USCB filing — read by section

Item 7. Management’s Discussion and Analysis

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

 
 Management’s 
discussion 
and 
analysis 
of 
financial 
condition 
and 
results 
of 
operations 
analyzes 
the 
consolidated 
 financial condition and results of operations of the Company and 
the Bank, its wholly owned subsidiary, for the years ended 
 December 31, 
2025 
and 
2024. 
This 
discussion 
and 
analysis 
is best 
read 
in 
conjunction 
with 
the 
Consolidated 
Financial 
 Statements and related 
footnotes of the Company 
presented in Item 
8 “Financial Statements 
and Supplementary Data” 
of 
 this Annual Report on Form 
10-K. In addition to 
historical information, this 
discussion contains forward-looking 
statements 
 that 
involve 
risks, 
uncertainties 
and 
assumptions 
that 
could 
cause 
actual 
results 
to 
differ 
materially 
from 
management's 
 expectations. 
Factors 
that 
could 
cause 
such 
differences 
are 
discussed 
in 
the 
sections 
entitled 
"Forward-Looking 
 Statements" and Item 1A “Risk Factors" of this Annual Report. 
 In this Annual Report on Form 10-K, unless the context indicated otherwise, references to “we,” “us,”, and “our” refer to 
 the Company and the Bank, as the contest dictates. 

 
 
 Table of Contents 
 

 

 53 
USCB Financial Holdings, Inc. 
2025 10-K 
 

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

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

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

 Non-GAAP Financial Measures 
 This Annual Report on Form 10-K includes 
financial information determined by methods 
other than in accordance with 
 generally 
accepted 
accounting 
principles 
(“GAAP”). 
This 
financial 
information 
includes 
certain 
operating 
performance 
 measures. Management has included these non-GAAP 
measures because it believes these measures may 
provide useful 
 supplemental information 
for evaluating 
the Company’s 
underlying performance 
trends. Further, 
management uses 
these 
 measures 
in 
managing 
and 
evaluating 
the 
Company’s 
business 
and 
intends 
to 
refer 
to 
them 
in 
discussions 
about 
our 

 
 
 Table of Contents 
 

 

 54 
USCB Financial Holdings, Inc. 
2025 10-K 
 

 operations and performance. 
Operating performance 
measures should be 
viewed in addition 
to, and not 
as an alternative 
 to or 
substitute 
for, 
measures 
determined 
in 
accordance 
with 
GAAP, 
and 
are 
not 
necessarily 
comparable 
to non-GAAP 
 measures 
that 
may 
be 
presented 
by 
other 
companies. 
To 
the 
extent 
applicable, 
reconciliations 
of 
these 
non-GAAP 
 measures to the most directly 
comparable GAAP measures can be found 
in the ‘Non-GAAP Reconciliation Tables’ included 
 in this Annual Report on form 10-K.
 Overview 
 For the year ended December 31, 2025, the Company reported net income of 
$26.1 million compared with net income 
 of $24.7 million for the year ended December 31, 2024. 

 In 
evaluating 
our 
financial 
performance, 
we 
consider 
the 
level 
of 
and 
trends 
in 
net 
interest 
income, 
the 
net 
interest 
 margin, the 
cost of 
deposits, growth 
and composition 
of our 
loan portfolio, 
levels and 
composition of 
non-interest income 
 and non-interest 
expense, 
performance 
ratios, 
asset 
quality ratios, 
regulatory 
capital 
ratios, 
and any 
significant 
event or 
 transaction. 
 The following significant highlights are of note for the year 
ended December 31, 2025: 
 •
 
Net interest income 
before provision 
for credit losses 
totaled $83.6 
million, an 
increase of $13.7 
million or 19.6%, 
 compared to $69.9 million for the year ended December 
31, 2024. 

 •
 
Net interest margin (“NIM”) was 3.20% for the year 
ended December 31, 2025, an improvement from 2.94% for the 
 year ended December 31, 2024. 

 •
 
Total assets 
grew to 
$2.8 billion 
at December 31, 
2025, 
an increase 
of $210.3 
million or 
8.1%, compared 
to $2.6 
 billion at December 31, 2024. 
 •
 
Total loans held for investment 
grew to $2.2 billion 
at December 31, 2025, 
an increase of $216.4 
million or 11.0%, 
 compared to $2.0 billion at December 31, 2024. 
 •
 
Return on average assets for the year ended December 
31, 2025 was 0.96% compared to 0.99% 
for 2024. 
 •
 
Return on average 
stockholders’ equity for 
the year ended 
December 31, 2025 
was 11.79% compared 
to 12.11% 
 for 2024. 
 •
 
Nonperforming assets totaled $3.1 million at December 
31, 2025 compared to $2.7 million at December 31, 2024. 

 •
 
The 
Bank 
maintained 
its 
strong 
capital 
position. 
As 
of 
December 31, 
2025, 
the 
Bank 
was 
well-capitalized 
for 
 regulatory capital purposes, 
with a 
total risk-based capital 
ratio of 13.67%, 
a tier 1 
risk-based capital ratio 
of 12.47%, 
 a 
common 
equity 
tier 
1 
capital 
ratio 
of 
12.47%, 
and 
a 
leverage 
ratio 
of 
9.65%. As 
of 
December 31, 
2025 
and 
 December 31, 2024, all of the Bank’s regulatory capital ratios exceeded the thresholds to be well-capitalized under 
 the applicable 
bank regulatory 
requirements. The 
Company, 
as a 
small 
bank holding 
company, 
is not 
subject 
to 
 regulatory capital requirements. 

 •
 
On August 14, 
2025, the 
Company entered 
into a 
Subordinated Note 
Purchase Agreement 
with certain 
qualified 
 institutional buyers pursuant to which the 
Company sold and issued $40.0 million 
in aggregate principal amount of 
 its 7.625% 
fixed-to-floating rate 
subordinated notes 
due August 15, 
2035 in 
a private 
placement transaction. 
This 
 transaction was 
conducted under 
the provisions 
of Regulation 
D promulgated 
under the 
Securities Act 1933. The 
 subordinated notes were issued by 
the Company to the 
purchasers at a price equal 
to 100% of their face 
amount. 
 The majority of 
the net proceeds 
were used to 
repurchase 2.0 million 
shares of Class 
A 
common stock in 
September 
 2025, from certain institutional shareholders through privately negotiated transactions, at a weighted average price 
 per share 
of $17.19. 
The aggregate 
purchase 
price for 
these transactions 
was 
approximately 
$34.4 million. 
The 
 repurchases 
were 
supplemental 
and 
not 
part 
of 
the 
Company’s 
two 
previously 
announced 
stock 
repurchase 
 programs. 
 •
 
During the fourth quarter 
of 2025 the Company 
executed a portfolio restructuring 
strategy which resulted in 
a sale 
 of $44.6 
million of 
its lower-yielding 
available-for sale 
securities for 
a pre-tax 
loss of 
$7.5 million. 
The majority 
of 
 proceeds from the sale were reinvested into loans at quarter-end. 

 
 
 Table of Contents 
 

 

 55 
USCB Financial Holdings, Inc. 
2025 10-K 
 

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

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

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

 
 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Table of Contents 
 

 

 56 
USCB Financial Holdings, Inc. 
2025 10-K 
 

 The model integrates qualitative 
factor adjustments to 
fine-tune risk calibration 
for each portfolio 
segment, addressing 
 aspects that quantitative analysis may 
not fully capture. Decisions concerning 
qualitative adjustments reflect management's 
 anticipation of loss conditions deviating from those already accounted 
for in the quantitative aspect of the model. 
 Our ACL 
included residential 
loans. To 
assess the 
potential impact 
of changes 
in qualitative 
factors related 
to these 
 loans, 
management 
performed 
a sensitivity 
analysis. 
The Company 
evaluated 
the 
impact 
of the 
HPI 
used 
in calculating 
 expected losses on the residential loan segment. 
As of December 31, 2025, for every 
100 basis points increase in the HPI 
 index, the 
forecast reduces 
reserves by 
approximately $398 
thousand and 
about 2 
basis points 
to the 
reserve coverage 
 ratio, everything else being 
constant. This sensitivity analysis 
provides a hypothetical result 
to assess the sensitivity 
of the 
 ACL and does not represent a change in management’s 
judgement. 
 As of 
December 31, 2025, 
we stress 
tested two 
qualitative factors 
in our 
commercial real 
estate loan 
pool, as 
it’s the 
 largest segment 
in our 
portfolio. We 
evaluated the 
impact of 
a change 
in the 
qualitative factors 
from no 
risk to 
maximum 
 loss to 
measure the 
sensitivity of 
the qualitative 
factors. The 
change resulted 
in a 
$10.3 million 
or 39.6% 
increase in 
the 
 ACL. This sensitivity 
analysis provides a 
hypothetical result to 
assess the sensitivity 
of the ACL 
and does 
not represent a 
 change in management’s judgement. 
 The Company calculates a reserve for unfunded commitments, distinct from 
the allowance for credit losses reported in 
 accrued interest 
and other liabilities. 
This reserve 
is determined 
using both quantitative 
and qualitative 
factors identical 
to 
 those applied to the collectively evaluated loan portfolio. 
 Results of Operations 
 General 
 The following tables 
present selected balance sheet, income statement, and profitability ratios for the dates and for the 
 periods indicated (in thousands, except ratios): 
 As of December 31, 
 2025 
 2024 
 Consolidated Balance Sheets: 
 Total 
assets 
 $ 
 2,791,540 
 $ 
 2,581,216 
 Total 
loans held for investment
 (1)
 $ 
 2,189,257 
 $ 
 1,972,848 
 Total 
deposits 
 $ 
 2,345,080 
 $ 
 2,174,004 
 Total 
stockholders' equity 
 $ 
 217,183 
 $ 
 215,388 
 (1) 
Loan amounts include deferred fees/costs. 
 Years Ended December 31, 
 2025 
 2024 
 Consolidated Statements of Operations: 
 Net interest income before provision for credit losses 
 $ 
 83,630 
 $ 
 69,936 
 Provision for credit losses 
 $ 
 2,297 
 $ 
 3,157 
 Total 
non-interest income 
 $ 
 6,592 
 $ 
 12,740 
 Total 
non-interest expense 
 $ 
 52,009 
 $ 
 47,042 
 Net income 

 $ 
 26,100 
 $ 
 24,674 
 Net income available to common stockholders 
 $ 
 26,100 
 $ 
 24,674 
 Profitability: 
 Efficiency ratio 
 57.65% 
 56.90% 
 Net interest margin 

 3.20% 
 2.94% 
 The Company’s results 
of operations 
depend substantially on 
net interest income 
and non-interest income. 
Other factors 
 contributing to the 
results of operations 
include our provision 
for credit losses, 
non-interest expense, and 
the provision for 
 income taxes. 
 Net income 
for the 
year ended 
December 31, 2025 
was $26.1 million 
, 
compared with 
net income 
of $24.7 million 
for 
 the same 
period in 
2024. The Company 
reported 
net income 
per diluted 
share for 
the year 
ended December 31, 
2025 of 
 $1.33 compared to net income per diluted share for the 
same period in 2024 of $1.24. 

 
 
 Table of Contents 
 

 

 57 
USCB Financial Holdings, Inc. 
2025 10-K 
 

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

 
 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Table of Contents 
 

 

 58 
USCB Financial Holdings, Inc. 
2025 10-K 
 

 The following table 
contains information 
related to average 
balances, average 
yields on assets, 
and average 
costs of 
 liabilities for the periods indicated (in thousands). 
 Years Ended December 31, 
 2025 
 2024 
 Average 
 Balance
 
(1)
 Interest 
 Yield/Rate 
 Average 
 Balance
 
(1)
 Interest 
 Yield/Rate 
 Assets 
 Interest-earning assets: 
 Loans 

 (2) 
 $ 
 2,069,039 
 $ 
 128,160 
 6.19 
 % 
 $ 
 1,862,013 
 $ 
 115,236 
 6.19 
 % 
 Investment securities 

 (3) 
 460,089 
 13,715 
 2.98 
 % 
 427,567 
 11,480 
 2.68 
 % 
 Other interest-earning assets 
 86,183 
 3,612 
 4.19 
 % 
 88,758 
 4,517 
 5.09 
 % 
 Total 
interest-earning assets 
 2,615,311 
 145,487 
 5.56 
 % 
 2,378,338 
 131,233 
 5.52 
 % 
 Non-interest earning assets 
 105,874 
 

 

 108,215 
 

 

 Total 
assets 
 $ 
 2,721,185 
 

 

 $ 
 2,486,553 
 

 

 Liabilities and stockholders' equity 
 

 

 

 

 

 

 Interest-bearing liabilities: 
 

 

 

 

 

 

 Interest-bearing demand deposits 
 $ 
 51,803 
 1,283 
 2.48 
 % 
 $ 
 54,667 
 1,509 
 2.76 
 % 
 Savings and money market deposits 
 1,255,719 
 38,027 
 3.03 
 % 
 1,109,853 
 40,098 
 3.61 
 % 
 Time deposits 
 470,213 
 18,104 
 3.85 
 % 
 326,373 
 13,354 
 4.09 
 % 
 Total 
interest-bearing deposits 
 1,777,735 
 57,414 
 3.23 
 % 
 1,490,893 
 54,961 
 3.69 
 % 
 FHLB advances 
 86,382 
 3,238 
 3.75 
 % 
 158,484 
 6,336 
 4.00 
 % 
 Subordinated notes 
 16,463 
 1,205 
 7.32 
 % 
 - 
 - 
 - 
 % 
 Total 
interest-bearing liabilities 
 1,880,580 
 61,857 
 3.29 
 % 
 1,649,377 
 61,297 
 3.72 
 % 
 Non-interest-bearing demand deposits 
 577,232 
 

 596,073 
 

 Other non-interest-bearing liabilities 
 41,955 
 

 37,399 
 

 Total 
liabilities 
 2,499,767 
 

 2,282,849 
 

 Stockholders' equity 
 221,418 
 

 203,704 
 

 Total 
liabilities and stockholders' equity 
 $ 
 2,721,185 
 

 $ 
 2,486,553 
 

 Net interest income 
 $ 
 83,630 
 

 $ 
 69,936 
 

 Net interest spread 

 (4) 
 

 2.27 
 % 
 

 1.80 
 % 
 Net interest margin 

 (5) 
 

 

 3.20 
 % 
 

 

 2.94 
 % 
 (1) 
Average balances - Daily average balances are used 
to calculate yields/rates. 
 (2) 
Average loan balances include non-accrual loans. Interest income 
on loans includes accretion of deferred 
loan fees, net of deferred loan costs. 
 (3) 
At fair value except for securities held to maturity. This amount includes 
FHLB stock. 
 (4) 
Net interest spread is the weighted average 
yield earned on total interest-earning assets 
minus the weighted average rate paid on total interest-
 bearing liabilities. 
 (5) 
Net interest margin is the ratio of net interest 
income to average total interest-earning assets. 
 Net interest 
income before 
the provision 
for credit 
losses was 
$83.6 million for 
the year 
ended December 31, 
2025, a 
 increase of $13.7 
million or 19.6%, 
from $69.9 million 
for the year 
ended December 31, 
2024. The increase 
was primarily 
 driven by a decrease in the weighted
 ‑
 average rates paid on interest
 ‑
 bearing liabilities, which lowered overall funding costs, 
 combined with higher weighted
 ‑
 average yields on interest
 ‑
 earning assets. In addition, growth in the 
loan portfolio increased 
 the volume of interest
 ‑
 earning assets, further contributing to the increase in net 
interest income. 
 The 
net 
interest 
margin 
(“NIM”) 
was 
3.20% 
for 
the 
year 
ended 
December 31, 
2025 
and 
2.94% 
for 
the 
year 
ended 
 December 31, 2024. The NIM increased 
primarily due to a decrease 
in the weighted average rate 
paid on interest-bearing 

 
 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Table of Contents 
 

 

 59 
USCB Financial Holdings, Inc. 
2025 10-K 
 

 liabilities, in 
particular a 
decrease in 
weighted average 
rate paid 
on saving 
and money 
market deposits. 
The decrease 
in 
 our cost of funds was primarily due to the interest rate 
market. 

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

 The 
provision 
for 
credit 
loss 
for 
the 
year 
ended 
December 31, 
2025, 
was 
$2.3 
million 
compared 
to 
$3.2 
million 
in 
 provision expense for the 
same period in 2024. The ACL as a 
percentage of total 
loans was 1.16% 
at December 31, 2025 
 compared to 1.22% at December 
31, 2024. The ratio of ACL to total loans decreased due 
to several payoffs of individually 
 reserved 
loans during 2025 and the improvement of the expected loss 
rate for various categories of pooled loans. 

 See “Allowance 
for Credit 
Losses” below 
for further 
discussion on 
how the 
ACL was 
calculated for 
the periods 
presented. 

 Non-Interest Income 
 Net interest income 
and other types of 
recurring non-interest 
income are generated 
from our operations. 
Our services 
 and products generate service charges and 
fees, mainly from our depository accounts. 
We also generate income from 
our 
 interest 
swap 
program 
and 
from 
the 
gain 
on 
sale 
of 
loans 
though 
our 
SBA program. 
In 
addition, 
we 
own 
life 
insurance 
 policies on several 
key employees and 
generate income reflecting 
the increase in 
the cash surrender 
value of these 
policies. 
 The following table presents the components of non-interest 
income for the periods indicated (in thousands): 
 Years Ended December 31, 
 2025 
 2024 
 Service fees 
 $ 
 9,603 
 $ 
 8,839 
 (Loss) gain on sale of securities available for sale, net 
 (7,526) 
 14 
 Gain on sale of loans held for sale, net 
 1,001 
 747 
 Other non-interest income 
 3,514 
 3,140 
 Total 
non-interest income 
 $ 
 6,592 
 $ 
 12,740 
 Non-interest income 
for the 
year ended 
December 31, 2025 
was $6.6 
million compared 
to $12.7 
million for 
the same 
 period in 
2024. This 
decrease was 
primarily driven 
by a 
$7.5 million 
loss on 
sale of 
securities available 
for sale 
resulting 
 from a portfolio restructuring strategy 
approved by the Board of 
Directors and implemented in December 2025. 
The portfolio 
 restructuring strategy 
resulted in 
the sale of 
lower-yielding available-for-sale 
securities at 
a loss in 
order to better 
position 
 our securities portfolio. 
Proceeds from the sale 
transactions were primarily 
reinvested in assets 
bearing higher yields 
than 
 those on the securities that were 
sold. Service fees increased $764 
thousand or 8.6%, primarily due 
to title insurance fees 
 and prepayment 
penalties. 
The gain 
on sale 
of SBA 7a 
loans increased 
$254 thousand 
or 34.0%, 
and other 
non-interest 
 income 
increased 
$374 
thousand 
or 
11.9%, 
primarily 
due 
to 
increases 
in 
the 
cash 
surrender 
values 
of 
bank-owned 
life 
 insurance policies. 

 Non-Interest Expense 
 The following table presents the components of non-interest 
expense for the periods indicated (in thousands):
 Years Ended December 31, 
 2025 
 2024 
 Salaries and employee benefits 
 $ 
 32,167 
 $ 
 28,793 
 Occupancy 
 5,330 
 5,258 
 Regulatory assessment and fees 
 1,637 
 1,766 
 Consulting and legal fees 
 1,941 
 1,568 
 Network and information technology services 
 2,324 
 1,993 
 Other operating 
 8,610 
 7,664 
 Total 
non-interest expense 
 $ 
 52,009 
 $ 
 47,042 

 
 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Table of Contents 
 

 

 60 
USCB Financial Holdings, Inc. 
2025 10-K 
 

 Non-interest expense 
for the 
year ended 
December 31, 2025 
increased $5.0 million 
or 10.6%, 
compared to 
the year 
 ended December 31, 2024. 
The increase is 
primarily due to 
$3.4 million or 
11.7% increase in 
salaries and employee 
benefits 
 consisting of a $2.2 
million or 11.0% increase 
due to merit 
promotions and new hires, 
a $455 thousand or 
13.6% increase 
 in benefits 
(health insurance) 
and payroll 
taxes, 
and a 
$876 thousand 
increase in 
stock-based 
compensation due 
to the 
 Company’s favorable financial performance in 2025. Other operating 
expense had an increase of $946 thousand or 12.3% 
 consisting of 
an increase 
of $204 
thousand in 
item processing, 
$146 thousand 
in internet 
banking fees, 
a $169 
thousand 
 increase 
in 
promotional 
expense, 
a 
$207 
thousand 
increase 
in 
director 
fees, 
and 
a 
$220 
thousand 
in 
other 
operating 
 expenses. 

 Provision for Income Tax 
 Fluctuations in the effective tax rate reflect the effect of the differences in the inclusion or deductibility of certain income 
 and expense for income tax purposes. 
Therefore, future decisions on the investments we 
choose will affect our effective tax 
 rate. Changes in the 
cash surrender value 
of bank-owned life 
insurance policies for 
key employees, purchasing 
municipal 
 bonds, and overall taxable income will be important elements 
in determining our effective tax rate. 
 Income tax 
expense for 
the year 
ended December 
31, 2025 
was 
$9.8 million, 
compared 
to $7.8 million 
for the 
year 
 ended December 31, 
2024. The effective 
tax rate 
increased to 27.3% 
for the year 
ended December 31, 
2025 from 24.0% 
 for the 
year ended 
December 31, 2024. 
The increase 
in effective 
tax rate 
in 2025 
was due 
primarily to 
the recognition 
of 
 $1.1 million of state tax liability expense for the year ended December 31, 2024. The state tax liability 
expense was related 
 to taxes due on interest income on loans whose collateral 
is located outside the State of Florida. 

 The Company did not have any tax-exempt securities 
at both December 31, 2025 and December 31, 2024. 
 For a further 
discussion on income taxes, see 
Note 6 “Income Taxes” 
to the Consolidated Financial Statements 
set forth 
 in Item 8 of this Annual Report on Form 10-K. 
 Rate/Volume Analysis 
 The 
table 
below 
sets 
forth 
information 
regarding 
changes 
in 
interest 
income 
and 
interest 
expense 
for 
the 
periods 
 indicated (in thousands). 
For each category of 
interest-earning assets and interest-bearing liabilities, 
information is provided 
 on changes attributable to (i) changes in rate (changes in rate multiplied by old volume); (ii) changes in volume (changes in 
 volume multiplied by old rate); and (iii) changes in rate-volume (change in 
rate multiplied by change in volume). Changes in 
 rate-volume are proportionately allocated between rate and volume 
variance (in thousands). 
 Years Ended 2025 vs. 2024 
 Years Ended 2024 vs. 2023 
 Increase (decrease) due to change in 
 Increase (decrease) due to change in 
 Volume 
 Rate 
 Net 
 Change 
 Volume 
 Rate 
 Net 
 Change 
 Interest-earning assets: 
 Loans 
 (1)
 $ 
 12,812 
 $ 
 112 
 $ 
 12,924 
 $ 
 13,949 
 $ 
 13,403 
 $ 
 27,352 
 Investment securities 
 (2)
 873 
 1,362 
 2,235 
 90 
 1,378 
 1,468 
 Other interest-earning assets 
 (130) 
 (775) 
 (905) 
 1,077 
 319 
 1,396 
 Total increase in interest income 
 $ 
 13,555 
 $ 
 699 
 $ 
 14,254 
 $ 
 15,116 
 $ 
 15,100 
 $ 
 30,216 
 Interest-bearing liabilities: 
 Interest-bearing demand deposits 
 $ 
 (79) 
 $ 
 (147) 
 $ 
 (226) 
 $ 
 23 
 $ 
 585 
 $ 
 608 
 Savings and money market deposits 
 5,270 
 (7,341) 
 (2,071) 
 4,498 
 5,942 
 10,440 
 Time deposits 
 5,885 
 (1,135) 
 4,750 
 1,824 
 3,030 
 4,854 
 FHLB advances 
 (2,882) 
 (216) 
 (3,098) 
 2,269 
 677 
 2,946 
 Subordinated notes 
 1,205 
 - 
 1,205 
 - 
 - 
 - 
 Total increase (decrease) in interest expense 
 9,399 
 (8,839) 
 560 
 8,614 
 10,235 
 18,848 
 Increase in net interest income 
 $ 
 4,156 
 $ 
 9,538 
 $ 
 13,694 
 $ 
 6,502 
 $ 
 4,865 
 $ 
 11,368 
 (1) 
Average loan balances include non-accrual loans. Interest income 
on loans includes accretion of deferred 
loan fees, net of deferred loan costs. 
 (2) 
At fair value except for securities held to maturity. This amount includes 
FHLB stock. 

 
 
 Table of Contents 
 

 

 61 
USCB Financial Holdings, Inc. 
2025 10-K 
 

 During 
the 
year 
ended 
December 31, 
2025 
average 
rates 
paid 
on 
interest-bearing 
liabilities 
decreased, 
while 
yields 
 earned 
on 
interest-earning 
assets 
increased 
slightly. 
The 
Company 
was 
able 
to 
reprice 
its 
interest-bearing 
liabilities 
 downward more rapidly than its interest-earning assets. 

 Analysis of Financial Condition 
 Total 
assets at December 31, 
2025, were $2.8 billion, 
an increase of $210.3 
million, or 8.1%, over 
total assets of $2.6 
 billion 
at 
December 31, 
2024. 
Total 
loans 
held 
for 
investment 
increased 
$216.4 
million, 
or 
11.0%, 
to 
$2.2 
billion 
at 
 December 31, 2025 
compared to 
$2.0 billion 
at December 31, 
2024. Total 
deposits increased 
by $171.1 
million, or 
7.9%, 
 to $2.3 
billion at December 31, 2025 compared to $2.2 
billion at December 31, 2024. 
 Investment Securities 
 The investment portfolio 
is used and 
managed to provide 
liquidity through cash 
flows, marketability 
and, if necessary, 
 collateral for 
borrowings. The 
investment portfolio 
is also 
used as 
a tool 
to manage 
interest rate 
risk and 
the Company’s 
 capital market risk exposure. The 
operating philosophy of the portfolio is 
to maximize the Company’s profitability, 
taking into 
 consideration the 
Company’s risk 
appetite and 
tolerance, manage 
it’s asset 
composition and 
diversification, and 
maintain 
 adequate risk-based capital ratios. 
 The 
investment 
portfolio 
is 
managed 
in 
accordance 
with 
the 
Asset 
and 
Liability 
Management 
(“ALM”) 
policy, 
which 
 includes 
investment 
guidelines, 
approved 
by 
the 
Board. 
Such 
policy 
is 
reviewed 
at 
least 
annually 
or 
more 
frequently 
if 
 deemed necessary, 
depending on 
market 
conditions 
and/or 
unexpected 
events. 
The investment 
portfolio 
composition 
is 
 subject 
to 
change 
depending 
on 
the 
funding 
and 
liquidity 
needs 
of 
the 
Company, 
and 
the 
interest 
risk 
management 
 objectives directed by the ALCO. The portfolio of investments can be used to modify the duration of the balance sheet. 
The 
 allocation of cash into securities takes into consideration anticipated 
future cash flows (uses and sources) and all available 
 sources of credit. 
 Our 
investment 
portfolio 
consists 
primarily 
of 
securities 
issued 
by 
U.S. 
government-sponsored 
agencies, 
agency 
 mortgage-backed securities, 
collateralized mortgage 
obligation securities, 
municipal securities, 
and other 
debt securities, 
 all with varying contractual maturities and coupons. Due to the optionality embedded in these securities, the final maturities 
 do not 
necessarily represent the 
expected life of 
the portfolio. Some 
of these 
securities will be 
called or paid 
down depending 
 on capital market conditions and expectations. The investment portfolio is regularly reviewed by the Chief Financial Officer, 
 Treasurer, and/or the ALCO of the Company to ensure an appropriate risk and return profile as 
well as for adherence to the 
 Company’s investment policy. 
 As of December 31, 2025, the investment portfolio consisted of available-for-sale 
(“AFS”) and held-to-maturity (“HTM”) 
 debt securities. In 2022, the Company transferred investment securities from 
AFS to HTM with an amortized cost basis and 
 fair value 
amount of 
$74.4 million 
and $63.8 
million, respectively. 
On the 
date of 
transfer, 
these securities 
had a 
total net 
 unrealized loss of $10.6 million. The transfer of the debt securities from the AFS to HTM 
category was made at fair value at 
 the date of transfer. The unrealized gain or loss at the date of transfer is retained in accumulated other comprehensive loss 
 and in the carrying value 
of the HTM securities. Such 
amounts are amortized over 
the remaining life of the security. 
There 
 was no impact 
to net income on 
the date of transfer. There were 
no securities transferred from 
AFS to HTM 
in 2025 or 2024. 
 The book value of the AFS securities is adjusted quarterly for 
unrealized gain or loss as a valuation allowance, and any 
 gain or loss is reported on an after-tax basis as a component 
of other comprehensive loss in stockholders’ equity. 

 CECL requires a loss reserve for securities 
classified as HTM. The reserve should reflect 
historical credit performance 
 as well as the impact of projected economic forecast. 
For U.S. Government bonds and U.S. Agency issued 
bonds in HTM, 
 the explicit guarantee of the U.S. 
Government is sufficient to conclude that a 
credit loss reserve is not required. 
The reserve 
 requirement 
is 
for three 
primary 
assets 
groups: 
municipal 
bonds, 
corporate 
bonds, 
and 
non-agency 
securitizations. 
The 
 Company calculates quarterly the loss reserve 
utilizing Moody’s ImpairmentStudio. The CECL measurement for investment 
 securities 
incorporates 
historical 
data, 
containing 
defaults 
and 
recoveries 
information, 
and 
Moody’s 
baseline 
economic 
 forecast. The 
solution uses 
probability of 
default/loss 
given default 
(“PD/LGD”) 
approach. PD 
represents the 
likelihood a 
 borrower will 
default. 
Within the 
Moody’s 
model, this 
is determined 
using historical 
default data, 
adjusted for 
the current 
 economic environment. LGD projects the expected loss 
if a borrower were to default. 
 The Company 
monitors the credit 
quality of HTM 
securities through the 
use of 
credit ratings. Credit 
ratings are monitored 
 by the Company 
on at least 
a quarterly basis. 
As of December 
31, 2025 and 
December 31, 2024, 
all HTM securities 
held 
 by the Company were rated investment grade. 

 
 
 Table of Contents 
 

 

 62 
USCB Financial Holdings, Inc. 
2025 10-K 
 

 At December 31, 2025, HTM securities included $144.9 
million of U.S. Government and U.S. 
Agency issued bonds and 
 mortgage-backed 
securities. 
Because 
of 
the 
explicit 
and/or 
implicit 
guarantee 
on 
these 
bonds, 
the 
Company 
holds 
no 
 reserves 
on 
these 
holdings. 
The 
remaining 
portion 
of 
the 
HTM 
portfolio 
is 
made 
up 
of 
$9.0 
million 
in 
investment 
grade 
 corporate bonds. The required reserve for these 
holdings is determined each quarter using the model described above. 
For 
 the portion of the HTM exposed to non-government credit risk, 
the Company utilized the PD/LGD methodology 
to estimate 
 a $2 thousand 
ACL as of 
December 31, 2025. The 
book value for 
debt securities classified 
as HTM represents 
amortized 
 cost less ACL. 
 As of December 31, 2025, securities with a fair value of $43.5 
million were pledged to secure public deposits. 

 
 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Table of Contents 
 

 

 63 
USCB Financial Holdings, Inc. 
2025 10-K 
 

 The 
following 
table 
presents 
the 
amortized 
cost 
and 
fair 
value 
of 
investment 
securities 
for 
the 
dates 
indicated 
(in 
 thousands): 
 December 31, 2025 
 Available-for-sale: 
 Amortized 
 Cost 
 Unrealized 
 Gains 
 Unrealized 
 Losses 
 Fair Value 
 U.S. Government Agency 
 $ 
 15,169 
 $ 
 18 
 $ 
 (1,043) 
 $ 
 14,144 
 Collateralized mortgage obligations 
 92,871 
 - 
 (17,043) 
 75,828 
 Mortgage-backed securities - residential 
 35,865 
 135 
 (6,083) 
 29,917 
 Mortgage-backed securities - commercial 
 174,622 
 347 
 (6,861) 
 168,108 
 Municipal securities 
 5,196 
 - 
 (933) 
 4,263 
 Bank subordinated debt securities 
 15,284 
 189 
 (243) 
 15,230 
 $ 
 339,007 
 $ 
 689 
 $ 
 (32,206) 
 $ 
 307,490 
 December 31, 2025 
 Held-to-maturity: 
 Amortized 
 Cost 
 Unrecognized 
 Gains 
 Unrecognized 
 Losses 
 Fair Value 
 U.S. Government Agency 
 $ 
 41,158 
 $ 
 91 
 $ 
 (3,279) 
 $ 
 37,970 
 Collateralized mortgage obligations 
 51,431 
 854 
 (5,499) 
 46,786 
 Mortgage-backed securities - residential 
 37,221 
 760 
 (3,263) 
 34,718 
 Mortgage-backed securities - commercial 
 15,088 
 - 
 (1,037) 
 14,051 
 Corporate bonds 
 9,045 
 - 
 (62) 
 8,983 
 $ 
 153,943 
 $ 
 1,705 
 $ 
 (13,140) 
 $ 
 142,508 
 Allowance for credit losses - securities held-to-maturity 
 (2) 
 Securities held-to maturity, net of allowance for credit losses 
 $ 
 153,941 
 December 31, 2024 
 Available-for-sale: 
 Amortized 
 Cost 
 Unrealized 
 Gains 
 Unrealized 
 Losses 
 Fair Value 
 U.S. Government Agency 
 $ 
 14,279 
 $ 
 14 
 $ 
 (1,668) 
 $ 
 12,625 
 Collateralized mortgage obligations 
 101,808 
 15 
 (22,918) 
 78,905 
 Mortgage-backed securities - residential 
 58,995 
 1 
 (12,063) 
 46,933 
 Mortgage-backed securities - commercial 
 86,604 
 40 
 (7,905) 
 78,739 
 Municipal securities 
 24,925 
 - 
 (5,614) 
 19,311 
 Bank subordinated debt securities 
 24,314 
 438 
 (1,044) 
 23,708 
 $ 
 310,925 
 $ 
 508 
 $ 
 (51,212) 
 $ 
 260,221 
 

 December 31, 2024 
 Held-to-maturity: 
 Amortized 
 Cost 
 Unrecognized 
 Gains 
 Unrecognized 
 Losses 
 Fair Value 
 U.S. Government Agency 
 $ 
 42,538 
 $ 
 - 
 $ 
 (5,094) 
 $ 
 37,444 
 Collateralized mortgage obligations 
 56,987 
 57 
 (7,785) 
 49,259 
 Mortgage-backed securities - residential 
 40,681 
 53 
 (4,613) 
 36,121 
 Mortgage-backed securities - commercial 
 15,272 
 - 
 (1,385) 
 13,887 
 Corporate bonds 
 9,222 
 - 
 (393) 
 8,829 
 164,700 
 $ 
 110 
 $ 
 (19,270) 
 $ 
 145,540 
 Allowance for credit losses - securities held-to-maturity 
 (6) 
 Securities held-to maturity, net of allowance for credit losses 
 $ 
 164,694 

 
 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Table of Contents 
 

 

 64 
USCB Financial Holdings, Inc. 
2025 10-K 
 

 AFS and 
HTM investment 
securities in 
aggregate increased 
$36.5 million 
or 8.6% 
to $461.4 
million at 
December 31, 
 2025 from $424.9 million at December 31, 2024. 
 The following 
table shows 
the weighted 
average yields, 
categorized by 
contractual maturity, 
for investment 
securities 
 as of December 31, 2025 (in thousands, except ratios): 

 Within 1 year 
 After 1 year 
 through 5 years 
 After 5 years 
 through 10 years 
 After 10 years 
 Total 
 Amortized 
 Cost 
 Yield 
 Amortized 
 Cost 
 Yield 
 Amortized 
 Cost 
 Yield 
 Amortized 
 Cost 
 Yield 
 Amortized 
 Cost 
 Yield 
 Available-for-sale: 
 U.S. Government Agency 
 $ 
 - 
 - 
 $ 
 - 
 - 
 $ 
 - 
 - 
 15,169 
 4.00% 
 $ 
 15,169 
 4.00% 
 Collateralized mortgage obligations 
 - 
 - 
 - 
 - 
 - 
 - 
 92,871 
 1.74% 
 92,871 
 1.74% 
 Mortgage-backed securities - residential 
 - 
 - 
 - 
 - 
 - 
 - 
 35,865 
 2.41% 
 35,865 
 2.41% 
 Mortgage-backed securities - commercial 
 - 
 - 
 - 
 - 
 - 
 - 
 174,622 
 4.02% 
 174,622 
 4.02% 
 Municipal securities 

 - 
 - 
 - 
 - 
 5,196 
 1.87% 
 - 
 - 
 5,196 
 1.87% 
 Bank subordinated debt securities 
 - 
 - 
 4,473 
 8.14% 
 10,811 
 5.65% 
 - 
 - 
 15,284 
 6.38% 
 $ 
 - 
 - 
 $ 
 4,473 
 8.14% 
 $ 
 16,007 
 4.42% 
 $ 
 318,527 
 3.17% 
 $ 
 339,006 
 3.30% 
 Held-to-maturity: 
 U.S. Government Agency 

 $ 
 2,999 
 0.64% 
 $ 
 19,773 
 1.25% 
 $ 
 5,001 
 1.99% 
 $ 
 13,385 
 1.85 
 $ 
 41,158 
 1.49% 
 Collateralized mortgage obligations 
 - 
 - 
 - 
 - 
 - 
 - 
 51,431 
 1.67% 
 51,431 
 1.67% 
 Mortgage-backed securities - residential 
 675 
 2.96% 
 3,888 
 1.66% 
 5,051 
 1.62% 
 27,607 
 2.18% 
 37,221 
 2.06% 
 Mortgage-backed securities - commercial 
 - 
 - 
 3,042 
 1.63% 
 - 
 - 
 12,046 
 2.56% 
 15,088 
 2.37% 
 Corporate bonds 
 9,045 
 2.82% 
 - 
 - 
 - 
 - 
 - 
 - 
 9,045 
 2.82% 
 $ 
 12,719 
 2.31% 
 $ 
 26,703 
 1.35% 
 $ 
 10,052 
 1.81% 
 $ 
 104,469 
 1.92% 
 $ 
 153,943 
 1.85% 
 The Company did not have any tax-exempt securities 
at both December 31, 2025 and 2024. 

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

 December 31, 2025 
 December 31, 2024 
 Total 
 Percent of 
 Total 
 Total 
 Percent of 
 Total 
 Residential Real Estate 
 $ 
 307,692 
 14.1 
 % 
 $ 
 289,961 
 14.8 
 % 
 Commercial Real Estate 
 1,244,835 
 57.0 
 % 
 1,136,417 
 57.8 
 % 
 Commercial and Industrial 
 295,548 
 13.5 
 % 
 258,311 
 13.1 
 % 
 Correspondent Banks 
 127,968 
 5.9 
 % 
 82,438 
 4.2 
 % 
 Consumer and Other 

 207,215 
 9.5 
 % 
 198,091 
 10.1 
 % 
 Total 
gross loans 
 2,183,258 
 100.0 
 % 
 1,965,218 
 100.0 
 % 
 Plus: Deferred costs/fees 
 5,999 
 7,630 
 Total 
loans held for investment, net of deferred costs/fees 
 2,189,257 
 1,972,848 
 Less: Allowance for credit losses 
 25,500 
 24,070 
 Total 
loans held for investment, net of allowance 
 $ 
 2,163,757 
 

 $ 
 1,948,778 
 

 Total 
loans held for investment net 
of deferred costs/fees increased 
by $216.4 million or 11.0% 
at December 31, 2025 
 compared to December 31, 
2024. The most 
significant growth was 
in the commercial 
real estate and 
correspondent bank 
 loan pools. 
Commercial real estate continues to 
be the main category of 
our portfolio, reflective of the 
market in which we 
 operate. We continue 
to grow our non-CRE 
loan pools to further 
diversify the loan portfolio 
overall composition, but we 
do 
 not expect any significant changes over the foreseeable 
future in the composition of our loan portfolio. 

 
 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Table of Contents 
 

 

 65 
USCB Financial Holdings, Inc. 
2025 10-K 
 

 The 
growth 
experienced 
over 
the 
last 
couple 
of 
years 
is 
primarily 
due 
to 
implementation 
of 
our 
relationship-based 
 banking 
model, 
our 
diversified 
business 
verticals, 
and 
the 
success 
of 
our 
relationship 
managers 
in 
competing 
for 
new 
 business in a highly competitive metropolitan area. 

 From a 
liquidity perspective, 
our loan 
portfolio provides 
us with 
additional 
liquidity due 
to repayments 
or unexpected 
 prepayments. 
The 
following 
table 
shows 
maturities 
and 
sensitivity 
to 
interest 
rate 
changes 
for 
the 
loan 
portfolio 
at 
 December 31, 2025 (in thousands): 
 Due in 1 year or 
 less 
 Due in 1 to 5 
 years 
 Due after 5 to 15 
 years 
 Due after 15 
 years 
 Total 
 Residential Real Estate 
 $ 
 8,435 
 
$ 

 61,279 
 
$ 

 66,063 
 
$ 

 171,915 
 $ 
 307,692 
 Commercial Real Estate 
 69,664 
 527,784 
 641,905 
 5,482 
 1,244,835 
 Commercial and Industrial 
 10,369 
 120,412 
 120,845 
 43,922 
 295,548 
 Correspondent Banks 
 127,968 
 - 
 - 
 - 
 127,968 
 Consumer and Other 
 2,493 
 1,152 
 24,760 
 178,810 
 207,215 
 Total 
gross loans 
 $ 
 218,929 
 $ 
 710,627 
 $ 
 853,573 
 $ 
 400,129 
 $ 
 2,183,258 
 Interest rate sensitivity: 
 Fixed interest rates 
 $ 
 176,933 
 $ 
 188,621 
 $ 
 164,498 
 $ 
 310,107 
 $ 
 840,159 
 Floating or adjustable rates 
 41,996 
 522,006 
 689,075 
 90,022 
 1,343,099 
 Total 
gross loans 
 $ 
 218,929 
 $ 
 710,627 
 $ 
 853,573 
 $ 
 400,129 
 $ 
 2,183,258 
 The information 
presented in 
the table 
above is 
based upon 
contractual maturities 
of the 
individual loans, 
which may 
 be subject to renewal at their contractual maturity. Renewals will depend on approval by our credit department and balance 
 sheet composition 
at the 
time of 
the analysis, 
as well 
as any 
modification of 
terms at 
the loan’s maturity. Additionally, maturity 
 concentrations, 
loan duration, 
prepayment 
speeds 
and 
other interest 
rate 
sensitivity 
measures 
are discussed, 
reviewed, 
 and analyzed by the ALCO. Decisions on term and rate 
modifications are discussed as well. 

 As of 
December 31, 
2025, 
approximately 
61.5% 
of the 
loans 
have adjustable/variable 
rates 
and 
38.5% 
of the 
loans 
 have fixed rates. 
The adjustable/variable 
loans re-price to 
different benchmarks 
and tenors in 
different periods 
of time. By 
 contractual characteristics, there are no 
material concentrations on anniversary repricing. Additionally, it is 
important to note 
 that most 
of our 
loans have 
interest rate 
floors. This 
embedded option 
protects the 
Company from 
a decrease 
in interest 
 rates and positions us to gain in the scenario of higher interest 
rates. 
 As of 
December 31, 2025, the 
commercial real estate 
portfolio was $1.2 
billion or 57.0% 
of the 
total gross loans 
portfolio. 
 At 
such 
date, 
$193.0 
million 
of 
outstanding 
balances 
are 
characterized 
as 
owner 
occupied 
and 
$1.05 
billion 
are 
 characterized as non-owner occupied. 
The retail sector 
was the largest 
segment comprising $320.1 million 
of the non-owner 
 occupied commercial real estate portfolio. 
 The 
following 
table 
is 
a 
summary 
of 
the 
distribution 
of 
non-owner 
occupied 
commercial 
real 
estate 
loans 
held 
for 
 investment by loan type (dollars in thousands): 
 December 31, 2025 
 Balance 
 # of Notes 
 % of Total 
 Gross Loans 
 Average Loan Size 
 Non-Accruals 
 Weighted Avg 
 LTV 
 (1)
 Retail 
 $ 
 320,132 
 

 145 
 

 15% 
 $ 
 2,208 
 $ 
 - 
 

 56% 
 Multifamily 
 252,041 
 197 
 12% 
 1,279 
 - 
 64% 
 Warehouse 
 134,190 
 68 
 6% 
 1,973 
 - 
 54% 
 Office 
 122,887 
 59 
 6% 
 2,083 
 - 
 49% 
 Hotels/Motels 
 117,226 
 52 
 5% 
 2,254 
 - 
 63% 
 Construction/Land 
 73,080 
 22 
 3% 
 3,322 
 - 
 46% 
 Other 
 32,272 
 28 
 1% 
 1,153 
 - 
 59% 
 $ 
 1,051,828 
 

 571 
 

 48% 
 $ 
 1,842 
 $ 
 - 
 $ 
 57% 
 (1) Loan-to-value is calculated based on the real estate value at the time of origination, renewal, or update, whichever is more recent. 

 
 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Table of Contents 
 

 

 66 
USCB Financial Holdings, Inc. 
2025 10-K 
 

 The following table is a summary of non-owner occupied commercial real estate loans held for investment by collateral 
 geographical location (dollars in thousands): 
 December 31, 2025 
 South Florida 
 (1)
 Rest of Florida 
 (2)
 Outside Florida 
 (3)
 Balance 
 % of Non-
 Owner 
 Occupied 
 CRE Loans 
 Balance 
 % of Non-
 Owner 
 Occupied 
 CRE Loans 
 Balance 
 % of Non-
 Owner 
 Occupied 
 CRE Loans 
 Retail 
 $ 
 220,390 
 21% 
 $ 
 46,268 
 4% 
 $ 
 53,475 
 5% 
 Multifamily 
 177,152 
 17% 
 74,888 
 7% 
 - 
 0% 
 Warehouse 
 70,399 
 7% 
 59,465 
 6% 
 4,326 
 0% 
 Office 
 90,470 
 9% 
 26,788 
 3% 
 5,629 
 1% 
 Hotels/Motels 
 89,754 
 9% 
 27,472 
 3% 
 - 
 0% 
 Construction/Land 
 59,039 
 6% 
 14,041 
 1% 
 - 
 0% 
 Other 
 17,112 
 2% 
 11,659 
 1% 
 3,500 
 0% 
 $ 
 724,316 
 71% 
 $ 
 260,581 
 25% 
 $ 
 66,930 
 6% 
 (1) Miami-Dade, Broward, and West Palm Beach counties 
 (2) All other Florida counties 
 (3) Within the U.S. 

 As of 
December 31, 2025, 
71% of 
the non-owner 
occupied CRE 
portfolio were 
located within 
South Florida. 
26 loan 
 notes with an 
outstanding principal 
balance of 
$66.9 million 
are located 
outside Florida. 
Balances of 
non-owner occupied 
 CRE loans outside 
Florida were: $44.2 
million in New 
York, 
$7.3 million in 
Georgia, 
$7.1 million in 
Indiana, $4.3 million 
in 
 Arkansas, and $4.1 million in North Carolina. 
 Asset Quality 

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

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

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

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

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

 Loss 
 – Loans classified as loss are considered uncollectible. 

 
 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Table of Contents 
 

 

 67 
USCB Financial Holdings, Inc. 
2025 10-K 
 

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

 December 31, 2025 
 Pass 
 Special Mention 
 Substandard 
 Doubtful 
 Total 
 Residential Real Estate 
 $ 
 304,276 
 $ 
 916 
 $ 
 2,500 
 $ 
 - 
 $ 
 307,692 
 Commercial Real Estate 
 1,230,823 
 11,613 
 2,399 
 - 
 1,244,835 
 Commercial and Industrial 
 293,169 
 907 
 1,472 
 - 
 295,548 
 Correspondent Banks 
 127,968 
 - 
 - 
 - 
 127,968 
 Consumer and Other 

 207,215 
 - 
 - 
 - 
 207,215 
 $ 
 2,163,451 
 $ 
 13,436 
 $ 
 6,371 
 $ 
 - 
 $ 
 2,183,258 
 December 31, 2024 
 Pass 
 Special Mention 
 Substandard 
 Doubtful 
 Total 
 Residential Real Estate 
 $ 
 289,401 
 $ 
 - 
 $ 
 560 
 $ 
 - 
 $ 
 289,961 
 Commercial Real Estate 
 1,133,965 
 - 
 2,452 
 - 
 1,136,417 
 Commercial and Industrial 
 256,031 
 - 
 2,280 
 - 
 258,311 
 Correspondent Banks 
 82,438 
 - 
 - 
 - 
 82,438 
 Consumer and Other 

 196,101 
 - 
 1,990 
 - 
 198,091 
 $ 
 1,957,936 
 $ 
 - 
 $ 
 7,282 
 $ 
 - 
 $ 
 1,965,218 
 Non-Performing Assets 
 The following table presents non-performing assets as 
of December 31, 2025 and 2024 (in thousands, except 
ratios): 
 2025 
 2024 
 Total 
non-performing loans 
 $ 
 3,138 
 $ 
 2,707 
 Other real estate owned 
 - 
 - 
 Total 
non-performing assets 
 3,138 
 2,707 
 Asset quality ratios: 
 

 

 

 Allowance for credit losses to total loans 
 1.16% 
 1.22% 
 Allowance for credit losses to non-performing loans 
 813% 
 889% 
 Non-performing loans to total loans 
 0.14% 
 0.14% 
 Non-performing 
assets 
include 
all 
loans 
categorized 
as non-accrual 
or restructured, 
impaired 
securities, 
OREO 
and 
 other repossessed assets. Problem loans for which the collection or liquidation in full is reasonably uncertain are placed on 
 non-accrual 
status. 
This 
determination 
is 
based 
on 
current 
existing 
facts 
concerning 
collateral 
values 
and 
the 
paying 
 capacity of the borrower. When the collection of the full contractual balance is unlikely, 
the loan is placed on non-accrual to 
 avoid overstating the Company’s income for a loan with 
increased credit risk. 

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

 
 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Table of Contents 
 

 

 68 
USCB Financial Holdings, Inc. 
2025 10-K 
 

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

 Banks 
 Consumer 
 and Other 
 Total 
 December, 31, 2025 
 

 

 

 

 

 

 

 

 

 

 

 

 Beginning balance 
 $ 
 5,121 
 $ 
 8,788 
 $ 
 4,633 
 $ 
 654 
 $ 
 4,874 
 $ 
 24,070 
 Provision for credit losses 
 (1)
 763 
 688 
 164 
 361 
 143 
 2,119 
 Recoveries 
 24 
 - 
 17 
 - 
 2 
 43 
 Charge-offs 
 - 
 - 
 - 
 - 
 (732) 
 (732) 
 Ending Balance 

 $ 
 5,908 
 $ 
 9,476 
 $ 
 4,814 
 $ 
 1,015 
 $ 
 4,287 
 $ 
 25,500 
 Average loans 
 $ 
 307,199 
 $ 
 1,186,105 
 $ 
 266,095 
 $ 
 99,580 
 $ 
 210,060 
 $ 
 2,069,039 
 Net charge-offs (recoveries) to 
 average loans 
 

 (0.01)% 
 

 - 
 

 (0.01)% 
 

 - 
 

 0.35% 
 

 0.03% 
 December, 31, 2024 
 

 

 

 

 

 

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

 $ 
 5,121 
 $ 
 8,788 
 $ 
 4,633 
 $ 
 654 
 $ 
 4,874 
 $ 
 24,070 
 Average loans 
 $ 
 256,112 
 $ 
 1,068,574 
 $ 
 238,266 
 $ 
 103,345 
 $ 
 195,716 
 $ 
 1,862,013 
 Net charge-offs (recoveries) to 
 average loans 
 (0.01)% 
 

 - 
 

 (0.01)% 
 

 - 
 

 0.01% 
 

 (0.00)% 
 (1) Provision for credit losses excludes $182 thousand provision for unfunded commitments included in accrued interest and other 
 liabilities and $4 thousand release for investment securities held to maturity. 
 (2) Provision for credit losses excludes $199 thousand provision for unfunded commitments included in accrued interest and other 
 liabilities and $2 thousand release for investment securities held to maturity. 
 The 
following 
table 
presents 
ACL 
by 
type 
and 
its 
individual 
percentage 
to 
total 
loans 
for 
the 
periods 
indicated 
(in 
 thousands): 
 December 31, 

 2025 
 2024 
 Loan Category 
 Allowance 
 % of Loans in 
 Each Category to 
 Total Loans 
 Allowance 
 % of Loans in 
 Each Category to 
 Total Loans 
 Residential Real Estate 
 $ 
 5,908 
 14.1 
 % 
 $ 
 5,121 
 14.8 
 % 
 Commercial Real Estate 
 

 9,476 
 57.0 
 % 
 8,788 
 57.8 
 % 
 Commercial and Industrial 
 4,814 
 13.5 
 % 
 4,633 
 13.1 
 % 
 Correspondent Banks 
 1,015 
 5.9 
 % 
 654 
 4.2 
 % 
 Consumer and Other 
 4,287 
 9.5 
 % 
 4,874 
 10.1 
 % 
 Total 
 $ 
 25,500 
 100.0 
 % 
 $ 
 24,070 
 100.0 
 % 

 
 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Table of Contents 
 

 

 69 
USCB Financial Holdings, Inc. 
2025 10-K 
 

 Bank-Owned Life Insurance 
 At 
December 31, 
2025, 
the 
combined 
cash 
surrender 
value 
of 
all 
bank-owned 
life 
insurance 
(“BOLI”) 
policies 
was 
 $59.4 million. 
Changes 
in 
cash 
surrender 
value 
are 
recorded 
in 
non-interest 
income 
on 
the 
Consolidated 
Statements 
of 
 Operations. In 
2025, the Company 
maintained BOLI 
policies with 
five insurance 
carriers. The 
Company is 
the beneficiary 
 of these policies. 
 Deposits 
 Customer deposits are the 
primary funding source for 
the Bank’s growth. 
Through our network of 
banking centers, we 
 offer a competitive array of deposit 
accounts and treasury management services designed 
to meet our customers’ business 
 needs. Our primary 
deposit customers 
are SMBs, 
and the personal 
business of owners 
and operators 
of these SMBs, 
as 
 well as the retail/consumer relationships of the employees 
of these businesses. Our focus on quality and customer 
service 
 has created a strong brand recognition within 
our depositors, which reflects in the composition 
of our deposits; most of our 
 funding sources are customer 
deposits. In addition 
to our banking centers 
network, we have developed 
business verticals 
 to diversify our 
portfolio in different specialty industries 
and we offer public 
fund deposit products to 
municipalities and public 
 agencies in our geographical footprint. 

 Furthermore, our 
personal and 
private banking 
management 
line of 
business is 
focused on 
the needs 
of the 
owners 
 and operators of 
our business customers, 
offering a suite 
of checking, savings, 
money market and 
time deposit accounts, 
 and utilizing superior 
client service 
to build and 
expand client relationships. 
A unique aspect 
of our business 
model is our 
 ability to offer correspondent services to banks in 
Central America and the Caribbean. 
 The following 
table presents 
the daily 
average balance 
and average 
rate paid 
on deposits 
by category 
for the 
years 
 ended December 31, 2025 and 2024 (in thousands, except 
ratios): 
 Years Ended December 31, 
 2025 
 2024 
 Average Balance 
 Average Rate 
 Paid 
 Average Balance 
 Average Rate 
 Paid 
 Non-interest bearing demand deposits 
 $ 
 577,232 
 0.00% 
 $ 
 596,073 
 0.00% 
 Interest-bearing demand deposits 
 51,803 
 2.48% 
 54,667 
 2.76% 
 Savings and money market deposits 
 1,255,719 
 3.03% 
 1,109,853 
 3.61% 
 Time deposits 
 470,213 
 3.85% 
 326,373 
 4.09% 
 $ 
 2,354,967 
 2.44% 
 $ 
 2,086,966 
 2.63% 
 Total average deposits for the year ended December 31, 2025 was $2.4 billion, 
an increase of $268.0 million, 
or 12.8% 
 over total 
average deposits 
of $2.1 billion 
for the 
same period 
in 2024. 
The greatest 
increase was 
in savings 
and money 
 market deposits which 
increased by 
$145.9 million, or 
13.1%. Non-interest-bearing 
demand deposits 
decreased by 
$18.8 
 million or 3.2%. 
 The 
uninsured 
deposits 
are 
estimated 
based 
on 
the 
FDIC 
deposit 
insurance 
limit 
of 
$250 thousand 
for 
all 
deposit 
 accounts at the Bank per account holder. Total 
estimated uninsured deposits was $1.2 billion at December 31, 2025 and at 
 December 31, 2024. As of December 31, 2025, 
49% of our deposits were estimated to 
be FDIC-insured. 
At December 31, 
 2025, our 
deposit portfolio 
included 7% 
of total 
deposits were 
public funds 
(partially collateralized), 
11% 
of total 
deposits 
 were 
brokered 
deposits 
(FDIC-insured), 
and 
8% 
were 
deposits 
in 
ICS/CDARs 
deposit 
programs 
(FDIC-insured). 
The 
 estimated average 
account size 
of our deposit 
portfolio is 
$113 
thousand. Time 
deposits with 
balances of 
$250 thousand 
 or more totaled $111.5 
million and $94.0 million at December 31, 2025 and 2024, 
respectively. At December 
31, 2025, our 
 top 10 depositors held 15.59% of our 
total deposit portfolio. At December 31, 2024, our top 10 
depositors held 16.7% of our 
 total deposit portfolio. 
 Critical elements of our liquidity 
risk management include: effective corporate governance consisting of 
oversight by the 
 Board and ALCO and 
involvement by senior management; 
appropriate strategies, policies, 
procedures, and limits 
used to 
 identify 
and 
mitigate 
liquidity 
risk; 
comprehensive 
liquidity 
risk 
measurement 
and 
monitoring 
systems 
(including 
 assessments 
of 
the 
current 
and 
prospective 
cash 
flows 
or 
sources 
and 
uses 
of 
funds) 
that 
are 
commensurate 
with 
the 
 complexity and business 
activities of the 
Company; management of intraday 
liquidity and collateral; 
an appropriately diverse 
 mix 
of 
existing 
and 
potential 
future 
funding 
sources; 
adequate 
levels 
of 
highly 
liquid 
marketable 
securities 
free 
of 
legal, 
 regulatory, 
or 
operational 
impediments, 
that 
can 
be 
used 
to 
meet 
liquidity 
needs 
in 
stressful 
situations; 
comprehensive 
 contingency 
funding 
plans 
that 
sufficiently 
address 
potential 
adverse 
liquidity 
events 
and 
emergency 
cash 
flow 

 
 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Table of Contents 
 

 

 70 
USCB Financial Holdings, Inc. 
2025 10-K 
 

 requirements; 
and 
internal 
controls and 
internal 
audit 
processes 
sufficient 
to 
determine 
the 
adequacy 
of 
the 
institution’s 
 liquidity risk management process. 
 We 
expect 
funds 
to 
be 
available 
from 
several 
basic 
banking 
activity 
sources, 
including 
the 
core 
deposit 
base, 
the 
 repayment and maturity of loans and investment security 
cash flows. Other potential funding sources include 
federal funds 
 purchased, brokered certificates of deposit, listing services certificates of deposit, Fed Funds lines and borrowings from the 
 FHLB 
Atlanta. 
Accordingly, 
our liquidity 
resources 
were 
at sufficient 
levels 
to fund 
loans 
and 
meet 
other 
cash 
needs as 
 necessary. 
 The following table shows scheduled maturities of uninsured 
time deposits as of December 31, 2025 (in thousands): 
 

 

 Total 
 Three months or less 
 $ 
 59,593 
 Over three through six months 
 16,190 
 Over six through twelve months 
 9,552 
 Over twelve months 
 26,146 
 $ 
 111,481 
 Borrowings 

 FHLB Advances 
 As 
a 
member 
of 
the 
FHLB 
Atlanta, 
we 
are 
eligible 
to 
obtain 
advances 
with 
various 
terms 
and 
conditions. 
This 
 accessibility of additional 
funding allows us 
to efficiently and 
timely meet both 
expected and unexpected 
outgoing cash flows 
 and collateral needs without adversely affecting 
either daily operations or the financial condition 
of the Company. 
 Outstanding fixed-rate 
advances from the 
FHLB were 
at $158.3 million 
and $163.0 million, 
as of December 
31, 2025, 
 and 
December 31, 
2024, 
respectively. 
The 
weighted 
average 
rate 
for 
outstanding 
FHLB 
advances 
was 
3.8% 
as 
of 
 December 31, 2025 and 2024. 
 The following table presents the FHLB fixed-rate advances 
as of December 31, 2025 (in thousands): 
 December, 31, 2025 
 Interest Rate 
 Type of Rate 
 Maturity Date 
 Amount 
 3.77% 
 Fixed 
 March 16, 2026 
 $ 
 104,750 
 3.88% 
 Variable 
 May 22, 2026 
 42,500 
 3.76% 
 Fixed 
 January 24, 2028 
 11,000 
 $ 
 158,250 
 December, 31, 2024 
 Interest Rate 
 Type of Rate 
 Maturity Date 
 Amount 
 2.05% 
 Fixed 
 March 27, 2025 
 $ 
 10,000 
 1.07% 
 Fixed 
 July 18, 2025 
 6,000 
 3.76% 
 Fixed 
 January 24, 2028 
 11,000 
 3.77% 
 Fixed 
 April 25, 2028 
 50,000 
 3.68% 
 Fixed 
 September 13, 2027 
 21,000 
 3.79% 
 Fixed 
 March 23, 2026 
 20,000 
 4.65% 
 Fixed 
 February 13, 2025 
 45,000 
 $ 
 163,000 
 We 
have 
also 
established 
Fed 
Funds 
lines 
of 
credit 
with 
our 
upstream 
correspondent 
banks 
to 
manage 
temporary 
 fluctuations in our daily 
cash balances. As of 
December 31, 2025, there were no 
outstanding balances under the Fed 
Funds 
 lines of credit. 
 The Board 
of Governors 
of the Federal 
Reserve System, 
on March 
12, 2023, 
announced the 
creation of 
a new 
Bank 
 Term 
Funding Program (“BTFP”). The BTFP offered loans of up to one year in length to banks, savings associations, credit 
 unions, 
and 
other 
eligible 
depository 
institutions 
pledging 
U.S. 
Treasuries, 
U.S. 
agency 
debt 
and 
mortgage-backed 
 securities, and other qualifying assets as collateral. The 
BTFP program ceased making new loans as of March 
2024. 

 
 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Table of Contents 
 

 

 71 
USCB Financial Holdings, Inc. 
2025 10-K 
 

 The Company paid off $80 million in borrowings under the BTFP 
program during the third quarter of 2024. The original 
 maturity of this borrowing by the Bank under the BTFP program was January 2025, and there are no remaining borrowings 
 under this program. 
 Subordinated Notes 
 On 
August 
14, 
2025, 
the 
Company 
entered 
into 
a 
Subordinated 
Note 
Purchase 
Agreement 
with 
certain 
qualified 
 institutional 
buyers 
pursuant 
to 
which 
the 
Company 
sold 
and 
issued 
$40.0 
million 
in 
aggregate 
principal 
amount 
of 
its 
 7.625% Fixed-to-Floating 
Rate Subordinated 
Notes due 2035. 
The Notes were 
issued by the 
Company to the 
purchasers 
 at a 
price equal 
to 100% 
of their 
face amount. 
The Notes 
were offered 
and sold 
by the 
Company in 
a private 
placement 
 transaction in reliance 
on exemptions from 
the registration 
requirements of the 
Securities Act, 
pursuant to 
Section 4(a)(2) 
 of the Securities 
Act and 
Rule 506(b) of 
Regulation D thereunder. For additional 
information, see the 
Form 8-K the 
Company 
 filed on August 14, 2025.The subordinated debt was originally issued at a cost of $760 thousand. The carrying value of the 
 issuance 
cost 
has 
been 
reduced 
to 
$700 
thousand, 
reflecting 
the 
scheduled 
expense 
recognition 
over 
the 
term 
of 
the 
 subordinated 
debt. 
The 
subordinated 
notes 
are 
presented 
net 
of 
these 
costs 
on 
the 
consolidated 
balance 
sheet. 
At 
 December 31, 2025, the outstanding balance of subordinated 
notes, net of costs, totaled $39.3 million. 
 Off-Balance Sheet Arrangements 
 We engage 
in various financial 
transactions in 
our operations 
that, under GAAP, 
may not be 
included on 
the balance 
 sheet. To 
meet the financing needs 
of our customers we may 
include commitments to extend 
credit and standby letters 
of 
 credit. To 
a varying 
degree, such 
commitments involve 
elements of 
credit, market, 
and interest 
rate risk 
in excess 
of the 
 amount recognized 
in the 
balance sheet. 
We use 
more conservative 
credit and 
collateral policies 
in making 
these credit 
 commitments as we 
do for on-balance sheet 
items. We are not 
aware of any accounting 
loss to be 
incurred by funding 
these 
 commitments; however, we maintain an allowance for off-balance sheet 
credit risk which is recorded 
under accrued interest 
 and other liabilities on the Consolidated Balance Sheets. 
 Since commitments associated with letters of 
credit and commitments to extend 
credit may expire unused, the 
amounts 
 shown do not necessarily 
reflect the actual 
future cash funding requirements 
. 
The following table 
presents lending related 
 commitments outstanding as of December 31, 2025 and 
2024 (in thousands): 
 December 31, 2025 
 December 31, 2024 
 Commitments to grant loans and unfunded lines of credit 
 $ 
 161,606 
 $ 
 122,578 
 Standby and commercial letters of credit 
 2,700 
 5,389 
 Total 
 $ 
 164,306 
 $ 
 127,967 
 Commitments to extend credit are agreements to lend funds to a client, as long as there is no violation of any condition 
 established 
in 
the 
contract, 
for 
a 
specific 
purpose. 
Commitments 
generally 
have 
variable 
interest 
rates, 
fixed 
expiration 
 dates or 
other 
termination 
clauses 
and 
may require 
payment 
of 
a fee. 
Since many 
of the 
commitments 
are 
expected to 
 expire without being 
fully drawn, the 
total commitment 
amounts disclosed 
above do not 
necessarily represent 
future cash 
 requirements. 
 Unfunded lines of credit represent unused portions of credit facilities to our current borrowers that represent no change 
 in credit risk in our portfolio. Lines of credit 
generally have variable interest rates. The 
maximum potential number of future 
 payments we could 
be required to 
make is represented 
by the contractual 
amount of the 
commitment, less 
the amount of 
 any advances made. 
 Letters of credit are 
conditional commitments issued 
by us to guarantee 
the performance of a 
client to a third 
party. 
In 
 the event of nonperformance by 
the client in accordance with the 
terms of the agreement with the 
third party, 
we would be 
 required to fund 
the commitment. 
If the commitment 
is funded, we 
would be entitled 
to seek recovery 
from the client 
from 
 the underlying collateral, 
which can include 
commercial real estate, 
physical plant and 
property, inventory, receivables, cash 
 or marketable securities. 
 Asset and Liability Management Committee 
 The asset and liability management committee of our Company, or ALCO, consists of members of senior management 
 and our Board. Senior management is responsible for 
ensuring in a timely manner that Board 
approved strategies, policies, 
 and procedures 
for managing 
and mitigating 
risks are 
appropriately executed 
within the 
designated lines 
of authority 
and 
 responsibility. 

 
 
 Table of Contents 
 

 

 72 
USCB Financial Holdings, Inc. 
2025 10-K 
 

 ALCO 
oversees 
the 
establishment, 
approval, 
implementation, 
and 
review 
of 
interest 
rate 
risk, 
management, 
and 
 mitigation strategies, ALM related policies, ALCO procedures 
and risk tolerances and appetite. 
 While some degree of interest 
rate risk (“IRR”) exposure is inherent 
to the banking business, our ALCO 
has established 
 what it believes are sound risk management practices 
in place to identify, 
measure, monitor and mitigate IRR exposures. 
 When assessing the scope 
of IRR exposure and 
impact on the consolidated 
balance sheet, cash flows 
and statement 
 of operations, 
management considers 
both earnings 
and economic 
impacts. Asset price 
variations, deposits 
volatility and 
 reduced earnings or outright losses could adversely affect 
the Company’s liquidity, 
performance, and capital adequacy. 
 Income simulations 
are used 
to assess 
the impact 
of changing 
rates on 
earnings under 
different rates 
scenarios and 
 time horizons. 
These simulations 
utilize both 
instantaneous and 
parallel changes 
in the 
level of 
interest rates, 
as well 
as 
 non-parallel changes such as changing slopes (flat and steeping) and 
twists of the yield curve, Static simulation models are 
 based on current exposures and 
assume a constant balance sheet with 
no new growth. Dynamic simulation analysis 
is also 
 utilized to have a 
more comprehensive assessment 
on IRR. This simulation 
relies on detailed 
assumptions outlined in 
our 
 budget and strategic plan, and in assumptions regarding changes in 
existing lines of business, new business, management 
 strategies and client expected behavior. 
 To 
have a more complete 
picture of IRR, the Company 
also evaluates the economic 
value of equity. 
This assessment 
 allows 
us 
to 
measure 
the 
degree 
to 
which 
the 
economic 
values 
will 
change 
under 
different 
interest 
rate 
scenarios. 
The 
 economic value of equity approach focuses on a longer-term time horizon and captures all future cash flows expected from 
 existing assets and liabilities. The economic value model utilizes a static approach in that the analysis does not incorporate 
 new business; rather, the 
analysis shows a snapshot in time of the risk inherent 
in the balance sheet.
 Market and Interest Rate Risk Management 
 
As of December 31, 2025, both the 
static and dynamic scenarios of the 
ALCO model indicate that the Bank’s 
balance 
 sheet is 
liability 
sensitive 
in 
year 
one. 
This means 
that 
our liabilities 
reprice 
more 
quickly than 
our 
assets, 
resulting in 
a 
 favorable expansion in net interest income 
(NII) when market interest rates 
decline. For year two, the static 
model shifts to 
 a neutral position, while the dynamic model reflects an asset sensitive 
posture, driven primarily by projected balance sheet 
 growth. 
This 
divergence 
is 
expected, 
as 
the 
dynamic 
model 
incorporates 
forward 
looking 
assumptions 
that 
include 
loan 
 growth and 
mix shifts 
over time. 
Many assumptions 
are used to 
calculate the 
impact of 
interest rate 
variations on 
our net 
 interest 
income, 
such 
as 
asset 
prepayment 
speeds, 
non-maturity 
deposit 
price 
sensitivity, 
pricing 
correlations, 
deposit 
 truncations and decay rates, and key interest rate drivers 
. 
 Because of the inherent use 
of these estimates and 
assumptions in the model, 
our actual results may, 
and most likely 
 will, differ from static measures results. In addition, static measures like the economic value of equity 
do not include actions 
 that management may undertake to 
manage the risks in response 
to anticipated changes in interest 
rates or client deposit 
 behavior. As part of our ALM strategy and 
policy, management has the ability to modify the balance sheet 
to either increase 
 or decrease 
asset 
duration 
and 
increase 
or decrease 
liability 
duration 
to 
modify 
the balance 
sheet 
sensitivity 
to interest 
 rates. 

 Additionally, utilizing an EVE approach, we analyze the risk to capital from the effects 
of various interest rate scenarios 
 through a long-term discounted 
cash flow model. This 
measures the difference 
between the economic value 
of our assets 
 and 
the 
economic 
value 
of 
our 
liabilities, 
which 
is 
a 
proxy 
for 
our 
liquidation 
value. 
According 
to 
our 
balance 
sheet 
 composition, and 
as expected, 
our model 
stipulates that 
an increase 
of interest 
rates will 
have a 
negative impact 
on the 
 EVE. Results and 
analysis are presented 
quarterly to the 
ALCO, and strategies 
are reviewed and 
refined. The Bank 
remains 
 within policy limits for long-term interest 
rate risk based on EVE 
results as of December 31, 2025. The 
balance sheet shows 
 larger EVE swings 
when rates go 
up than when 
rates go down. 
This happens because, 
in rising rate 
scenarios, the value 
 of our longer 
term assets 
falls more 
quickly, 
especially when 
loan prepayments 
slow while our 
liabilities do 
not reprice as 
 fast. In contrast, 
when rates 
decline, faster 
loan prepayments 
and quicker 
asset repricing 
help soften the 
impact on 
EVE. 
 Additionally, during 2025, we have been taking actions to reduce 
our asset sensitivity by extending asset duration. This has 
 reduced our NII 
volatility for the 
first and second 
year in the 
analysis and has 
helped us to 
maintain the NII 
in accordance 
 with ALCO expectations. 

 Liquidity 
 
Liquidity is 
defined as 
a Company’s capacity 
to meet 
its cash 
and collateral 
obligations at 
a reasonable 
cost. Maintaining 
 an adequate level of liquidity depends on the Company’s ability to 
efficiently meet both expected and unexpected cash flow 
 and collateral needs without adversely affecting 
either daily operations or the financial condition of the 
Company. 

 
 
 Table of Contents 
 

 

 73 
USCB Financial Holdings, Inc. 
2025 10-K 
 

 Liquidity risk 
is the 
risk that 
we will 
be unable 
to meet 
our short-term 
and long-term 
obligations as 
they become 
due 
 because of an 
inability to liquidate 
assets or obtain 
adequate funding on 
acceptable terms in 
a timely matter. The 
Company’s 
 obligations, and the funding sources used to meet them, depend significantly 
on our business mix, balance sheet structure 
 and composition, credit quality of 
our assets, interest rate 
environment and the cash flow 
profiles of our on- and 
off-balance 
 sheet obligations. 
 In 
managing 
cash 
inflows 
and 
outflows, 
management 
regularly 
monitors 
situations 
that 
can 
give 
rise 
to 
increased 
 liquidity risk. 
These include 
funding mismatches, market 
constraints on 
the ability 
to convert 
assets (particularly investments) 
 into cash or in 
accessing sources of 
funds (i.e., market 
liquidity), and contingent 
liquidity events. Management 
presents to 
 the ALCO, 
on a 
quarterly basis, liquidity 
stress tests following 
the scenarios 
described in 
the Company’s contingency 
funding 
 plan. 

 Changes 
in 
macroeconomic 
conditions, 
exposure 
to 
credit 
deterioration, 
market, 
operational, 
legal 
and 
reputational 
 risks, including cybersecurity risk and 
social media events could 
also affect the Company’s liquidity risk 
profile unexpectedly 
 and are considered in the assessment of liquidity and ALM 
framework. 
 Management has established 
a comprehensive and 
holistic management process for 
identifying, measuring, monitoring 
 and 
mitigating 
liquidity 
risk. 
Due 
to 
its 
critical 
importance 
to 
the 
viability 
of 
the 
Company, 
liquidity 
risk 
management 
is 
 integrated into our risk management processes, Contingency 
Funding Plan and ALM policy. 
 Critical elements of our liquidity 
risk management include: effective corporate governance consisting of 
oversight by the 
 Board and ALCO and 
involvement by senior management; 
strategies, policies, procedures, 
and limits used to 
identify and 
 mitigate 
liquidity 
risk; 
comprehensive 
liquidity 
risk 
measurement 
and 
monitoring 
systems 
(including 
assessments 
of 
the 
 current and prospective cash flows or sources and uses of funds) that are commensurate with the complexity and 
business 
 activities 
of the 
Company; 
management 
of intraday 
liquidity and 
collateral; 
a diverse 
mix of 
existing 
and 
potential 
future 
 funding sources; adequate levels of highly liquid marketable securities free 
of legal, regulatory, or operational impediments, 
 that can 
be used 
to meet 
liquidity needs 
in stressful situations; 
comprehensive contingency 
funding plans 
that sufficiently 
 address potential adverse 
liquidity events and 
emergency cash 
flow requirements; and 
internal controls and 
internal audit 
 processes sufficient to determine the adequacy 
of the institution’s liquidity risk management 
process. 
 We 
expect 
funds 
to 
be 
available 
from 
several 
basic 
banking 
activity 
sources, 
including 
the 
core 
deposit 
base, 
the 
 repayment and maturity of loans and investment security 
cash flows. Other potential funding sources include 
federal funds 
 purchased, brokered 
certificates of 
deposit, listing 
certificates of 
deposit, Fed 
Funds lines 
and borrowings 
from the 
FHLB 
 Atlanta. Accordingly, our liquidity resources were at sufficient levels to 
fund loans and meet other 
cash needs as necessary. 
 At December 31, 2025, the 
Company had $321.4 
million in available liquidity 
on balance sheet, including 
$286.9 million in 
 unpledged securities available to 
use as collateral and 
$34.5 million in 
excess cash. The Company 
had an additional $349.0 
 million in off-balance sheet liquidity including excess FHLB Atlanta borrowing 
capacity, the Federal Reserve 
Bank discount 
 window and Fed 
Fund lines of credit, excluding 
access to brokered deposits 
and other off-balance sheet sources 
of funding.

 
 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Table of Contents 
 

 

 74 
USCB Financial Holdings, Inc. 
2025 10-K 
 

 Capital Adequacy 
 As 
of 
December 31, 
2025, 
the 
Bank 
was 
well 
capitalized 
under 
the 
FDIC’s 
prompt 
corrective 
action 
framework. 
 Additionally, 
we follow the capital conservation 
buffer framework, and according to 
our actual ratios, the Bank 
exceeds the 
 capital conversation 
buffer in 
all capital ratios 
as of December 
31, 2025. The 
Company is not 
subject to regulatory 
capital 
 requirements because it is deemed by the Federal Reserve 
to be a small bank holding company. 
 The 
following 
table 
presents 
the 
capital 
ratios 
for 
the 
Bank 
at 
December 31, 
2025 
and 
2024 
(in 
thousands, 
except 
 ratios): 
 Actual 
 Minimum Capital 
 Requirements 

 To be Well Capitalized Under 
 Prompt Corrective Action 
 Provisions 
 Amount 
 Ratio 
 Amount 
 Ratio 
 Amount 
 Ratio 
 December 31, 2025 
 Total 
risk-based capital: 
 $ 
 299,596 
 13.67% 
 $ 
 175,387 
 8.00% 
 219,234 
 10.00% 
 Tier 1 risk-based capital: 
 $ 
 273,342 
 12.47% 
 $ 
 131,541 
 6.00% 
 175,387 
 8.00% 
 Common equity tier 1 capital: 
 $ 
 273,342 
 12.47% 
 $ 
 98,655 
 4.50% 
 142,502 
 6.50% 
 Leverage ratio: 
 $ 
 273,342 
 9.65% 
 $ 
 113,296 
 4.00% 
 141,620 
 5.00% 
 

 December 31, 2024 
 

 

 Total 
risk-based capital: 
 $ 
 266,387 
 13.34% 
 $ 
 159,795 
 8.00% 
 199,744 
 10.00% 
 Tier 1 risk-based capital: 
 $ 
 241,740 
 12.10% 
 $ 
 119,846 
 6.00% 
 159,795 
 8.00% 
 Common equity tier 1 capital: 
 $ 
 241,740 
 12.10% 
 $ 
 89,885 
 4.50% 
 129,834 
 6.50% 
 Leverage ratio: 
 $ 
 241,740 
 9.38% 
 $ 
 103,074 
 4.00% 
 128,843 
 5.00% 
 Impact of Inflation 
 Our Consolidated 
Financial Statements 
and related 
notes have been 
prepared in 
accordance with U.S. 
GAAP, 
which 
 requires the 
measurement of 
financial position 
and operating 
results in 
terms of 
historical dollars, 
without considering 
the 
 changes 
in 
the 
relative 
purchasing 
power 
of 
money 
over 
time due 
to 
inflation. 
The 
impact 
of 
inflation 
is 
reflected 
in 
the 
 increased cost of operations. 
Unlike most industrial companies, 
nearly all our assets and 
liabilities are monetary in 
nature. 
 As a result, 
interest rates have a 
greater impact on our 
performance than do the 
effects of general levels 
of inflation. Periods 
 of high inflation 
are often accompanied 
by relatively higher 
interest rates, and 
periods of low 
inflation are accompanied 
by 
 relatively lower interest rates. 
As market interest rates 
rise or fall in relation 
to the rates earned 
on loans and investments, 
 the value of these assets decreases or increases respectively. 
 Recently Issued Accounting Pronouncements
 

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

 
 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Table of Contents 
 

 

 75 
USCB Financial Holdings, Inc. 
2025 10-K 
 

 Reconciliation and Management Explanation of Non 
-GAAP Financial Measures 
 Management has included 
the non-GAAP measures 
set forth below 
because it believes 
these measures may 
provide 
 useful supplemental information 
for evaluating the Company’s 
underlying performance trends. 
Further, management 
uses 
 these measures in managing and evaluating the Company’s business and intends to refer to them in discussions about our 
 operations and performance. 
Operating performance 
measures should be 
viewed in addition 
to, and not 
as an alternative 
 to or 
substitute 
for, 
measures 
determined 
in 
accordance 
with 
GAAP, 
and 
are 
not 
necessarily 
comparable 
to non-GAAP 
 measures 
that 
may be 
presented 
by other 
companies. 
The Company 
believes 
these 
non-GAAP 
measurements 
are key 
 indicators of the 
earnings power 
of the Company. 
The following 
table reconciles 
the non-GAAP 
financial measurement 
of 
 operating net income available to common stockholders 
for the periods presented (in thousands, 
except per share data):
 As of and for the years ended December 31, 
 2025 
 2024 
 Pre-Tax Pre-Provision ("PTPP") income: (1) 
 Net income (GAAP) 
 $ 
 26,100 
 $ 
 24,674 
 Plus: Provision for income taxes 
 9,816 
 7,803 
 Plus: Provision for credit losses 
 2,297 
 3,157 
 PTPP income 
 $ 
 38,213 
 $ 
 35,634 
 Operating net income: (1) 
 Net income (GAAP) 
 $ 
 26,100 
 $ 
 24,674 
 Less: Net gain (loss) on sale of securities 
 (7,526) 
 14 
 Less: Tax 
effect on sale of securities 
 1,908 
 (4) 
 Plus: Tax 
liability expenses from prior periods 
 764 
 - 
 Operating net income 
 $ 
 32,482 
 $ 
 24,664 
 Operating revenue: (1) 
 Net interest income 
 $ 
 83,630 
 $ 
 69,936 
 Non-interest income 
 

 6,592 
 

 12,740 
 Less: Net gain (losses) on sale of securities 
 

 (7,526) 
 

 14 
 Operating revenue 
 $ 
 97,748 
 $ 
 82,662 
 

 Operating efficency ratio: (1) 
 Total 
non-interest expense 
 $ 
 52,009 
 47,042 
 Operating revenue 
 $ 
 97,748 
 82,662 
 Operating efficency ratio 
 53.21% 
 56.91% 
 (1) The Company believes these non-GAAP measurements are key indicators of the ongoing earnings power of the Company. 
 

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

 
 
 Table of Contents 
 

 

 76 
USCB Financial Holdings, Inc. 
2025 10-K
USCB FINANCIAL HOLDINGS, INC. 10-K

Item 7. Management’s Discussion and Analysis
