes to the Consolidated Financial Statements

USCB Financial Holdings, Inc.

are secured by securities pledged to

the State of Florida at a ratio of

% of the average outstanding amount

The Company must

also maintain a minimum amount of

pledged securities to be in the

program related to these

At December 31,

2022, the Company

securities with a

securities with

fair value of

million pledged to

Florida under the public funds program.

The Company held

million in public funds at December 31, 2022.

million pledged

December 31, 2024.

At December 31, 2023, the Company

securities with an aggregate fair value

million pledged

December 31, 2023.

of the Federal

2 unchanged sentences

Funding Program (“BTFP”).

The BTFP offers

loans of up to one year

in length to banks, savings

associations, credit

The BTFP offered loans of up to one year in length to banks, savings associations, credit

mortgage-backed

securities, and other qualifying assets as collateral.

assets will be valued at par.

The Company had

BTFP program ceased making new loans as of March

borrowings under

program during

quarter 2024.

maturity of this

borrowing under the

BTFP program as

of December 31,

2023, and had

in securities

BTFP program.

program ceased

making new loans as of March 2024.

On January 12, 2024, the Company borrowed $

million at a rate of

%, maturing on January 10, 2025, under the

BTFP program.

was January 2025,

are no remaining

borrowings under

USCB FINANCIAL HOLDINGS, INC.

Notes to the Consolidated Financial Statements

USCB Financial Holdings, Inc.

The following table is a summary of the distribution of

5 unchanged sentences

Commercial and Industrial

Foreign Banks

Correspondent Banks

Consumer and Other

Deferred cost

loans net of deferred cost

Deferred costs

loans net of deferred costs

Allowance for credit losses

5 unchanged sentences

At December 31, 2024 and 2023, the Company

loans in the process of foreclosure.

The Company was a participant of the SBAs Paycheck

Protection Program (“PPP”) loans.

These loans were

to provide a direct incentive for small businesses

to keep their workers on payroll and

had to be used towards payroll cost,

mortgage interest, rent,

utilities and other

costs related to

are forgivable under

specific criteria as

determined by

loans totaling

December 31, 2023

December 31, 2022, which are categorized as commercial and industrial loans.

loans had deferred loan fees of

thousand at December 31, 2023 and $

thousand at December 31, 2022.

respectively,

Statements of Operations.

real estate loans in the process of foreclosure.

Allowance for Credit Losses

28 unchanged sentences

probability of default

USCB FINANCIAL HOLDINGS, INC.

Notes to the Consolidated Financial Statements

USCB Financial Holdings, Inc.

receivables use at least

one of the following economic

civilian unemployment rate (national), real

gross domestic

civilian unemployment rate (national), real gross

product growth

39 unchanged sentences

cause estimated

credit losses for the loan portfolio to differ from

historical losses.

December 31, 2022, it was estimated under the incurred

the allowance

valuation allowance

probable incurred credit

Management estimated the

allowance balance required

using past loan

loss experience,

information and events,

it was probable

that the Bank

the contractual

modified resulting

borrower is experiencing financial difficulties, were

considered troubled debt restructurings and classified as

credit losses for the loan portfolio to differ from historical

USCB FINANCIAL HOLDINGS, INC.

4 unchanged sentences

and Industrial

Correspondent

December 31, 2024:

Beginning balance

Cumulative effect of adoption of

accounting principle

Provision for credit losses

2 unchanged sentences

Beginning balance

Cumulative effect of adoption of

accounting principle

Provision for credit losses

Ending Balance

(1) Provision for credit losses excludes $

thousand provision for unfunded commitments included

in other liabilities and $

thousand release for

investment securities held to maturity.

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

7 unchanged sentences

and Industrial

Correspondent

December 31, 2024:

8 unchanged sentences

Allowance for credit losses:

Individually evaluated for impairment

Collectively evaluated for impairment

Individually evaluated

Collectively evaluated

Balances, end of period

Individually evaluated for impairment

Collectively evaluated for impairment

Individually evaluated

Collectively evaluated

Balances, end of period

6 unchanged sentences

on the borrower,

documentation

periodically.

USCB FINANCIAL HOLDINGS, INC.

1 unchanged sentence

USCB Financial Holdings, Inc.

documentation

periodically.

The Company's internally assigned credit risk grades are as follows:

32 unchanged sentences

Residential real estate

Special Mention

Commercial real estate

Special Mention

Commercial and

Special Mention

Foreign banks

Special Mention

Correspondent banks

Consumer and other

Special Mention

USCB FINANCIAL HOLDINGS, INC.

2 unchanged sentences

As of December 31, 2023

Term Loans by Origination Year

Residential real estate

Home equity line of credit ("HELOC") and other

1-4 family residential

Condo residential

Commercial real estate

Land and construction

Multi-family residential

Condo commercial

Commercial property

Leasehold improvements

Commercial and industrial:

Foreign banks

Consumer and other loans

All outstanding PPP loans were internally graded

Commercial and

Correspondent banks

Consumer and other

Special Mention

USCB FINANCIAL HOLDINGS, INC.

24 unchanged sentences

Commercial and industrial:

Foreign banks

Correspondent banks

Consumer and other

14 unchanged sentences

Commercial and industrial:

Foreign banks

Correspondent banks

Consumer and other

8 unchanged sentences

past due over

and still accruing as of December 31, 2023 (in thousands):

and still accruing as of December 31, 2024 and December

31, 2023 (in thousands):

December 31, 2024

Nonaccrual Loans

With No Related

Nonaccrual Loans

Loans Past Due

Over 90 Days and

Still Accruing

Residential real estate

Commercial real estate

Commercial and industrial

Consumer and other

The Company did not have loans in non-accrual status

as of December 31, 2022.

December 31, 2023

Nonaccrual Loans

With No Related

Nonaccrual Loans

Loans Past Due

Over 90 Days and

Still Accruing

Commercial and industrial

Accrued interest

3 unchanged sentences

to non-accrual

USCB FINANCIAL HOLDINGS, INC.

Notes to the Consolidated Financial Statements

USCB Financial Holdings, Inc.

approximately

2 unchanged sentences

original terms.

USCB FINANCIAL HOLDINGS, INC.

Notes to the Consolidated Financial Statements

USCB Financial Holdings, Inc.

Collateral-Dependent Loans

substantially through

expected to be

provided substantially

operation of the

collateral dependent

loans as of December 31,

2023 or as of December 31, 2022.

Impaired Loans

The following table includes

the unpaid principal balances

for impaired loans with

the associated allowance amount,

applicable, on the basis of impairment methodology as of December

loans as of December 31, 2024 and

collateral dependent loans as of December 31, 2023.

The following

table includes

the amortized cost

collateral dependent

loans related

financial difficulty by type of collateral as of December

31, 2024 (in thousands):

December 31, 2022

Net Investment

Impaired Loans with No Specific Allowance:

Residential real estate

Commercial real estate

Impaired Loans with Specific Allowance:

Residential real estate

Commercial and industrial

Consumer and other

investment balance is the unpaid principal balance of the loans

adjusted for the remaining net deferred loan fees.

The following table

presents the average

As of December 31, 2024

Collateral type

Specific Reserves

Consumer and other loans

Management evaluates

on an individual

basis collateral

dependent loans

using the fair

collateral method

the difference

collateral and

recorded investment

balance on impaired

loans for the

periods indicated (in

Residential real estate

Commercial real estate

Commercial and industrial

Consumer and other

reserve amount

is calculated.

recorded investment of the loan, no reserve is determined.

Loan Modifications to Borrowers Experiencing Financial

2 unchanged sentences

newly restructured

of modification,

which occurred

December 31, 2023 (in thousands):

modification, which

occurred during

December 31, 2024 and December 31, 2023 (dollars

in thousands):

December 31, 2024

Recorded Investment Prior to Modification

4 unchanged sentences

Modifications

Residential real estate

Commercial real estate

Commercial and industrial

Consumer and other

The Company had two new

modifications to borrowers experiencing

financial difficulties for

the year ended December

existing loan modifications that subsequently

defaulted during the year

December 31, 2023

Recorded Investment Prior to Modification

Recorded Investment After Modification

Modifications

Commercial and industrial

new modification

experiencing financial

difficulties for

ended December

USCB FINANCIAL HOLDINGS, INC.

Notes to the Consolidated Financial Statements

USCB Financial Holdings, Inc.

modifications

December 31, 2023.

December 31, 2024, the

10 unchanged sentences

would extend these

USCB FINANCIAL HOLDINGS, INC.

Notes to the Consolidated Financial Statements

USCB Financial Holdings, Inc.

has classified

32 unchanged sentences

incremental borrowing

advance rate matching or nearing the lease term.

advances rate matching or nearing the lease term.

The following table presents the ROU assets and lease liabilities

38 unchanged sentences

the statutory tax expense

for the year (computed by applying the

federal corporate tax rate of

% for 2023 and 2022 to

income before provision

for income taxes) as follows (in thousands):

for the year (computed by applying the U.S.

corporate tax rate of

% for 2024 and

% for 2023 to income before

provision for income taxes) as follows (in thousands):

Federal taxes at statutory rate

23 unchanged sentences

Net deferred tax asset

At December 31,

2023 the Company

had approximately $

million of Federal

million of State

net operating

loss carryforwards

various amounts

their utilization

is limited to

loss carryforwards expiring

in various amounts

after 2036, their

utilization is limited

taxable earnings of the Company.

25 unchanged sentences

2024 and 2023 (in thousands):

Non-interest bearing deposits

Interest-bearing transaction accounts

Saving and money market deposits

Non-interest bearing demand deposits

Interest-bearing demand deposits

Savings and money market deposits

Time deposits

5 unchanged sentences

million, respectively.

Brokered CDs were

% of total deposits at such date.

USCB FINANCIAL HOLDINGS, INC.

1 unchanged sentence

USCB Financial Holdings, Inc.

The Company brought in $

million of brokered CDs at a weighted average rate

% to boost liquidity during the

second quarter of 2023.

The CDs renewed in

Q1 2024 at weighted

brokered deposits

as of December 31, 2022.

Brokered CDs were

% of total deposits at such date.

At December 31, 2024, the scheduled maturities of time deposits

10 unchanged sentences

FHLB advances

million and at December 31, 2022 were $46.0 million.

million and at December 31, 2023 were $

The following table presents outstanding FHLB advances

5 unchanged sentences

July 18, 2025

July 30, 2024

January 24, 2028

April 25, 2028

December 26, 2024

September 13, 2027

March 23, 2026

February 13, 2025

At December 31, 2023

1 unchanged sentence

Maturity Date

March 27, 2025

July 30, 2024

July 18, 2025

August 17, 2023

March 27, 2025

January 24, 2028

April 25, 2028

December 26, 2024

advances, subject

4 unchanged sentences

for further discussion on pledged loans.

of the Federal

Reserve System,

announced the

Funding Program (“BTFP”).

The BTFP offered loans of up to one year in length to banks, savings associations, credit

mortgage-backed

securities, and other qualifying assets as collateral.

BTFP program ceased making new loans as of March

January 10, 2025

Subsequently,

borrowings under

program during

third quarter

original maturity

borrowing under

January 2025,

remaining borrowings by the Company under this program.

USCB FINANCIAL HOLDINGS, INC.

Notes to the Consolidated Financial Statements

USCB Financial Holdings, Inc.

EQUITY BASED AND OTHER COMPENSATION

Employee 401(k) Plan

The Company has an

employee 401(k) plan (the

“Plan”) covering substantially all

covering substantially all

eligible employees.

The Plan includes

a provision that the employer may contribute to the accounts of eligible employees for whom a salary deferral is made.

Company contributed $

thousand and $

thousand to the Plan during

the years ended December 31, 2023 and

that the employer may contribute

to the accounts of

eligible employees for whom

a salary deferral is made.

respectively;

contributions

USCB FINANCIAL HOLDINGS, INC.

Notes to the Consolidated Financial Statements

USCB Financial Holdings, Inc.

Stock-Based Compensation

5 unchanged sentences

expiration of

the grant date.

Option Plan has

years from the

2015 Option Plan

-year life and

initially would

have terminated

initially would have

terminated in

the stockholders

14 unchanged sentences

shares) for a total of

At December 31, 2023, there were

shares available for grant under the

2015 Option Plan.

At December 31,

shares available

2023, there were

13 unchanged sentences

years ended December 31, 2024 and 2023.

Unrecognized compensation cost remaining

on stock-based compensation

thousand and $

Unrecognized compensation

cost remaining

on stock-based

compensation totaled

for the years ended December 31, 2024 and 2023, respectively.

5 unchanged sentences

tax asset attributable to the compensation cost for such

For the fair value of options granted in 2023 and 2022,

the following were the assumptions:

options granted in 2024.

For the fair value of options granted in 2023, the following

were the assumptions:

Risk-free interest rate

27 unchanged sentences

exercised their options.

share fair value

granted for the

December 31, 2023

, respectively.

The weighted average per share fair value of options granted for the year ended December 31, 2023, was $

were no grants in 2024.

Restricted Stock

4 unchanged sentences

Company's 2015

transferred until certain restrictions have lapsed.

restricted stock awards outstanding as of December

transferred until

certain restrictions have

primarily issues restricted

stock awards with

-year vesting

pursuant restricted

shares issued in

October 2024 had

a modified vesting

shares vested

period of two months in 2024, and

% remaining will vest in the next 2 years.

In 2023 , the Company issued

shares of Class A common stock to employees and

directors as restricted stock

awards pursuant

Company's 2015

transferred until certain restrictions

Company's common

1 unchanged sentence

amortized straight

line over the

vesting period

As of December

unearned share-based

expense associated with these awards totaled $

Compensation expense

recognized for

ended December

under salaries and benefits in the accompanying Consolidated

Statement of Operations.

2024, unearned

share-based compensation

expense associated

awards totaled $

Compensation expense totaling $

million was recognized for

the year ended December

31, 2024 and reported

of Operations.

expense totaling

thousand was recognized for the year ended December

USCB FINANCIAL HOLDINGS, INC.

2 unchanged sentences

The following table presents a summary of restricted stock

awards for the year ended December 31, 2023:

awards for the years ended December 31, 2024 and 2023:

Restricted Stock

2 unchanged sentences

Balance at December 31, 2024

Restricted Stock

Weighted Average Grant Date

Balance at January 1, 2023

Balance at December 31, 2023

OFF-BALANCE SHEET ARRANGEMENTS

15 unchanged sentences

same credit policies in making

commitments and conditional obligations as it does for

on-balance-sheet instruments.

commitments and conditional obligations as it does for on-balance-sheet

The Company's

16 unchanged sentences

cost, including loan receivables

held-to-maturity debt

to the adoption

2023, the allowance

valuation allowance for probable incurred credit losses.

held-to-maturity debt securities.

off-balance-sheet

18 unchanged sentences

fixed expiration dates or other termination clauses.

USCB FINANCIAL HOLDINGS, INC.

Notes to the Consolidated Financial Statements

USCB Financial Holdings, Inc.

Unfunded lines of

19 unchanged sentences

to the Company.

USCB FINANCIAL HOLDINGS, INC.

Notes to the Consolidated Financial Statements

USCB Financial Holdings, Inc.

The Company utilizes interest rate swap agreements

18 unchanged sentences

compound SOFR (Secured Overnight Financing Rate) being received.

As of December

the Company had

cash flow hedges outstanding

on December 31, 2022.

interest rate swap

agreements with

a notional aggregate

million that were designated as cash flow hedges of certificates of deposit.

The interest rate swap agreements have an

compound SOFR (Secured Overnight Financing Rate)

being received.

corresponding recognition

5 unchanged sentences

Interest Rate Swaps Designated as Fair Value

As of December

31, 2023, the

interest rate swap

agreements with a

notional aggregate amount

years, the weighted average fixed-rate paid

%, with the weighted average

3-month compound SOFR

being received.

third quarter

interest rate

forecasts and

liability management

early termination fee

fees allocated to

each loan category

will be amortized

over the remining

hedge loans on

straight-line

termination fee

loan interest

Company’s Consolidated

agreements had an average maturity of

years at the date of termination.

interest rate

swap agreements

notional aggregate

were designated

agreements have

compound SOFR being received

corresponding recognition in the assets being hedged.

4 unchanged sentences

interest rate

swaps with loan customers with a notional aggregate

swaps with loan customers with

a notional aggregate amount of $

million and $

7 unchanged sentences

corresponding

USCB FINANCIAL HOLDINGS, INC.

Notes to the Consolidated Financial Statements

USCB Financial Holdings, Inc.

Company to provide the counterparty

6 unchanged sentences

accounting purposes.

USCB FINANCIAL HOLDINGS, INC.

Notes to the Consolidated Financial Statements

USCB Financial Holdings, Inc.

The following table reflects the Company’s customer

4 unchanged sentences

Interest rate swaps

Derivatives Designated as Fair Value Hedges

Interest rate swaps

Other liabilities

Derivatives not designated as hedging instruments:

2 unchanged sentences

December 31, 2023:

Derivatives Designated as Cash Flow Hedges

Interest rate swaps

Derivatives Designated as Fair Value Hedges

Interest rate swaps

Other liabilities

Derivatives not designated as hedging instruments:

71 unchanged sentences

or liabilities.

USCB FINANCIAL HOLDINGS, INC.

Notes to the Consolidated Financial Statements

USCB Financial Holdings, Inc.

is based on inputs other

10 unchanged sentences

no market activity

USCB FINANCIAL HOLDINGS, INC.

Notes to the Consolidated Financial Statements

USCB Financial Holdings, Inc.

is determined

30 unchanged sentences

classified within Level 2 of the hierarchy.

The following table represents

the Company's assets measured at

fair value on a

recurring basis at December 31, 2023

and 2022 for each of the fair value hierarchy levels (in thousands):

December 31, 2024 and 2023 for each of the fair value

hierarchy levels (in thousands):

Investment securities available for sale:

5 unchanged sentences

Bank subordinated debt securities

Corporate bonds

Derivative assets

2 unchanged sentences

Total liabilities at fair value

Items Measured at Fair Value

on a Non-recurring Basis

Individually Evaluated

Impaired Loans:

eliminates the

current accounting

loans effective as

of January 1,

December 31, 2022,

in accordance

with provisions

loan impairment

individual loans

carrying amount

million, resulting

impairment charge of $

thousand, which was included

in the allowance for

credit losses at December

subject to write

impaired loans,

are estimated

using the present

expected cash

conditions and are considered a Level 3 valuation.

Other Real Estate:

estate owned are

valued at the

lesser of the

third-party appraisals

less management's

carrying cost of

Appraisals generally

use the market

valuation technique

market observable

the properties.

the appraiser

uses professional

determining the

the value for changes in

market conditions subsequent

to the valuation date

when current appraisals

are not available.

a consequence of the carrying cost or the

third-party appraisal and adjustments therein, the fair values of the properties are

considered a Level 3 valuation.

USCB FINANCIAL HOLDINGS, INC.

1 unchanged sentence

USCB Financial Holdings, Inc.

The following table represents the Company’s assets measured at fair value on a non-recurring basis at December 31,

2023 and 2022 for each of the fair value hierarchy levels

(in thousands):

December 31, 2022:

Impaired loans

The following table presents

quantified information about

Level 3 fair value

measurements for assets measured

value on a non-recurring basis at December 31, 2022 (in

Valuation Technique(s)

Unobservable Input(s)

December 31, 2022:

Residential real estate

Sales comparison approach

for differences between comparable sales

Commercial and industrial

Discounted cash flow

for differences in net operating income expectations

Discounted cash flow

for differences in net operating income expectations

impaired loans

financial liabilities measured at fair value on a non-recurring

basis at December 31, 2023 and 2022.

Items Not Measured at Fair Value

The carrying amounts and estimated fair values of financial instruments not carried at fair value, at December 31, 2023

and 2022 are as follows (in thousands):

The following table

presents the carrying

amounts and estimated

fair values of

financial instruments

not carried at fair

value, at December 31, 2024 and 2023 are as follows (in thousands):

Fair Value Hierarchy

17 unchanged sentences

Interest-bearing deposits in banks

Investment securities held to maturity

Investment securities held to maturity, net

Loans held for investment, net

7 unchanged sentences

Accrued interest payable

Collateral Dependent Loans Measured for

Expected Credit Losses:

Fair values of collateral-dependent yacht

and real estate loans

are based on recent

boat and real estate

appraisals less estimated costs of

sale, repossession, and/or

holding costs.

its evaluation

income approach or a combination of methodologies.

The fair value

of collateral dependent

loans considered Level 3

value hierarchy was $

million with a

thousand at December 31, 2024.

collateral-dependent loans at December 31, 2023.

STOCKHOLDERS’ EQUITY

Bank completed

public offering

shares of Class A

common stock at a

received total net proceeds

million after deducting underwriting discounts and expenses.

In December 2021,

the Company acquired

all the issued

and outstanding shares

A common stock

Bank, which at the time were

the only issued and outstanding shares

of the Bank’s capital stock,

in a share exchange (the

“Reorganization”)

USCB FINANCIAL HOLDINGS, INC.

1 unchanged sentence

USCB Financial Holdings, Inc.

STOCKHOLDERS’ EQUITY

common stock,

formerly held

converted into

and exchanged

Company’s wholly owned subsidiary.

Reorganization,

received securities

substantially

same designations,

powers, preferences,

qualifications,

and restrictions,

held in the Bank,

and the Company’s

then current shareholders

owned the same

percentages of the

Company’s common

stock as they previously owned of the Bank’s common

In 2024, the Company issued

shares of Class A common stock to employees and

directors as restricted stock

December 31, 2022.

shares of Class A common stock to employees and directors as restricted stock

awards pursuant to the Company's 2015 Option Plan.

In 2023, the Company issued

shares of Class A common stock to employees and directors as restricted stock

awards pursuant to the Company's 2015 Option Plan.

As previously announced,

Board of Directors

new share repurchase

program of up

or approximately

the Company’s

outstanding shares

discretionary basis from time

to time through open

market repurchases, privately negotiated

transactions, or other means.

repurchase program

will commence

upon completion

of the Company’s

current repurchase

this new program will be funded from the Company’s

existing cash and cash equivalents or future cash flow.

During the year

ended December

Class A common

weighted average price per share of $

The aggregate purchase price for these transactions was approximately $

thousand, including transaction costs.

As of December 31,

shares remained authorized for

repurchase under

the Company’s two stock repurchase programs.

During the year ended December

5 unchanged sentences

approximately $

million, including

shares remained

for repurchase

this program.

million, including transaction costs.

of December 31, 2023,

shares remained authorized for repurchase under

Company’s first stock repurchase program.

Shares of the Company’s Class A common stock issued and

1 unchanged sentence

, respectively.

Declaration of dividends by the Board is required before dividend payments are made.

dividends were approved by

stock classes

Additionally,

dividends declared and unpaid as of December 31, 2023

Declaration of dividends

is required before

dividend payments

limited in the

cash dividends

generally limited

dividend declaration,

must consider

additional factors

current period net income, liquidity,

asset quality,

capital adequacy and economic conditions

at the Bank since the Bank is

the primary source

of funds to fund

dividends by the Company.

It is likely that

these factors would

further limit the

of dividends which

the Company could

bank regulators have

the authority to

prohibit banks and

holding companies from paying dividends if they deem

such payment to be an unsafe or unsound practice.

Company's shareholders

Bank's negative

retained earnings.

under applicable

FDIC regulations

and policy, because the Bank has negative retained

earnings, it must obtain the prior approval of the FDIC before effecting

a cash dividend or other capital distribution.

On January 29, 2024, the

Company announced that its Board of

Directors approved a quarterly cash dividend program.

The quarterly dividend for all quarters in 2024 was $

per share of Class A common stock.

The aggregate distribution in

connection with dividend payments paid during the year

ended December 31, 2024 was $

USCB FINANCIAL HOLDINGS, INC.

Notes to the Consolidated Financial Statements

USCB Financial Holdings, Inc.

Declaration Date

Dividend Per Share

Dividend Amount

January 22, 2024

February 15, 2024

March 5, 2024

April 22, 2024

July 22, 2024

August 15, 2024

September 5, 2024

October 28, 2024

November 15, 2024

December 5, 2024

See Note 20, “Subsequent Events”, for information regarding

2 unchanged sentences

guidelines as of December 31, 2024 and December

At December 31,

2023, the total risk-based capital ratios

At December 31, 2024, the total

risk-based capital ratios for

the Company and the Bank were

20 unchanged sentences

the period determined using the treasury-stock method.

purposes of this calculation, common stock equivalents include

purposes of this calculation, common stock equivalents

common stock options and are only included in the calculation

2 unchanged sentences

Net income available to common stockholders

USCB FINANCIAL HOLDINGS, INC.

Notes to the Consolidated Financial Statements

USCB Financial Holdings, Inc.

The following table

22 unchanged sentences

for each of the periods presented.

USCB FINANCIAL HOLDINGS, INC.

Notes to the Consolidated Financial Statements

USCB Financial Holdings, Inc.

to regulatory

2 unchanged sentences

discretionary actions

by regulators

undertaken, could

by regulators that,

if undertaken,

direct material

the Company's

Financial Statements.

capital adequacy

guidelines and

the regulatory

Company and the

55 unchanged sentences

is required to accept brokered

USCB FINANCIAL HOLDINGS, INC.

Notes to the Consolidated Financial Statements

USCB Financial Holdings, Inc.

undercapitalized,

27 unchanged sentences

Bank’s category.

USCB FINANCIAL HOLDINGS, INC.

Notes to the Consolidated Financial Statements

USCB Financial Holdings, Inc.

Actual and required

24 unchanged sentences

Payment of dividends

the Company’s

combined with

retained income

preceding two

defined by state banking regulations.

However, for any dividend declaration, the Company must consider

additional factors

such as the amount

of current period net

income, liquidity,

asset quality,

capital adequacy and

economic conditions at

It is likely that

these factors would further limit the

amount of dividends which the Company could

company, if they deem

such payment to be an unsafe or unsound practice.

the Company’s net income for the current year combined with the Company’s

retained income for the preceding two years,

factors such as the amount of current period net income, liquidity,

asset quality, capital adequacy

and economic conditions

that these factors

would further limit

the amount of

dividends which the

Company could declare.

holding company,

if they deem such payment to be an unsafe or unsound

RELATED PARTY

7 unchanged sentences

Interest expense

USCB FINANCIAL HOLDINGS, INC.

Notes to the Consolidated Financial Statements

USCB Financial Holdings, Inc.

Loan Purchases

4 unchanged sentences

During 2023, the Bank purchased $

million of loans from entities that are deemed to be related

million of loans from entities that are

deemed to be related parties.

paid those entities fees of $

USCB FINANCIAL HOLDINGS, INC.

Notes to the Consolidated Financial Statements

USCB Financial Holdings, Inc.

PARENT COMPANY

20 unchanged sentences

Income before income taxes and undistributed subsidiary income

Provision (benefit) for income taxes

Benefit from income taxes

Equity in undisbursed subsidiary income

26 unchanged sentences

Cash and cash equivalents, end of period

USCB FINANCIAL HOLDINGS, INC.

Notes to the Consolidated Financial Statements

USCB Financial Holdings, Inc.

SEGMENT REPORTING

are components

allocate resources.

The Company’s CODM is the

President, Chief Executive Officer,

and Chairman.

banking centers

Florida providing

banking products

and services,

title insurance policies for real estate transactions closed at

The Company’s business activities are similar in their

characteristics,

banking clients

with products

offered through

similar processes

and platforms.

Accounting policies

referenced here are the same as those described in Note 1, “Summary of Significant Accounting Policies”.

The Company’s

segment revenue

interest income

the origination

from fees charged on loans and deposit

Lending activities include loans

to individuals, which primarily consist of

home equity lines of credit, residential real estate loans, yacht loans, and consumer loans, and loans to

commercial clients,

which include

commercial and

industrial loans,

commercial real

estate loans,

residential real

estate loans,

correspondent

banking loans, and letters of credit.

expenses that the CODM receives

regularly are interest expense, provision for

credit losses, salaries and wages, employee

shareholder value

Additionally,

internal financial

information is

credit quality

and credit loss expense.

Furthermore, net income, as the measure of profit or loss, is used to monitor budget versus actual

competitive analyses

that benchmark

to competitors.

determined that it has only one reportable segment.

LOSS CONTINGENCIES

9 unchanged sentences

SUBSEQUENT EVENTS

quarterly dividend

first quarter

stockholders of record as of the close of business

On January 21, 2025, the Company’s Board of

Directors declared a quarterly cash dividend of

per share of Class

A common stock, to be paid on March 5, 2025, to stockholders of record as of the close of business

on February 14, 2025.

Total amount paid to shareholders in dividends on

February 15, 2024 was $

In January 2025, the Company acquired a bank owned life insurance policy with a

cash surrender value of $

in connection

Funds unsecured

uncommitted facility with another insured depository institution.

Company entered

connection with

Funds unsecured

uncommitted facility with another insured depository institution.

As of February 28, 2025 there are

advances under these new Fed Funds lines.

USCB Financial Holdings, Inc.

2 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 8. Financial Statements and Supplementary Data