What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2025-11-07 compared with 2025-08-08 · 628 added, 667 removed, 1044 unchanged (55% of the section changed)

3 unchanged sentences

(Dollars in thousands, except share data)

June 30, 2025

September 30, 2025

December 31, 2024

20 unchanged sentences

Federal Home Loan Bank advances

Subordinated notes

Lease liability

5 unchanged sentences

per share liquidation preference;

issued and outstanding as of June 30, 2025

issued and outstanding as of September 30, 2025

and December 31, 2024

1 unchanged sentence

per share liquidation preference;

issued and outstanding as of June 30, 2025

issued and outstanding as of September 30, 2025

and December 31, 2024

1 unchanged sentence

per share liquidation preference;

issued and outstanding as of June 30, 2025

issued and outstanding as of September 30, 2025

and December 31, 2024

1 unchanged sentence

shares authorized;

outstanding as of June 30, 2025,

outstanding as of September 30, 2025,

issued and outstanding as of December 31,

1 unchanged sentence

shares authorized;

outstanding as of June 30, 2025 and December

outstanding as of September 30, 2025 and

December 31, 2024

Additional paid-in capital on common stock

11 unchanged sentences

except per share data)

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended September 30,

Nine Months Ended September 30,

Interest income:

7 unchanged sentences

Time deposits

Federal Home Loan Bank advances and other borrowings

Federal Home Loan Bank advances

Subordinated notes

Total interest expense

5 unchanged sentences

Non-interest income:

Gain on sale of securities available for sale, net

(Loss) gain on sale of securities available for

Gain on sale of loans held for sale, net

22 unchanged sentences

Three Months Ended

Six Months Ended

Other comprehensive income (loss):

Unrealized gain (loss) on investment securities

September 30,

Nine Months Ended

September 30,

Other comprehensive income:

Unrealized gain on investment securities

Reclassification adjustment for amortization of net

1 unchanged sentence

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

Reclassification adjustment for gain included in net

Unrealized gain (loss) on cash flow hedge

Tax benefit (expense)

Total other comprehensive income (loss), net of tax

Reclassification adjustment for realized losses (gains)

included in net

Unrealized loss on cash flow hedge

Total other comprehensive income, net of tax

Total comprehensive income

13 unchanged sentences

Stockholders'

Balance at March 31, 2025

Other comprehensive loss

Balance at June 30, 2025

Other comprehensive income

Repurchase of Class A common stock

( 2,000,000 )

Exercise of stock options

1 unchanged sentence

Stock-based compensation

Balance at September 30, 2025

Balance at June 30, 2024

Balance at March 31, 2024

Other comprehensive income

Repurchase of Class A common stock

Restricted stock issued

Dividend payment

Stock-based compensation

Balance at June 30, 2024

USCB Financial Holdings, Inc.

Q2 2025 Form 10-Q

Balance at September 30, 2024

Additional Paid-in

6 unchanged sentences

Repurchase of Class A common stock

( 2,009,671 )

Restricted stock issued

Restricted stock forfeiture

Exercise of stock options

1 unchanged sentence

Stock-based compensation

Balance at June 30, 2025

Balance at September 30, 2025

Balance at December 31, 2023

Other comprehensive loss

Other comprehensive income

Repurchase of Class A common stock

4 unchanged sentences

Stock-based compensation

Balance at June 30, 2024

The accompanying notes are an integral

part of these unaudited consolidated financial

Balance at September 30, 2024

The accompanying notes are an integral

5 unchanged sentences

(Dollars in thousands)

Six Months Ended June 30,

Nine Months Ended September 30,

Cash flows from operating activities:

6 unchanged sentences

Stock-based compensation

Gain on sale of available for sale securities,

(Loss) gain on sale of available for sale securities,

Gain on sale of loans held for sale, net

29 unchanged sentences

Net increase in deposits

Proceeds from subordinated notes

Proceeds from FHLB advances

Proceeds from other borrowings

Repayments on Federal Home Loan Bank advances

Net cash provided by financing activities

Net increase (decrease) in cash and

cash equivalents

Net decrease in cash and cash equivalents

Cash and cash equivalents at beginning

56 unchanged sentences

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.

adoption of this ASU did

not have a material

impact on the Company’s consolidated financial

2023-09, Income Taxes (Topic

Improvements to Income Tax Disclosures.

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

ASU is effective

business entities

periods beginning

after December

Company adopted this ASU 2023-09 effective January 1, 2025.

The adoption of

this ASU did not have a material impact on

the Company’s consolidated financial statements.

USCB FINANCIAL HOLDINGS, INC.

9 unchanged sentences

value of investment securities at the dates indicated (in

June 30, 2025

September 30, 2025

Available-for-sale:

29 unchanged sentences

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

The unrealized gain

Transfers of debt

securities into the held

-to-maturity (“HTM”) category

from the available for

sale (“AFS”) category

unrealized gain or

date of transfer

is retained in

other comprehensive

loss (“AOCL”) and

in the carrying

the HTM securities

HTM securities

are amortized

remaining life

transfers from AFS to HTM portfolios in 2022.

During the quarter

ended June 30,

2025 there were

investment securities

that were transferred

For the three

months ended June 30, 2025, total

amortization out of AOCI

for net unrealized losses

on securities transferred

of the security.

transfers from

portfolios in 2022.

During the quarter ended

September 30, 2025, there

investment securities that

were transferred from

September 30,

USCB FINANCIAL HOLDINGS, INC.

2 unchanged sentences

Q3 2025 Form 10-Q

in 2022 from AFS to HTM was $

thousand and $

thousand for the six month ended June 30, 2025.

At June 30, 2025,

the fair value of the securities was $

million and the balance of the net unrealized loss was $

securities transferred in

months ended September

At September 30,

2025, the fair value of the

transferred securities was $

million and the balance of

unrealized loss was $

For the quarter

ended September 30,

2024, total amortization

unrealized losses

on securities

transferred from

the six month

2024, the fair value of the securities

million and the balance of the net

unrealized losses retained in AOCI was

ended September

September 30,

transferred securities

net unrealized

The measurement of expected credit losses under the current expected credit loss (“CECL”) methodology is applicable

to financial assets measured at amortized cost, including

loan receivables and held-to-maturity debt securities.

CECL requires a loss reserve for

securities classified as held-to-maturity

loan receivables and HTM debt securities.

CECL requires a loss reserve for securities

classified as HTM.

The reserve should reflect

credit performance

projected economic

classified as

explicit guarantee

historical credit performance

as the impact

economic forecasts.

Government bonds

Agency issued bonds

Government is

1 unchanged sentence

conclude that

reserve is not required.

The reserve requirement is for

three primary assets groups:

municipal bonds, corporate bonds, and

securitizations.

utilizing Moody’s

ImpairmentStudio.

CECL measurement for

investment securities

incorporates historical

data, containing

defaults and recoveries

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

Moody’s baseline

economic forecast.

uses the 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.

monitors the credit

3 unchanged sentences

ratings are monitored

by the Company on at least a quarterly basis.

As of June 30, 2025 and December 31,

2024, all HTM securities held by the

Company were rated investment grade.

mortgage-backed

by the Company on

at least a quarterly basis.

As of September 30, 2025

and December 31, 2024,

all HTM securities held

by the Company were rated investment grade.

HTM securities

Agency issued

and mortgage-backed securities.

Because of the explicit

and/or implicit guarantee

on these bonds, the

Company holds

The remaining

6 unchanged sentences

methodology to estimate

debt securities

classified as

HTM represents

amortized cost

less the ACL related to these securities.

The Company’s investment

portfolio includes Available-for-Sale

(“AFS”) debt securities,

which are carried at

with unrealized gains and losses recognized in accumulated other comprehensive income (loss) (“AOCI”), net of

evaluates whether the declines

in fair value

are attributable to credit

losses or other

factors like interest

rate risk, using both

quantitative and qualitative analyses, including company

performance analysis, review of credit

bond vintage,

thousand ACL as of September

The book value

for debt securities classified

as HTM represents amortized

cost less the ACL related to these securities.

The Company’s investment portfolio

includes AFS debt securities, which

are carried at fair value with unrealized

of applicable

attributable to credit losses or other factors like interest rate risk, using both quantitative and qualitative

analyses, including

company performance analysis, review

of credit ratings, bond

vintage, remaining payment terms,

prepayment speeds and

macro-economic

value of an AFS security is less than its amortized

cost and the decline is attributable to credit-related factors, an allowance

for credit losses (“ACL”) is recorded.

As a result of this evaluation, the Company concluded that no allowance was required

on AFS securities as of June 30, 2025.

decline is attributable

to credit-related

factors, an ACL

this evaluation, the

Company concluded

that no allowance was required on AFS securities as of

September 30, 2025.

Information pertaining

9 unchanged sentences

dates (in thousands):

June 30, 2025

September 30, 2025

Less than 12 months

21 unchanged sentences

Bank subordinated debt securities

The contractual cash

flows for these securities

are guaranteed by U.S.

government sponsored entities.

The municipal

bonds are of high

credit quality and the declines

in fair value are

not due to credit

Based on the assessment of these

mitigating factors,

management believed that

the unrealized

security holdings

in investment spreads and interest rate movements and

not changes in credit quality.

The contractual

associated with

Agency securities,

collateralized

mortgage obligations,

and residential

and commercial

mortgage-backed

are guaranteed

government-sponsored

thereby minimizing

Municipal bonds

observed declines

attributable to deterioration in the

creditworthiness.

Similarly, the decrease in fair value of bank

subordinated debt securities

is primarily driven

in market interest

on management’s

evaluation of

these factors,

management believes

unrealized losses

debt securities

are attributable

to fluctuations

market spreads and interest rate movements, rather than adverse

changes in the underlying credit quality of the issuers.

identification basis.

sales or calls of securities nor gains

or losses of securities during the three

six months ended June 30, 2025.

The following table presents the proceeds,

realized gross gains and realized gross losses

on sales and calls of AFS debt securities for the three

and six months ended June 30, 2024 (in thousands):

Three Months Ended June 30,

Six Months Ended June 30,

The following table presents the proceeds, realized gross gains and realized gross losses on sales and

calls of AFS debt securities for the three and nine months

ended September 30, 2025 and 2024 (in thousands):

Three Months Ended September 30,

Nine Months Ended September 30,

Available-for-sale:

Proceeds from sale and call of securities

Net realized gain

Net realized gain (loss)

The amortized

13 unchanged sentences

Held-to-maturity

June 30, 2025:

September 30, 2025:

Due within one year

6 unchanged sentences

Mortgage-backed securities - commercial

At June 30, 2025,

there were no

securities held in

the portfolio from

any one issuer

in an amount greater

total stockholders’

Government Agency

the collateralized

mortgage-backed

At September 30,

securities held

portfolio from

stockholders’

equity other than

Agency issued securities.

collateralized mortgage obligations

and mortgage-backed securities

at September 30, 2025 and

December 31, 2024 were

issued by U.S.

Government entities.

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

As a QPD, the

Bank has the legal authority

As a QPD, the Bank

has the legal authority

municipalities,

securities pledged to the

State of Florida at a

% of the quarter daily

average balance at June 30,

USCB FINANCIAL HOLDINGS, INC.

2 unchanged sentences

Q3 2025 Form 10-Q

minimum amount

As of June 30, 2025, the

Bank had a total of $

million in deposits under the

public funds program and pledged

the State of Florida for these public funds were

September 30, 2025, and

% for the quarter daily average balance

for quarter ended December 31, 2024.

The Bank must

also maintain a minimum amount of pledged securities

to be in the public funds program.

September 30,

pledged 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 $

The following table is a summary of the distribution of

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

June 30, 2025

The following table is a summary of the distribution of loans

held for investment by type (dollars in thousands):

September 30, 2025

December 31, 2024

7 unchanged sentences

Allowance for credit losses

respectively,

commercial real estate and residential mortgage loans pledged as collateral for

lines of credit with the FHLB of Atlanta and

the Federal Reserve Bank of Atlanta.

At September 30, 2025

and December 31, 2024,

the Company had

million and $

million, respectively,

commercial real estate and residential mortgage

loans pledged as collateral for lines of

credit with the Federal Home Loan

Bank (“FHLB”) of Atlanta and the Federal Reserve Bank

Allowance for Credit Losses

4 unchanged sentences

DCF method uses a loss

driver analysis (“LDA”) and discounted cash

flow analyses.

Management engaged

advisors and consultants

with expertise

in CECL model development

to assist in development of

a LDA based on

regression models and supportable forecast.

reasonable and

supportable forecasts

in projective

forecasts applied

to regression

probability of default for

loan receivables use

at least one of the

following economic indicators:

civilian unemployment rate

(national), real gross

domestic product growth (national

GDP) or the House

Price Index (“HPI”).

each of the segments

in which the WARM methodology is used,

the long-term average loss rate is calculated and applied on a quarterly basis for

the remaining life of the pool.

Adjustments for economic

expectations are made through qualitative factors.

driver analysis (“LDA”)

and DCF analyses.

Management engaged advisors

and consultants with expertise

in CECL model

development to

development of

regression models

and supportable

of reasonable

default for loan receivables use at least

one of the following economic indicators:

civilian unemployment rate (national), real

gross domestic

product growth

(national GDP)

Index (“HPI”).

WARM methodology is used,

the long-term average

calculated and applied

on a quarterly

basis for the

life of the pool.

Adjustments for economic expectations are

made through qualitative factors.

Qualitative factors (“Q-Factors”) used in the ACL methodology

Changes in lending policies, procedures, and strategies

Changes in international, national, regional, and local conditions

Changes in nature and volume of portfolio

Changes in international, national, regional, and local economic

Changes in nature and volume of the portfolio

Changes in the volume and severity of past due loans

10 unchanged sentences

Q3 2025 Form 10-Q

Changes in the ACL for the three and six months ended June

30, 2025 and 2024 were as follows (in thousands):

Changes in the

three and nine

months ended September 30,

2025 and 2024

were as follows

(in thousands):

Correspondent

Three Months Ended June 30, 2025

Three Months Ended September 30,

Beginning balance

1 unchanged sentence

Ending Balance

Six Months Ended June 30, 2025

Nine Months Ended September 30, 2025

Beginning balance

2 unchanged sentences

(1) Provision for credit losses excludes a $

thousand provision due to unfunded commitments included in accrued interest and

other liabilities and a $

thousand provision related to investment securities held to maturity.

thousand provision 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 $

1 unchanged sentence

other liabilities and a $

thousand provision related to investment securities held to maturity.

thousand release related to investment securities held to maturity.

Correspondent

Three Months Ended June 30, 2024

Three Months Ended September 30,

Beginning balance

1 unchanged sentence

Ending Balance

Six Months Ended June 30, 2024

Nine Months Ended September 30, 2024

Beginning balance

2 unchanged sentences

(1) Provision for credit losses excludes a $

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

liabilities and a $

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

liabilities and $

thousand provision related to investment securities held to maturity.

At June 30, 2025, the ACL

for loans was $

million compared to $

million at December 31, 2024.

thousand provision due to unfunded commitments included in accrued interest and

other liabilities.

million compared

increase of $

thousand in the ACL was due to loan growth.

Charge offs related to loans for the

three months ended June 30, 2025 were

thousand originated in 2022 and $

September 30,

originated in 2025.

thousand originated

thousand originated in 2025.

Charge offs related

to loans for the

three months ended

June 30, 2024

thousand and were

all originated in

Charge offs for the six months ended June 30,

2024 totaled $

thousand and were all originated in 2024.

USCB FINANCIAL HOLDINGS, INC.

2 unchanged sentences

Q3 2025 Form 10-Q

outstanding balances

specified loan

categories as

December 31, 2024

Charge-offs for the nine months ended September

30, 2024 totaled $

thousand and were all originated in 2024.

the outstanding balances

in the specified

loan categories

as of September

2024 are as follows (in thousands):

1 unchanged sentence

Correspondent

June 30, 2025:

September 30, 2025:

Allowance for credit losses:

17 unchanged sentences

on relevant information

which may include:

current financial information

on the borrower,

current financial

information on the

documentation

32 unchanged sentences

presented below for the periods indicated (in thousands):

As of June 30, 2025

As of September 30, 2025

Term Loans by Origination Year

30 unchanged sentences

analyzes credit

payment performance

December 31, 2024 (in thousands):

As of June 30, 2025

loan grades based

performance and

the aging status

of the loans.

The following

tables include

accruing loans

of September 30,

and December 31, 2024 (in thousands):

As of September 30, 2025

Residential real estate:

28 unchanged sentences

Non-accrual Status

The following

the amortized

December 31, 2024 (in thousands):

June 30, 2025

The following table includes

the amortized cost basis of loans

on non-accrual status as of

September 30, 2025 and as

of December 31, 2024 (in thousands):

September 30, 2025

Loans With No

14 unchanged sentences

interest income

attributable to non-accrual

loans outstanding during

the three months

ended June 30,

2025 and 2024.

Interest income

September 30,

Interest income on these loans for the three months ended September 30, 2025 and 2024, would have been

approximately

thousand and $

thousand, respectively,

had these loans

performed in accordance

with their original

ended September

been approximately

thousand and $

thousand, respectively,

had these loans performed

in accordance with their

had these loans performed in accordance with their

original terms.

income on these loans

approximately

respectively, had

these loans performed in accordance with their original

USCB FINANCIAL HOLDINGS, INC.

10 unchanged sentences

loans related

financial difficulty by type of collateral as of June

financial difficulty by type of collateral as of September

30, 2025 and December 31, 2024 (in thousands):

June 30, 2025

September 30, 2025

Collateral Type

14 unchanged sentences

collateral and

recorded investment

amortized cost

final collateral

investment of

reserve amount

1 unchanged sentence

collateral valuation

recorded investment of the loan, no reserve is determined.

investment of

loan, no reserve is determined.

Loan Modifications to Borrowers Experiencing Financial

new modifications

The Company had

no new modifications

experiencing financial

experiencing financial difficulties

months ended June

difficulties for

the three and

September 30,

borrowers experiencing

financial difficulties

ended September

The following

table presents newly

loans, by type of modification, which occurred during the

six months ended June 30, 2024 (in thousands):

table presents

newly restructured

modification, which

occurred during

September 30,

Recorded Investment Prior to Modification

5 unchanged sentences

Commercial and industrial

The loan modification for the

borrower experiencing financial

difficulty at June 30,

The loan modification

for the borrower

experiencing financial

difficulty at

September 30,

2024 included

a combination of rate

modifications.

September 2029 was extended to January

existing loan modifications that

subsequently defaulted during

either the three or the

six months ended

June 30, 2025 and June 30, 2024.

a combination

of rate and maturity modifications.

The rate was modified

from a variable rate

to a fixed rate

The original maturity

of September 2029 was extended to January

existing loan modifications that subsequently defaulted during either the three or the

nine months ended

September 30, 2025 and 2024.

USCB FINANCIAL HOLDINGS, INC.

2 unchanged sentences

Q3 2025 Form 10-Q

The Company’s provision for income taxes is presented

The Company’s income tax expense is presented

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

Six Months Ended June 30,

The actual income tax

expense for the six months

ended June 30, 2025 and 2024

differs from the statutory tax expense

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

Nine Months Ended September 30,

The actual income tax expense for the nine months ended

September 30, 2025 and 2024 differs from

the statutory tax

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

federal corporate tax rate of

% for both 2025 and 2024

periods to income

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

Six Months Ended June 30,

to income before income tax expense) as follows (in thousands):

Nine Months Ended September 30,

Federal taxes at statutory rate

3 unchanged sentences

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

June 30, 2025

September 30, 2025

December 31, 2024

15 unchanged sentences

has approximately

loss carryforwards

expiring in various amounts between

2031 and 2036 and which

are limited to offset,

to the extent permitted, future

earnings of the Company.

operating loss

carryforwards expiring

between 2031 and 2036 and which are limited to offset,

to the extent permitted, future taxable earnings of the

In assessing the realizability of deferred tax assets, management considers

21 unchanged sentences

by tax authorities for years before 2022.

For the six months

ended June 30, 2025 and

2024, the Company did

t have any unrecognized

tax benefits as a

of tax positions taken during a prior period or during

the current period.

September 30, 2025

and 2024, the

unrecognized tax

as a result of

tax positions taken during a prior

period or during the current period.

Additionally,

interest or penalties were recorded

as a result of tax uncertainties.

interest or penalties were

recorded as a result of tax uncertainties.

significant provisions, such as the permanent extension of certain expiring provisions of

the Tax Cuts and Jobs Act enacted

in 2017, modifications to the international

tax framework and the restoration of

favorable tax treatment for certain business

provisions, in particular the depreciation

of capital asset additions.

legislation has multiple effective

dates, with certain

provisions effective

implemented through

currently assessing

preliminarily

significantly

effective income tax rate.

OFF-BALANCE SHEET ARRANGEMENTS

6 unchanged sentences

These financial

instruments include

unfunded commitments

commitments to

extend credit,

instruments involve,

degrees, elements

amount recognized in the Company’s Consolidated Balance Sheets.

commercial letters

Those instruments involve,

degrees, elements of

interest rate

of the amount recognized

in the Company’s

Consolidated Balance Sheets.

The Company uses the

same credit policies in making

commitments and conditional obligations as it does for on-balance

sheet instruments.

The Company's

exposure to credit

event of nonperformance

financial instruments

for unused lines of credit, and standby letters of credit

is represented by the contractual amount of these commitments.

June 30, 2025 and December 31, 2024 (in thousands):

June 30, 2025

same credit policies in

making commitments and conditional obligations as it

does for on-balance sheet instruments.

The Company's exposure

to credit loss

of nonperformance by

the other party

to the financial

for unused lines of credit and standby letters of credit is

represented by the contractual amount of these commitments.

September 30, 2025 and December 31, 2024 (in thousands):

September 30, 2025

December 31, 2024

38 unchanged sentences

individual interest rate swap agreements.

USCB FINANCIAL HOLDINGS, INC.

Notes to the Consolidated Financial Statements - Unaudited

USCB Financial Holdings, Inc.

Q3 2025 Form 10-Q

Interest Rate Swaps Designated as a Cash Flow Hedge

June 30, 2025,

interest rate

swap agreements

notional aggregate

were designated

interest rate

compound SOFR being received.

Company entered into

a two-year costless

notional amount of

exposure to interest

rate volatility on

a three-month brokered CD.

The derivative is

USD SOFR overnight index

and establishes a

floor rate of

%, effectively creating a

defined range of

interest rate outcomes

without requiring

designated as

815, Derivatives

comprehensive income (loss) to the extent the hedge remains

Company entered

costless collar

interest rate outcomes without requiring

an upfront premium.

The hedge was

designated as a cash flow hedge

recorded in other comprehensive income (loss) to the extent the

hedge remains effective.

As of September 30, 2025,

the Company had

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

compound USD SOFR being received.

As of December

5 unchanged sentences

The interest rate swap agreements have an

USCB FINANCIAL HOLDINGS, INC.

Notes to the Consolidated Financial Statements - Unaudited

USCB Financial Holdings, Inc.

Q2 2025 Form 10-Q

compound SOFR being received.

compound USD SOFR being received.

these interest

4 unchanged sentences

Interest Rate Swaps Designated as Fair Value

quarter ended

September 30,

Company unwound

interest rate

The Company had

interest rate swap

agreements designated

as fair value

hedges at September

the quarter ended September 30, 2024,

the Company unwound

fair value interest rate swaps with

a notional aggregate

interest rate

12 unchanged sentences

The remaining

unamortized termination fee as of June 30, 2025 was $

The original maturities of these fair value interest swaps

were between 2025

fair value interest

rate swap agreements

had an average

date of their termination.

million that were designated as fair value hedges on loans.

rate swap agreements have an average maturity of

unamortized termination fee as

of September 30, 2025

The original maturities

of these fair value

swaps were between 2025 and

The fair value interest

rate swap agreements had

an average maturity of

at the date of their termination.

Interest Rate Swaps

2 unchanged sentences

interest rate swaps

respectively.

customers with

notional amount

September 30,

December 31, 2024, respectively.

At September 30, 2025,

these interest rate swaps mature

between 2025 and 2051.

Company entered

10 unchanged sentences

do not qualify as hedges for accounting purposes.

USCB FINANCIAL HOLDINGS, INC.

Notes to the Consolidated Financial Statements - Unaudited

USCB Financial Holdings, Inc.

Q3 2025 Form 10-Q

The following table reflects the Company’s

1 unchanged sentence

Balance Sheet Location

June 30, 2025:

September 30, 2025:

Derivatives designated as cash flow hedges:

Interest rate swaps

Other assets/Accrued interest and

other liabilities

Derivatives not designated as hedging instruments:

Interest rate swaps related to customer loans

Other assets/Other liabilities

Other assets/Accrued interest and

other liabilities

December 31, 2024:

3 unchanged sentences

Interest rate swaps related to customer loans

Other assets/Other liabilities

Other assets/Accrued interest and

other liabilities

Determination of Fair Value

7 unchanged sentences

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

USCB FINANCIAL HOLDINGS, INC.

Notes to the Consolidated Financial Statements - Unaudited

USCB Financial Holdings, Inc.

Q2 2025 Form 10-Q

between market

71 unchanged sentences

no market activity

USCB FINANCIAL HOLDINGS, INC.

Notes to the Consolidated Financial Statements - Unaudited

USCB Financial Holdings, Inc.

Q3 2025 Form 10-Q

is determined

22 unchanged sentences

are classified within

the hierarchy

involve using quoted

market prices

the hierarchy and

often involve using

quoted market

prices for similar

securities, pricing models or discounted cash flow analyses

1 unchanged sentence

classified within Level 2 of the hierarchy.

USCB FINANCIAL HOLDINGS, INC.

Notes to the Consolidated Financial Statements - Unaudited

USCB Financial Holdings, Inc.

Q2 2025 Form 10-Q

June 30, 2025 and December 31, 2024 for each of the

fair value hierarchy levels (in thousands):

June 30, 2025

September 30, 2025 and December 31, 2024 for each

of the fair value hierarchy levels (in thousands):

September 30, 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 2025 Form 10-Q

Fair Value Measurements

on a Nonrecurring Basis

liabilities measured at fair value on a nonrecurring basis.

Items Not Measured at Fair Value

5 unchanged sentences

not carried at fair

value as of June 30, 2025 and December 31, 2024 (in

value as of September 30, 2025 and December 31, 2024

(in thousands):

Fair Value Hierarchy

June 30, 2025:

September 30, 2025:

Financial Assets:

9 unchanged sentences

Time deposits

FHLB advances and other borrowings

FHLB advances

Subordinated notes

Accrued interest payable

13 unchanged sentences

Accrued interest payable

STOCKHOLDERS’ EQUITY

During the three months ended September 30 2025, the

Company repurchased

million shares of Class A common

certain institutional shareholders

through privately negotiated

transactions, at a

weighted average price

aggregate purchase

these transactions

was approximately

supplemental and not

Company’s two previously announced

stock repurchase programs.

the nine months

purchase price for

these transactions

was approximately $

thousand including

transaction costs.

As of September

shares remained authorized for repurchase under the

Company’s two stock repurchase programs.

USCB FINANCIAL HOLDINGS, INC.

2 unchanged sentences

Q3 2025 Form 10-Q

STOCKHOLDERS’ EQUITY

restricted stock awards issued

in the three months ended

June 30, 2025.

the six months ended

Company issued

as restricted

pursuant to the Company’s 2015 equity incentive

second quarter 2024,

the Company issued

common stock to

employees as restricted

stock awards pursuant to the Company’s 2015 equity incentive

For the six month ended June 30, 2024 the Company

shares of Class A common stock

to employees as restricted stock

awards pursuant to the Company’s

equity incentive plan.

During the first quarter 2025, the Company repurchased

shares of Class A

common stock at a weighted average

cost per share of $

The aggregate purchase price for

these transactions was approximately $

ended September

approximately $

thousand, including

transaction costs.

These repurchases

the Company’s

publicly announced

authorized for repurchase under the Company’s two stock

repurchase programs.

Shares of the Company’s Class A common stock issued and outstanding as of June 30, 2025 and December

During the nine

months ended September

30, 2024, Company

purchase price for these transactions was approximately $

thousand, including transaction costs

restricted stock awards issued in the three months ended September

During the nine months

ended September

as restricted

stock awards pursuant to the Company’s 2015 equity

incentive plan.

ended September 30, 2024 the Company issued

shares of Class A common stock to employees as restricted stock

awards pursuant to the Company’s 2015 equity incentive

The number of shares of the Company’s Class A common

stock issued and outstanding as of September 30, 2025 and

December 31, 2024 were

, respectively.

Declaration of dividends

is required before

dividend payments

limited in the

cash dividends

Declaration of

before dividend

dividends that

generally limited

dividend declaration,

must consider

additional factors

current period net income, liquidity,

income of the current year combined with

the Company’s

retained income for the preceding two years,

as defined by state

amount of current

period net income,

asset quality,

capital adequacy and economic conditions

at the Bank since the Bank is

the primary source

of funds to fund

dividends by the Company.

capital adequacy

conditions at the

the Bank is the

primary source of

funds to fund

dividends by the

It is likely that

these factors would

further limit the

of dividends which

the Company could

bank regulators have

the authority to

prohibit banks and

holding companies from paying dividends if they deem

such payment to be an unsafe or unsound practice.

As of June 30, 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

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,

The aggregate

distribution in connection

with the first quarter

2025 dividend was

quarterly dividend

second quarter

June 5, 2025, to stockholders

of record as of close of

business on May 15, 2025.

The aggregate distribution in connection

with the second quarter dividend was $

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

on February 15,

The 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 in connection with the second quarter dividend was

USCB FINANCIAL HOLDINGS, INC.

Notes to the Consolidated Financial Statements - Unaudited

USCB Financial Holdings, Inc.

Q2 2025 Form 10-Q

further limit

the amount of dividends which the

Company could legally declare.

In addition, bank regulators

have the authority to prohibit

banks and bank holding companies from paying dividends if they

deem such payment to be an unsafe or

unsound practice.

stockholders in

Bank's negative

retained earnings.

under applicable

FDIC regulations

prior approval

dividend or other capital distribution from the Bank to the

The following table details the dividends declared and paid by

the Company for the periods presented:

Six Months Ended June 30, 2025

Nine Months Ended September 30, 2025

Declaration Date

5 unchanged sentences

April 21, 2025

Six Months Ended June 30, 2024

July 21, 2025

August 15, 2025

September 5, 2025

Nine Months Ended September 30, 2024

Declaration Date

5 unchanged sentences

April 22, 2024

July 22, 2024

August 15, 2024

September 5, 2024

“well-capitalized”

guidelines as

2025 and December

At June 30, 2025,

the total risk

-based capital ratios

because the Company is deemed to be a small bank holding

guidelines as of September 30, 2025 and December 31,

At September 30, 2025, the total risk-based

capital ratio for

companies because the Company is deemed to be a small

bank holding company.

See Note 12, Subsequent Events, for information regarding

dividends declared in July 2025.

dividends declared in October 2025.

USCB FINANCIAL HOLDINGS, INC.

Notes to the Consolidated Financial Statements - Unaudited

USCB Financial Holdings, Inc.

Q3 2025 Form 10-Q

EARNINGS PER SHARE

6 unchanged sentences

computed by dividing

net income available

available to common

shareholders by the

11 unchanged sentences

EPS when their effect is dilutive.

The following table

reflects the calculation of

net income available to

common shareholders for the

three and six months

ended June 30, 2025 and 2024 (in thousands):

Three Months Ended June 30,

Six Months Ended

months ended September 30, 2025 and 2024 (in thousands):

Three Months Ended

September 30,

Nine Months Ended

September 30,

Net income available to common shareholders

USCB FINANCIAL HOLDINGS, INC.

Notes to the Consolidated Financial Statements - Unaudited

USCB Financial Holdings, Inc.

Q2 2025 Form 10-Q

The following table reflects

the calculation of basic

and diluted earnings per

common share class

for the three

months ended June 30, 2025 and 2024 (in thousands,

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

months ended September 30, 2025 and 2024 (in thousands,

except share amounts):

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended September 30,

Nine Months Ended September 30,

Net income available to common shares

18 unchanged sentences

stock for each of the periods

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 bank

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

reportable segment.

USCB FINANCIAL HOLDINGS, INC.

Notes to the Consolidated Financial Statements - Unaudited

USCB Financial Holdings, Inc.

Q2 2025 Form 10-Q

LOSS CONTINGENCIES

9 unchanged sentences

on the Company’s Consolidated Financial Statements.

USCB FINANCIAL HOLDINGS, INC.

Notes to the Consolidated Financial Statements - Unaudited

USCB Financial Holdings, Inc.

Q3 2025 Form 10-Q

RELATED PARTY

2 unchanged sentences

Loan Purchases

During the six months ended June 30, 2025 the Bank purchased

million from entities that deemed to be related

During the nine months ended September 30, 2025,

the Bank purchased $

million from entities that deemed to be

related parties.

The Bank paid those entities net fees of

During the year 2024, the Bank purchased $

million of loans from entities that are deemed to be related

The Bank paid those entities fees of $

During the nine months ended September 30, 2024,

the Bank purchased $

million of loans from entities that are

deemed to be related parties.

The Bank paid those entities

Loan Originations

During the three months ended June 30, 2025, the Bank

acted as the lead arranger in a $

million syndicated loan

extended to an entity deemed to be a related party.

As of June 30, 2025, the Bank held an outstanding balance

During the nine months ended September 30, 2025, the

Bank acted as the lead arranger in a $

million syndicated

loan extended to an entity deemed to be a related party.

As of September 30, 2025, the Bank held an outstanding

million related to this transaction.

1 unchanged sentence

the Bank received a

-basis point commitment fee

and will earn a

commitment fee and will earn a

-basis point annual servicing fee.

The other two financial

institutions participating in the syndication were

also deemed to be related parties.

Although originating

loans to related parties is not part of the Company’s

policy, this transaction

was reviewed by the appropriate departments in accordance

with Company procedures.

analyses were presented to the Board of Directors and

the Audit and Risk Committee, and all necessary approvals

Additional analysis was conducted to determine that

the transaction was executed in the ordinary course

business and on arm’s-length terms, consistent with the

requirements of Regulation O.

institutions participating in the

syndication were also deemed to be related parties.

originating loans to related parties is not part of the

Company’s standard policy,

this transaction was reviewed by the appropriate departments

in accordance with Company

Detailed analyses were presented to the Board of Directors

and the Audit and Risk Committee, and all

necessary approvals were obtained.

Additional analysis

was conducted to determine that the transaction was executed

the ordinary course of business and on arm’s-length terms,

consistent with the requirements of Regulation O.

loan originations or syndications extended to entities deemed

to be related parties during the three

months ended March 31, 2025 and for the year ended December

to be related parties for the year ended

December 31, 2024.

SUBSEQUENT EVENTS

21, 2025, the

Company announced that

declared its quarterly

cash dividend.

dividend for the third quarter of

per share of Class A

common stock and will be paid

on September 5, 2025,

to stockholders of record as of the close of business on August

Company entered into

a two-year costless

notional amount of

exposure to interest

rate volatility on a

three-month brokered CD.

derivative is based on

overnight index

and establishes a

floor rate of

%, effectively creating a

defined range of

interest rate outcomes

without requiring

designated as

under ASC 815,

Derivatives and

comprehensive income

hedge remains

believes this

strengthens the

Company’s interest rate risk management strategy by

mitigating the impact of rate movements on future cash flows.

costless collar

interest rate outcomes without requiring

an upfront premium.

The hedge was

designated as a cash flow

hedge under ASC

recorded in other

comprehensive income

to the extent

the hedge remains

Management believes

this instrument

USCB FINANCIAL HOLDINGS, INC.

Notes to the Consolidated Financial Statements - Unaudited

USCB Financial Holdings, Inc.

Q2 2025 Form 10-Q

strengthens the

Company’s interest

management strategy

by mitigating

Kroll Bond Rating Agency assigned both the Company and the Bank investment grade

debt ratings in July 2025.

announced that

quarterly cash

quarterly dividend for

the fourth quarter

Class A common

stock and will

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

on November 14, 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