What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2025-05-09 compared with 2024-11-12 · 538 added, 709 removed, 1034 unchanged (55% of the section changed)

3 unchanged sentences

(Dollars in thousands, except share data)

September 30, 2024

March 31, 2025

December 31, 2024

3 unchanged sentences

Investment securities held to maturity, net of allowance of $

for both periods (fair value $

, respectively (fair value of

, respectively)

8 unchanged sentences

Lease right-of-use asset

Demand deposits

Money market and savings accounts

Interest-bearing checking

Non-interest bearing demand deposits

Savings and money market deposits

Interest-bearing demand deposits

Time deposits

Total deposits

Federal Home Loan Bank advances and other

Federal Home Loan Bank advances

Lease liability

4 unchanged sentences

Preferred stock - Class C;

$1.00 par value;

per share liquidation preference;

52,748 shares

0 and 0 issued and outstanding as

of September 30, 2024 and December 31, 2023

issued and outstanding as of March 31, 2025

and December 31, 2024

Preferred stock - Class D;

$1.00 par value;

per share liquidation preference;

0 and 0 issued and outstanding as

of September 30, 2024 and December 31,

issued and outstanding as of March 31, 2025

and December 31, 2024

Preferred stock - Class E;

$1.00 par value;

share liquidation preference;

3,185,024 shares

0 and 0 issued and outstanding as

of of September 30, 2024 and December 31,

per share liquidation preference;

issued and outstanding as of March 31, 2025

and December 31, 2024

Common stock - Class A Voting;

$1.00 par value;

45,000,000 shares

19,620,632 issued and

as of September 30, 2024, 19,575,435 issued and

outstanding as of

December 31, 2023

shares authorized;

outstanding as of March 31, 2025,

issued and outstanding as of December

Common stock - Class B Non-voting;

shares authorized;

outstanding as of September 30, 2024 and

December 31, 2023

outstanding as of March 31, 2025 and December

Additional paid-in capital on common stock

11 unchanged sentences

except per share data)

Three Months Ended September 30,

Nine Months Ended September 30,

Three Months Ended March 31,

Interest income:

4 unchanged sentences

Interest expense:

Interest-bearing checking

Money market and savings accounts

Interest-bearing demand deposits

Savings and money market deposits

Time deposits

7 unchanged sentences

Non-interest income:

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

Gain on sale of loans held for sale, net

3 unchanged sentences

Salaries and employee benefits

Regulatory assessment and fees

Regulatory assessments and fees

Consulting and legal fees

7 unchanged sentences

Net income per share, diluted

Cash dividend declared

Cash dividends declared

The accompanying notes are an integral part of

4 unchanged sentences

Consolidated Statements of Comprehensive Income

(Loss) - Unaudited

(Dollars in thousands)

Three Months Ended

September 30,

Nine Months Ended

September 30,

Three Months Ended March 31,

Other comprehensive income (loss):

Unrealized gain (loss) on investment securities

Amortization of net unrealized gain on securities

transferred from

available-for-sale to held-to-maturity

Reclassification adjustment for (gain) loss included

in net income

Amortization of net unrealized gain on securities transferred

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

Unrealized gain (loss) on cash flow hedge

Total other comprehensive income (loss), net of tax

Total comprehensive income (loss)

Total comprehensive income

The accompanying notes are an integral part of

12 unchanged sentences

Stockholders'

Balance at June 30,2024

Other comprehensive income

Repurchase of Class A common stock

Dividend payment

Stock-based compensation

Balance at September 30,2024

Balance at June 30, 2023

Other comprehensive loss

Restricted stock forfeiture

Stock-based compensation

Balance at September 30, 2023

The accompanying notes are an integral

part of these consolidated financial statements.

Additional Paid-in

Capital on Common

Accumulated Other

Comprehensive

Stockholders'

Balance at December 31, 2024

2 unchanged sentences

Restricted stock issued

Restricted stock forfeiture

Exercise of stock options

1 unchanged sentence

Stock-based compensation

Balance at September 30, 2024

Balance at March 31, 2025

Balance at December 31, 2023

After tax cumulative effect of adoption of accounting

principle related to ASC

Adjusted beginning balance after cumulative

effect adjustment

Other comprehensive loss

2 unchanged sentences

Restricted stock forfeiture

Exercise of stock options

Dividend payment

Stock-based compensation

Balance at September 30, 2023

Balance at March 31, 2024

The accompanying notes are an integral

part of these unaudited consolidated financial

part of these consolidated financial statements.

USCB Financial Holdings, Inc.

3 unchanged sentences

(Dollars in thousands)

Nine Months Ended September 30,

Three Months Ended March 31,

Cash flows from operating activities:

3 unchanged sentences

Depreciation and amortization

(Accretion) amortization of premiums on securities,

Accretion of deferred loan fees, net

Accretion of premiums on securities, net

Amortization (accretion) of deferred loan

Stock-based compensation

(Gain) loss on sale of available for sale securities

Gain on sale of loans held for sale

Gain on sale of loans held for sale, net

Proceeds from the sale of loans held for sale

Origination of loans held for sale

Increase in cash surrender value of bank owned

6 unchanged sentences

Cash flows from investing activities:

Purchase of investment securities held

Proceeds from maturities and pay-downs of investment

3 unchanged sentences

securities available for sale

Proceeds from sales of investment securities

available for sale

Net increase in loans held for investment

1 unchanged sentence

Additions to premises and equipment

Proceeds from the sale of loans held for sale

Purchase of bank owned life insurance

8 unchanged sentences

Net increase in deposits

Proceeds from Federal Home Loan Bank advances

and other borrowings

Proceeds from other borrowings

Repayments on Federal Home Loan Bank advances

and other borrowings

Net cash provided by financing activities

4 unchanged sentences

Interest paid

Supplemental schedule of non-cash investing

and financing activities:

Transfer of loans held for investment to loans held

The accompanying notes are an integral

59 unchanged sentences

Adoption of New Accounting Standards

Reference Rate Reform

In March 2020, the Financial Accounting Standards

Board (“FASB”) issued Accounting Standard Update (“ASU”) 2020-

04, Reference Rate Reform (Topic 848), aiming to facilitate the impacts of reference rate reform on financial reporting.

initiative was

subsequently clarified

providing optional

directives for

timeframe to alleviate challenges associated

with accounting for,

or acknowledging the effects of, reference

rate reform on

financial reporting.

These amendments

discretionary

alleviate potential

complexities associated with reference rate reform in financial reporting.

The expedients

and exceptions provided by these

modifications

relationships

December 31, 2022, except

for pre-existing hedging relationships

as of December 31, 2022,

for which an entity

optional expedients,

hedging relationship.

Additionally,

categorized as held to

maturity, referencing a rate impacted by reference rate

reform, and classified as

held to maturity prior

to January 1, 2020.

In December 2022, the FASB issued new guidance extending the expiration date of this guidance from

entities will

USCB FINANCIAL HOLDINGS, INC.

Notes to the Consolidated Financial Statements - Unaudited

USCB Financial Holdings, Inc.

Q3 2024 Form 10-Q

under this guidance.

Before this recent guidance, these amendments

were effective for all entities from March 12, 2020, to

December 31, 2022.

The Company executed its transition strategy in preparation for the cessation of the London Intrabank

transactions,

Company substituted

Overnight Financing Rate

completed its

away from LIBOR for its loan and other financial instruments

Issued and Not Yet Adopted

Improvements to Income Tax

to disclosures

regarding effective

providing stakeholders with more transparent and relevant information.

This ASU is effective for public business entities for

annual periods beginning

is currently assessing

the potential impact

consolidated financial statements.

Improvements to Reportable Segment Disclosures

2023-07, “Improvements

to Reportable

Segment Disclosures.”

standard is effective

for fiscal years beginning

after December 15,

interim periods beginning

after December

The Company is evaluating the impact of the

changes to its existing disclosures.

Improvements to Income Tax

This ASU pertains to

disclosures regarding effective

tax rates and cash income

taxes paid with the goal of providing stakeholders with more transparent

and relevant information.

This ASU is effective for

public business

annual periods

beginning after

effective January 1, 2025, the adoption of this ASU did not have a material impact on the

Company’s consolidated financial

INVESTMENT SECURITIES

1 unchanged sentence

held-to-maturity

for available-for-sale

debt securities

allowance rather

Management does not intend to sell or believes that

it is more likely they will not be required to sell AFS

USCB FINANCIAL HOLDINGS, INC.

Notes to the Consolidated Financial Statements - Unaudited

USCB Financial Holdings, Inc.

Q1 2025 Form 10-Q

accounting for available-for-sale

debt securities (“AFS”)

credit losses is

presented as an

allowance rather than

Management does not intend to sell or believes

that it is more likely they will not be required to sell

AFS securities.

CECL requires a loss reserve for

20 unchanged sentences

defaults and recoveries

and Moody’s baseline

economic forecast.

uses probability of default/loss

given default (“PD/LGD”)

PD represents

the likelihood

will default.

Moody’s model

determined using

historical default

data, adjusted for the current economic environment.

the expected loss if a borrower were to default.

PD represents the likelihood

a borrower will default.

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

monitors the credit

3 unchanged sentences

ratings are monitored

by the Company on

at least a quarterly basis.

As of September 30, 2024

and December 31, 2023,

all HTM securities held

by the Company were rated investment grade.

by the Company on at least

a quarterly basis.

As of March 31, 2025

and December 31, 2024, all HTM securities held by

Company were rated investment grade.

mortgage-backed

6 unchanged sentences

methodology to estimate

thousand ACL as of September

thousand ACL as of March

The book value

1 unchanged sentence

as HTM represents amortized

cost less the ACL related to these securities.

September 30,

December 31, 2023 was not required.

USCB FINANCIAL HOLDINGS, INC.

Notes to the Consolidated Financial Statements - Unaudited

USCB Financial Holdings, Inc.

Q3 2024 Form 10-Q

less the ACL related to these securities.

The following

4 unchanged sentences

value of investment securities at the dates indicated (in

September 30, 2024

March 31, 2025

Available-for-sale:

13 unchanged sentences

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

USCB FINANCIAL HOLDINGS, INC.

Notes to the Consolidated Financial Statements - Unaudited

USCB Financial Holdings, Inc.

Q1 2025 Form 10-Q

December 31, 2024

14 unchanged sentences

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

During the quarter ended

September 30, 2024 there were

investment securities that were

transferred from available-

September 30,

Comprehensive

on securities

unamortized net

unrealized loss

September 30,

September 30, 2024,

total amortization

out of Additional

Other Comprehensive

Income (“AOCI”) for

net unrealized

on securities transferred in 2022 from AFS to HTM was

maturity securities.

There was no impact to net income.

are amortized over the remaining life of the security.

The Company made

transfers from AFS to HTM portfolios in 2022.

During the quarter ended March 31, 2025 there were

investment securities that were transferred from

transferred in

the securities

million and the balance of the net unrealized loss was $

transferred from AFS to HTM was $

In addition for these securities,

the balance of the net unrealized

retained in AOCI was $

million at December 31, 2023.

thousand, At March 31, 2025, the fair value of the securities

the balance of the net unrealized losses retained in AOCI

million at March 31, 2024.

When evaluating

securities under

has evaluated

value is attributable

to credit losses

or other factors

like interest rate risk,

using both quantitative

and qualitative analyses,

speeds and analysis

of macro-economic conditions.

Each investment is

expected to recover

its price depreciation

holding period

these securities

As a result of

this evaluation, the Company

concluded that no allowance

was required on AFS

securities as of

March 31, 2025.

mortgage-backed

securities and collateralized

mortgage obligations of

government sponsored

entities, in the

AFS and HTM categories

respectively.

The unrealized losses for both AFS and HTM portfolios were attributable to a combination of factors, including

relative changes in interest rates since the

time of purchase.

mortgage-backed

securities and

collateralized mortgage

obligations of

sponsored entities.

The municipal bonds are of high credit quality and the declines in fair

value are not due to credit quality.

security holdings are

a function of

changes in investment

spreads and interest

rate movements

and not changes

expects to recover the entire amortized cost basis of these

At September 30, 2024, the Company did not intend to

sell debt securities that are in an unrealized loss position

is more than likely not required to sell these securities

before recovery of the amortized cost basis.

Government entities.

The Bank is a Qualified Public Depository (“QPD”) with the State of Florida.

5 unchanged sentences

uninsured deposits

at September 30,

% at December 31, 2024.

must also maintain a minimum amount of pledged

securities to be in the public

Bank must also maintain a

minimum amount of pledged securities

to be in the public

As of March 31,

2025, the Bank

million in deposits

under the public

funds program

September 30,

pledged to the State of Florida for these public funds were

to the State of Florida for these public funds were

bonds with an aggregate fair value of $

4 unchanged sentences

bonds with an aggregate fair value of $

of the Federal

Reserve System,

announced the

Funding Program (“BTFP”).

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

mortgage-backed

securities, and other qualifying assets as collateral.

BTFP program ceased making new loans as of March

USCB FINANCIAL HOLDINGS, INC.

Notes to the Consolidated Financial Statements - Unaudited

USCB Financial Holdings, Inc.

Q3 2024 Form 10-Q

borrowings under

program during

quarter 2024.

maturity of this

borrowing under the

was January 2025,

are no remaining

borrowings under

The following table is a summary of the distribution of

loans held for investment by type (in thousands):

September 30, 2024

loans held for investment by type (dollars in thousands):

March 31, 2025

December 31, 2024

7 unchanged sentences

Allowance for credit losses

At September 30, 2024

and December 31, 2023,

the Company had

million and $

million, respectively,

respectively,

commercial real estate

38 unchanged sentences

Changes in the value of underlying collateral

The effect of other external factors:

e.g., competition,

legal, and regulatory requirements

Changes in lending management, among others

USCB FINANCIAL HOLDINGS, INC.

2 unchanged sentences

Q1 2025 Form 10-Q

Changes in the

three and nine

months ended September 30,

2024 and 2023

were as follows

(in thousands):

The effect of other external factors:

e.g., competition,

legal, and regulatory requirements

Changes in lending management, among others

Changes in the ACL for the three months ended March

31, 2025 and 2024 were as follows (in thousands):

Correspondent

Three Months Ended September 30,

Beginning balance

Provision for credit losses

Ending Balance

Nine Months Ended September 30, 2024

Three Months Ended March 31, 2025

Beginning balance

2 unchanged sentences

(1) Provision for credit losses excludes a $

thousand charge due to unfunded commitments included in other liabilities and a $

thousand charge due to unfunded commitments included in accrued interest and other

liabilities and a $

thousand release related to investment securities held to maturity.

(2) Provision for credit losses excludes a $

thousand charge due to unfunded commitments included in other liabilities.

Correspondent

Three Months Ended September 30,

Beginning balance

Provision for credit losses

Ending Balance

Nine Months Ended September 30, 2023

Three Months Ended March 31, 2024

Beginning balance

Cumulative effect of adoption of accounting

Provision for credit losses

1 unchanged sentence

(1) Provision for credit losses excludes a $

thousand release due to unfunded commitments included in other liabilities and $

thousand expense related to investment securities held to maturity.

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

(3) Provision for credit losses excludes a $

thousand release due to unfunded commitments included in other liabilities and $

thousand expense related to investment securities held to maturity.

At September 30, 2024,

thousand charge due to unfunded commitments included in accrued interest and other

liabilities and a $

thousand charge related to investment securities held to maturity.

At March 31, 2025, the ACL for loans

million compared to $

million at December 31, 2024.

million in the ACL was due to loan growth.

September 30,

Charge-offs for the nine months ended September

30, 2024 totaled $

thousand and were all originated in 2024.

thousand in the ACL was due to loan growth.

The Company had

charge-offs totaling

thousand for the

quarter ended March

31, 2025 related

to loans that

all originated in 2025.

The Company had charge-offs totaling $

thousand for the quarter ended March 31, 2024 related to loans that were all

originated in 2024.

USCB FINANCIAL HOLDINGS, INC.

2 unchanged sentences

Q1 2025 Form 10-Q

originated in

September 30,

related to loans.

thousand was related to loans originated

in 2023 and $

thousand of charge offs was related to

originated in 2015.

September 30,

deterioration in unemployment

improvement forecast for

Fannie Mae HPI forecast

reflected moderate

improvement in national housing prices

over the next four quarters.

The Company continued to adjust the

HPI index effect

included residential

potential impact

in qualitative

factors related

a sensitivity

in calculating

expected losses on the residential loan segment.

As of September 30, 2024, for every 100 basis points increase in the HPI

index, the forecast reduces

reserves by approximately $

thousand and about

basis point to

the reserve coverage ratio,

everything else being

sensitivity analysis provides

a hypothetical result

to assess the

sensitivity of the

and does not represent a change in management’s

September 30, 2024,

qualitative factors

in our commercial

largest segment

evaluated the

qualitative factors

sensitivity of

the qualitative

risk resulted

% increase in ACL.

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 outstanding balances

in the specified

loan categories

as of September

The ACL and the outstanding

balances in the specified

loan categories as of March

31, 2025 and December 31,

are as follows (in thousands):

1 unchanged sentence

Correspondent

September 30, 2024:

March 31, 2025:

Allowance for credit losses:

20 unchanged sentences

on the borrower,

USCB FINANCIAL HOLDINGS, INC.

Notes to the Consolidated Financial Statements - Unaudited

USCB Financial Holdings, Inc.

Q3 2024 Form 10-Q

documentation

32 unchanged sentences

presented below for the periods indicated (in thousands):

As of September 30, 2024

As of March 31, 2025

Term Loans by Origination Year

1 unchanged sentence

Commercial real estate

Special Mention

Commercial and

Special Mention

Correspondent banks

26 unchanged sentences

tables include

accruing loans

of September 30,

and December 31, 2023 (in thousands):

As of September 30, 2024

total non-accruing

December 31, 2024 (in thousands):

As of March 31, 2025

Residential real estate:

7 unchanged sentences

Commercial property

Leasehold improvements

Commercial and industrial:

26 unchanged sentences

past due over

and still accruing as of September 30, 2024 and as of

December 31, 2023 (in thousands):

September 30, 2024

and still accruing as of March 31, 2025 and as of December

31, 2024 (in thousands):

March 31, 2025

Days and Still

4 unchanged sentences

Days and Still

Residential real estate

Commercial and industrial

Consumer and other

Accrued interest

2 unchanged sentences

interest income

attributable to non-accrual

loans outstanding during

the three months

ended September 30, 2024 and

Interest income

on these loans for

the three months

ended September 30,

2024 and 2023,

would have been

approximately $

thousand, respectively, had these loans performed

in accordance with

their original terms.

attributable to non-accrual loans outstanding during the three

months ended March 31, 2025 and 2024.

Interest income on

3 unchanged sentences

Q1 2025 Form 10-Q

September 30, 2024

been approximately

these loans for

the three months

ended March 31,

2025 and 2024,

would have been

approximately $

thousand and $

thousand, respectively,

2 unchanged sentences

Collateral-Dependent Loans

substantially through

expected to be provided substantially through the sale

or operation of the collateral.

The following

table includes

the amortized cost

collateral dependent

loans as of September 30, 2024, or as of December 31,

loans related

financial difficulty by type of collateral as of March

31, 2025 and December 31, 2024 (in thousands):

March 31, 2025

Collateral Type

Residential Real

Specific Reserve

Residential real estate

Consumer and other

December 31, 2024

Collateral Type

Specific Reserve

Consumer and other

Management evaluates

on an individual

basis collateral

dependent loans

using the fair

collateral method

the difference

collateral and

recorded investment

reserve amount

is calculated.

recorded investment of the loan, no reserve is determined.

Loan Modifications to Borrowers Experiencing Financial

The following table

presents newly restructured

loans, by type of

modification, which occurred

during the nine

ended September 30, 2024 (in thousands):

modifications

March 31, 2025 and one new modification

for the three months ended March 31,

The following table presents newly

restructured loans, by type of modification, which occurred

during the three months ended March 31, 2024 (in

Recorded Investment Prior to Modification

5 unchanged sentences

Commercial and industrial

modifications

September 30,

new modification

September 30,

loan modifications that subsequently

defaulted during the three

months and nine

months ended September 30,

September 30, 2023.

existing loan modifications that subsequently

defaulted for the three and nine

ended September 30, 2023.

The loan modification for the borrower experiencing financial difficulty at March 31, 2024

a combination of rate

and maturity modifications.

existing loan modifications that

subsequently defaulted during the

three months ended March 31,

and March 31, 2024.

USCB FINANCIAL HOLDINGS, INC.

Notes to the Consolidated Financial Statements - Unaudited

USCB Financial Holdings, Inc.

Q1 2025 Form 10-Q

The Company’s provision for income taxes is presented

in the following table for the periods indicated (in thousands):

Nine Months Ended September 30,

The actual income tax expense for the nine months

ended September 30, 2024 and 2023 differs

from the statutory tax

Three Months Ended March 31,

expense for the periods (computed by applying the U.S.

3 unchanged sentences

(in thousands):

Nine Months Ended September 30,

Three Months Ended March 31,

Federal taxes at statutory rate

1 unchanged sentence

Bank owned life insurance

USCB FINANCIAL HOLDINGS, INC.

Notes to the Consolidated Financial Statements - Unaudited

USCB Financial Holdings, Inc.

Q3 2024 Form 10-Q

The Company’s deferred tax assets and deferred

tax liabilities as of the dates indicated were (in thousands):

September 30, 2024

March 31, 2025

December 31, 2024

23 unchanged sentences

whether it is more likely than not that some

USCB FINANCIAL HOLDINGS, INC.

Notes to the Consolidated Financial Statements - Unaudited

USCB Financial Holdings, Inc.

Q1 2025 Form 10-Q

upon the generation of

15 unchanged sentences

by tax authorities for years before 2022.

September 30,

unrecognized tax benefits

as a result of

tax positions taken

during a prior

period or during

the current period.

For the three months ended

March 31, 2025 and 2024, the

t have any unrecognized

tax benefits as a

tax positions

current period.

Additionally,

interest or penalties were recorded as a result

of tax uncertainties.

recorded as a result of tax uncertainties.

OFF-BALANCE SHEET ARRANGEMENTS

23 unchanged sentences

is represented by the contractual amount of these commitments.

USCB FINANCIAL HOLDINGS, INC.

Notes to the Consolidated Financial Statements - Unaudited

USCB Financial Holdings, Inc.

Q3 2024 Form 10-Q

September 30, 2024 and December 31, 2023 (in thousands):

September 30, 2024

March 31, 2025 and December 31, 2024 (in thousands):

March 31, 2025

December 31, 2024

39 unchanged sentences

Interest Rate Swaps Designated as a Cash Flow Hedge

As of September 30,

As of March 31,

2025, the Company

interest rate swap

agreements with a

notional aggregate amount

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

The interest rate swap agreements have an

agreements with

a notional aggregate

were designated

interest rate

compound SOFR being received.

USCB FINANCIAL HOLDINGS, INC.

Notes to the Consolidated Financial Statements - Unaudited

USCB Financial Holdings, Inc.

Q1 2025 Form 10-Q

As of December

13 unchanged sentences

Interest Rate Swaps Designated as Fair Value

As of March 31, 2024, the Company had

interest rate swap agreements with a notional aggregate amount of $

million that were designated as fair value hedges on loans.

rate swap agreements have an average maturity of

During the quarter

7 unchanged sentences

fair value swaps totaled $

termination fees

category will

remining life

termination fee allocated

loan category

is being amortized

over the remining

straight-line basis with full recognition of the unamortized

1 unchanged sentence

The amortization of

the termination fee

is reflected in

the loan interest income

statement of operations.

The original maturities of

years at the date of termination.

the termination

interest income

the Consolidated

maturities of

value interest

had an average maturity of

years at the date of their termination.

The Company had no interest rate swap agreements

designated as fair value hedges at March 31, 2025.

Interest Rate Swaps

2 unchanged sentences

interest rate swaps

September 30,

December 31, 2023, respectively.

At September 30, 2024, these

interest rate swaps mature between

2025 and 2051.

USCB FINANCIAL HOLDINGS, INC.

Notes to the Consolidated Financial Statements - Unaudited

USCB Financial Holdings, Inc.

Q3 2024 Form 10-Q

corresponding

derivatives requires the Company to

provide the counterparty with funds to

be held as collateral which

the Company reports

as other assets under

the Consolidated Balance

While these derivatives

represent economic hedges,

qualify as hedges for accounting purposes.

respectively.

Company entered

into corresponding

and offsetting

derivatives with

third parties.

the liability

these derivatives requires the Company to

provide the counterparty with funds to be

held as collateral which the Company

reports as other assets under the Consolidated Balance

While these derivatives represent economic

do not qualify as hedges for accounting purposes.

The following table reflects the Company’s

1 unchanged sentence

Balance Sheet Location

September 30, 2024:

March 31, 2025:

Derivatives designated as cash flow hedges:

6 unchanged sentences

Interest rate swaps

Derivatives designated as fair value hedges:

Interest rate swaps

Other liabilities

Derivatives not designated as hedging instruments:

9 unchanged sentences

fair value of

USCB FINANCIAL HOLDINGS, INC.

Notes to the Consolidated Financial Statements - Unaudited

USCB Financial Holdings, Inc.

Q1 2025 Form 10-Q

financial instrument is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction

64 unchanged sentences

observable for the

USCB FINANCIAL HOLDINGS, INC.

Notes to the Consolidated Financial Statements - Unaudited

USCB Financial Holdings, Inc.

Q3 2024 Form 10-Q

markets that are

37 unchanged sentences

classified within Level 2 of the hierarchy.

September 30, 2024 and December 31, 2023 for each

of the fair value hierarchy levels (in thousands):

September 30, 2024

USCB FINANCIAL HOLDINGS, INC.

Notes to the Consolidated Financial Statements - Unaudited

USCB Financial Holdings, Inc.

Q1 2025 Form 10-Q

March 31, 2025 and December 31, 2024 for each of the

fair value hierarchy levels (in thousands):

March 31, 2025

December 31, 2024

10 unchanged sentences

Total liabilities at fair value

USCB FINANCIAL HOLDINGS, INC.

Notes to the Consolidated Financial Statements - Unaudited

USCB Financial Holdings, Inc.

Q3 2024 Form 10-Q

Items Not Measured at Fair Value

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not carried at fair

value as of September 30, 2024 and December 31, 2023

(in thousands):

value as of March 31, 2025 and December 31, 2024 (in

Fair Value Hierarchy

September 30, 2024:

March 31, 2025:

Financial Assets:

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Accrued interest payable

USCB FINANCIAL HOLDINGS, INC.

Notes to the Consolidated Financial Statements - Unaudited

USCB Financial Holdings, Inc.

Q1 2025 Form 10-Q

STOCKHOLDERS’ EQUITY

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stock as they previously owned of the Bank’s common

USCB FINANCIAL HOLDINGS, INC.

Notes to the Consolidated Financial Statements - Unaudited

USCB Financial Holdings, Inc.

Q3 2024 Form 10-Q

During the first quarter 2024, the Company issued

shares of Class A common stock to employees as restricted

During the first quarter

2025, the Company issued

shares of Class A

common stock to employees as

the Company’s

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shares of Class A

common stock to

employees and directors as

restricted stock awards pursuant

to the Company’s

2015 equity incentive plan.

As previously announced,

Board of Directors

new share repurchase

program of up

or approximately

the Company’s

outstanding shares

discretionary basis from time

to time through open

market repurchases, privately negotiated

transactions, or other means.

repurchase program

will commence

upon completion

of the Company’s

current repurchase

this new program will be funded from the Company’s

existing cash and cash equivalents or future cash flow.

September 30,

common stock to employees

as restricted stock awards

pursuant to the Company’s

incentive plan.

During the three months ended

March 31, 2025, the Company

shares of Class A common stock at

a weighted average cost per

The aggregate purchase

price for these transactions was

approximately $

publicly announced repurchase programs.

As of September 30, 2024,

shares remained authorized for repurchase

under the Company’s

two stock repurchase

the nine months

ended September 30,

2023, the Company

Class A common

purchase price for these transactions was approximately $

million, including transaction costs.

repurchases in new share repurchase programs.

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

of September 30, 2024 and December 31,

repurchase programs.

shares remained

for repurchase

two stock repurchase programs.

Shares of the

Company’s Class A common stock

issued and outstanding as

of March 31, 2025 and

December 31, 2024

, respectively.

11, Subsequent Events, for

information regarding issuance

Declaration of dividends

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such payment to be an unsafe or unsound practice.

As of March 31, 2025,

the Company was not subject to any

formal supervisory restrictions on its ability to

pay dividends

but will notify the Federal Reserve

Bank of Atlanta in advance of any

proposed dividend to the Company's

shareholders in

negative retained

addition, under

applicable FDIC

regulations and

prior approval

dividend or other capital distribution.

On January 29, 2024, the

Company announced that its Board of

Directors approved a quarterly cash dividend program.

The quarterly dividend for

the first quarter of

per share of Class

A common stock, paid

on March 5, 2024,

to stockholders

light of the Bank's negative retained earnings.

In addition, under applicable FDIC regulations and policy,

because the Bank

has negative retained

earnings, it must

obtain the prior

approval of the

FDIC before effecting a

cash dividend or other

distribution.

quarter of 2025 was $

per share of Class A common

stock, paid on March 5, 2025,

to stockholders of record as

close of business

on February 14,

aggregate distribution

in connection

quarter dividend

quarterly dividend

second quarter

common stock, paid on June

5, 2024, to stockholders of

record as of the

close of business on May 15,

The aggregate

distribution on connection with

the second quarter dividend

The quarterly dividend

for the third quarter

per share of Class

A common stock, paid on

September 5, 2024, to

stockholders of record as of

the close of business

on August 15, 2024.

The aggregate distribution on connection with

the second quarter dividend was $

distribution in connection

with the first quarter

2025 dividend was

quarter of 2024 was $

per share of Class A common

stock, paid on March 5, 2024,

to stockholders of record as

USCB FINANCIAL HOLDINGS, INC.

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Q1 2025 Form 10-Q

September 30, 2023.

See Note 11, Subsequent

Events, for information regarding dividends declared in October

The following table details the dividends declared and paid by

the Company during the three months and nine months

ended September 30, 2024:

close of business

on February 15,

The aggregate

distribution in connection

with the first quarter

2024 dividend was

The following table details the dividends

declared and paid by the Company during

the three months ended March 31,

2025 and 2024:

As of March 31, 2025

Declaration Date

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March 5, 2025

April 22, 2024

July 22, 2024

August 15, 2024

September 5, 2024

As of March 31, 2024

Declaration Date

Dividend Per Share

Dividend Amount

January 22, 2024

February 15, 2024

March 5, 2024

“well-capitalized”

guidelines as of September 30, 2024 and December 31,

At September 30, 2024, the total

risk-based capital ratios for

guidelines as of March 31, 2025 and December 31, 2024.

At March 31, 2025, the total risk-based capital

ratios for the Bank

because the Company is deemed to be a small bank holding

See Note 11, Subsequent

Events, for information regarding dividends declared in April 2025.

EARNINGS PER SHARE

participating

is calculated by

dividing net income

(loss) available to

common shareholders by

the weighted-average

weighted-average

number of common shares outstanding for

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Diluted EPS is

income (loss)

shares outstanding for

the period and

the weighted-average number

of dilutive common

stock equivalents outstanding

the period determined using the treasury-stock method.

purposes of this calculation, common stock equivalents

common stock options and are only included in the calculation

of diluted EPS when their effect is dilutive.

months ended September 30, 2024 and 2023 (in thousands):

Three Months Ended

September 30,

Nine Months Ended

September 30,

computed by dividing

net income available

shareholders by the

weighted-average number

of common shares

outstanding for

weighted-average number of

dilutive common stock

equivalents outstanding

determined using the treasury-stock

For purposes of this

calculation, common stock equivalents

include common

stock options and are only included in the calculation of diluted

EPS when their effect is dilutive.

The following table reflects the calculation of net income

available to common shareholders for the three months ended

March 31, 2025 and 2024 (in thousands):

Three Months Ended March 31,

Net income available to common shareholders

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Q1 2025 Form 10-Q

The following table reflects the calculation of basic and diluted earnings per common share class for the three and nine

months ended September 30, 2024 and 2023 (in thousands,

except per share amounts):

Three Months Ended September 30,

The following table reflects

the calculation of basic and

diluted earnings per common

share class for the

ended March 31, 2025 and 2024 (in thousands, except

per share amounts):

Three Months Ended March 31,

Net income available to common shares

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for each of the periods presented.

Nine Months Ended September 30,

Net income available to common shares

Weighted average shares outstanding

Earnings per share, basic

Net income available to common shares

Weighted average shares outstanding for basic EPS

Dilutive effects of assumed exercises of stock options

Weighted avg.

shares including dilutive potential common shares

Earnings per share, diluted

Anti-dilutive stock options excluded from diluted EPS

Net income has not been allocated to unvested

restricted stock awards that are participating securities

because the amounts that would be allocated are

not material to net income per share of common

Unvested restricted stock awards that are participating

securities represent less than one percent

of all of the outstanding shares of common stock

for each of the periods presented.

SEGMENT REPORTING

Operating segments are components of an enterprise about which

separate financial information is available that is

evaluated regularly by the chief operating decision maker

(“CODM”) in assessing performance and in deciding how to

allocate resources.

The Company’s CODM is the

President, Chief Executive Officer,

and Chairman of the Board.

The Company through the Bank, its sole direct subsidiary,

banking centers in South Florida providing a

wide range of personal and business banking products and services,

and through a subsidiary of the Bank, offers clients

title insurance policies for real estate transactions closed

The Company’s business activities

are similar in

their nature, operations and economic characteristics, largely serving

commercial and specialty banking clients with

products and services that are offered through similar

processes and platforms.

Accounting policies for the products

services referenced here are the same as those described

in Note 1, “Summary of Significant Accounting Policies”

The Company’s segment revenue is

driven primarily by interest income on loans as well as fee

the origination of loans and from fees charged on loans

and deposit accounts.

Lending activities include loans

individuals, which primarily consist of home equity lines

of credit, residential real estate loans, yacht loans, and

loans, and loans to commercial clients, which include

commercial and industrial loans, commercial real estate

investor residential real estate loans, correspondent banking

loans, and letters of credit.

The CODM regularly reviews consolidated income and

expenses, as presented on the Consolidated Statements

Operations, in addition to consolidated assets presented on the

Consolidated Balance Sheets.

The significant segment

expenses that the CODM reviews regularly are interest

expense, provision for credit losses, salaries and wages,

employee benefits, and occupancy expense.

evaluates the performance of the segment and allocates

resources based on net income that is also reported on

the Consolidated Statements of Operations as consolidated

income to maximize shareholder value.

Additionally,

consolidated internal financial information is used by the

monitor credit quality and credit loss expense.

net income, as the measure of profit or loss, is used

monitor budget versus actual results and to perform competitive

analyses that benchmark the Company to competitors.

As a result, the Company has determined that it has only one

reportable segment.

USCB FINANCIAL HOLDINGS, INC.

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SUBSEQUENT EVENTS

October 2024,

restricted stock awards pursuant to the Company’s

2015 equity incentive plan.

Shares of the

Company’s Class A common

stock issued and outstanding as of October 31, 2024

On October 28,

2024, the Company

announced that its

Board of Directors

declared its fourth

quarterly cash

The quarterly

December 5, 2024, to stockholders of record as of the close

of business on November 15, 2024.

quarterly dividend for

the second quarter

per share of Class

A common stock

and will be paid

5, 2025, to stockholders of record as of the close of business

on May 15, 2025.

USCB Financial Holdings, Inc.

1 unchanged sentence

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

What changed 10-Q

Item 1. Financial Statements