What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2026-08-07 compared with 2026-05-08 · 503 added, 331 removed, 1234 unchanged (40% of the section changed)

2 unchanged sentences

understanding

condition and results

of operations of

the Company and

the Bank, its

wholly owned subsidiary,

ended March 31,

discussion and analysis

in conjunction

with the unaudited

consolidated financial

statements and related

notes included in

this Quarterly

condition and results of

operations of the

Company and the Bank,

its wholly owned subsidiary,

as of and for

the three and

six months ended June 30, 2026.

This discussion and analysis is

best read in conjunction with

the unaudited consolidated

consolidated financial statements

and related notes

included in the Annual

Report on Form

10-Q (“Form 10-Q”)

and the audited

Securities and Exchange Commission (“SEC”) for the year ended

December 31, 2025.

10-K (“2025 Form

with the Securities and Exchange Commission (“SEC”)

for the year ended December 31, 2025.

This discussion contains forward-looking statements that involve risks, uncertainties and assumptions that could cause

53 unchanged sentences

the accuracy of our financial statement estimates and assumptions, including the estimates used for our allowance

for credit losses and deferred tax asset valuation allowance;

for credit losses;

the efficiency and effectiveness of our

8 unchanged sentences

of the One Big Beautiful Bill, and changes in accounting

principles, policies,

guidelines, including

Expected Credit

(“CECL”) standard;

principles, policies, practices or guidelines;

the lack of a

29 unchanged sentences

employee, or third-party fraud and security breaches;

USCB Financial Holdings, Inc.

Q1 2026 Form 10-Q

other risks described in this Form 10-Q, the 2025 Form

10-K and other filings we make with the SEC.

USCB Financial Holdings, Inc.

Q2 2026 Form 10-Q

forward-looking

5 unchanged sentences

forward-looking statements.

forward-looking statements

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

any forward-looking

statements included

forward-looking

circumstances ocurring after the date

on which the statement is

made or to reflect the occurrence

of unanticipated events,

unless required

securities laws.

You should also review the

risk factors described in

the 2025 Form 10-K

the Company has filed or will file with the SEC.

ended March 31,

2026 compared

diluted share

March 31, 2025.

Form 10-K and in the reports the Company has filed

or will file with the SEC.

June 30, 2025.

In evaluating our financial

11 unchanged sentences

calculated at

March 31, 2026

quarter ended

and annualized

where appropriate:

income before

June 30, 2026 compared to at or for the quarter ended June 30, 2025 and as of December 31, 2025 and annualized where

provision for

credit losses

for the three

March 31, 2026

increased $2.9

million or 15.9% to $24.4 million from $21.0 million for the

quarter ended March 31, 2025.

Net interest margin (“NIM”) expanded to 3.27% for the three months ended March 31, 2026 compared to 3.10% for

the three months ended March 31, 2025.

March 31, 2026,

representing an

$168.4 million

from March 31,

2025 and an increase of $54.2 million or 7.9% annualized from

quarter ended June 30, 2025.

Net interest margin (“NIM”)

expanded to 3.49% for

the three months ended

June 30, 2026 compared

the three months ended June 30, 2025.

June 30, 2025 and an increase of $228.2 million or 16.5%

annualized from December 31, 2025.

increase of $209.0 million or 9.9% from June 30, 2025 and an increase of $133.1 million or 12.3% annualized from

December 31, 2025.

investment (net

March 31, 2026,

increase of $204.8 million or 10.1% from March 31, 2025 and an increase of $51.8 million or 9.6% annualized from

Total deposits were $2.5 billion at June 30, 2026, representing an increase of $116.6 million or 5.0% from June

2025 and an increase of $107.2 million or 9.2% annualized from

December 31, 2025.

March 31, 2025 and an increase of $148.5 million or

25.7% annualized from December 31, 2025.

Annualized return on average assets for the quarter

ended March 31, 2026 was 1.34% compared to

1.19% for the

quarter ended March 31, 2025.

Annualized return on average stockholders’ equity for the quarter ended March 31, 2026 was 17.07% compared to

14.15% for quarter ended March 31, 2025.

The ACL to total loans was 1.16% at March 31, 2026 and at December 31, 2025.

Non-performing loans to total loans was 0.16% at March

Annualized return on

average assets for

ended June 30,

26% compared to

quarter ended June 30, 2025.

Annualized return on

average stockholders’ equity

for the quarter

ended June 30, 2026

was 15.90% compared

for quarter ended June 30, 2025.

The ACL to total loans was 1.15% at June 30, 2026 compared to 1.16% at December 31, 2025.

Non-performing loans to total loans was 0.09% at June

30, 2026 and 0.14% at December 31, 2025.

-based capital

respectively.

Tangible book

March 31, 2026,

representing an

increase of $1.00 or

8.9% annualized from

$11.23 at March

At March 31, 2026,

tangible book value

2026, tangible

common share was

3 unchanged sentences

loss of $31.4

March 31, 2025, tangible book value per common share was negatively affected by ($2.05) due to an accumulated

June 30, 2025, tangible

book value per

common share was

negatively affected by

($2.08) due to

an accumulated

comprehensive loss

12 unchanged sentences

Generally Accepted

Practices (“GAAP”),

the most significant

described in Note

of Significant Accounting

Principles (“GAAP”), the

most significant of which

are described in Note

1 “Summary of

Significant Accounting Policies”

the Company’s 2025

64 unchanged sentences

indicated (in thousands, except ratios):

March 31, 2026

June 30, 2026

December 31, 2025

4 unchanged sentences

Q2 2026 Form 10-Q

Three Months Ended March 31,

Three Months Ended

Six Months Ended

Consolidated Statements of Operations:

13 unchanged sentences

expense, and the provision for income taxes.

Three months ended March 31, 2026 compared to the three

months ended March 31, 2025

Net income increased

$1.7 million to

$9.4 million for the

three months ended

March 31, 2026

from $7.7 million

Three months ended June 30, 2026 compared to the three

months ended June 30, 2025

Net income increased $938 thousand to $9.1 million for

the three months ended June 30, 2026 from $8.1 million for

$938 thousand

was primarily

loan portfolio and

expansion of net

interest margin resulting

funding costs.

benefits were

partially offset

by higher non-interest expense, income tax expense, and

provision for credit losses.

Six months ended June 30, 2026 compared to the six

months ended June 30, 2025

increased $2.6

$18.4 million

ended June 30,

primarily driven

larger loan portfolio combined with a reduction

on rates paid of interest-bearing liabilities

between periods.

The increase in

net interest income was partially offset by an increase in

non-interest expense between periods.

larger loan portfolio

lesser extent, an

increase in service

was partially offset

increase in non-interest expense, income tax expense,

and provision for credit losses expense between periods.

Net Interest Income

31 unchanged sentences

non-interest-

bearing sources

of funds, such as non-interest-bearing deposits and

bearing sources of funds, such as non-interest-bearing deposits and

stockholders’ equity, also fund interest-earning assets,

27 unchanged sentences

costs of liabilities for the periods indicated (dollars in

Three Months Ended March 31,

Three Months Ended June 30,

Interest-earning assets:

Loans held for investment

Investment securities

5 unchanged sentences

Interest-bearing demand deposits

Saving and money market deposits

Savings and money market deposits

Time deposits

1 unchanged sentence

FHLB advances

Subordinated notes

Subordinated notes, net

Total interest-bearing liabilities

21 unchanged sentences

income to average total interest-earning assets.

Three months ended March 31, 2026 compared to the three months

ended March 31, 2025

Net interest income before the provision for

credit losses was $22.0 million for the

three months ended March 31, 2026,

USCB Financial Holdings, Inc.

Q2 2026 Form 10-Q

Six Months Ended June 30,

Interest-earning assets:

Loans held for investment

Investment securities

Other interest-earnings assets

Total interest-earning assets

Non-interest earning assets

Liabilities and stockholders' equity

Interest-bearing liabilities:

Interest-bearing demand deposits

Savings and money market deposits

Time deposits

Total interest-bearing deposits

FHLB advances

Subordinated notes, net

Total interest-bearing liabilities

Non-interest bearing demand deposits

Other non-interest-bearing liabilities

Total liabilities

Stockholders' equity

Total liabilities and stockholders' equity

Net interest income

Net interest spread

Net interest margin

Average balances - Daily average balances are used

to calculate yields/rates.

Average loan balances include

deferred fees/costs and non-accrual loans.

Interest income on loans includes accretion

of deferred loan fees, net of

deferred loan costs.

At fair value except for securities held to maturity.

This amount includes

Net interest spread is the weighted average

yield on total interest-earning assets minus the weighted

average rate on total interest-bearing

Net interest margin is the ratio of net interest

income to average total interest-earning assets.

Three months ended June 30, 2026 compared to the three

months ended June 30, 2025

Net interest income before the provision

for credit losses was $24.4 million

for the three months ended June

$21.0 million

primarily driven

higher income from a

larger loan portfolio

and a reduction in

the weighted average

rates paid on interest-bearing

between periods.

expansion of 17 basis

points reflects primarily

the increase in the

loan portfolio average balance

along with a decrease

the weighted average interest rate paid on interest-bearing

liabilities, particularly in savings and money market deposits.

higher income

loan portfolio

offset by interest expense associated with the subordinated

notes issued during 2025.

The NIM was 3.49%

for the three

months ended June 30,

2026 and 3.28%

for the same period

point increase in net interest margin was primarily attributable to a

reduction in the weighted average rates paid on interest-

bearing deposits, particularly savings and money market accounts,

together with a favorable earning asset mix.

Six months ended June 30, 2026 compared to the six months ended

June 30, 2025

Net interest income before the provision for credit losses was $46.4 million for the six months ended June 30, 2026, an

increase of $6.3 million or

15.7%, from $40.1 million for the

same period in 2025.

growth was primarily driven by higher

income from a larger loan portfolio and a reduction in the weighted average rates paid on interest-bearing

deposit between

USCB Financial Holdings, Inc.

Q2 2026 Form 10-Q

ended June 30, 2026

reflects primarily

weighted average

interest rate

interest-bearing deposits,

particularly in savings and money market deposits.

Provision for Credit Losses

8 unchanged sentences

The provision for

credit losses is impacted by variations in the size and composition of our loan and debt securities portfolio, recent historical

portfolios and net charge-offs.

USCB Financial Holdings, Inc.

Q1 2026 Form 10-Q

Three months ended March 31, 2026 compared to the three months

ended March 31, 2025

thousand for the same period in 2025.

The increase in the provision

for credit losses was due to loan portfolio growth.

credit losses

by variations

composition of

and investment

securities portfolio,

historical and projected future economic conditions, our internal assessment of the credit quality of the loan and investment

securities portfolios and net charge-offs.

Three months ended June 30, 2026 compared to the three

months ended June 30, 2025

The provision for credit losses was $1.3 million for the three

months ended June 30, 2026 compared to $1.0

the same period in 2025.

The increase in the provision for credit

losses primarily reflects growth in the loan portfolio and

balance sheet arrangements,

which increased the level of estimated expected credit losses

Six months ended June 30, 2026 compared to the six months ended

June 30, 2025

The provision

ended June 30,

2026 compared

the same period in 2025.

The increase in the provision for credit losses

primarily reflects growth in the loan portfolio, which

increased the level of estimated expected credit losses

Non-Interest Income

16 unchanged sentences

income for the periods indicated (in thousands):

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

Gain on sale of securities available for sale, net

2 unchanged sentences

non-interest income

Three months ended March 31, 2026 compared to the three months

ended March 31, 2025

Non-interest income for the

three months ended March

31, 2026 increased $434

thousand or 11.7%, compared to

Three months ended June 30, 2026 compared to the three

months ended June 30, 2025

5.6%, compared

same period in 2025.

This increase

was primarily driven by $1.5 million increase in income

generated by the Company loan

swap program reported under service fees in the Consolidated

Statements of Operations.

This increase was

primarily driven by

a $322 thousand

increase in loan

prepayment penalty income

reported under service fees compared to the same

period last year.

Six months ended June 30, 2026 compared to the six months ended

June 30, 2025

Non-interest income for the six months ended June 30, 2026 increased $624 thousand or 8.8%, compared to

swap program reported under service fees in the Consolidated Statements of Operations.

This increase was partially offset

by a decrease in gain on sale of loans during the quarter

ended June 30, 2026.

USCB Financial Holdings, Inc.

Q2 2026 Form 10-Q

Non-Interest Expense

1 unchanged sentence

expense for the dates indicated (in thousands):

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

Salaries and employee benefits

4 unchanged sentences

non-interest expense

Three months ended March 31, 2026 compared to the three months ended

March 31, 2025

Non-interest expense

increased $1.7

13.8%, compared

same period in 2025.

The increase was primarily driven by

Three months ended June 30, 2026 compared to the three

months ended June 30, 2025

Non-interest expense for

the three months

ended June 30, 2026

increased $1.3 million

or 10.5%, compared

period in 2025.

This increase was

primarily driven by an increase

of $583 thousand in salaries

and employee benefits due

increase of $236

thousand in salaries

associated with additional

full-time employees and

an increase of

thousand in salaries and employee

payroll taxes,

addition, consulting

increased $368

primarily due

validation-related consulting

human resources

insurance expense and $183 thousand increase in promotional

expenses between periods.

$228 thousand

thousand reimbursement of legal expenses recognized during the second quarter

of 2025, which reduced legal expense in

expense paid in the quarter ended June 30, 2026.

Six months ended June 30, 2026 compared to the six months ended

June 30, 2025

Non-interest expense for the six months

ended June 30, 2026 increased $3.0

million or 12.1%, compared to the

primarily driven by

an increase of

in salaries and

employee benefits, consisting

insurance and 401(k)

thousand increase in

additional stock-based compensation expense.

consulting and legal fees

increased $688 thousand,

primarily due to an

increase of $405 thousand

in legal fees due to

reimbursement of legal expenses recognized during

the second quarter of 2025, which reduced

legal expense in the prior-

Other non-interest

expenses increased by $643

mainly due to increase of

$285 thousand in excise

tax expense and increase of $83 thousand in ATM expense for the six months ended June

Provision for Income Tax

14 unchanged sentences

elements in determining our effective tax rate.

USCB Financial Holdings, Inc.

Q1 2026 Form 10-Q

Three months ended March 31, 2026 compared to the three months ended

March 31, 2025

Income tax expense

for the three

March 31, 2026

was $2.3 million

as compared to

$2.4 million for

Company recognized

a non-recurring

$619 thousand

2026 due to an

adjustment to the deferred tax

asset calculation from December 31,

Three months ended June 30, 2026 compared to the three

months ended June 30, 2025

same period in 2025.

The effective

tax rate for the

months ended March 31, 2026 was 19.98% compared to 24.16%

tax rate for the three months

ended June 30, 2026 was 28.60% compared to 24.20% for

the same period in 2025.

Six months ended June 30, 2026 compared to the six months ended

June 30, 2025

Income tax expense for the six months ended June 30, 2026 was $6.0 million as compared to $5.0 million for

period in 2025.

The Company recognized a non-recurring $619 thousand income tax benefit in the first quarter of 2026 due

adjustment to

calculation from

effective tax

ended June 30, 2026 was 24.47% compared to 24.18%

for the same period in 2025.

Statements in Item 1 of Part I of this Form 10-Q.

USCB Financial Holdings, Inc.

Q2 2026 Form 10-Q

Analysis of Financial Condition

March 31, 2026

were $2.85 billion,

an increase of

$54.2 million,

or 7.9% annualized,

over total assets

of $2.79 billion at December 31, 2025.

loans, net of deferred fees/costs, increased $51.8 million, or 9.6% annualized,

March 31, 2026

million, or 25.7% annualized, to $2.49 billion at March

assets at June 30, 2026 were

$3.02 billion, an increase

of $228.2 million, or 16.5%

annualized, over total assets

annualized, to $2.32 billion at June 30,

2026 compared to $2.19 billion at December

deposits increased by

$107.2 million,

or 9.2% annualized, to $2.45 billion at June 30, 2026 compared

to $2.35 billion at December 31, 2025.

Investment Securities

60 unchanged sentences

macro-economic

required on AFS securities as of March 31, 2026.

required on AFS securities as of June 30, 2026.

mortgage-backed

explicit and/or

holds no reserves

on these holdings.

The remaining portion

portfolio is made

million in investment

grade corporate

methodology and

considering the

short remaining

securities exposed to

government credit risk,

allowance for credit

securities classified

represents amortized

$34.3 million

these holdings.

PD/LGD methodology

and considering

HTM securities

exposed to non

government credit risk, the Company estimated an allowance for credit losses (“ACL”) of $0 as of June 30,

For periods where

there was an ACL

for HTM securities recorded

the book value for

debt securities classified as

represents amortized cost less ACL.

$469.0 million

$461.4 million at December 31, 2025.

The decrease was primarily attributable to $38.2 million

of AFS securities sold during

the quarter ended March 31, 2026.

As of June 30, 2026,

investment securities with a market value of $56.3 million were pledged to secure public deposits.

The investment portfolio does not contain any tax-exempt

USCB Financial Holdings, Inc.

Q2 2026 Form 10-Q

March 31, 2026, investment

securities with a

market value of

$55.1 million were pledged

to secure public

The investment portfolio does not contain any tax-exempt

The following table

5 unchanged sentences

in thousands):

March 31, 2026

June 30, 2026

December 31, 2025

19 unchanged sentences

for investment

as of March 31, 2026 (in thousands, except yields):

as of June 30, 2026 (in thousands,

except yields):

Within 1 year

15 unchanged sentences

MBS - commercial

Corporate bonds

Loans are the

18 unchanged sentences

as of the dates indicated (in thousands):

March 31, 2026

June 30, 2026

December 31, 2025

7 unchanged sentences

Allowance for credit losses

fees/costs, increased

by $133.1 million,

annualized to

$2.32 billion,

2026 compared to December 31,

The residential real estate loan segment had the most

significant balance increase

The commercial real

estate loan segment had

the most significant balance increase

compared to December 31, 2025.

4 unchanged sentences

loan portfolio

March 31, 2026.

growth strategy

since inception

been reflective of the market in which we operate and

11 unchanged sentences

or unexpected

The following table shows maturities and sensitivity to interest rate changes of the loan portfolio at March 31,

The following table

shows maturities and sensitivity

to interest rate changes

of the loan portfolio

2026 (in thousands):

26 unchanged sentences

/rate modifications are discussed as well.

March 31, 2026,

approximately 63.1%

As of June 30, 2026, approximately 63%

of the loan portfolio has

adjustable/variable rates and 37% of the

loan portfolio

has adjustable/variable

adjustable/variable

periods of time.

By contractual characteristics, there are no

material concentrations on anniversary repricing.

adjustable/variable rate

loans re-price

different periods

By contractual characteristics, there are no material

concentrations on anniversary repricing.

USCB Financial Holdings, Inc.

46 unchanged sentences

as follows for the dates indicated (in thousands):

March 31, 2026

June 30, 2026

Special Mention

17 unchanged sentences

except ratios):

March 31, 2026

June 30, 2026

December 31, 2025

46 unchanged sentences

borrowers experiencing financial

difficulties, see

Note 3 “Loans” to

difficulties,

see Note 3 “Loans”

the unaudited Consolidated Financial Statements in Item

14 unchanged sentences

Correspondent

Three Months Ended March 31, 2026

Three Months Ended June 30, 2026

Beginning balance

3 unchanged sentences

Net charge-offs (recoveries) to average

Six Months Ended June 30, 2026

Beginning balance

Provision for credit losses

Ending Balance

Average loans

Net charge-offs (recoveries) to average

(1) Provision for credit losses excludes a $380 thousand provision due to unfunded commitments included in accrued interest and

other liabilities and a $2 thousand release related to investment securities held to maturity.

other liabilities.

(2) Annualized.

(3) Provision for credit losses excludes a $585 thousand provision due to unfunded commitments included in accrued interest and

other liabilities and a $2 thousand release related to investment securities held to maturity.

USCB Financial Holdings, Inc.

Q2 2026 Form 10-Q

Correspondent

Three Months Ended March 31, 2025

Three Months Ended June 30, 2025

Beginning balance

3 unchanged sentences

Net charge-offs (recoveries) to average

Six Months Ended June 30, 2025

Beginning balance

Provision for credit losses

Ending Balance

Average loans

Net charge-offs (recoveries) to average

(1) Provision for credit losses excludes a $134 thousand provision due to unfunded commitments included in accrued interest and other

liabilities and a $1 thousand release related to investment securities held to maturity.

liabilities and a $2 thousand provision related to investment securities held to maturity.

(2) Annualized.

USCB Financial Holdings, Inc.

Q1 2026 Form 10-Q

(3) Provision for credit losses excludes $144 thousand provision due to unfunded commitments included in accrued interest and a $1

thousand provision related to investment securities held to maturity.

improvement in

22 unchanged sentences

in calculating

expected losses on the residential loan segment.

As of March 31,

2026, for every 100 basis points increase in the HPI, the

expected losses

residential loan

approximately

2 unchanged sentences

analysis provides a

hypothetical result to

assess the sensitivity

hypothetical result

to assess the

sensitivity of the

not represent

8 unchanged sentences

occupied subsegment.

As of March 31, 2026, the Company stress tested

two qualitative factors within the non

As of June 30, 2026,

the Company stress

tested two qualitative factors

within the non

occupied subsegment of

2 unchanged sentences

stress resulted in a hypothetical increase

of $6.7 million, or 25.7%,

of $6.0 million, or 22.3%, in

sensitivity analysis is intended solely to illustrate the responsiveness

7 unchanged sentences

occupied subsegment.

USCB Financial Holdings, Inc.

Q2 2026 Form 10-Q

Bank-Owned Life Insurance

As of March 31, 2026, the combined cash surrender value of all bank-owned life insurance (“BOLI”) policies was

As of June 30,

2026, the combined

cash surrender value

of all bank-owned

life insurance (“BOLI”)

policies was $60.4

Statements of Operations.

24 unchanged sentences

presented (in thousands, except ratios):

Three Months Ended March 31,

Three Months Ended June 30,

Average Balance

4 unchanged sentences

Time deposits

USCB Financial Holdings, Inc.

Q1 2026 Form 10-Q

The Company has a

4 unchanged sentences

partially collateralized)

brokered deposits balance at March 31, 2026 was $215.0

brokered deposits balance at June 30, 2026 was $190.9

million and $256.8 million at December 31, 2025.

As of March 31, 2026, the Company has approximately

21 thousand deposit accounts with the majority

As of June 30,

2026, the Company

has approximately

21 thousand deposit

accounts with the

personal accounts, approximately

3 unchanged sentences

portfolio was

approximately $120 thousand as of March 31, 2026.

approximately $118

thousand as of June 30, 2026.

account holder for all deposit accounts at the Company.

1 unchanged sentence

Deposit Account

ICS/CDARS was $186.5 million at March 31, 2026 and was

$183.2 million at December 31, 2025.

ICS/CDARS was $176.1 million at June 30, 2026 and

was $183.2 million at December 31, 2025.

The following table shows scheduled maturities of uninsured

time deposits as of March 31, 2026 (in thousands):

March 31, 2026

time deposits as of June 30, 2026 (in thousands):

June 30, 2026

Three months or less

11 unchanged sentences

consolidated balance sheet.

As of March 31, 2026, escrow balances totaled $15.4

million compared to $8.1 million at December 31, 2025.

As of June 30, 2026, escrow balances totaled $23.5 million

compared to $8.1 million at December 31, 2025.

increase reflects the normal growth in escrow accounts

pending tax and insurance payments.

USCB Financial Holdings, Inc.

Q2 2026 Form 10-Q

FHLB Advances

7 unchanged sentences

either daily operations or the financial condition of the

As of March 31, 2026, we had

$11.0 million of fixed-rate advances and $42.0 million of daily-rate advances outstanding

respectively, as detailed

in the table below.

June 30, 2026, we

had $112.0 million of

fixed-rate advances and

$128.9 million of

daily-rate advances outstanding

with the FHLB,

with weighted average

interest rates

and 3.88%, maturing

and September

the fixed-rate advances and May 2027 for the daily-rate advance

as detailed in the table below.

The following table presents the FHLB advances as of

March 31, 2026 (in thousands):

March 31, 2026

June 30, 2026 (in thousands):

June 30, 2026

Interest Rate

Maturity Date

January 24, 2028

July 13, 2026

July 23, 2026

July 29, 2026

September 09, 2026

correspondent

March 31, 2026, there were no outstanding balances with

any of these additional liquidity sources.

USCB Financial Holdings, Inc.

Q1 2026 Form 10-Q

June 30, 2026, there were no outstanding balances with any

of these additional liquidity sources.

Subordinated Notes

11 unchanged sentences

The subordinated notes

are presented net of

these costs on the

consolidated balance sheet.

are presented net

of these costs on

the consolidated balance

registration requirements of the Securities Act of

22 unchanged sentences

unfunded commitments

at December 31,

$752 thousand.

was primarily driven by an increase in unfunded commitments.

was primarily driven by an increase

in unfunded commitments.

USCB Financial Holdings, Inc.

Q2 2026 Form 10-Q

Since commitments associated with letters of

3 unchanged sentences

commitments outstanding as of the dates indicated (in thousands

March 31, 2026

June 30, 2026

December 31, 2025

55 unchanged sentences

monitor, and limit IRR exposures.

USCB Financial Holdings, Inc.

Q1 2026 Form 10-Q

When assessing the

17 unchanged sentences

and twists of the yield

Dynamic simulation

more comprehensive

This simulation

comprehensive

assumptions regarding

11 unchanged sentences

balance sheet.

USCB Financial Holdings, Inc.

Q2 2026 Form 10-Q

Market and Interest Rate Risk Management

simulations indicate

Bank’s balance sheet remains liability

sensitive in Year 1, positioning the Bank to benefit in a declining rate environment as

ALM simulations

Bank’s balance sheet remains liability sensitive in Year 1, positioning the Bank to benefit in a declining rate environment as

liabilities reprice more

3 unchanged sentences

(NII) outcomes.

both models transition toward

sensitive posture, reflecting projected

sheet growth, continued variable

both models transition toward an asset sensitive posture,

reflecting projected balance sheet growth, continued variable rate

loan production,

This progression

is consistent

with management’s

looking assumptions embedded in the dynamic model.

interest rate

neutral, with

no significant

overall sensitivity.

liability-sensitive

All modeled NII and EVE results continued to remain within ALCO policy limits across all rate shock scenarios.

Bank’s relationship

3 unchanged sentences

Florida market.

Modeled NII and Economic Value of Equity (EVE) outcomes remain well within ALCO policy limits across all rate shock

incorporates a

of assumptions,

The ALM model

incorporates a wide

range of assumptions,

including asset

1 unchanged sentence

correlations,

inherent estimation involved

in these assumptions,

actual results may

modeled outcomes, particularly

EVE sensitivity remains compliant with policy guidelines, with greater volatility observed in rising

rate scenarios, driven

estimation involved in these assumptions, actual results may differ from modeled outcomes, particularly as static measures

do not incorporate potential management actions in response

to changes in market conditions or customer behavior.

EVE sensitivity remains compliant with policy guidelines, with greater volatility

observed in rising rate scenarios, driven

environments,

particularly as loan prepayments slow, while certain funding sources reprice less immediately.

in declining rate

scenarios, faster prepayments and

2 unchanged sentences

Importantly, EVE volatility

declined quarter over quarter, reflecting balance

sheet actions taken during the period and an overall

reduction in structural

declined quarter over quarter, reflecting balance sheet actions taken during the period and an overall reduction in structural

interest rate risk.

The improvement in the Bank’s

IRR profile was driven primarily by a

reduction in asset duration, while liability

repositioning contributed to a shorter effective

asset duration and reduced optionality risk.

well positioned

current interest

rate volatility,

with limited exposure

rate scenarios

and favorable

positioning in

rate environment.

Management continues

sheet strategies as market conditions evolve.

and related strategies are reviewed quarterly

with ALCO and

adjusted as appropriate.

USCB Financial Holdings, Inc.

Q1 2026 Form 10-Q

consistent with

liability duration

through balance

strategies as

market conditions

strategies are

reviewed quarterly

Liquidity is defined

35 unchanged sentences

Funding Plan and ALM policy.

USCB Financial Holdings, Inc.

Q2 2026 Form 10-Q

Critical elements of our liquidity

31 unchanged sentences

unpledged securities

(excluding Unencumbered

HTM securities)

collateral and

The Company had an

8 unchanged sentences

Capital Adequacy

March 31, 2026,

prompt corrective

As of June 30, 2026,

the Company and

the Bank were

well capitalized under

the FRB’s and

FDIC’s prompt corrective

action framework.

follow the capital conservation buffer framework, and as of March 31, 2026, we exceeded the capital conversation buffer

indicated (in thousands, except ratios).

capital conservation

capital conversation buffer in all

capital ratios, according to our actual

The following table presents

the capital ratios

for the Company and the Bank at the dates indicated (in

thousands, except ratios).

The Company's consolidated regulatory capital amounts and ratios:

Minimum Capital

2 unchanged sentences

Action Provisions

March 31, 2026

June 30, 2026

risk-based capital

7 unchanged sentences

Leverage ratio

The Company is

not subject to

regulatory capital ratios

imposed by Basel

holding companies because

Company is deemed to be a small bank holding company.

The Bank's regulatory capital amounts and ratios:

Minimum Capital

To be Well Capitalized

Under Prompt Corrective

Action Provisions

June 30, 2026

risk-based capital

Tier 1 risk-based capital

Common equity tier 1 capital

Leverage ratio

December 31, 2025

risk-based capital

Tier 1 risk-based capital

Common equity tier 1 capital

Leverage ratio

Impact of Inflation

20 unchanged sentences

considers as part

of its ongoing balance

sheet and earnings planning processes.

of its ongoing balance sheet and earnings planning processes.

USCB Financial Holdings, Inc.

85 unchanged sentences

of the Company.

Excludes the dilutive effect, if any, of shares of common stock issuable upon exercise

of outstanding stock options.

Since the Company has no intangible assets,

1 unchanged sentence

assets are the same amounts as stockholders’ equity

and total assets, respectively, as calculated under GAAP.

Excludes the dilutive effect, if any, of shares of common stock issuable upon exercise

of outstanding stock options.

and total assets,

The decrease in total stockholders’ equity in

September 2025 was primarily driven by the repurchase

of 2.0 million shares of Class A common

stock, as previously

USCB Financial Holdings, Inc.

5 unchanged sentences

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis