What changed in this filing

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Item 1A. Risk Factors

2026-03-13 compared with 2025-03-14 · 607 added, 672 removed, 2755 unchanged (32% of the section changed)

42 unchanged sentences

operations, growth and prospects.

trade policies

global political factors

control, including the

imposition of tariffs,

economic policies,

uncertainties

the potential

that could, in turn, adversely impact our business, results

of operations and financial condition.

Our lending business is subject to credit risk, which could

lead to unexpected losses.

The transition from the use of LIBOR may adversely impact the interest rates paid

on certain financial instruments.

financial condition and operations.

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financial performance.

material adverse effect on our business, financial

condition and results of operations.

Our allowance for credit losses may not be sufficient

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loans in compliance with SBA guidelines.

USCB Financial Holdings, Inc.

Correspondent banking is an important part of our business,

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owed to us by our borrowers.

USCB Financial Holdings, Inc.

Non-performing assets

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expensive and less stable sources.

Any change in the Bank's ability to gather brokered deposits

may adversely impact the Bank.

not effectively

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to invest in technological improvements.

Our current and future uses of Artificial Intelligence (AI)

and other emerging technologies may create additional

Our current and future uses of artificial intelligence and

other emerging technologies may create additional risks.

failure, interruption, or breach in the

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banking regulations.

USCB Financial Holdings, Inc.

penalties, judgments

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restrictions on

USCB Financial Holdings, Inc.

Certain of our

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may materially

Increasing scrutiny

expectations from

customers, regulators,

investors, and

other stakeholders

respect to our environmental, social

and governance practices may

impose additional costs on

us or expose us to

new or additional risks.

Risks Related to Our Class A Common Stock

Our ability to pay dividends is subject to restrictions.

dividends or distributions on our Class A common stock.

issue additional

debt securities,

and may cause

price of our Class A common stock to decline.

The market price and trading volume of our Class A common stock may be volatile, which could result in rapid and

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South Florida,

or prospective

South Florida,

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of key natural resources, inflation, the potential

resurgence of economic

and political tensions with

China, the continuing war

in Ukraine, the conflict

in Gaza and the

other things,

Russian supply

disruptions resulting

ongoing Ukrainian

conflict, each

a destabilizing

financial markets

Economic pressure

consumers and

overall economic

uncertainty may

business spending,

borrowing and

international

markets or economies may

significantly affect the markets in

which we do business, the

value of our loans

and investments,

and our ongoing operations, costs and profitability.

resurgence of economic and political tensions with China, the continuing war in Ukraine and the level of oil and natural gas

prices due to, among

other things, Russian supply

disruptions resulting from

the ongoing Ukrainian conflict,

each of which

destabilizing effect

on financial markets

and economic activity.

Economic pressure on

consumers and overall

economic conditions and/or other negative developments in the domestic or international credit markets or economies may

significantly affect the

markets in which

business, the value

loans and investments,

ongoing operations,

costs and profitability.

USCB Financial Holdings, Inc.

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market area exposes us to lending risks.

At December 31, 2024,

approximately $1,426 million,

or 72.6%, of our

total loan portfolio, was

secured by real

in particular commercial real

estate, most of which is

located in our primary

lending market area of

the Miami metropolitan

At December 31, 2025, approximately

$1.55 billion, or 71.1%, of our

total loan portfolio, was secured

by real estate, in

particular commercial

lending market

significantly impair

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was 2.7% year-over-year.

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

While this is

a significant reduction to the rate of inflation experienced in 2023 and 2024,

above the FRB’s targeted rate.

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three times in 2024,

no assurance can

be given that

January 2025,

determined not

The resurgence

of elevated levels

of inflation could

to cease reducing

its benchmark rate

or potentially starting

to increase it

again which could,

in turn, increase

the borrowings costs

of our customers,

making it more

difficult for them

to repay their

other obligations.

Elevated interest

and further three times

no assurance can be given that it will continue to do so.

At the end of January 2026,

the FRB determined not to reduce the

federal funds rate.

resurgence of elevated

levels of inflation could

lead the FRB to cease

reducing its benchmark

or potentially

turn, increase

the borrowings

our customers,

more difficult for

them to repay their

loans or other obligations.

Elevated interest rates

may be needed to

tame inflationary

price pressures,

push down asset prices, including collateral values, and weaken

economic activity.

price pressures, which could also push down asset prices,

including collateral values, and weaken economic activity.

As inflation increases and market interest

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financial condition, and results of operations.

political factors

control, including

the imposition

of tariffs, retaliatory tariffs, or other sanctions, may adversely impact our business, financial condition and results

of operations.

future, changes

and international

trade policies,

restrictions.

administration

resources, subject to a reduced 10% tariff.

The tariffs were set to take effect on February 4,

2025, but following discussions

between the United States and each

of Canada and Mexico, the U.S.

administration agreed to a pause of

at least 30 days

in the implementation of the duties.

The tariffs on China went into

effect as scheduled on February 4, 2025.

This led to 10%

Subsequently,

Significant changes

structure, powers

and operations of

the federal government,

changes to U.S.

economic policies, and

uncertainties regarding

the potential for

these changes may

cause economic

that could, in turn, adversely impact our business,

results of operations and financial condition.

The current U.S.

administration

announced the

United States would

on all imports

retaliatory tariffs

trade restrictions

and materials

that customers

other related

governmental actions

tariffs, international

trade agreements

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

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

our business, financial condition and results

has implemented significant changes in

federal priorities and has

taken steps to change

the operations,

structure, and

federal agencies,

as regulatory

priorities, policy

interpretations

legislation has changed agency mandates, modified or reduced federal program funding, altered regulatory frameworks, or

adjusted the size and

composition of the

federal workforce.

leadership transitions at

key federal agencies

rulemaking, supervision,

enforcement, and

priorities across

the financial

These developments in the federal government may

have varying effects on the banking and financial services

industry that are difficult to predict, which makes it difficult for us to anticipate and mitigate attendant risks.

Compliance with

changing federal and regulatory

priorities could, among

other things, increase

operating our business,

operational and reputational risks, any or all of which could

materially adversely affect our results of operations.

The current U.S.

administration also has implemented rapid shifts in macroeconomic policies, such as those relating to

trade restrictions and tariffs, which

have created significant uncertainties regarding

economic growth, the potential for

recession, and concerns

over an increase in

Slow economic

growth, economic contraction

or recession, or shifts

in broader consumer and business trends would significantly impact our ability to originate loans, the ability of borrowers to

repay loans, and the value of the collateral securing loans.

Changes in U.S.

immigration policies, particularly those

that could lead

to mass deportations, may

disrupt key industries

in our region such as construction and

These disruptions could exacerbate labor shortages, reduce productivity,

and cause financial instability among affected

businesses, impairing the repayment abilities of borrowers

in these sectors.

Other political and economic events within the U.S., including a contentious domestic political environment, changes in

disagreements

financial markets and the U.S.

the perception

potential for

additional significant

federal regulatory

also increased uncertainty and may exacerbate declines in investor and

consumer confidence, which in turn may adversely

impact financial

markets and the broader economy of the United States.

Regional business

conditions are

of operations.

Russia's invasion of

Ukraine, the U.S.

imposed, and may

continue to impose

material additional,

financial and economic sanctions and export

controls against certain Russian organizations

and/or individuals, with similar

actions either implemented or

planned by the

European Union ("EU")

and the United

Kingdom (“UK”) and other

jurisdictions.

measures taken by

its allies, could

have negative impacts

on regional and

global financial markets

continued heightened

tensions between

condition could be materially and adversely impacted.

conditions in

predictability

USCB Financial Holdings, Inc.

policymaking,

demand for our products and services.

Regional business

conditions are

of operations.

conditions in

predictability

policymaking,

demand for our products and services.

Our lending business is subject to credit risk, which

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industries in

USCB Financial Holdings, Inc.

concentrations with individual borrowers

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may result in loan

defaults, foreclosures and additional

charge-offs and may necessitate

defaults, foreclosures and additional charge-offs and

may necessitate

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

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and results of operations.

LIBOR (the London

InterBank Offered

reference rate for

certain of the

Corporation’s adjustable-

rate loans and

Conduct Authority, which regulates LIBOR,

announced that the

of LIBOR would not be guaranteed beyond 2021.

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

the publication

and two-month

publication of all other

tenors of U.S.

dollar LIBOR (one, three,

after June 30,

The remaining

synthetic LIBOR was published for the last time

as of September 30, 2024.

Synthetic LIBOR was a temporary measure

allow entities to transition to alternative risk-free reference

There are ongoing efforts to establish an alternative

reference rate.

The Federal Reserve Board, in conjunction with

institutions,

agreements backed by

Treasury securities.

The Bank adopted

preferred benchmark as an

alternative to LIBOR

for use in new contracts in 2023.

contracts to a new benchmark rate, the

substitution of SOFR for LIBOR may

have potentially significant economic impacts

on parties to affected

different from LIBOR

in that it is

a retrospective-looking secured

rate rather than

a forward-looking

unsecured rate.

Additionally,

preferred replacement

transition from LIBOR, may adversely affect the val

ue of LIBOR-based financial arrangements of the Company.

Natural disasters and severe weather events in Florida

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our exposure to credit and liquidity risks.

USCB Financial Holdings, Inc.

Our business is subject to

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policy determinations with respect to interest rates.

USCB Financial Holdings, Inc.

During 2022 and 2023, the Federal

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increased certain benchmark interest

to reduce the rate of

inflation to the extent necessary

to reduce inflation to

the rate that the

FOMC believes is appropriate.

action, including

continues to decrease

the federal funds

rate or implements

January 2025, the

FOMC determined to

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

increases were expressly made

in response to

inflationary pressures.

However, In 2024, the

decreased such benchmark

rates three times

followed in 2025

by three additional

totaling 0.75%.

However, there

assurances as

to any future

including whether

it continues to

decrease the federal

funds rate or

implements increases.

In late January 2026, the

FOMC determined to not change the federal

funds rate at 3.50% to 3.75%.

While an increase in

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0.62% for 2022

FOMC’s actions

paid on our interest-bearing deposits.

while the overall funds increased, the cost of it

increased at a lesser pace

when compared to the

increase in cost of

deposits from 2022 to

we cannot provide

any assurances that

can maintain our current levels of noninterest-bearing deposits as

customers may seek higher-yielding products due to the

increased interest rates being paid on deposits currently,

as compared to 2023 and 2022.

decreased the

interest-bearing deposits.

increased, as

to 2022 and 2023, it increased at a slower

pace when compared to the increase

in the cost of deposits from 2022 to

noninterest-bearing

customers continue

seeking higher-yielding

to the increased

interest rates

being paid on

deposits currently,

as compared to rates in early 2024 and 2023 and 2022.

quality, loan origination

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and overall profitability.

A failure or the perceived

risk of a failure to raise

the statutory debt limit

in the future

material adverse effect on our business, financial

condition and results of operations

credit-rating

2023, ratings agencies have lowered

or threatened to lower the long-term

sovereign credit rating on the

United States.

ceiling limit

was reinstated

January 2, 2025,

at $36.1 trillion,

a figure reflecting

the total federal

debt accumulated

by that date.

In late January

began employing

retirement funds

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

There are proposals to

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

Cuts and Jobs

expire in 2025)

and implementing

$2 trillion in

mandatory spending

reductions over a

creditworthiness could adversely

affect the U.S.

financial markets and

economic conditions.

could cause interest

rates and borrowing

costs to rise

(unless the Federal

Reserve re-initiates

quantitative easing),

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

In addition, disagreement over the federal

budget has caused the U.S.

government to shut down for periods

Continued adverse political and

conditions could have a material adverse effect

on our business, financial condition and results of operations.

Our allowance for credit losses may not be sufficient

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evaluation of general economic

USCB Financial Holdings, Inc.

diversification

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to small business

USCB Financial Holdings, Inc.

and middle market customers.

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generated, or expected

to be generated, by the property securing the loan and/or

by the cash flow generated by the business borrower and

to be generated, by the property securing the loan

and/or by the cash flow generated by the business borrower and

adversely affected by changes in the economy or

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to liquidate the collateral securing

these loans at times when

there may be significant fluctuation

of commercial real estate

these loans at times when there

may be significant fluctuation of commercial

values or to the

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50% or more during the preceding 36

USCB Financial Holdings, Inc.

buildings, commercial real estate, and construction and

land loans represented 366% of the Bank’s

total risk-based capital

and the growth in the commercial real estate portfolio exceeded 50% over

the preceding 36 months.

buildings, commercial real estate, and construction and land loans represented 370% of the Bank’s total risk-based capital.

commercial real

estate portfolio

exceeded the threshold in prior

The particular focus of

the guidance is on exposure to commercial

real estate loans that are dependent

on the cash flow from the real estate

as collateral and that

are likely to be

at greater risk

to conditions in the

commercial real estate

the guidance is on exposure

to commercial real estate loans

the cash flow

real estate held

as collateral and

that are likely

in the commercial

market (as opposed

estate collateral held as a secondary source of repayment

or as an abundance of caution).

of the guidance is

to guide institutions in developing risk management practices and capital

levels commensurate with the level and nature of

to real estate

collateral held as

a secondary source

of repayment or

institutions in

developing risk

management practices

levels commensurate

concentrations.

Management has

established a

commercial real

estate lending

exposures and limits by

types within the commercial

real estate portfolio and

takes appropriate actions, as necessary.

implemented policies and

has established

procedures with

our commercial

loan portfolio

guidance, the

Bank’s primary

federal regulator,

could require

implement additional

procedures pursuant to their interpretation

primary federal regulator,

could require us

to implement additional

policies and procedures

pursuant to their

interpretation

of the guidance that may result

in additional costs to us.

were to impose restrictions on the amount

of commercial real estate loans we can

hold in our portfolio, our earnings would

be adversely affected.

In addition, If the FDIC were

to impose restrictions on the

of commercial real estate loans we can hold in our portfolio,

our earnings would be adversely affected.

a participant

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can be no assurance

USCB Financial Holdings, Inc.

that we will be able to continue originating these loans, that a secondary market for these loans will continue to exist or that

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loans in compliance with SBA guidelines

SBA lending programs

typically guarantee

an underlying

SBA establishes

SBA guaranteed

SBA lending programs typically guarantee 75% of the

principal on an underlying loan.

SBA establishes that a loss

SBA guaranteed loan

is attributable

to significant

notwithstanding that a portion of the loan was

guaranteed by the SBA, which could adversely

affect our business, financial

condition and results of

follow the SBA's underwriting

guidelines, our ability to

do so depends on the

knowledge and diligence of our employees

and the effectiveness of controls

we have established.

technical deficiencies in

was originated,

funded or serviced by us, the SBA may seek recovery of the principal loss related to the

deficiency from us notwithstanding

was guaranteed

could adversely

our business,

financial condition

results of operations.

While we follow the SBA's underwriting

guidelines, our ability to do so depends on

the knowledge and

diligence of our employees

and the effectiveness

of controls we have

If our employees

do not follow the

guidelines in

originating loans

audit programs

failures, the

cases, refuse

its guarantee

obligations and

USCB Financial Holdings, Inc.

Correspondent banking is an important part of our

business, which creates increased BSA/AML risk.

may reduce or, in some cases,

refuse to honor its guarantee obligations and we may incur

losses as a result.

Correspondent banking is an important part of our business,

which creates increased BSA/AML risk.

correspondent

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non-compliance

correspondent

relationships with foreign

laundering (“AML”) rules and regulations including the AML Act due

to our correspondent banking relationships with foreign

financial institutions.

Additionally,

international private banking

places additional pressure

international private

banking places additional

pressure on our

policies, procedures

for complying

and regulations

Our failure to strictly adhere

to the terms and requirements

license or our failure to

BSA/AML compliance

our correspondent

banking relationship

financial institutions

and international private banking could result in regulatory

or other actions being taken against us, including the imposition

requirements could require us to incur additional significant costs in order

to bring our BSA/AML processes and procedures

into compliance, negatively

impact our reputation,

material adverse

our business, financial

and results of operations.

systems for complying with the BSA, and

AML statutes and regulations as well as

the recently enacted CTA.

Our failure to

compliance risk in light of our correspondent banking relationship

with foreign financial institutions and international private

banking could result in regulatory or other actions being

taken against us, including the imposition

of civil money penalties,

formal agreements and

cease and desist

Furthermore, failure

to meet regulatory

requirements could require

impact our reputation, and have a material adverse effect

on our business, financial condition and results of operations

years, sanctions

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our operations or to repay our existing debt.

USCB Financial Holdings, Inc.

credit-related

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and results of operations.

USCB Financial Holdings, Inc.

Non-performing

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or regulations

USCB Financial Holdings, Inc.

are ultimately enacted

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to financial claims for negligence.

USCB Financial Holdings, Inc.

implemented a

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implementation, or customer attrition

USCB Financial Holdings, Inc.

potential adverse publicity.

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business, financial condition and results of operations.

December 31, 2024, our top 10 depositors held

16.7% of our total

As of December

31, 2024, 45% of

our deposits are estimated

to be FDIC-insured.

date, our public funds

are 5% of total deposits and are partially collateralized.

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

Consequently,

the occurrence of

such event could have

a material adverse effect

on our business, financial

condition and

December 31, 2025, our top 10 depositors held 15.5% of

deposit portfolio.

As of December 31, 2025, 49% of our deposits

are estimated to be FDIC-insured.

At such date, our

of total deposits

and are partially

collateralized.

estimated average account

deposit portfolio

December 31, 2025 and 2024.

Any change in the Bank's ability to gather brokered

deposits may adversely impact the Bank.

Failure to maintain

the Bank's status as

a "well capitalized" institution

could have an adverse

effect on us, and

our operations.

uses brokered

other financing

minimum capital

FDIC, from utilizing brokered deposits

(i.e., no insured depository institution

that is deemed to be

less than "well capitalized"

may accept, renew or

rollover brokered deposits absent a

waiver from the

In such event,

such a result

could produce

material adverse

consequences for

the Bank with

liquidity and could

material adverse

financial condition

of operations.

these deposits

therefore could have

a material adverse

effect on our

financial condition and

results of operations.

In addition, changes

FDIC regulations regarding brokered deposits

or interpretations of such

regulations by federal banking agencies could

an adverse impact on the Bank’s ability to accept

brokered deposits.

Additionally,

brokered deposits are highly sensitive to

changes in interest rates and, accordingly,

can be a more volatile source of funding.

Use of brokered deposits involves the

risk that growth supported by such deposits would be halted,

or the Bank’s liquidity adversely impacted, if the

rates offered

those offered

institutions seeking

such deposits,

depositors were

decline in the Bank’s safety and soundness, or both.

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

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time, may result in significant changes

USCB Financial Holdings, Inc.

the values of these securities in future

Any of these factors could require us

to recognize further impairments in the

the values of these securities in future periods.

of these factors could require us to

recognize further impairments in the

value of our securities portfolio, which may have an adverse

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which in turn depends on a number of factors,

USCB Financial Holdings, Inc.

infrastructure to accommodate expanded operations.

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be successful in

controlling costs and

maintaining asset

controlling costs and maintaining

quality in the

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therefore may

USCB Financial Holdings, Inc.

be required to attempt to

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companies within or outside our principal market areas that fit within the mission-driven values of our franchise and that we

USCB Financial Holdings, Inc.

believe support our business and make financial and strategic

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institutions,

attractive opportunistic

opportunistic

successful in identifying or completing any future acquisitions.

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may incur costs

USCB Financial Holdings, Inc.

otherwise adequately address and

manage the risks associated

with such transactions could have

otherwise adequately address and manage

the risks associated with

such transactions could have

a material adverse effect

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In particular,

we believe that retaining Luis de la

Aguilera, our Chairman, President,

and Chief Executive Officer,

Robert Anderson,

Financial Officer,

Credit Officer,

into employment

executive and

senior management team, including Mr.

de la Aguilera and Mr.

Anderson, no assurance can be given that these individuals

will continue

we believe that retaining

Luis de la Aguilera,

our Chairman, President

and Chief Executive

change-in-control

Anderson, Bustle

these individuals

could negatively

growth strategy and could have a material adverse effect

on our business and results of operations.

will continue

loss of any of these

individuals could negatively affect

our ability to achieve our

growth strategy and could

have a material

adverse effect on our business and results of operations.

USCB Financial Holdings, Inc.

We also need to continue

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and governance

addition, a cybersecurity

event affecting

customers' data

cybersecurity event

or our customers'

have a negative

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and future competitors.

USCB Financial Holdings, Inc.

We must respond to rapid technological changes

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and results of operations.

USCB Financial Holdings, Inc.

technological

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introductions

technology-driven

institutions to

better serve customers

reduce costs.

future success will

depend, in part,

upon our ability

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

Many national vendors provide turn-key services

institutions that have

substantially greater resources to

invest in technological

technology-driven products

and services,

including recent

developments in

artificial intelligence

(“AI”) including

The effective use of technology increases efficiency

and enables financial institutions to better serve customers

and to reduce

success will depend,

in part, upon

our ability to

address the needs

of our clients

technology to provide products and services that will satisfy client demands for convenience, as well as to create additional

capabilities.

community banks, such

as internet banking

and remote deposit

capture that allow

smaller banks to

compete with institutions

substantially

technological

improvements.

be able, however,

to effectively

implement new

technology-driven

these products

services to our customers.

Our current and

future uses of artificial

intelligence (AI) and other

emerging technologies may create additional

The increasing adoption of AI in financial services

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

regulators increasingly require transparency and explainability

in AI-driven decision-making.

explainability

decision-making.

environment for AI is uncertain and rapidly evolving, potentially

increasing compliance cost and risk of non-compliance.

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

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institutions,

attempts to infiltrate the security of their websites or other systems, some involving sophisticated targeted

attacks intended

attempts to infiltrate the security of their websites or other systems, some involving sophisticated

targeted attacks intended

unauthorized access

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other technological difficulties or failures.

USCB Financial Holdings, Inc.

Despite efforts to

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our risks and exposures

to cybersecurity attacks have increased as

a result of the related increased

reliance on remote working (largely

of the COVID-19 pandemic)

and the increase in

digital operations.

risks and exposures

are expected to

for the foreseeable

to the rapidly

to cybersecurity attacks have increased as a result of the related increased reliance on remote working and the increase in

evolving nature

and sophistication

the expanding

technology, as our web

-based product offerings grow and we expand

internal usage of web-based applications.

and sophistication of

these threats

expanding use

of technology, as our

web-based product offerings

internal usage

applications.

Cybersecurity

other security

major focus of regulatory authorities.

USCB Financial Holdings, Inc.

circumvention

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investigations

USCB Financial Holdings, Inc.

regarding our

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and results of operations.

USCB Financial Holdings, Inc.

our directors may

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utilize our net

operating loss

carryforwards and other

tax attributes

pursuant to Section

operating loss carryforwards

and other tax

attributes pursuant

to Section 382

and Section 383

of the Internal

Revenue Code,

Future changes in

changes in ownership

structure could

Internal Revenue

Future changes

ownership structure

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

USCB Financial Holdings, Inc.

assumptions or estimates used in our critical accounting

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Our critical accounting policies, which

in the section captioned "Management's Discussion and Analysis of Financial Condition and Results

of Operations" in Item

USCB Financial Holdings, Inc.

in the section captioned "Management's Discussion and Analysis of Financial Condition and Results of Operations"

7 of this Annual Report

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of completion

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

be subject to adverse

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

we may be subject to adverse

regulatory consequences and there

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over financial

reporting issued

independent registered

public accounting

eventual compliance

company or as a non-accelerated smaller

reporting company,

we are engaged in a process

to document and evaluate our

internal control over financial reporting, which is

both costly and challenging.

In this regard,

we will need to dedicate internal

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

internal control over financial

reporting, continue steps to improve

control processes as appropriate, validate

through testing

reporting issued by

our independent registered

public accounting firm.

company no later

than December 31,

prepare for compliance

with the auditor

attestation requirement

non-accelerated

company, we are engaged in a process to document and evaluate

our internal control over financial reporting, which

dedicate internal

resources, potentially

engage outside

and adopt a detailed work

plan to assess and document

the adequacy of internal

control over financial reporting,

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

steps to improve control

processes as appropriate, validate through

testing that controls are

functioning as documented and

reporting and

improvement process

financial reporting.

If we identify one or

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

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

USCB Financial Holdings, Inc.

within the prescribed

internal control

Sarbanes-Oxley.

weaknesses, it could result in an adverse reaction in

the financial markets due to a loss of confidence in

the reliability of our

financial statements.

corporate governance,

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shareholders.

customers, depositors, the Deposit Insurance Fund,

or DIF, and the overall financial health and

USCB Financial Holdings, Inc.

customers, depositors, the Deposit Insurance

Fund, or DIF, and the overall financial health and

stability of the United

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impose additional operating costs.

Further, we must obtain approval from our

regulators before engaging in many activities,

Further, we must obtain approval from our regulators

before engaging in many activities,

assurance that any regulatory approvals we may require

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Changes to the legal and regulatory framework governing our

operations, including

the Dodd-Frank

Street Reform

Protection Act,

Economic Growth, Regulatory Relief and Consumer

Protection Act, or the Regulatory Relief

Act, have significantly revised

the laws and regulations under which we operate.

Such regulations and laws may be modified or repealed at any time, and

new legislation may be enacted that will affect us and

our subsidiaries.

operations, including the Dodd-Frank Act and the 2018 Act, have significantly

revised the laws and regulations under which

Such regulations

and laws may be modified

or repealed at any time,

and new legislation may be

will affect us and our subsidiaries.

Our failure to comply with these laws and regulations, even if the failure follows good faith effort

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interpretation,

Further, any new laws, rules and

regulations, such as were imposed

under the Dodd-Frank Act or

the Regulatory

Relief Act, could make

Further, any new laws, rules

and regulations, such as were imposed under the Dodd-Frank

Act or the 2018 Act,

compliance more difficult

or expensive or otherwise

adversely affect our

business, prospects, cash

flow, liquidity,

business, prospects,

cash flow, liquidity,

financial condition and results of operations.

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our business, financial condition and results of operations.

USCB Financial Holdings, Inc.

Significantly

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any identified deficiencies

USCB Financial Holdings, Inc.

restrictions,

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enforcement proceedings;

Responding to regulatory inquiries

and proceedings can be

Responding to regulatory inquiries and

proceedings can be time

consuming and

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assets, usually

The new rules now apply to us.

The rules apply to us.

The Basel III rules increased

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adjustments, the

assets, meaning

against these

required to hold capital against short-term commitments

that are not unconditionally cancellable.

While we currently meet these new

requirements of the Basel III-based capital requirements, we

may fail to do so

to meet applicable

regulatory capital

requirements could result

regulators placing

limitations or conditions on our activities, including our growth initiatives, or restricting the commencement of new activities,

and could affect customer and investor confidence, our costs of funds and level of required deposit insurance

our ability to

pay dividends on

our capital stock,

our ability to

make acquisitions, and

our business, results

the risk weights

for certain assets,

meaning that we

hold more capital

against these assets.

are also required

to hold capital against short-term commitments that are not

unconditionally cancellable.

While we currently meet the requirements of

the Basel III-based capital requirements, we may fail to

do so in the future.

The failure to

meet applicable regulatory

capital requirements could

result in one

our regulators placing

or conditions on our activities, including our growth initiatives, or restricting the commencement of new activities, and could

investor confidence,

acquisitions,

operations and financial condition, generally.

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examination, one

USCB Financial Holdings, Inc.

concentration,

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different remedial

include the power to prohibit the continuation of "unsafe

or unsound" practices, to require affirmative

actions to correct any

include the power to prohibit the continuation

of "unsafe or unsound" practices, to require

affirmative actions to correct any

administrative

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an imminent risk

regulatory actions, our business, financial condition, results

regulatory actions, our business, financial condition, result

of operations and reputation may be negatively impacted.

USCB Financial Holdings, Inc.

consumers, including the Community Reinvestment

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of the global

As a result, the global business community has increased

its political and social awareness surrounding the issue,

United States

into international

agreements in

global temperatures,

the Paris Agreement.

state legislatures and

federal and state

regulatory agencies

propose numerous

initiatives to

supplement the

global effort

climate change,

including provisions

the Inflation Reduction Act

Furthermore, additional

initiative may be undertaken

in the future, including potentially

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

change in stress testing scenarios

and systemic risk assessments,

revising expectations for credit

portfolio concentrations

climate-related

communities disproportionately impacted by the effects of climate change.

empirical data surrounding the credit

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

or even impossible, to predict how climate change may

impact our financial

condition and results

of operations;

the physical effects

of climate change

may also directly

The lack of empirical

data surrounding the credit and

other financial risks posed by

climate change render it

difficult, or even

Specifically,

unpredictable and more frequent weather

disasters may adversely impact

the real property,

real property,

our portfolios.

unpredictable

disasters may adversely impact the real property,

and/or the value of the real property,

securing the loans in our portfolios.

Additionally,

our borrowers

insufficient to cover

any losses sustained

collateral, or if

insurance coverage is

otherwise unavailable to

our borrowers,

the collateral securing our

loans may be negatively

impacted by climate change,

natural disasters and related events,

could impact our financial condition and results of operations.

Further, the effects

of climate change may negatively impact

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

Overall, climate change, its effects

and the resulting unknown impact

could have a material adverse

effect on our financial

condition and results of operations.

Increasing scrutiny

and evolving expectations

from customers,

regulators, investors,

and other stakeholders

with respect to our environmental, social and

governance practices may impose additional

costs on us or expose

us to new or additional risks.

Companies have

increased scrutiny

from customers,

regulators, investors,

stakeholders related

environmental, social,

and governance

(“ESG”) practices

and disclosure.

Investor advocacy

compliance costs

overall operational

USCB Financial Holdings, Inc.

requirements, or

stakeholder expectations

and standards,

could negatively

reputation, ability

business with certain partners, and our stock price.

administration

emphasis on certain ESG priorities, particularly

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

is leading to

the rollback of

regulations that mandate specific

disclosures and operational practices

in these areas.

conflicting environment for

regulatory enforcement of

ESG-related policies becomes

less stringent,

expectations,

especially related to DEI and environmental stewardship.

As a result, navigating this evolving regulatory and public opinion

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

customer, and

stakeholder trust.

insurance coverage is otherwise unavailable to

our borrowers, the collateral securing

our loans may be negatively

change, natural disasters

and related events,

which could impact

our financial condition

and results of

negatively impact

local economic

unknown impact could have a material adverse effect

on our financial condition and results of operations.

Risks Related to Our Class A Common Stock

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economic conditions in general.

are numerous laws and banking

regulations and guidance that limit

the Bank's ability

Company without the prior

approval of the FDIC.

we have agreed to notify

the Federal Reserve before

numerous laws and banking regulations and

guidance that limit the Bank's

retained earnings,

pay dividends

Company without

have agreed to notify the Federal Reserve before declaring

and paying any dividends on our Class A common stock.

If we fail to

pay interest on

or otherwise default

on our subordinated

notes, we will

be prohibited from

dividends or distributions on our Class A common

distributions

things, certain events

of bankruptcy,

insolvency or liquidation

relating to us.

make a required

of principal or interest

on our subordinated

notes, it could have

a material adverse effect on

the market value of

USCB Financial Holdings, Inc.

market price of our Class A common stock to decline.

We have issued $40.0 million in aggregate principal amount of 7.625% Fixed-to-Floating Rate Subordinated Notes due

In the future, we may increase our capital resources by making additional offerings of debt or equity securities, which

additional subordinated

notes, classes

and/or common

common stock are

not entitled to

preemptive rights or

other protections against

Preferred shares

have a preference on liquidating distributions or a preference

on dividend or interest payments that could limit our

perception that

stock to decline

and may adversely

ability to raise

additional capital

in the financial

markets at times

favorable to us.

Further issuances of our Class A common stock could

be dilutive to holders of our Class A common stock.

The market price and trading volume of our Class A

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transfer of stock

USCB Financial Holdings, Inc.

Company continues to have "deferred tax assets." Such

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of operations

USCB Financial Holdings, Inc.

assessment of our internal control over financial reporting

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ownership criteria

also have certain registration rights,

including demand registration rights, and information

Although Patriot and Priam

institutional

stock ownership

representation

have a greater

ability than our

other shareholders to

influence the election

and the potential

other matters

shareholders,

including mergers

transactions,

USCB Financial Holdings, Inc.

Incorporation

certain registration rights

have exercised), including

demand registration rights,

and information rights.

Although Patriot

are independent

these institutional

investors will

level of influence over us because of their level

of Class A common stock ownership and their right

to representation on our

example, Patriot

shareholders to

influence the

directors and the

potential outcome of

other matters submitted

of our shareholders,

including mergers and

acquisition transactions,

amendments to

Incorporation and

Restated Bylaws,

extraordinary

corporate matters.

The interests of these

investors could conflict with the interests

of our other shareholders, and any

these investors of

other investors

different business objectives

could adversely affect our business, results

of operations, financial condition, prospects

or the market value of our Class A

common stock.

shareholders, and

these investors

investors who

have different business objectives

could adversely affect our

business, results of operations,

financial condition, prospects

or the market value of our Class A common stock.

anti-takeover

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Board or management.

USCB Financial Holdings, Inc.

Our governing documents include provisions that:

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an acquisition.

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

prohibits any direct or indirect

and continued availability

of our "deferred

tax assets," our

amended Articles of

Incorporation prohibit any

direct or indirect

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

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Incorporation could

anti-takeover effect

anti-takeover

that you may favor.

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-K

Item 1A. Risk Factors