USCB filing — read by section

Item 7. Management’s Discussion and Analysis

Item 7. 
Management's Discussion and Analysis of Financial Condition 
and Results of Operations 

 
 Management’s 
discussion 
and 
analysis 
of 
financial 
condition 
and 
results 
of 
operations 
analyzes 
the 
consolidated 
 financial condition and results of operations of the Company and 
the Bank, its wholly owned subsidiary, for the years ended 
 December 
31, 2024 
and 
2023. This 
discussion 
and 
analysis 
is best 
read 
in 
conjunction 
with 
the 
Consolidated 
Financial 
 Statements and related 
footnotes of the Company 
presented in Item 
8 “Financial Statements 
and Supplementary Data” 
of 
 this Annual Report on Form 
10-K. In addition to 
historical information, this 
discussion contains forward-looking 
statements 
 that 
involve 
risks, 
uncertainties 
and 
assumptions 
that 
could 
cause 
actual 
results 
to 
differ 
materially 
from 
management's 
 expectations. 
Factors 
that 
could 
cause 
such 
differences 
are 
discussed 
in 
the 
sections 
entitled 
"Forward-Looking 
 Statements" and Item 1A “Risk Factors" of this Annual Report. 
 In this Annual Report on Form 10-K, unless the context indicated otherwise, references to “we,” “us,”, and “our” refer to 
 the Company and the Bank, as 
the contest dictates. However, if 
the discussion relates to a period 
before the Effective Date, 
 the terms refer only to the Bank. 

 
 
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 55 
USCB Financial Holdings, Inc. 
2024 10-K 
 

 CAUTIONARY NOTE REGARDING FORWARD 
-LOOKING STATEMENTS 
 This 
Annual 
Report 
on 
Form 
10-K 
contains 
statements 
that 
are 
not 
historical 
in 
nature 
are 
intended 
to 
be, 
and 
are 
 hereby identified as, forward-looking 
statements for purposes of 
the safe harbor provided by 
Section 21E of the Securities 
 Exchange Act 
of 1934, 
as amended. 
The words 
“may,” “will,” “anticipate,” “could,” 
“should,” “would,” “believe,” 
“contemplate,” 
 “expect,” “aim,” 
“plan,” “estimate,” 
“seek,” “continue,” 
and “intend,” 
as well 
as other 
similar words 
and expressions 
of the 
 future, are intended to identify forward-looking statements. These forward-looking statements include statements related to 
 our projected growth, anticipated future financial performance, and management’s long-term performance goals, as well as 
 statements relating to 
the anticipated effects 
on results of 
operations and financial 
condition from expected 
developments 
 or events, or business and growth strategies, including 
anticipated internal growth and balance sheet restructuring. 
 These forward-looking statements involve significant risks and uncertainties that could cause our actual results to differ 
 materially from those anticipated in such statements. 
Potential risks and uncertainties include, but are not 
limited to: 
 •
 
the strength of the United States economy 
in general and the strength of the local 
economies in which we conduct 
 operations; 
 •
 
our ability to successfully manage interest rate risk, credit 
risk, liquidity risk, and other risks inherent to our industry; 
 •
 
the accuracy of our financial statement estimates and assumptions, including the estimates used for our credit loss 
 reserve and deferred tax asset valuation allowance; 
 •
 
the efficiency and effectiveness of our 
internal control environment; 
 •
 
our ability 
to comply 
with the 
extensive laws 
and regulations 
to which 
we are 
subject, including 
the laws 
for each 
 jurisdiction where we operate; 
 •
 
adverse 
changes 
or 
conditions 
in 
the 
capital 
and 
financial 
markets, 
including 
actual 
or 
potential 
stresses 
in 
the 
 banking industry; 
 •
 
deposit attrition and the level of our uninsured deposits; 
 •
 
legislative or regulatory 
changes and changes 
in accounting 
principles, policies, 
practices or guidelines, 
including 
 the on-going effects of the implementation of CECL; 
 •
 
the lack of a significantly diversified loan portfolio and concentration in the South Florida market, including the risks 
 of geographic, depositor, 
and industry concentrations, 
including our concentration 
in loans secured by 
real estate, 
 in particular, commercial real estate; 
 •
 
the effects of climate change; 
 •
 
the concentration of ownership of our common stock; 
 •
 
fluctuations in the price of our common stock; 
 •
 
our ability to fund or access the capital markets at attractive 
rates and terms and manage our growth, both organic 
 growth as well as growth through other means, such as 
future acquisitions; 
 •
 
inflation, interest rate, unemployment rate, market, and monetary 
fluctuations; 
 •
 
impacts of international hostilities and geopolitical events; 
 •
 
increased 
competition 
and 
its 
effect 
on 
the 
pricing 
of 
our 
products 
and 
services 
as 
well 
as 
our 
net 
interest 
rate 
 spread and net interest margin; 
 •
 
the loss of key employees; 

 •
 
the effectiveness of our risk management strategies, including operational risks, including, but not limited to, client, 
 employee, or third-party fraud and cybersecurity breaches; 
and 

 •
 
other risks described in this Annual Report on Form 10-K 
and other filings we make with the SEC. 
 All 
forward-looking 
statements 
are 
necessarily 
only 
estimates 
of 
future 
results, 
and 
there 
can 
be 
no 
assurance 
that 
 actual results will 
not differ 
materially from expectations. 
Therefore, you are 
cautioned not to 
place undue reliance 
on any 
 forward-looking 
statements. 
Further, 
forward-looking 
statements 
included in 
this 
Annual Report 
on Form 
10-K are 
made 
 only 
as of 
the 
date 
hereof, 
and 
we 
undertake 
no 
obligation 
to 
update 
or 
revise 
any forward 
-looking 
statement 
to reflect 
 events or circumstances after the date on which the statement is made or to 
reflect the occurrence of unanticipated events, 
 unless required to do so under 
the federal securities laws. You 
should also review the risk 
factors described in this Annual 
 Report on 
Form 10-K 
and in 
the reports 
the Company 
filed or 
will file 
with the 
SEC and, 
for periods 
prior to 
the Effective 
 Date, the Bank filed with the FDIC. 

 Non-GAAP Financial Measures 
 This Annual Report on Form 10-K includes 
financial information determined by methods 
other than in accordance with 
 generally 
accepted 
accounting 
principles 
(“GAAP”). 
This 
financial 
information 
includes 
certain 
operating 
performance 
 measures. Management has included these non-GAAP 
measures because it believes these measures may 
provide useful 
 supplemental information 
for evaluating 
the Company’s 
underlying performance 
trends. Further, 
management uses 
these 
 measures 
in 
managing 
and 
evaluating 
the 
Company’s 
business 
and 
intends 
to 
refer 
to 
them 
in 
discussions 
about 
our 
 operations and performance. 
Operating performance 
measures should be 
viewed in addition 
to, and not 
as an alternative 

 
 
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 56 
USCB Financial Holdings, Inc. 
2024 10-K 
 

 to or 
substitute 
for, 
measures 
determined 
in 
accordance 
with 
GAAP, 
and 
are 
not 
necessarily 
comparable 
to non-GAAP 
 measures 
that 
may 
be 
presented 
by 
other 
companies. 
To 
the 
extent 
applicable, 
reconciliations 
of 
these 
non-GAAP 
 measures to the most directly 
comparable GAAP measures can be found 
in the ‘Non-GAAP Reconciliation Tables’ included 
 in this Annual Report on form 10-K.
 Overview 
 For the year ended December 31, 2024, the Company reported net income of 
$24.7 million compared with net income 
 of 
$16.5 million for the year ended December 31, 
2023. 

 In 
evaluating 
our 
financial 
performance, 
we 
consider 
the 
level 
of 
and 
trends 
in 
net 
interest 
income, 
the 
net 
interest 
 margin, the 
cost of 
deposits, growth 
and composition 
of our 
loan portfolio, 
levels and 
composition of 
non-interest income 
 and non-interest 
expense, 
performance 
ratios, 
asset 
quality ratios, 
regulatory 
capital 
ratios, 
and any 
significant 
event or 
 transaction. 
 The following significant highlights are of note for the year 
ended December 31, 2024: 
 •
 
On January 29, 
2024, the Company 
announced that its 
Board of Directors 
had adopted a 
quarterly cash dividend 
 program. The quarterly dividend for all quarters in 2024 was $0.05 per share 
of Class A common stock. 
 •
 
Net interest 
income before 
provision for 
credit losses 
totaled $69.9 
million, an 
increase of 
$11.4 million 
or 19.4%, 
 compared to $58.6 million for the year ended December 
31, 2023. 

 •
 
Net interest 
margin (“NIM”) 
was 2.94% 
for the 
year ended 
December 31, 2024 
, an 
improvement from 
2.79% for 
 the year ended December 31, 2023. 

 •
 
Total assets grew to 
$2.6 billion at December 
31, 2024, an increase 
of $242.1 million 
or 10.4%, compared 
to $2.3 
 billion at December 31, 2023. 
 •
 
Total loans held for investment 
grew to $2.0 billion at 
December 31, 2024, an 
increase of $192.0 million or 
10.8%, 
 compared to $1.8 billion at December 31, 2023. 
 •
 
Return on average assets for the year ended December 
31, 2024 was 0.99% compared to 0.75% for 2023. 
 •
 
Return on average stockholders’ equity 
for the year ended December 31, 2024 was 12.11% compared 
to 8.99% for 
 2023. 
 •
 
Nonperforming 
assets 
totaled 
$2.7 
million 
at 
December 31, 
2024 
compared 
to 
$468 
thousand 
at 
December 31, 
 2023. 

 •
 
The Company 
maintained its 
strong capital 
position. As of 
December 31, 2024, 
the Bank 
was well-capitalized 
for 
 regulatory capital purposes, 
with a 
total risk-based capital 
ratio of 13.34%, 
a tier 1 
risk-based capital ratio 
of 12.10%, 
 a common equity tier 1 capital ratio of 12.10%, and a leverage ratio of 9.38%. As of December 31, 2024 and 2023, 
 all of the Bank’s regulatory 
capital ratios exceeded the 
thresholds to be well-capitalized 
under the applicable bank 
 regulatory requirements. 
 •
 
In April 2024, the Board of 
Directors approved a 
new share repurchase 
program of up to 
500,000 shares of 
Class 
 A common stock or approximately 2.5% of the Company’s then issued and outstanding shares 
of common stock. 
 •
 
During the year ended December 31, 2024, the Company repurchased 42,100 
shares of Class A common stock at 
 a 
weighted 
average 
price 
per 
share 
of 
$11.85. 
The 
aggregate 
purchase 
price 
for 
these 
transactions 
was 
 approximately 
$501 
thousand, 
including 
transaction 
costs. 
These repurchases 
were 
made 
through 
open 
market 
 purchases 
pursuant 
to 
the 
Company’s 
publicly 
announced 
repurchase 
programs. 
As 
of 
December 
31, 
2024, 
 537,980 shares remained authorized for repurchase under 
the current two programs. 
 •
 
During the third 
quarter in 2024, 
the Company unwound four 
fair value interest rate 
swaps with a 
notional aggregate 
 amount of $200 million. 

 
 
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 57 
USCB Financial Holdings, Inc. 
2024 10-K 
 

 Critical Accounting Policies and Estimates 
 The 
consolidated 
financial 
statements 
are 
prepared 
based 
on 
the 
application 
of 
U.S. 
GAAP, 
the 
most 
significant 
of 
 which are described 
in Note 1 “Summary 
of Significant Accounting 
Policies” to our 
Consolidated Financial Statements. 
To 
 prepare financial statements in conformity with GAAP, 
management makes estimates, assumptions, 
and judgments based 
 on 
available 
information. 
These 
estimates, 
assumptions, 
and 
judgments 
affect 
the 
amounts 
reported 
in 
the 
financial 
 statements and accompanying notes. These estimates, assumptions, and judgments are based on 
information available as 
 of 
the 
date 
of 
the 
financial 
statements 
and, 
as 
this 
information 
changes, 
actual 
results 
could 
differ 
from 
the 
estimates, 
 assumptions 
and 
judgments 
reflected 
in 
the 
financial 
statements. 
In 
particular, 
management 
has 
identified 
accounting 
 policies that, due to 
the estimates, assumptions 
and judgments inherent 
in those policies, are 
critical in understanding 
our 
 financial statements. 
Management 
has presented 
the application 
of these 
policies 
to the 
audit and 
risk committee 
of our 
 Board. 

 Allowance for Credit Losses - Loans 
 The allowance for credit 
losses (“ACL”) is 
a valuation allowance that 
is established through charges 
to earnings in the 
 form of 
a provision for 
credit losses. The 
amount of the 
ACL is 
affected by the 
following: (i) charge-offs 
of loans that 
decrease 
 the allowance; 
(ii) subsequent 
recoveries on 
loans previously 
charged off 
that increase 
the allowance; 
and (iii) 
provisions 
 for credit losses charged to income that increase or decrease the allowance. Management considers the policies related to 
 the ACL as the most critical to the financial statement presentation. 

 On 
January 
1, 
2023, 
the 
Company 
implemented 
ASU 
2016-13 
Financial 
Instruments 
- 
Credit 
Losses 
(Topic 
326): 
 Measurement of Credit Losses on Financial Instruments, as amended. This update replaces the incurred 
loss methodology 
 with 
the 
CECL 
methodology. 
The 
CECL 
methodology 
measures 
expected 
credit 
losses 
and 
applies 
to 
financial 
assets 
 measured at 
amortized cost, 
including loan 
receivables and 
held-to-maturity debt 
securities. It 
also applies 
to off-balance 
 sheet 
credit 
exposures 
not 
accounted 
for 
as 
insurance 
(e.g., 
loan 
commitments, 
standby 
letters 
of 
credit, 
financial 
 guarantees, and similar instruments), as 
well as net investments in leases 
recognized by lessors in accordance 
with Topic 
 842 on leases. 
 Under CECL, the Company estimates the allowance for credit losses by utilizing pertinent available data, sourced both 
 internally and 
externally, 
relating to 
past events, 
current conditions, 
and reasonable 
and supportable 
forecasts. Historical 
 credit losses provide the foundation for the 
estimation of expected credit losses. Qualitative 
adjustments are applied to the 
 estimated 
expected 
credit 
losses 
for 
the 
loan 
portfolio 
to 
account 
for 
potential 
constraints 
of 
the 
quantitative 
model. 
 Management 
employs 
a 
scorecard 
to 
facilitate 
the 
evaluation 
of 
qualitative 
factor 
adjustments 
made 
to 
expected 
credit 
 losses. 
 The estimation's 
quantitative aspect 
relies on 
the statistical 
correlation between 
the anticipated 
value of 
an economic 
 indicator and the 
historical loss 
experience implied 
within a 
selected group 
of peers. 
The Company conducted 
regression 
 analyses using 
peer data, 
inclusive of 
the Company 
itself, where 
observed credit 
losses and chosen 
economic indicators 
 were utilized to identify 
appropriate drivers for 
modeling the lifetime 
probability of default 
(“PD”) rates. A 
loss given default 
 rate (“LGD”) is assigned to each pool 
of loans for each period based on 
these PD outcomes. The model 
primarily employs 
 an expected 
discounted cash 
flow (“DCF”) 
analysis for 
segments within 
the loan 
portfolio. This 
DCF analysis 
operates at 
 the 
individual 
instrument 
level 
and 
incorporates 
various 
loan-specific 
data 
points 
and 
segment-specific 
assumptions 
to 
 ascertain the lifetime expected 
loss associated with each 
instrument. An implicit "hypothetical 
loss" is determined for 
each 
 period of the DCF, 
aiding in establishing the 
present value of future 
cash flows for each 
period. The reserve allocated 
to a 
 particular loan represents the disparity 
between the sum of the 
present value of future cash 
flows and the book 
balance of 
 the loan at the measurement date. 
 Management 
uses 
the 
Remaining 
Life 
(“WARM”) 
methodology 
for 
five 
segments 
within 
the 
loan 
portfolio. 
For 
each 
 segment, 
a 
long-term 
average 
loss 
rate 
is 
computed 
and 
applied 
quarterly 
throughout 
the 
remaining 
life 
of 
the 
pool. 
 Qualitative assessments 
are conducted 
to adjust for 
economic expectations. 
To 
estimate the remaining 
life, management 
 employed a software solution utilizing an attrition-based calculation. This software conducts quarterly cohort-based attrition 
 measurements based on the loan portfolio. 
 Portfolio 
segments 
represent 
the 
level 
at 
which 
loss 
assumptions 
are 
applied 
to 
a 
pool of 
loans, 
determined 
by 
the 
 similarity of 
risk characteristics inherent 
in the 
included instruments, based 
on collateral 
codes and 
FFIEC Call Report 
codes. 
 Currently, 
the Company segments 
the portfolio based on 
collateral codes to establish 
reserves. Each segment 
is linked to 
 regression 
models 
(Loss 
Driver 
Analyses) 
using 
peer 
data 
for 
loans 
with 
similar 
risk 
characteristics. 
The 
Company 
has 
 established connections 
between 
internal portfolio 
segmentation and 
FFIEC Call 
Report codes 
for this 
purpose. The 
loss 
 driver 
for 
each 
loan 
portfolio 
segment 
is 
derived 
from 
a 
readily 
available 
and 
reasonable 
economic 
forecast, 
including 
 Federal 
Reserve 
Bank 
projections 
of 
the 
U.S. 
civilian 
unemployment 
rate 
and 
year-over-year 
real 
GDP 
growth. 
For 
the 

 
 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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 58 
USCB Financial Holdings, Inc. 
2024 10-K 
 

 residential 
loan 
segment, 
House 
Price 
Index 
(“HPI”) 
projections 
published 
by 
Fannie 
Mae’s 
Economic 
and 
Strategic 
 Research Group are utilized for the forecast. Forecasts are applied for the first four 
quarters of the credit loss estimate and 
 then linearly revert to the historical mean of the economic indicator 
over the expected life of the loans. 
 The model integrates qualitative 
factor adjustments to 
fine-tune risk calibration 
for each portfolio 
segment, addressing 
 aspects that quantitative analysis may 
not fully capture. Decisions concerning 
qualitative adjustments reflect management's 
 anticipation of loss conditions deviating from those already accounted 
for in the quantitative aspect of the model. 
 Our ACL 
included residential 
loans. To 
assess the 
potential impact 
of changes 
in qualitative 
factors related 
to these 
 loans, 
management 
performed 
a sensitivity 
analysis. 
The Company 
evaluated 
the 
impact 
of the 
HPI 
used 
in calculating 
 expected losses on the residential loan segment. 
As of December 31, 2024, for every 
100 basis points increase in the HPI 
 index, the 
forecast reduces 
reserves by 
approximately $582 
thousand and 
about 3 
basis points 
to the 
reserve coverage 
 ratio, everything else being 
constant. This sensitivity analysis 
provides a hypothetical result 
to assess the sensitivity 
of the 
 ACL and does not represent a change in management’s 
judgement. 
 As of December 
31, 2024, 
we stress 
tested two 
qualitative factors 
in our commercial 
real estate 
loan pool, 
as it’s 
the 
 largest segment 
in our 
portfolio. We 
evaluated the 
impact of 
a change 
in the 
qualitative factors 
from no 
risk to 
maximum 
 loss 
to measure 
the 
sensitivity 
of the 
qualitative 
factors. 
The change 
resulted 
in 
a $9.6 
million 
or 
39.8% 
increase 
in the 
 allowance for credit losses. 
This sensitivity analysis 
provides a hypothetical result 
to assess the sensitivity 
of the ACL and 
 does not represent a change in management’s judgement 
. 
 The Company calculates a reserve for unfunded commitments, distinct from 
the allowance for credit losses reported in 
 other liabilities. 
This reserve 
is determined 
using both 
quantitative and 
qualitative factors 
identical to 
those applied 
to the 
 collectively evaluated loan portfolio. 
 Results of Operations 
 General 
 The following tables 
present selected balance sheet, income statement, and profitability ratios for the dates and for the 
 periods indicated (in thousands, except ratios): 
 As of December 31, 
 2024 
 2023 
 Consolidated Balance Sheets: 
 Total 
assets 
 $ 
 2,581,216 
 $ 
 2,339,093 
 Total 
loans 
 (1)
 $ 
 1,972,848 
 $ 
 1,780,827 
 Total 
deposits 
 $ 
 2,174,004 
 $ 
 1,937,139 
 Total 
stockholders' equity 
 $ 
 215,388 
 $ 
 191,968 
 (1) 
Loan amounts include deferred fees/costs. 
 Years Ended December 31, 
 2024 
 2023 
 Consolidated Statements of Operations: 
 Net interest income before provision for credit losses 
 $ 
 69,936 
 $ 
 58,568 
 Provision fro credit losses 
 $ 
 3,157 
 $ 
 2,367 
 Total 
non-interest income 
 $ 
 12,740 
 $ 
 7,403 
 Total 
non-interest expense 
 $ 
 47,042 
 $ 
 41,808 
 Net income 

 $ 
 24,674 
 $ 
 16,545 
 Net income available to common stockholders 
 $ 
 24,674 
 $ 
 16,545 
 Profitability: 
 Efficiency ratio 
 56.90% 
 63.37% 
 Net interest margin 

 2.94% 
 2.79% 
 The Company’s results 
of operations 
depend substantially on 
net interest income 
and non-interest income. 
Other factors 
 contributing to the 
results of operations 
include our provision 
for credit losses, 
non-interest expense, and 
the provision for 
 income taxes. 

 
 
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 59 
USCB Financial Holdings, Inc. 
2024 10-K 
 

 Net income 
for the 
year ended 
December 31, 2024 
was $24.7 million 
, 
compared with 
net income 
of $16.5 million 
for 
 the same 
period in 
2023. The Company 
reported 
net income 
per diluted 
share for 
the year 
ended December 31, 
2024 of 
 $1.24 compared to net income per diluted share for the 
same period in 2023 of $0.84. 

 Net Interest Income 
 Net 
interest 
income 
is 
the 
difference 
between 
interest 
earned 
on 
interest-earning 
assets 
and 
interest 
incurred 
on 
 interest-bearing liabilities and 
is the 
primary driver of 
core earnings. Interest 
income is generated 
from interest and 
dividends 
 on 
interest-earning 
assets, 
including 
loans, 
investment 
securities 
and 
other 
short-term 
investments. 
Interest 
expense 
is 
 incurred 
from 
interest 
paid 
on 
interest-bearing 
liabilities, 
including 
interest-bearing 
deposits, 
FHLB 
advances 
and 
other 
 borrowings. 
 To evaluate net 
interest income, we 
measure and monitor 
(i) yields on 
loans and other 
interest-earning assets, (ii) 
the 
 costs of deposits 
and other funding 
sources, (iii) net 
interest spread, and 
(iv) net interest margin. 
Net interest spread is 
equal 
 to the difference 
between the weighted 
average yields 
earned on interest 
-earning assets 
and the weighted 
average rates 
 paid on interest-bearing liabilities. 
Net interest margin is 
equal to the 
net interest income divided 
by average interest-earning 
 assets. Because non-interest-bearing 
sources of funds, 
such as non-interest-bearing 
deposits and stockholders’ 
equity, also 
 fund interest-earning assets, net interest margin includes 
the benefit of these non-interest-bearing sources. 
 Changes in 
the market 
interest rates 
and interest 
rates we 
earn on 
interest-earning assets 
or pay on 
interest-bearing 
 liabilities, as well 
as the volume 
and types of 
interest-earning assets and interest-bearing 
and non-interest-bearing liabilities, 
 are usually the 
largest drivers of 
periodic changes in 
net interest spread, 
net interest margin 
and net interest 
income. The 
 Asset-Liability Committee (“ALCO”) has in place asset-liability management techniques to manage major factors that affect 
 net interest income and net interest margin. 

 
 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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 60 
USCB Financial Holdings, Inc. 
2024 10-K 
 

 The following table 
contains information 
related to average 
balances, average 
yields on assets, 
and average 
costs of 
 liabilities for the periods indicated (in thousands). 
 Years Ended December 31, 
 2024 
 2023 
 Average 
 Balance
 
(1)
 Interest 
 Yield/Rate 
 Average 
 Balance
 
(1)
 Interest 
 Yield/Rate 
 Assets 
 Interest-earning assets: 
 Loans 

 (2) 
 $ 
 1,862,013 
 $ 
 115,236 
 6.19 
 % 
 $ 
 1,606,960 
 $ 
 87,884 
 5.47 
 % 
 Investment securities 

 (3) 
 427,567 
 11,480 
 2.68 
 % 
 423,749 
 10,012 
 2.36 
 % 
 Other interest-earnings assets 
 88,758 
 4,517 
 5.09 
 % 
 65,986 
 3,121 
 4.73 
 % 
 Total 
interest-earning assets 
 2,378,338 
 131,233 
 5.52 
 % 
 2,096,695 
 101,017 
 4.82 
 % 
 Non-interest earning assets 
 108,215 
 

 

 109,541 
 

 

 Total 
assets 
 $ 
 $2,486,553 
 

 

 $ 
 2,206,236 
 

 

 Liabilities and stockholders' equity 
 

 

 

 

 

 

 Interest-bearing liabilities: 
 

 

 

 

 

 

 Interest-bearing demand deposits 
 $ 
 54,667 
 1,509 
 2.76 
 % 
 $ 
 53,324 
 901 
 1.69 
 % 
 Savings and money market deposits 
 1,109,853 
 40,098 
 3.61 
 % 
 963,708 
 29,658 
 3.08 
 % 
 Time deposits 
 326,373 
 13,354 
 4.09 
 % 
 268,715 
 8,500 
 3.16 
 % 
 Total 
interest-bearing deposits 
 1,490,893 
 54,961 
 3.69 
 % 
 1,285,747 
 39,059 
 3.04 
 % 
 Borrowings and repurchase agreements 
 158,484 
 6,336 
 4.00 
 % 
 94,936 
 3,390 
 3.57 
 % 
 Total 
interest-bearing liabilities 
 1,649,377 
 61,297 
 3.72 
 % 
 1,380,683 
 42,449 
 3.07 
 % 
 Non-interest bearing demand deposits 
 596,073 
 

 607,506 
 

 

 Other non-interest-bearing liabilities 
 37,399 
 

 34,010 
 

 

 Total 
liabilities 
 2,282,849 
 

 2,022,199 
 

 

 Stockholders' equity 
 203,704 
 

 184,038 
 

 

 Total 
liabilities and stockholders' equity 
 $ 
 $2,486,553 
 

 $ 
 2,206,236 
 

 

 Net interest income 
 $ 
 69,936 
 

 $ 
 58,568 
 

 Net interest spread 

 (4) 
 

 1.80 
 % 
 

 1.74 
 % 
 Net interest margin 

 (5) 
 

 

 2.94 
 % 
 

 

 2.79 
 % 
 (1) 
Average balances - Daily average balances are used 
to calculate yields/rates. 
 (2) 
Average loan balances include non-accrual loans. Interest income 
on loans includes accretion of deferred 
loan fees, net of deferred loan costs. 
 (3) 
At fair value except for securities held to maturity. This amount includes 
FHLB stock. 
 (4) 
Net interest spread is the weighted average 
yield on total interest-earning assets minus the weighted 
average rate on total interest-bearing liabilities. 
 (5) 
Net interest margin is the ratio of net interest 
income to average total interest-earning assets. 
 Net interest 
income before 
the provision 
for credit 
losses was 
$69.9 million for 
the year 
ended December 31, 
2024, a 
 increase of $11.4 million 
or 19.4%, from 
$58.6 million for 
the year ended 
December 31, 2023. This 
increase was 
primarily 
 attributable to increase in weighted average yields on interest-earning assets growing at a higher pace than the increase in 
 weighted average rates paid on 
interest-earning liabilities. Additionally, the increase 
in the volume of 
interest-earning assets 
 was higher than interest-earning liabilities. 

 The net 
interest margin was 
2.94% for 
the year ended 
December 31, 2024 and 
2.79% 
for the 
year ended 2023. 
Although 
 the overall and 
individual yields for 
interest-earning assets 
and interest-bearing liabilities 
both increased in 
2024, the yield 
 on interest-earning assets, especially on loans, had a greater 
increase when compared to 2023. The increase in our yields 
 and cost of funds was primarily due to the interest rate 
market. 

 The Company did not have any tax-exempt securities 
at both December 31, 2024 and 2023. 

 
 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Table of Contents 
 

 

 61 
USCB Financial Holdings, Inc. 
2024 10-K 
 

 Provision for Credit Losses 
 ACL represents expected 
credit losses 
in our 
portfolio as 
the measurement 
date. We 
maintain an 
adequate ACL that 
 can 
mitigate 
expected 
credit 
losses 
in 
the 
loan 
portfolio. 
The ACL 
is 
increased 
by 
the 
provision 
for 
credit 
losses 
and 
is 
 decreased by charge-offs, net 
of recoveries on prior 
loan charge-offs. There are 
multiple credit quality metrics 
that we use 
 to base 
our determination 
of the 
amount 
of the 
ACL and 
corresponding 
provision 
for credit 
losses. These 
credit metrics 
 evaluate the 
credit quality 
and level 
of credit 
risk inherent 
in our 
loan portfolio, 
assess non-performing 
loans and 
charge-
 offs levels, consider statistical trends and economic conditions 
and other applicable factors. 

 The 
provision 
for 
credit 
loss 
for 
the 
year 
ended 
December 31, 
2024, 
was 
$3.2 
million 
compared 
to 
$2.4 
million 
in 
 provision expense for the 
same period in 2023. The ACL as a 
percentage of total 
loans was 1.22% 
at December 31, 2024 
 compared to 1.18% at December 31, 2023. 
 See “Allowance 
for Credit 
Losses” below 
for further 
discussion on 
how the 
ACL 
was calculated for 
the periods 
presented. 

 Non-Interest Income 
 Net interest income 
and other types of 
recurring non-interest 
income are generated 
from our operations. 
Our services 
 and products generate service charges and fees, mainly from our depository accounts. We also 
generate income from gain 
 on sale 
of loans 
though our 
interest rate 
swap and 
SBA programs. In 
addition, we 
own life 
insurance policies 
on several 
 employees and generate income reflecting the increase in 
the cash surrender value of these policies. 
 The following table presents the components of non-interest 
income for the periods indicated (in thousands): 
 Years Ended December 31, 
 2024 
 2023 
 Service fees 
 $ 
 8,839 
 $ 
 5,055 
 Gain (loss) on sale of securities available for sale, net 
 14 
 (1,859) 
 Gain on sale of loans held for sale, net 
 747 
 801 
 Other non-interest income 
 3,140 
 3,406 
 Total 
non-interest income 
 $ 
 12,740 
 $ 
 7,403 
 Non-interest income 
for the 
year ended 
December 31, 2024 
was $12.7 
million compared 
to $7.4 
million for 
the same 
 period in 2023. This 
increase was primarily 
driven by a 
$2.9 million increase 
in interest rate 
swap income, $415 
thousand 
 increase 
in 
wire 
transfer 
fees, 
and 
$530 
thousand 
increase 
in 
prepayment 
penalties 
reported 
under 
service 
fees. 
 Additionally, in 
2023, the 
Company executed 
a portfolio 
restructuring strategy 
which resulted 
in the 
sale of 
lower-yielding 
 available-for-sale securities at a loss 
in order to better 
position our securities portfolio. 
The loss on the sale 
of securities was 
 $1.9 million for 
2023. Proceeds from 
the sale transactions 
were primarily reinvested 
in securities and 
loans bearing yields 
 higher than those on the securities that were sold. 
 Non-Interest Expense 
 The following table presents the components of non-interest 
expense for the periods indicated (in thousands):
 Years Ended December 31, 
 2024 
 2023 
 Salaries and employee benefits 
 $ 
 28,793 
 $ 
 24,429 
 Occupancy 
 5,258 
 5,230 
 Regulatory assessment and fees 
 1,766 
 1,453 
 Consulting and legal fees 
 1,568 
 1,899 
 Network and information technology services 
 1,993 
 2,016 
 Other operating 
 7,664 
 6,781 
 Total 
non-interest expense 
 $ 
 47,042 
 $ 
 41,808 
 Non-interest expense for 
the year ended 
December 31, 2024 
increased $5.2 million 
or 12.5%, compared 
to the same 
 period in 2023. The increase is primarily due to $4.4 million or 
17.9% increase in salaries and employee benefits consisting 
 of 
a 
$1.2 
million 
or 
6.5% 
increase 
due 
to 
merit 
promotions 
and 
new 
hires, 
a 
$1.8 
million 
increase 
in 
bonus 
and 
sales 
 incentives, and a $1.1 million 
increase in stock-based compensation 
due to the Company’s financial 
performance in 2024. 
 Other operating 
expense had 
an increase 
of $883 
thousand or 
13.0% consisting 
of a 
$157 thousand 
increase in 
internet 

 
 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Table of Contents 
 

 

 62 
USCB Financial Holdings, Inc. 
2024 10-K 
 

 banking fees, 
a $123 
thousand 
increase in 
insurance expense, 
a $229 
thousand 
increase in 
director’s fees, 
and a 
$374 
 thousand in other expenses. 

 Provision for Income Tax 
 Fluctuations in the effective tax rate reflect the effect of the differences in the inclusion or deductibility of certain income 
 and expense for income tax purposes. 
Therefore, future decisions on the investments we 
choose will affect our effective tax 
 rate. Changes in the 
cash surrender value 
of bank-owned life 
insurance policies for 
key employees, purchasing 
municipal 
 bonds, and overall taxable income will be important elements 
in determining our effective tax rate. 
 Income tax 
expense for 
the year 
ended 
December 31, 
2024 was 
$7.8 million, 
compared 
to $5.3 
million 
for the 
year 
 ended December 31, 2023. The 
effective tax rate for 
the year ended December 31, 2024 
was 24.0% and for the 
year ended 
 December 31, 2023 was 24.1%. 
 For a further 
discussion on income taxes, see 
Note 6 “Income Taxes” 
to the Consolidated Financial Statements 
set forth 
 in Item 8 of this Annual Report on Form 10-K. 
 Rate/Volume Analysis 
 The 
table 
below 
sets 
forth 
information 
regarding 
changes 
in 
interest 
income 
and 
interest 
expense 
for 
the 
periods 
 indicated (in thousands). 
For each category of 
interest-earning assets and interest-bearing liabilities, 
information is provided 
 on changes attributable to (i) changes in rate (changes in rate multiplied by old volume); (ii) changes in volume (changes in 
 volume multiplied by old rate); and (iii) changes in rate-volume (change in 
rate multiplied by change in volume). Changes in 
 rate-volume are proportionately allocated between rate and volume 
variance (in thousands). 
 Years Ended 2024 vs. 2023 
 Years Ended 2023 vs. 2022 
 Increase (decrease) due to change in 
 Increase (decrease) due to change in 
 Volume 
 Rate 
 Net 
 Change 
 Volume 
 Rate 
 Net 
 Change 
 Interest-earning assets: 
 Loans 
 (1)
 $ 
 13,949 
 $ 
 13,403 
 $ 
 27,352 
 $ 
 12,026 
 $ 
 15,033 
 $ 
 27,059 
 Investment securities 
 (2)
 90 
 1,378 
 1,468 
 (929) 
 1,595 
 666 
 Other interest-earning assets 
 1,077 
 319 
 1,396 
 (64) 
 2,256 
 2,192 
 Total increase in interest income 
 $ 
 15,116 
 $ 
 15,100 
 $ 
 30,216 
 $ 
 11,033 
 $ 
 18,884 
 $ 
 29,917 
 Interest-bearing liabilities: 
 Interest-bearing demand deposits 
 $ 
 23 
 $ 
 585 
 $ 
 608 
 $ 
 (15) 
 $ 
 830 
 $ 
 815 
 Savings and money market deposits 
 4,498 
 5,942 
 10,440 
 1,032 
 23,453 
 24,485 
 Time deposits 
 1,824 
 3,030 
 4,854 
 331 
 6,660 
 6,991 
 Borrowings and repurchase agreements 
 2,269 
 677 
 2,946 
 985 
 1,734 
 2,719 
 Total increase in interest expense 
 8,614 
 10,235 
 18,848 
 2,333 
 32,677 
 35,010 
 Increase (decrease) in net interest income 
 $ 
 6,502 
 $ 
 4,865 
 $ 
 11,368 
 $ 
 8,700 
 $ 
 (13,793) 
 $ 
 (5,093) 
 (1) 
Average loan balances include non-accrual loans. Interest income 
on loans includes accretion of deferred 
loan fees, net of deferred loan costs. 
 (2) 
At fair value except for securities held to maturity. This amount includes 
FHLB stock. 
 Both average yields 
earned on interest-earning 
assets and average 
rates paid on 
interest-bearing liabilities 
increased 
 in 2024 as a compared to 2023, reflecting the 
changes in the macro interest rate environment. 
However, the average yields 
 earned on interest-earning 
assets increased to a 
greater degree than 
rates paid on interest 
-bearing liabilities. Additionally, 
 interest-earning assets volume growth was greater than 
the volume growth of interest-bearing liabilities. 

 The Company did not have any tax-exempt securities 
at both December 31, 2024 and December 31, 2023. 
 Analysis of Financial Condition 
 Total 
assets at December 31, 2024, were $2.6 billion, an increase of $242.1 million, or 10.4%, over total assets of $2.3 
 billion at 
December 31, 2023. Total loans increased 
$192.0 million, 
or 10.8%, 
to $2.0 
billion at 
December 31, 2024 compared 
 to $1.8 billion at December 31, 2023. Total 
deposits increased by $236.9 million, 
or 12.2%, to $2.2 billion at December 
31, 
 2024 compared to $1.9 billion at December 31, 2023. 

 
 
 Table of Contents 
 

 

 63 
USCB Financial Holdings, Inc. 
2024 10-K 
 

 Investment Securities 
 The investment portfolio 
is used and 
managed to provide 
liquidity through cash 
flows, marketability 
and, if necessary, 
 collateral for 
borrowings. The 
investment portfolio 
is also 
used as 
a tool 
to manage 
interest rate 
risk and 
the Company’s 
 capital market risk exposure. The 
operating philosophy of the portfolio is 
to maximize the Company’s profitability, 
taking into 
 consideration the 
Company’s risk 
appetite and 
tolerance, manage 
it’s asset 
composition and 
diversification, and 
maintain 
 adequate risk-based capital ratios. 
 The 
investment 
portfolio 
is 
managed 
in 
accordance 
with 
the 
Asset 
and 
Liability 
Management 
(“ALM”) 
policy, 
which 
 includes 
investment 
guidelines, 
approved 
by 
the 
Board. 
Such 
policy 
is 
reviewed 
at 
least 
annually 
or 
more 
frequently 
if 
 deemed necessary, 
depending on 
market 
conditions 
and/or 
unexpected 
events. 
The investment 
portfolio 
composition 
is 
 subject 
to 
change 
depending 
on 
the 
funding 
and 
liquidity 
needs 
of 
the 
Company, 
and 
the 
interest 
risk 
management 
 objectives directed by the ALCO. The portfolio of investments can be used to modify the duration of the 
balance sheet. The 
 allocation of cash into securities takes into consideration anticipated 
future cash flows (uses and sources) and all available 
 sources of credit. 
 Our 
investment 
portfolio 
consists 
primarily 
of 
securities 
issued 
by 
U.S. 
government-sponsored 
agencies, 
agency 
 mortgage-backed securities, 
collateralized mortgage 
obligation securities, 
municipal securities, 
and other 
debt securities, 
 all with varying contractual maturities and coupons. Due to the optionality embedded in these securities, the final maturities 
 do not 
necessarily represent the 
expected life of 
the portfolio. Some 
of these 
securities will be 
called or paid 
down depending 
 on capital market conditions and expectations. The investment portfolio is regularly reviewed by the Chief Financial Officer, 
 Treasurer, and/or the ALCO of the Company to ensure an appropriate risk and return profile as 
well as for adherence to the 
 Company’s investment policy. 
 As of December 31, 2024, the investment portfolio consisted of available-for-sale 
(“AFS”) and held-to-maturity (“HTM”) 
 debt securities. 
In 2022, the Company transferred investment securities from AFS to 
HTM with an amortized cost basis and 
 fair value 
amount of 
$74.4 million 
and $63.8 
million, respectively. 
On the 
date of 
transfer, 
these securities 
had a 
total net 
 unrealized loss of $10.6 million. The transfer of the debt securities from the AFS to HTM 
category was made at fair value at 
 the date 
of transfer. 
The unrealized 
gain 
or loss 
at the 
date 
of transfer 
is retained 
in 
accumulated 
other 
comprehensive 
 income (loss) 
and in the 
carrying value 
of the HTM 
securities. Such 
amounts are 
amortized over 
the remaining 
life of the 
 security. There was no impact to net income on the date of transfer. There were no securities transferred from AFS to HTM 
 in 2024 or 2023. 
 The book value of the AFS securities is adjusted quarterly for 
unrealized gain or loss as a valuation allowance, and any 
 gain or loss is reported on an after-tax basis as a component of other comprehensive income (loss) in stockholders’ equity. 

 CECL requires a loss reserve for securities 
classified as HTM. The reserve should reflect 
historical credit performance 
 as well as the impact 
of projected economic forecast. 
For U.S. 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. 
The reserve 
 requirement 
is 
for three 
primary 
assets 
groups: 
municipal 
bonds, 
corporate 
bonds, 
and 
non-agency 
securitizations. 
The 
 Company calculates quarterly the loss reserve 
utilizing Moody’s ImpairmentStudio. The CECL measurement for investment 
 securities 
incorporates 
historical 
data, 
containing 
defaults 
and 
recoveries 
information, 
and 
Moody’s 
baseline 
economic 
 forecast. The 
solution uses 
probability of 
default/loss 
given default 
(“PD/LGD”) 
approach. PD 
represents the 
likelihood a 
 borrower will 
default. 
Within the 
Moody’s 
model, this 
is determined 
using historical 
default data, 
adjusted for 
the current 
 economic environment. LGD projects the expected loss 
if a borrower were to default. 
 The Company 
monitors the credit 
quality of HTM 
securities through the 
use of 
credit ratings. Credit 
ratings are monitored 
 by the Company 
on at least 
a quarterly basis. 
As of December 
31, 2024 and 
December 31, 2023, 
all HTM securities 
held 
 by the Company were rated investment grade. 
 At December 31, 2024, HTM securities 
included $155.5 million of U.S. Government and 
U.S. Agency issued bonds and 
 mortgage-backed 
securities. 
Because 
of 
the 
explicit 
and/or 
implicit 
guarantee 
on 
these 
bonds, 
the 
Company 
holds 
no 
 reserves 
on 
these 
holdings. 
The 
remaining 
portion 
of 
the 
HTM 
portfolio 
is 
made 
up 
of 
$9.2 
million 
in 
investment 
grade 
 corporate bonds. The required reserve for these 
holdings is determined each quarter using the model described above. 
For 
 the portion of the HTM exposed to non-government credit risk, 
the Company utilized the PD/LGD methodology 
to estimate 
 a $6 thousand 
ACL as of 
December 31, 2024. 
The book value 
for debt securities 
classified as HTM 
represents amortized 
 cost less ACL. 
 As of December 31, 2024, securities with a market value of $66.1 million were pledged to secure public deposits. 
As of 
 December 31, 2024, the Company did not have any tax-exempt 
securities in the portfolio. 

 
 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Table of Contents 
 

 

 64 
USCB Financial Holdings, Inc. 
2024 10-K 
 

 The 
following 
table 
presents 
the 
amortized 
cost 
and 
fair 
value 
of 
investment 
securities 
for 
the 
dates 
indicated 
(in 
 thousands): 
 December 31, 2024 
 Available-for-sale: 
 Amortized 
 Cost 
 Unrealized 
 Gains 
 Unrealized 
 Losses 
 Fair Value 
 U.S. Government Agency 
 $ 
 14,279 
 $ 
 14 
 $ 
 (1,668) 
 $ 
 12,625 
 Collateralized mortgage obligations 
 101,808 
 15 
 (22,918) 
 78,905 
 Mortgage-backed securities - residential 
 58,995 
 1 
 (12,063) 
 46,933 
 Mortgage-backed securities - commercial 
 86,604 
 40 
 (7,905) 
 78,739 
 Municipal securities 
 24,925 
 - 
 (5,614) 
 19,311 
 Bank subordinated debt securities 
 24,314 
 438 
 (1,044) 
 23,708 
 $ 
 310,925 
 $ 
 508 
 $ 
 (51,212) 
 $ 
 260,221 
 Held-to-maturity: 
 U.S. Government Agency 
 $ 
 42,538 
 $ 
 - 
 $ 
 (5,094) 
 $ 
 37,444 
 Collateralized mortgage obligations 
 56,987 
 57 
 (7,785) 
 49,259 
 Mortgage-backed securities - residential 
 40,681 
 53 
 (4,613) 
 36,121 
 Mortgage-backed securities - commercial 
 15,272 
 - 
 (1,385) 
 13,887 
 Corporate bonds 
 9,222 
 - 
 (393) 
 8,829 
 $ 
 164,700 
 $ 
 110 
 $ 
 (19,270) 
 $ 
 145,540 
 Allowance for credit losses - securities held-to-maturity 
 (6) 
 Securities held-to maturity, net of allowance for credit losses 
 $ 
 164,694 
 December 31, 2023 
 Available-for-sale: 
 Amortized 
 Cost 
 Unrealized 
 Gains 
 Unrealized 
 Losses 
 Fair Value 
 U.S. Government Agency 
 $ 
 9,664 
 $ 
 - 
 $ 
 (1,491) 
 $ 
 8,173 
 Collateralized mortgage obligations 
 103,645 
 - 
 (23,039) 
 80,606 
 Mortgage-backed securities - residential 
 63,795 
 - 
 (11,608) 
 52,187 
 Mortgage-backed securities - commercial 
 49,212 
 56 
 (6,504) 
 42,764 
 Municipal securities 
 25,005 
 - 
 (5,667) 
 19,338 
 Bank subordinated debt securities 
 28,106 
 188 
 (2,033) 
 26,261 
 $ 
 279,427 
 $ 
 244 
 $ 
 (50,342) 
 $ 
 229,329 
 Held-to-maturity: 
 U.S. Government Agency 
 $ 
 43,626 
 $ 
 2 
 $ 
 (5,322) 
 $ 
 38,306 
 Collateralized mortgage obligations 
 62,735 
 - 
 (7,983) 
 54,752 
 Mortgage-backed securities - residential 
 43,784 
 348 
 (4,533) 
 39,599 
 Mortgage-backed securities - commercial 
 15,439 
 - 
 (1,257) 
 14,182 
 Corporate bonds 
 9,398 
 - 
 (727) 
 8,671 
 174,982 
 $ 
 350 
 $ 
 (19,822) 
 $ 
 155,510 
 Allowance for credit losses - securities held-to-maturity 
 (8) 
 Securities held-to maturity, net of allowance for credit losses 
 $ 
 174,974 

 
 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Table of Contents 
 

 

 65 
USCB Financial Holdings, Inc. 
2024 10-K 
 

 AFS and 
HTM investment 
securities in 
aggregate increased 
$20.6 million 
or 5.1% 
to $424.9 
million at 
December 31, 
 2024 from $404.3 million at December 31, 2023. 
 The following 
table shows 
the weighted 
average yields, 
categorized by 
contractual maturity, 
for investment 
securities 
 as of December 31, 2024 (in thousands, except ratios): 

 Within 1 year 
 After 1 year 
 through 5 years 
 After 5 years 
 through 10 years 
 After 10 years 
 Total 
 Amortized 
 Cost 
 Yield 
 Amortized 
 Cost 
 Yield 
 Amortized 
 Cost 
 Yield 
 Amortized 
 Cost 
 Yield 
 Amortized 
 Cost 
 Yield 
 Available-for-sale: 
 U.S. Government Agency 
 $ 
 - 
 - 
 $ 
 - 
 - 
 $ 
 2,379 
 3.14% 
 $ 
 11,900 
 4.61% 
 $ 
 14,279 
 4.37% 
 Collateralized mortgage obligations 
 - 
 - 
 - 
 - 
 - 
 - 
 101,808 
 1.62% 
 101,808 
 1.62% 
 Mortgage-backed securities - residential 
 - 
 - 
 - 
 - 
 - 
 - 
 58,995 
 1.70% 
 58,995 
 1.70% 
 Mortgage-backed securities - commercial 
 - 
 - 
 1,596 
 4.41% 
 4,097 
 4.71% 
 80,911 
 3.25% 
 86,604 
 3.34% 
 Municipal securities 

 - 
 - 
 - 
 - 
 20,680 
 1.72% 
 4,245 
 1.86% 
 24,925 
 1.75% 
 Bank subordinated debt securities 
 - 
 - 
 2,926 
 9.27% 
 21,388 
 5.11% 
 - 
 - 
 24,314 
 5.61% 
 $ 
 - 
 - 
 $ 
 4,522 
 7.56% 
 $ 
 48,544 
 3.54% 
 $ 
 257,859 
 2.30% 
 $ 
 310,925 
 2.57% 
 Held-to-maturity: 
 U.S. Government Agency 

 $ 
 - 
 - 
 $ 
 7,951 
 1.02% 
 $ 
 20,078 
 1.45% 
 $ 
 14,509 
 1.85% 
 $ 
 42,538 
 1.51% 
 Collateralized mortgage obligations 
 - 
 - 
 - 
 - 
 - 
 - 
 56,987 
 1.66% 
 56,987 
 1.66% 
 Mortgage-backed securities - residential 
 - 
 - 
 4,322 
 1.86% 
 5,882 
 1.75% 
 30,477 
 2.38% 
 40,681 
 2.23% 
 Mortgage-backed securities - commercial 
 - 
 - 
 3,057 
 1.62% 
 - 
 - 
 12,215 
 2.59% 
 15,272 
 2.40% 
 Corporate bonds 
 - 
 - 
 9,222 
 2.81% 
 - 
 - 
 - 
 - 
 9,222 
 2.81% 
 $ 
 - 
 - 
 $ 
 24,552 
 1.92% 
 $ 
 25,960 
 1.52% 
 $ 
 114,188 
 1.98% 
 $ 
 164,700 
 1.90% 
 The Company did not have any tax-exempt securities 
at both December 31, 2024 and 2023. 

 Loans 
 Loans are 
the largest 
category of 
interest-earning assets 
on the 
Consolidated 
Balance Sheets, 
and usually 
provides 
 higher yields than the remainder of the Company’s 
interest-earning assets. Higher yields typically carry 
inherent credit and 
 liquidity risks in 
comparison to lower 
yielding assets. The 
Company manages and 
mitigates such risks 
in accordance with 
 the credit and ALM policies, risk tolerance and balance 
sheet composition. 
 The following table shows the loan portfolio composition 
as of the dates indicated (in thousands): 
 

 December 31, 2024 
 December 31, 2023 
 Total 
 Percent of 
 Total 
 Total 
 Percent of 
 Total 
 Residential Real Estate 
 $ 
 289,961 
 14.8 
 % 
 $ 
 204,419 
 11.5 
 % 
 Commercial Real Estate 
 1,136,417 
 57.8 
 % 
 1,047,593 
 58.8 
 % 
 Commercial and Industrial 
 258,311 
 13.1 
 % 
 219,757 
 12.4 
 % 
 Correspondent Banks 
 82,438 
 4.2 
 % 
 114,945 
 6.5 
 % 
 Consumer and Other 

 198,091 
 10.1 
 % 
 191,930 
 10.8 
 % 
 Total 
gross loans 
 1,965,218 
 100.0 
 % 
 1,778,644 
 100.0 
 % 
 Plus: Deferred costs 
 7,630 
 2,183 
 Total 
loans net of deferred costs 
 1,972,848 
 1,780,827 
 Less: Allowance for credit losses 
 24,070 
 21,084 
 Total 
net loans 
 $ 
 1,948,778 
 

 $ 
 1,759,743 
 Total 
loans 
held 
for 
investment 
net 
of 
deferred 
costs 
increased 
by 
$192.0 million 
or 
10.8% 
at 
December 31, 
2024 
 compared to December 31, 2023. The most significant growth was in the residential real estate and commercial real estate 
 loan pools. Our loan 
portfolio continues to diversify 
as commercial and industrial loans 
continue to increase as 
a percentage 
 to total loans. However, we do not expect any significant 
changes over the foreseeable future in 
the composition of our loan 
 portfolio. Commercial 
real 
estate continues 
to be 
the main 
category 
of our 
portfolio, 
reflective 
of the 
market 
in which 
we 
 operate. 
 The 
growth 
experienced 
over 
the 
last 
couple 
of 
years 
is 
primarily 
due 
to 
implementation 
of 
our 
relationship-based 
 banking 
model, 
our 
diversified 
business 
verticals, 
and 
the 
success 
of 
our 
relationship 
managers 
in 
competing 
for 
new 

 
 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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 66 
USCB Financial Holdings, Inc. 
2024 10-K 
 

 business in a highly competitive metropolitan area. Many of 
our larger loan clients have lengthy relationships with members 
 of our senior management team or our relationship managers 
that date back to former institutions. 

 From a 
liquidity perspective, 
our loan 
portfolio provides 
us with 
additional 
liquidity due 
to repayments 
or unexpected 
 prepayments. 
The 
following 
table 
shows 
maturities 
and 
sensitivity 
to 
interest 
rate 
changes 
for 
the 
loan 
portfolio 
at 
 December 31, 2024 (in thousands): 
 Due in 1 year or 
 less 
 Due in 1 to 5 
 years 
 Due after 5 to 15 
 years 
 Due after 15 
 years 
 Total 
 Residential Real Estate 
 $ 
 10,713 
 
$ 

 64,513 
 
$ 

 68,677 
 
$ 

 146,059 
 $ 
 289,961 
 Commercial Real Estate 
 85,967 
 378,704 
 666,276 
 5,471 
 1,136,417 
 Commercial and Industrial 
 7,726 
 82,601 
 123,166 
 44,818 
 258,311 
 Correspondent Banks 
 82,438 
 - 
 - 
 - 
 82,438 
 Consumer and Other 
 2,179 
 1,883 
 19,118 
 174,911 
 198,091 
 Total 
gross loans 
 $ 
 189,023 
 $ 
 527,700 
 $ 
 877,237 
 $ 
 371,258 
 $ 
 1,965,218 
 Interest rate sensitivity: 
 Fixed interest rates 
 $ 
 164,523 
 $ 
 203,861 
 $ 
 163,800 
 $ 
 282,633 
 $ 
 814,817 
 Floating or adjustable rates 
 24,500 
 323,839 
 713,436 
 88,626 
 1,150,401 
 Total 
gross loans 
 $ 
 189,023 
 $ 
 527,700 
 $ 
 877,236 
 $ 
 371,259 
 $ 
 1,965,218 
 The information 
presented in 
the table 
above is 
based upon 
contractual maturities 
of the 
individual loans, 
which may 
 be subject to renewal at their contractual maturity. Renewals will depend on approval by our credit department and balance 
 sheet composition 
at the 
time of 
the analysis, 
as well 
as any 
modification of 
terms at 
the loan’s maturity. Additionally, maturity 
 concentrations, 
loan duration, 
prepayment 
speeds 
and 
other interest 
rate 
sensitivity 
measures 
are discussed, 
reviewed, 
 and analyzed by the ALCO. Decisions on term and rate 
modifications are discussed as well. 

 As of 
December 31, 
2024, approximately 
58.5% 
of the 
loans 
have adjustable/variable 
rates 
and 
41.5% 
of the 
loans 
 have fixed rates. 
The adjustable/variable 
loans re-price to 
different benchmarks 
and tenors in 
different periods 
of time. By 
 contractual characteristics, there are no 
material concentrations on anniversary repricing. Additionally, it is 
important to note 
 that most 
of our 
loans have 
interest rate 
floors. This 
embedded option 
protects the 
Company from 
a decrease 
in interest 
 rates and positions us to gain in the scenario of higher interest 
rates. 
 As of 
December 31, 2024, the 
commercial real estate 
portfolio was $1.1 
billion or 57.8% 
of the 
total gross loans 
portfolio. 
 At 
such 
date, 
$200.8 
million 
of 
outstanding 
balances 
are 
characterized 
as 
owner 
occupied 
and 
$935.6 
million 
are 
 characterized as non-owner occupied. 
The retail sector 
was the largest 
segment comprising $305.0 million 
of the non-owner 
 occupied commercial real estate portfolio. 
 The 
following 
table 
is 
a 
summary 
of 
the 
distribution 
of 
non-owner 
occupied 
commercial 
real 
estate 
loans 
held 
for 
 investment by loan type (dollars in thousands): 
 December 31, 2024 
 Balance 
 # of Notes 
 % of Total 
 Gross Loans 
 Average Loan Size 
 Non-Accruals 
 Weighted Avg 
 LTV 
 (1)
 Retail 
 $ 
 305,027 
 

 97 
 

 16% 
 $ 
 3,145 
 $ 
 - 
 

 57% 
 Multifamily 
 210,576 
 7,122 
 11% 
 30 
 - 
 56% 
 Warehouse 
 132,269 
 56 
 7% 
 2,362 
 - 
 54% 
 Office 
 114,043 
 54 
 6% 
 2,112 
 - 
 52% 
 Hotels/Motels 
 102,480 
 20 
 5% 
 5,124 
 - 
 56% 
 Construction/Land 
 37,974 
 19 
 2% 
 1,999 
 - 
 47% 
 Other 
 33,212 
 21 
 2% 
 1,582 
 - 
 55% 
 $ 
 935,581 
 

 7,389 
 

 48% 
 $ 
 127 
 $ 
 - 
 $ 
 55% 
 (1) Loan-to-value is calculated based on the real estate value at the time of origination, renewal, or update, whichever is more recent. 

 
 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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 67 
USCB Financial Holdings, Inc. 
2024 10-K 
 

 The following table is a summary of non-owner occupied commercial real estate loans held for investment by collateral 
 geographical location (dollars in thousands): 
 December 31, 2024 
 South Florida 
 (1)
 Rest of Florida 
 (2)
 Outside Florida 
 (3)
 Balance 
 % of Non-
 Owner 
 Occupied 
 CRE Loans 
 Balance 
 % of Non-
 Owner 
 Occupied 
 CRE Loans 
 Balance 
 % of Non-
 Owner 
 Occupied 
 CRE Loans 
 Retail 
 $ 
 185,838 
 20% 
 $ 
 47,007 
 5% 
 $ 
 72,182 
 8% 
 Multifamily 
 159,172 
 17% 
 51,404 
 5% 
 
- 

 0% 
 Warehouse 
 71,438 
 8% 
 53,923 
 6% 
 6,908 
 1% 
 Office 
 75,813 
 8% 
 29,401 
 3% 
 8,829 
 1% 
 Hotels/Motels 
 74,439 
 8% 
 28,041 
 3% 
 
- 

 0% 
 Construction/Land 
 33,277 
 4% 
 4,697 
 1% 
 
- 

 0% 
 Other 
 26,294 
 3% 
 6,919 
 1% 
 
- 

 0% 
 $ 
 626,271 
 67% 
 $ 
 221,392 
 24% 
 $ 
 87,919 
 9% 
 (1) Miami-Dade, Broward, and West Palm Beach counties 
 (2) All other Florida counties 
 (3) Within the U.S. 

 As of December 
31, 2024, 
67% of the 
non-owner occupied 
CRE portfolio 
were located 
within South Florida, 
and only 
 12 loan 
notes with 
an outstanding 
principal 
balance of 
$87.9 million 
are located 
outside Florida. 
Balances 
of non-owner 
 occupied CRE loans outside Florida were: $67.2 million in New York, $6.9 million in Georgia, 
$4.4 million in Arkansas, $4.2 
 million in North Carolina, $2.8 million in Indiana, and $2.5 million 
in New Jersey. 
 Asset Quality 

 Our asset quality grading 
analysis estimates the capability of 
the borrower to repay 
the contractual obligation of 
the loan 
 agreement as scheduled or at all. The Company’s internal credit risk grading system is based on experiences with similarly 
 graded loans. Internal 
credit risk 
grades are evaluated 
at least annually, 
or more frequently 
if deemed necessary. 
Internal 
 credit 
risk 
ratings 
may 
change 
based 
on 
management’s 
assessment 
of 
the 
results 
from 
the 
annual 
review, 
portfolio 
 monitoring and other developments observed with borrowers. 

 The internal credit risk grades used by the Company to 
assess the credit worthiness of a loan are shown below: 
 Pass 
 – Loans indicate different levels of satisfactory 
financial condition and performance. 

 Special Mention
 
– Loans classified as special mention have a potential weakness 
that deserves management’s 
 close attention. If left uncorrected, these potential weaknesses 
may result in deterioration of the repayment 
 prospects for the loan or of the institution’s 
credit position at some future date. 

 Substandard 
 – Loans classified as substandard are inadequately protected 
by the current net worth and paying 
 capacity of the obligator or of the collateral pledged, if 
any. Loans so classified 
have a well-defined weakness or 
 weaknesses that jeopardize the liquidation of the debt. 
They are characterized by the distinct possibility that the 
 institution will sustain some loss if the deficiencies are 
not corrected. 

 Doubtful
 
– Loans classified as doubtful have all the weaknesses inherent 
in those classified at substandard, with 
 the added characteristic that the weaknesses make collection 
or liquidation in full on the basis of currently existing 
 facts, conditions, and values, highly questionable and improbable. 

 Loss 
 – Loans classified as loss are considered uncollectible. 

 
 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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 68 
USCB Financial Holdings, Inc. 
2024 10-K 
 

 Loan credit exposures by internally assigned grades are 
as follows for the dates indicated (in thousands): 

 December 31, 2024 
 Pass 
 Special Mention 
 Substandard 
 Doubtful 
 Total 
 Residential Real Estate 
 $ 
 289,401 
 $ 
 - 
 $ 
 560 
 $ 
 - 
 $ 
 289,961 
 Commercial Real Estate 
 1,133,965 
 - 
 2,452 
 - 
 1,136,417 
 Commercial and Industrial 
 256,031 
 - 
 2,280 
 - 
 258,311 
 Correspondent Banks 
 82,438 
 - 
 - 
 - 
 82,438 
 Consumer and Other 

 196,101 
 - 
 1,990 
 - 
 198,091 
 $ 
 1,957,936 
 $ 
 - 
 $ 
 7,282 
 $ 
 - 
 $ 
 1,965,218 
 December 31, 2023 
 Pass 
 Special Mention 
 Substandard 
 Doubtful 
 Total 
 Residential Real Estate 
 $ 
 204,127 
 $ 
 
- 

 $ 
 292 
 $ 
 
- 

 $ 
 204,419 
 Commercial Real Estate 
 1,040,032 
 
- 

 7,561 
 
- 

 1,047,593 
 Commercial and Industrial 
 218,129 
 
- 

 1,628 
 
- 

 219,757 
 Correspondent Banks 
 114,945 
 
- 

 
- 

 
- 

 114,945 
 Consumer and Other 

 191,930 
 
- 

 
- 

 
- 

 191,930 
 $ 
 1,769,163 
 $ 
 
- 

 $ 
 9,481 
 $ 
 
- 

 $ 
 1,778,644 
 Non-Performing Assets 
 The following table presents non-performing assets as 
of December 31, 2024 and 2023 (in thousands, except 
ratios): 
 2024 
 2023 
 Total 
non-performing loans 
 $ 
 2,707 
 $ 
 468 
 Other real estate owned 
 - 
 - 
 Total 
non-performing assets 
 2,707 
 468 
 Asset quality ratios: 
 

 - 
 - 
 Allowance for credit losses to total loans 
 1.22% 
 1.18% 
 Allowance for credit losses to non-performing loans 
 889% 
 4505% 
 Non-performing loans to total loans 
 0.14% 
 0.03% 
 Non-performing 
assets 
include 
all 
loans 
categorized 
as non-accrual 
or restructured, 
impaired 
securities, 
OREO 
and 
 other repossessed assets. Problem loans for which the collection or liquidation in full is reasonably uncertain are placed on 
 a 
non-accrual 
status. 
This 
determination 
is 
based 
on 
current 
existing 
facts 
concerning 
collateral 
values 
and 
the 
paying 
 capacity of the borrower. When the collection of the full contractual balance is unlikely, 
the loan is placed on non-accrual to 
 avoid overstating the Company’s income for a 
loan with increased credit risk. 

 If the 
principal or 
interest on 
a commercial 
loan becomes 
due and 
unpaid for 
90 days 
or more, 
the loan 
is placed 
on 
 non-accrual status as of 
the date it becomes 
90 days past due 
and remains in non-accrual 
status until it meets 
the criteria 
 for restoration to accrual status. 
Residential loans, on 
the other hand, are placed 
on non-accrual status when 
the principal 
 or interest 
becomes due 
and unpaid 
for 120 
days or 
more and remains 
in non-accrual 
status until 
it meets 
the criteria 
for 
 restoration 
to 
accrual 
status. 
Restoring 
a 
loan 
to 
accrual 
status 
is 
possible 
when 
the 
borrower 
resumes 
payment 
of 
all 
 principal and interest 
payments for a period 
of six months 
and the Company 
has a documented 
expectation of repayment 
 of the remaining contractual principal and interest or the 
loan becomes secured and in the process of collection. 
 The 
Company 
may 
grant 
a 
loan 
concession 
to 
a 
borrower 
experiencing 
financial 
difficulties. 
This 
determination 
is 
 performed during 
the annual 
review process 
or whenever 
problems are 
surfacing regarding 
the client’s 
ability to 
repay in 
 accordance with 
the original 
terms of 
the loan 
or line 
of credit. 
The concessions 
are given 
to the 
debtor in 
various forms, 
 including interest rate 
reductions, principal forgiveness, extension 
of maturity date, 
waiver, or deferral of 
payments and other 
 concessions intended to minimize potential losses. 
 For further discussion on non-performing loans, see Note 
3 “Loans” to the Consolidated Financial Statements 
set forth 
 in Item 8 of this Annual Report on Form 10-K. 

 
 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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 69 
USCB Financial Holdings, Inc. 
2024 10-K 
 

 Allowance for Credit Losses 
 On January 1, 
2023, the Company 
adopted FASB ASU 2016-13, which 
introduced the CECL methodology 
and required 
 us to 
estimate all 
expected credit 
losses over 
the remaining 
life of 
our loan 
portfolio. Accordingly, 
the ACL 
represents an 
 amount 
that, 
in 
management's 
evaluation, 
is 
adequate 
to 
provide 
coverage 
for 
all 
expected 
future 
credit 
losses 
on 
 outstanding loans as of the 
measurement date. Additionally, 
qualitative adjustments are made to 
the ACL when, based on 
 management’s judgment, there 
are factors impacting 
the allowance estimate 
not considered by 
the quantitative calculations. 
 See Note 3 “Loans” to the Consolidated Financial Statements set 
forth in Item 8 of Part 1 
of this Annual Report as Form 10-
 K for more information on the allowance for credit losses. 
 The following table presents ACL and net charge-offs to average loans by 
type for the periods indicated (in thousands): 
 Residential 
 Real Estate 
 Commercial 
 Real Estate 
 Commercial 
 and Industrial 
 Correspondent 

 Banks 
 Consumer 
 and Other 
 Total 
 December, 31, 2024 
 

 

 

 

 

 

 

 

 

 

 

 

 Beginning balance 
 $ 
 2,695 
 $ 
 10,366 
 $ 
 3,974 
 $ 
 911 
 $ 
 3,138 
 $ 
 21,084 
 Provision for credit losses 
 (1)
 2,403 
 (1,578) 
 640 
 (257) 
 1,752 
 2,960 
 Recoveries 
 23 
 - 
 19 
 - 
 3 
 45 
 Charge-offs 
 - 
 - 
 - 
 - 
 (19) 
 (19) 
 Ending Balance 

 $ 
 5,121 
 $ 
 8,788 
 $ 
 4,633 
 $ 
 654 
 $ 
 4,874 
 $ 
 24,070 
 Average loans 
 $ 
 256,112 
 $ 
 1,068,574 
 $ 
 238,266 
 $ 
 103,345 
 $ 
 195,716 
 $ 
 1,862,013 
 Net charge-offs (recoveries) to 
 average loans 
 

 (0.01)% 
 

 - 
 

 (0.01)% 
 

 - 
 

 0.01% 
 

 (0.00)% 
 December, 31, 2023 
 

 

 

 

 

 

 Beginning balance 
 $ 
 1,352 
 $ 
 10,143 
 $ 
 4,163 
 $ 
 720 
 $ 
 1,109 
 $ 
 17,487 
 Cumulative effect of adoption of 
 accounting principle 
 (2)
 1,238 
 1,105 
 (2,158) 
 23 
 858 
 1,066 
 Provision for credit losses 
 (3)
 95 
 (882) 
 1,897 
 168 
 1,225 
 2,503 
 Recoveries 
 10 
 - 
 72 
 - 
 3 
 85 
 Charge-offs 
 - 
 - 
 - 
 - 
 (57) 
 (57) 
 Ending Balance 

 $ 
 2,695 
 $ 
 10,366 
 $ 
 3,974 
 $ 
 911 
 $ 
 3,138 
 $ 
 21,084 
 Average loans 
 $ 
 186,854 
 $ 
 986,234 
 $ 
 179,574 
 $ 
 93,364 
 $ 
 160,934 
 $ 
 1,606,960 
 Net charge-offs (recoveries) to 
 average loans 
 (0.01)% 
 

 - 
 

 (0.04)% 
 

 - 
 

 0.03% 
 

 (0.00)% 
 (1) Provision for credit losses excludes $199 thousand release for unfunded commitments included in other liabilities and $2 thousand 
 release for investment securities held to maturity. 
 (2) Impact of CECL adoption on January 1, 2023. 
 (3) Provision for credit losses excludes $144 thousand release for unfunded commitments included in other liabilities and $8 thousand 
 provision for investment securities held to maturity. 

 
 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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 70 
USCB Financial Holdings, Inc. 
2024 10-K 
 

 The 
following 
table 
presents 
ACL 
by 
type 
and 
its 
individual 
percentage 
to 
total 
loans 
for 
the 
periods 
indicated 
(in 
 thousands): 
 December 31, 

 2024 
 2023 
 Loan Category 
 Allowance 
 % of Loans in 
 Each Category to 
 Total Loans 
 Allowance 
 % of Loans in 
 Each Category to 
 Total Loans 
 Residential Real Estate 
 $ 
 5,121 
 21.3 
 % 
 $ 
 2,695 
 11.5 
 % 
 Commercial Real Estate 
 

 8,788 
 36.5 
 % 
 10,366 
 58.8 
 % 
 Commercial and Industrial 
 4,633 
 19.2 
 % 
 3,974 
 12.4 
 % 
 Correspondent Banks 
 654 
 2.7 
 % 
 911 
 6.5 
 % 
 Consumer and Other 
 4,874 
 20.3 
 % 
 3,138 
 10.8 
 % 
 Total 
 $ 
 24,070 
 100.0 
 % 
 $ 
 21,084 
 100.0 
 % 
 Bank-Owned Life Insurance 
 At 
December 31, 
2024, 
the 
combined 
cash 
surrender 
value 
of 
all 
bank-owned 
life 
insurance 
(“BOLI”) 
policies 
was 
 $53.5 million. 
Changes 
in 
cash 
surrender 
value 
are 
recorded 
in 
non-interest 
income 
on 
the 
Consolidated 
Statements 
of 
 Operations. In 
2024, the Company 
maintained BOLI 
policies with 
five insurance 
carriers. The 
Company is 
the beneficiary 
 of these policies. 
 Deposits 
 Customer deposits are the 
primary funding source for 
the Bank’s growth. 
Through our network of 
banking centers, we 
 offer a competitive array of deposit 
accounts and treasury management services designed 
to meet our customers’ business 
 needs. Our primary 
deposit customers 
are SMBs, 
and the personal 
business of owners 
and operators 
of these SMBs, 
as 
 well as the retail/consumer relationships of the employees 
of these businesses. Our focus on quality and customer 
service 
 has created a strong brand recognition within 
our depositors, which reflects in the composition 
of our deposits; most of our 
 funding sources 
are core 
deposits. In 
addition to 
our banking 
centers 
network, we 
have developed 
business 
verticals to 
 diversify our portfolio in 
different specialty 
industries and we offer 
public fund deposit 
products to municipalities 
and public 
 agencies in our geographical footprint. 

 Furthermore, our 
personal and 
private banking 
management 
line of 
business is 
focused on 
the needs 
of the 
owners 
 and operators of 
our business customers, 
offering a suite 
of checking, savings, 
money market and 
time deposit accounts, 
 and utilizing superior 
client service 
to build and 
expand client relationships. 
A unique aspect 
of our business 
model is our 
 ability to offer correspondent services to banks in 
Central America and the Caribbean. 
 The following 
table presents 
the daily 
average balance 
and average 
rate paid 
on deposits 
by category 
for the 
years 
 ended December 31, 2024 and 2023 (in thousands, except 
ratios): 
 Years Ended December 31, 
 2024 
 2023 
 Average Balance 
 Average Rate 
 Paid 
 Average Balance 
 Average Rate 
 Paid 
 Non-interest bearing demand deposits 
 $ 
 596,073 
 0.00% 
 $ 
 607,506 
 0.00% 
 Interest-bearing demand deposits 
 54,667 
 2.76% 
 53,324 
 1.69% 
 Savings and money market deposits 
 1,109,853 
 3.61% 
 963,708 
 3.08% 
 Time deposits 
 326,373 
 4.09% 
 268,715 
 3.16% 
 $ 
 2,086,966 
 2.63% 
 $ 
 1,893,253 
 2.06% 
 Total average deposits for the year ended December 31, 2024 was $2.1 billion, 
an increase of $193.7 million, 
or 10.2% 
 over total 
average deposits 
of $1.9 billion 
for the 
same period 
in 2023. 
The greatest 
increase was 
in money 
market and 
 savings deposits which increased 
by $146.1 million, 
or 15.2%. Non-interest-bearing demand 
deposits decreased by $11.4 
 million or 
1.9% due 
to customers 
moving deposits 
to interest-bearing 
accounts due 
to increases 
in rate 
paid on 
deposits 
 due to increases in the interest rate market. 

 
 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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 71 
USCB Financial Holdings, Inc. 
2024 10-K 
 

 The 
uninsured 
deposits 
are 
estimated 
based 
on 
the 
FDIC 
deposit 
insurance 
limit 
of 
$250 thousand 
for 
all 
deposit 
 accounts at 
the Bank 
per account 
holder. 
Total 
estimated uninsured 
deposits was 
$1.2 billion 
at December 31, 
2024 and 
 $1.1 billion at December 
31, 2023. As of 
December 31, 2024, 
45% 
of our deposits 
are estimated to be 
FDIC-insured. Our 
 public funds 
are 5% 
of total 
deposits and 
are partially 
collateralized. 
Brokered deposits 
are 6% 
of total 
deposits and 
are 
 FDIC-insured. The estimated average 
account size of our deposit 
portfolio is $105 thousand. 
Time deposits 
with balances 
 of $250 thousand or more 
totaled $94.0 million and 
$58.1 million at December 31, 
2024 and 2023, respectively. 
The Bank 
 maintains a well-diversified deposit 
base. At December 31, 
2024, our top 
10 depositors only 
held 16.7% of 
our total portfolio. 
 Critical elements of our liquidity 
risk management include: effective corporate governance consisting of 
oversight by the 
 Board and ALCO and 
involvement by senior management; 
appropriate strategies, policies, 
procedures, and limits 
used to 
 identify 
and 
mitigate 
liquidity 
risk; 
comprehensive 
liquidity 
risk 
measurement 
and 
monitoring 
systems 
(including 
 assessments 
of 
the 
current 
and 
prospective 
cash 
flows 
or 
sources 
and 
uses 
of 
funds) 
that 
are 
commensurate 
with 
the 
 complexity and business 
activities of the 
Company; management of intraday 
liquidity and collateral; 
an appropriately diverse 
 mix 
of 
existing 
and 
potential 
future 
funding 
sources; 
adequate 
levels 
of 
highly 
liquid 
marketable 
securities 
free 
of 
legal, 
 regulatory, 
or 
operational 
impediments, 
that 
can 
be 
used 
to 
meet 
liquidity 
needs 
in 
stressful 
situations; 
comprehensive 
 contingency 
funding 
plans 
that 
sufficiently 
address 
potential 
adverse 
liquidity 
events 
and 
emergency 
cash 
flow 
 requirements; 
and 
internal 
controls and 
internal 
audit 
processes 
sufficient 
to 
determine 
the 
adequacy 
of 
the 
institution’s 
 liquidity risk management process. 
 We 
expect 
funds 
to 
be 
available 
from 
several 
basic 
banking 
activity 
sources, 
including 
the 
core 
deposit 
base, 
the 
 repayment and maturity of loans and investment security 
cash flows. Other potential funding sources include 
federal funds 
 purchased, brokered 
certificates of 
deposit, listing 
certificates of 
deposit, Fed 
Funds lines 
and borrowings 
from the 
FHLB 
 Atlanta. Accordingly, our liquidity resources were at sufficient levels to 
fund loans and meet other 
cash needs as necessary. 
 The following table shows scheduled maturities of uninsured 
time deposits as of December 31, 2024 (in thousands): 
 Three months or less 
 $ 
 38,848 
 Over three through six months 
 31,977 
 Over six through twelve months 
 22,239 
 Over twelve months 
 942 
 $ 
 94,006 
 Borrowings 
 As 
a 
member 
of 
the 
FHLB 
Atlanta, 
we 
are 
eligible 
to 
obtain 
advances 
with 
various 
terms 
and 
conditions. 
This 
 accessibility of additional 
funding allows us 
to efficiently and 
timely meet both 
expected and unexpected 
outgoing cash flows 
 and collateral needs without adversely affecting 
either daily operations or the financial condition 
of the Company. 
 Outstanding fixed-rate 
advances from the 
FHLB were at 
$163.0 million and 
$183.0 million, 
as of December 
31, 2024, 
 and December 31, 
2023, respectively. 
The weighted average 
rate for outstanding 
FHLB advances was 
3.8% and 4.4% 
at 
 December 31, 2024, and December 31, 2023, respectively. 

 
 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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 72 
USCB Financial Holdings, Inc. 
2024 10-K 
 

 The following table presents the FHLB fixed rate advances 
as of December 31, 2024 (in thousands): 
 December, 31, 2024 
 Interest Rate 
 Type of Rate 
 Maturity Date 
 Amount 
 2.05% 
 Fixed 
 March 27, 2025 
 $ 
 10,000 
 1.07% 
 Fixed 
 July 18, 2025 
 6,000 
 3.76% 
 Fixed 
 January 24, 2028 
 11,000 
 3.77% 
 Fixed 
 April 25, 2028 
 50,000 
 3.68% 
 Fixed 
 September 13, 2027 
 21,000 
 3.79% 
 Fixed 
 March 23, 2026 
 20,000 
 4.65% 
 Fixed 
 February 13, 2025 
 45,000 
 $ 
 163,000 
 December, 31, 2023 
 Interest Rate 
 Type of Rate 
 Maturity Date 
 Amount 
 1.04% 
 Fixed 
 July 30, 2024 
 5,000 
 1.07% 
 Fixed 
 July 18, 2025 
 6,000 
 2.05% 
 Fixed 
 March 27, 2025 
 $ 
 10,000 
 3.76% 
 Fixed 
 January 24, 2028 
 11,000 
 3.77% 
 Fixed 
 April 25, 2028 
 50,000 
 5.57% 
 Fixed 
 December 26, 2024 
 101,000 
 $ 
 183,000 
 We 
have 
also 
established 
Fed 
Funds 
lines 
of 
credit 
with 
our 
upstream 
correspondent 
banks 
to 
manage 
temporary 
 fluctuations in our daily 
cash balances. As of 
December 31, 2024, there were no 
outstanding balances under the Fed 
Funds 
 line of credit. 
 The Board 
of Governors 
of the Federal 
Reserve System, 
on March 
12, 2023, 
announced the 
creation of 
a new 
Bank 
 Term 
Funding Program (“BTFP”). The BTFP offered loans of up to one year in length to banks, savings associations, credit 
 unions, 
and 
other 
eligible 
depository 
institutions 
pledging 
U.S. 
Treasuries, 
U.S. 
agency 
debt 
and 
mortgage-backed 
 securities, and other qualifying assets as collateral. The 
BTFP program ceased making new loans as of March 
2024. 

 The Company paid off $80 million in borrowings under the BTFP 
program during the third quarter of 2024. The original 
 maturity of this borrowing by the Bank under the BTFP program was January 2025, and there are no remaining borrowings 
 under this program.
 Off-Balance Sheet Arrangements 
 We engage 
in various financial 
transactions in 
our operations 
that, under GAAP, 
may not be 
included on 
the balance 
 sheet. To 
meet the financing needs 
of our customers we may 
include commitments to extend 
credit and standby letters 
of 
 credit. To 
a varying 
degree, such 
commitments involve 
elements of 
credit, market, 
and interest 
rate risk 
in excess 
of the 
 amount recognized 
in the 
balance sheet. 
We use 
more conservative 
credit and 
collateral policies 
in making 
these credit 
 commitments as we 
do for on-balance sheet 
items. We are not 
aware of any accounting 
loss to be 
incurred by funding 
these 
 commitments; however, 
we maintain an allowance 
for off-balance sheet 
credit risk which is 
recorded under other liabilities 
 on the Consolidated Balance Sheets. 
 Since commitments associated with letters of 
credit and commitments to extend 
credit may expire unused, the 
amounts 
 shown do not necessarily 
reflect the actual 
future cash funding requirements 
. 
The following table 
presents lending related 
 commitments outstanding as of December 31, 2024 and 
2023 (in thousands): 
 December 31, 2024 
 December 31, 2023 
 Commitments to grant loans and unfunded lines of credit 
 $ 
 122,578 
 $ 
 85,117 
 Standby and commercial letters of credit 
 5,389 
 3,987 
 Total 
 $ 
 127,967 
 $ 
 89,104 
 Commitments to extend credit are agreements to lend funds to a client, as long as there is no violation of any condition 
 established 
in 
the 
contract, 
for 
a 
specific 
purpose. 
Commitments 
generally 
have 
variable 
interest 
rates, 
fixed 
expiration 
 dates or 
other 
termination 
clauses 
and 
may require 
payment 
of 
a fee. 
Since many 
of the 
commitments 
are 
expected to 

 
 
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 73 
USCB Financial Holdings, Inc. 
2024 10-K 
 

 expire without being 
fully drawn, the 
total commitment 
amounts disclosed 
above do not 
necessarily represent 
future cash 
 requirements. 
 Unfunded lines of credit represent unused portions of credit facilities to our current borrowers that represent no change 
 in credit risk in our portfolio. Lines of credit 
generally have variable interest rates. The 
maximum potential number of future 
 payments we could 
be required to 
make is represented 
by the contractual 
amount of the 
commitment, less 
the amount of 
 any advances made. 
 Letters of credit are 
conditional commitments issued 
by us to guarantee 
the performance of a 
client to a third 
party. 
In 
 the event of nonperformance by 
the client in accordance with the 
terms of the agreement with the 
third party, 
we would be 
 required to fund 
the commitment. 
If the commitment 
is funded, we 
would be entitled 
to seek recovery 
from the client 
from 
 the underlying collateral, 
which can include 
commercial real estate, 
physical plant and 
property, inventory, receivables, cash 
 or marketable securities. 
 Asset and Liability Management Committee 
 The asset and liability management committee of our Company, or ALCO, consists of members of senior management 
 and our Board. Senior management is responsible for 
ensuring in a timely manner that Board 
approved strategies, policies, 
 and procedures 
for managing 
and mitigating 
risks are 
appropriately executed 
within the 
designated lines 
of authority 
and 
 responsibility. 
 ALCO 
oversees 
the 
establishment, 
approval, 
implementation, 
and 
review 
of 
interest 
rate 
risk, 
management, 
and 
 mitigation strategies, ALM related policies, ALCO procedures 
and risk tolerances and appetite. 
 While some degree of interest 
rate risk (“IRR”) exposure is inherent 
to the banking business, our ALCO 
has established 
 what it believes are sound risk management practices 
in place to identify, 
measure, monitor and mitigate IRR exposures. 
 When assessing the scope 
of IRR exposure and 
impact on the consolidated 
balance sheet, cash flows 
and statement 
 of operations, 
management considers 
both earnings 
and economic 
impacts. Asset price 
variations, deposits 
volatility and 
 reduced earnings or outright losses could adversely affect 
the Company’s liquidity, 
performance, and capital adequacy. 
 Income simulations 
are used 
to assess 
the impact 
of changing 
rates on 
earnings under 
different rates 
scenarios and 
 time horizons. 
These simulations 
utilize both 
instantaneous and 
parallel changes 
in the 
level of 
interest rates, 
as well 
as 
 non-parallel changes such as changing slopes (flat and steeping) and 
twists of the yield curve, Static simulation models are 
 based on current exposures and 
assume a constant balance sheet with 
no new growth. Dynamic simulation analysis 
is also 
 utilized to have a 
more comprehensive assessment 
on IRR. This simulation 
relies on detailed 
assumptions outlined in 
our 
 budget and strategic plan, and in assumptions regarding changes in 
existing lines of business, new business, management 
 strategies and client expected behavior. 
 To 
have a more complete 
picture of IRR, the Company 
also evaluates the economic 
value of equity. 
This assessment 
 allows 
us 
to 
measure 
the 
degree 
to 
which 
the 
economic 
values 
will 
change 
under 
different 
interest 
rate 
scenarios. 
The 
 economic value of equity approach focuses on a longer-term time horizon and captures all future cash flows expected from 
 existing assets and liabilities. The economic value model utilizes a static approach in that the analysis does not incorporate 
 new business; rather, the 
analysis shows a snapshot in time of the risk inherent 
in the balance sheet.
 Market and Interest Rate Risk Management 
 
According to our ALCO model, as 
of December 31, 2024, the Bank’s balance sheet was neutral for 
year one and asset 
 sensitive for year two. Asset sensitivity indicates that 
our assets generally reprice faster than our 
liabilities, which results in 
 a favorable impact to 
net interest income when market 
interest rates increase. Liability sensitivity 
indicates that our liabilities 
 generally reprice 
faster 
than our 
assets, which 
results 
in a 
favorable 
impact to 
net interest 
income 
when market 
interest 
 rates decrease. 
Neutral indicates 
minimal changes 
to the net 
interest income 
due to changes 
on the market 
interest rate. 
 Many assumptions 
are used 
to calculate 
the impact 
of interest 
rate variations 
on our 
net interest 
income, such 
as asset 
 prepayment speeds, 
non-maturity 
deposit price 
sensitivity, 
pricing correlations, 
deposit truncations 
and decay 
rates, and 
 key interest rate drivers. 
 Because of the inherent use 
of these estimates and 
assumptions in the model, 
our actual results may, 
and most likely 
 will, differ from static measures results. In addition, static measures like the economic value of equity 
do not include actions 
 that management may undertake to 
manage the risks in response 
to anticipated changes in interest 
rates or client deposit 
 behavior. As part of our ALM strategy and 
policy, management has the ability to modify the balance sheet 
to either increase 

 
 
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 74 
USCB Financial Holdings, Inc. 
2024 10-K 
 

 or decrease 
asset 
duration 
and 
increase 
or decrease 
liability 
duration 
to 
modify 
the balance 
sheet 
sensitivity 
to interest 
 rates. 

 According to our model, as of 
end of 2024, the NIM will 
remain fairly stable for static rate 
scenarios (-400 basis points: 
 +400 basis points). Additionally, utilizing an EVE approach, we analyze the risk to 
capital from the effects of various interest 
 rate scenarios through a long-term discounted cash flow model. This measures the difference between the economic value 
 of our assets 
and the economic 
value of our 
liabilities, which is 
a proxy for 
our liquidation value. 
According to our 
balance 
 sheet composition, and as 
expected, our model stipulates 
that an increase of 
interest rates will have 
a negative impact on 
 the EVE. Results and analysis are presented quarterly 
to the ALCO, and strategies are reviewed and refined. 
 Additionally, in the last year we have been reducing our asset sensitivity by extending asset duration. This has reduced 
 our NII volatility for the first and 
second year in the analysis and has helped us 
to maintain the NII in accordance with ALCO 
 expectations. 

 Liquidity 
 
Liquidity is 
defined as 
a Company’s capacity 
to meet 
its cash 
and collateral 
obligations at 
a reasonable 
cost. Maintaining 
 an adequate level of liquidity depends on the Company’s ability to 
efficiently meet both expected and unexpected cash flow 
 and collateral needs without adversely affecting 
either daily operations or the financial condition of the 
Company. 
 Liquidity risk 
is the 
risk that 
we will 
be unable 
to meet 
our short-term 
and long-term 
obligations as 
they become 
due 
 because of an 
inability to liquidate 
assets or obtain 
adequate funding on 
acceptable terms in 
a timely matter. The 
Company’s 
 obligations, and the funding sources used to meet them, depend significantly 
on our business mix, balance sheet structure 
 and composition, credit quality of 
our assets, interest rate 
environment and the cash flow 
profiles of our on- and 
off-balance 
 sheet obligations. 
 In 
managing 
cash 
inflows 
and 
outflows, 
management 
regularly 
monitors 
situations 
that 
can 
give 
rise 
to 
increased 
 liquidity risk. 
These include 
funding mismatches, market 
constraints on 
the ability 
to convert 
assets (particularly investments) 
 into cash or in 
accessing sources of 
funds (i.e., market 
liquidity), and contingent 
liquidity events. Management 
presents to 
 the ALCO, 
on a 
quarterly basis, liquidity 
stress tests following 
the scenarios 
described in 
the Company’s contingency 
funding 
 plan. 

 Changes 
in 
macroeconomic 
conditions, 
exposure 
to 
credit 
deterioration, 
market, 
operational, 
legal 
and 
reputational 
 risks, including cybersecurity risk and 
social media events could 
also affect the Company’s liquidity risk 
profile unexpectedly 
 and are considered in the assessment of liquidity and ALM 
framework. 
 Management has established 
a comprehensive and 
holistic management process for 
identifying, measuring, monitoring 
 and 
mitigating 
liquidity 
risk. 
Due 
to 
its 
critical 
importance 
to 
the 
viability 
of 
the 
Company, 
liquidity 
risk 
management 
is 
 integrated into our risk management processes, Contingency 
Funding Plan and ALM policy. 
 Critical elements of our liquidity 
risk management include: effective corporate governance consisting of 
oversight by the 
 Board and ALCO and 
involvement by senior management; 
strategies, policies, procedures, 
and limits used to 
identify and 
 mitigate 
liquidity 
risk; 
comprehensive 
liquidity 
risk 
measurement 
and 
monitoring 
systems 
(including 
assessments 
of 
the 
 current and prospective cash flows or sources and uses of funds) that are commensurate with the complexity and 
business 
 activities 
of the 
Company; 
management 
of intraday 
liquidity and 
collateral; 
a diverse 
mix of 
existing 
and 
potential 
future 
 funding sources; adequate levels of highly liquid marketable securities free 
of legal, regulatory, or operational impediments, 
 that can 
be used 
to meet 
liquidity needs 
in stressful situations; 
comprehensive contingency 
funding plans 
that sufficiently 
 address potential adverse 
liquidity events and 
emergency cash 
flow requirements; and 
internal controls and 
internal audit 
 processes sufficient to determine the adequacy 
of the institution’s liquidity risk management 
process. 
 We 
expect 
funds 
to 
be 
available 
from 
several 
basic 
banking 
activity 
sources, 
including 
the 
core 
deposit 
base, 
the 
 repayment and maturity of loans and investment security 
cash flows. Other potential funding sources include 
federal funds 
 purchased, brokered 
certificates of 
deposit, listing 
certificates of 
deposit, Fed 
Funds lines 
and borrowings 
from the 
FHLB 
 Atlanta. Accordingly, our liquidity resources were at sufficient levels to 
fund loans and meet other 
cash needs as necessary. 
 At December 31, 2024, 
the Company had $412.8 
million in available liquidity 
on balance sheet, including 
$339.7 million in 
 unpledged securities available to 
use as collateral and 
$73.1 million in 
excess cash. The Company 
had an additional $267.0 
 million in off-balance sheet liquidity, 
excluding access to brokered deposits and other off-balance sheet sources of funding.

 
 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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USCB Financial Holdings, Inc. 
2024 10-K 
 

 Capital Adequacy 
 As 
of 
December 31, 
2024, 
the 
Bank 
was 
well 
capitalized 
under 
the 
FDIC’s 
prompt 
corrective 
action 
framework. 
 Additionally, 
we follow the capital conservation 
buffer framework, and according to 
our actual ratios, the Bank 
exceeds the 
 capital conversation 
buffer in 
all capital ratios 
as of December 
31, 2024. The 
Company is not 
subject to regulatory 
capital 
 requirements because it is deemed by the Federal Reserve 
to be a small bank holding company. 
 The 
following 
table 
presents 
the 
capital 
ratios 
for 
the 
Bank 
at 
December 31, 
2024 
and 
2023 
(in 
thousands, 
except 
 ratios): 
 Actual 
 Minimum Capital 
 Requirements 

 To be Well Capitalized Under 
 Prompt Corrective Action 
 Provisions 
 Amount 
 Ratio 
 Amount 
 Ratio 
 Amount 
 Ratio 
 December 31, 2024 
 Total 
risk-based capital: 
 $ 
 266,387 
 13.34% 
 $ 
 159,795 
 8.00% 
 199,744 
 10.00% 
 Tier 1 risk-based capital: 
 $ 
 241,740 
 12.10% 
 $ 
 119,846 
 6.00% 
 159,795 
 8.00% 
 Common equity tier 1 capital: 
 $ 
 241,740 
 12.10% 
 $ 
 89,885 
 4.50% 
 129,834 
 6.50% 
 Leverage ratio: 
 $ 
 241,740 
 9.38% 
 $ 
 103,074 
 4.00% 
 128,843 
 5.00% 
 

 December 31, 2023 
 

 

 Total 
risk-based capital: 
 $ 
 233,109 
 12.65% 
 $ 
 147,432 
 8.00% 
 184,290 
 10.00% 
 Tier 1 risk-based capital: 
 $ 
 211,645 
 11.48% 
 $ 
 110,574 
 6.00% 
 147,432 
 8.00% 
 Common equity tier 1 capital: 
 $ 
 211,645 
 11.48% 
 $ 
 83,931 
 4.50% 
 119,789 
 6.50% 
 Leverage ratio: 
 $ 
 211,645 
 9.17% 
 $ 
 92,328 
 4.00% 
 115,410 
 5.00% 
 Impact of Inflation 
 Our Consolidated 
Financial Statements 
and related 
notes have been 
prepared in 
accordance with U.S. 
GAAP, 
which 
 requires the 
measurement of 
financial position 
and operating 
results in 
terms of 
historical dollars, 
without considering 
the 
 changes 
in 
the 
relative 
purchasing 
power 
of 
money 
over 
time due 
to 
inflation. 
The 
impact 
of 
inflation 
is 
reflected 
in 
the 
 increased cost of operations. 
Unlike most industrial companies, 
nearly all our assets and 
liabilities are monetary in 
nature. 
 As a result, 
interest rates have a 
greater impact on our 
performance than do the 
effects of general levels 
of inflation. Periods 
 of high inflation 
are often accompanied 
by relatively higher 
interest rates, and 
periods of low 
inflation are accompanied 
by 
 relatively lower interest rates. 
As market interest rates 
rise or fall in relation 
to the rates earned 
on loans and investments, 
 the value of these assets decreases or increases respectively. 
 Recently Issued Accounting Pronouncements
 

 Recently issued accounting 
pronouncements are discussed 
in Note 1 “Summary 
of Significant Accounting 
Policies” in 
 the Consolidated Financial Statements of this Annual Report 
on Form 10-K.

 
 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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USCB Financial Holdings, Inc. 
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 Reconciliation and Management Explanation of Non 
-GAAP Financial Measures 
 Management has included 
the non-GAAP measures 
set forth below 
because it believes 
these measures may 
provide 
 useful supplemental information 
for evaluating the Company’s 
underlying performance trends. 
Further, management 
uses 
 these measures in managing and evaluating the Company’s business and intends to refer to them in discussions about our 
 operations and performance. 
Operating performance 
measures should be 
viewed in addition 
to, and not 
as an alternative 
 to or 
substitute 
for, 
measures 
determined 
in 
accordance 
with 
GAAP, 
and 
are 
not 
necessarily 
comparable 
to non-GAAP 
 measures 
that 
may be 
presented 
by other 
companies. 
The Company 
believes 
these 
non-GAAP 
measurements 
are key 
 indicators of the 
earnings power 
of the Company. 
The following 
table reconciles 
the non-GAAP 
financial measurement 
of 
 operating net income available to common stockholders 
for the periods presented (in thousands, 
except per share data):
 As of and for the years ended December 31, 
 2024 
 2023 
 Pre-Tax Pre-Provision ("PTPP") income: (1) 
 Net income (GAAP) 
 $ 
 24,674 
 $ 
 16,545 
 Plus: Provision for income taxes 
 7,803 
 5,251 
 Plus: Provision for credit losses 
 3,157 
 2,367 
 PTPP income 
 $ 
 35,634 
 $ 
 24,163 
 Operating net income: (1) 
 Net income (GAAP) 
 $ 
 24,674 
 $ 
 16,545 
 Less: Net gain (loss) on sale of securities 
 14 
 (1,859) 
 Less: Tax 
effect on sale of securities 
 (4) 
 471 
 Operating net income 
 $ 
 24,664 
 $ 
 17,933 
 Operating PTPP income: (1) 
 PTPP income 
 $ 
 35,634 
 $ 
 24,163 
 Less: Net gain (loss) on sale of securities 
 14 
 (1,859) 
 Operating PTPP Income 
 $ 
 35,620 
 $ 
 26,022 
 (1) The Company believes these non-GAAP measurements are key indicators of the ongoing earnings power of the Company. 
 

 Item 7A. 
Quantitative and Qualitative Disclosures About Market Risk 
 
 As a smaller reporting company, 
we are not required to provide the information required 
by this item.

 
 
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 77 
USCB Financial Holdings, Inc. 
2024 10-K
USCB FINANCIAL HOLDINGS, INC. 10-K

Item 7. Management’s Discussion and Analysis
