株探米国株
英語
エドガーで原本を確認する
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uscb-20250331p1i0
Washington, D.C. 20549
FORM
10-Q
☒
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended
March 31, 2025
OR
☐
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _____to_____
Commission File Number:
001-41196
USCB Financial Holdings, Inc.
(Exact name of registrant as specified in its charter)
 
Florida
87-4070846
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification No.)
2301 N.W. 87th Avenue
,
Doral
,
FL
33172
(Address of principal executive offices) (zip code)
Registrant’s telephone number, including area code:
 
(
305
)
715-5200
 
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol(s)
Name of each exchange on which registered
Class A common stock, $1.00 par value per share
USCB
The Nasdaq Stock Market LLC
Indicate by check
 
mark whether the
 
registrant (1) has
 
filed all reports
 
required to be
 
filed by Section
 
13 or 15(d)
 
of the Securities
 
Exchange
Act of 1934 during the preceding 12 months
 
(or for such shorter period that the registrant was
 
required to file such reports), and (2)
 
has
been subject to such filing requirements for the past 90 days.
 
Yes
☒
 
No
☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data
 
File required to be submitted pursuant
to Rule 405
 
of Regulation S-T
 
(§232.405 of this
 
chapter) during the
 
preceding 12 months
 
(or for such
 
shorter period that
 
the registrant
was required to submit such files).
 
Yes
☒
 
No
☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting
company
 
or
 
an
 
emerging
 
growth
 
company.
 
See
 
the
 
definitions
 
of
 
“large
 
accelerated
 
filer,”
 
“accelerated
 
filer,”
 
“non-accelerated
 
filer,”
“smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
☐
 
Accelerated filer
☒
 
Non-accelerated filer
☐
 
Smaller reporting company
☒
 
Emerging growth company
☒
If an
 
emerging growth
 
company, indicate by
 
check mark
 
if the
 
registrant has elected
 
not to
 
use the
 
extended transition
 
period for
 
complying
with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes
☐
 
No
☒
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
As of April 30, 2025 the registrant had
20,048,385
 
shares of Class
A
common stock outstanding.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
3
 
USCB Financial Holdings, Inc.
 
Q1 2025 Form 10-Q
PART
 
I
Item 1.
 
Financial Statements
USCB FINANCIAL HOLDINGS, INC
Consolidated Balance Sheets – Unaudited
(Dollars in thousands, except share data)
March 31, 2025
December 31, 2024
ASSETS:
Cash and due from banks
$
6,726
$
6,986
Interest-bearing deposits in banks
91,258
70,049
Total cash and cash equivalents
97,984
77,035
Investment securities held to maturity, net of allowance of $
5
 
and $
6
, respectively (fair value of
$
145,665
 
and $
145,540
, respectively)
161,790
164,694
Investment securities available for sale, at fair value
275,139
260,221
Federal Home Loan Bank stock, at cost
6,936
9,379
Loans held for investment, net of allowance of $
24,740
 
and $
24,070
, respectively
2,011,472
1,948,778
Accrued interest receivable
11,024
10,945
Premises and equipment, net
4,461
4,563
Bank owned life insurance
57,943
53,472
Deferred tax assets, net
26,045
29,646
Lease right-of-use asset
7,708
8,451
Other assets
16,880
14,032
Total assets
$
2,677,382
$
2,581,216
 
LIABILITIES:
 
Deposits:
 
Non-interest bearing demand deposits
$
605,489
$
575,159
Savings and money market deposits
1,207,303
1,180,809
Interest-bearing demand deposits
49,951
50,648
Time deposits
446,826
367,388
Total deposits
2,309,569
2,174,004
Federal Home Loan Bank advances
 
108,000
163,000
Lease liability
7,708
8,451
Accrued interest and other liabilities
27,017
20,373
Total liabilities
2,452,294
2,365,828
 
Commitments and contingencies (See Notes 5
 
and 11)
(nil)
 
 
(nil)
 
STOCKHOLDERS' EQUITY:
 
Preferred stock - Class C; $
1.00
 
par value; $
1,000
 
per share liquidation preference;
52,748
 
shares
authorized;
0
 
and
0
 
issued and outstanding as of March 31, 2025
 
and December 31, 2024
-
-
Preferred stock - Class D; $
1.00
 
par value; $
5.00
 
per share liquidation preference;
12,309,480
 
shares
authorized;
0
 
and
0
 
issued and outstanding as of March 31, 2025
 
and December 31, 2024
-
-
Preferred stock - Class E; $
1.00
 
par value; $
1,000
 
per share liquidation preference;
3,185,024
 
shares
authorized;
0
 
and
0
 
issued and outstanding as of March 31, 2025
 
and December 31, 2024
-
-
Common stock - Class A Voting; $
1.00
 
par value;
45,000,000
 
shares authorized;
20,048,385
 
issued and
outstanding as of March 31, 2025,
19,924,632
 
issued and outstanding as of December
 
31, 2024
 
20,048
19,925
Common stock - Class B Non-voting; $
1.00
 
par value;
8,000,000
 
shares authorized;
0
 
and
0
 
issued and
outstanding as of March 31, 2025 and December
 
31, 2024
 
-
-
Additional paid-in capital on common stock
308,313
307,810
Accumulated deficit
(62,160)
(67,813)
Accumulated other comprehensive loss
(41,113)
(44,534)
Total stockholders' equity
225,088
215,388
Total liabilities and stockholders' equity
$
2,677,382
$
2,581,216
 
The accompanying notes are an integral part of
 
these unaudited consolidated financial statements.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
4
 
USCB Financial Holdings, Inc.
 
Q1 2025 Form 10-Q
USCB FINANCIAL HOLDINGS, INC.
Consolidated Statements of Operations - Unaudited
(Dollars in thousands,
 
except per share data)
 
Three Months Ended March 31,
2025
2024
Interest income:
 
Loans, including fees
$
30,245
$
26,643
 
Investment securities
3,024
2,811
 
Interest-bearing deposits in financial institutions
709
1,433
 
Total interest income
33,978
30,887
Interest expense:
 
 
Interest-bearing demand deposits
338
369
Savings and money market deposits
9,335
10,394
 
Time deposits
3,918
3,294
 
Federal Home Loan Bank advances and other borrowings
1,272
1,672
 
Total interest expense
14,863
15,729
 
Net interest income before provision for
 
credit losses
19,115
15,158
Provision for credit losses
681
410
 
Net interest income after provision for
 
credit losses
18,434
14,748
Non-interest income:
 
 
 
Service fees
2,331
1,651
 
Gain on sale of loans held for sale, net
525
67
 
Other non-interest income
860
746
 
Total non-interest income
3,716
2,464
Non-interest expense:
 
 
 
Salaries and employee benefits
7,636
6,310
 
Occupancy
1,284
1,314
 
Regulatory assessments and fees
421
433
 
Consulting and legal fees
193
592
 
Network and information technology services
505
507
 
Other operating expense
2,013
2,018
 
Total non-interest expense
12,052
11,174
 
Income before income tax expense
10,098
6,038
Income tax expense
2,440
1,426
 
Net income
$
7,658
$
4,612
Per share information:
 
 
Net income per share, basic
$
0.38
$
0.23
Net income per share, diluted
$
0.38
$
0.23
Cash dividends declared
$
0.10
$
0.05
The accompanying notes are an integral part of
 
these unaudited consolidated financial statements.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
5
 
USCB Financial Holdings, Inc.
 
Q1 2025 Form 10-Q
USCB FINANCIAL HOLDINGS, INC.
Consolidated Statements of Comprehensive Income
 
- Unaudited
(Dollars in thousands)
 
Three Months Ended March 31,
2025
2024
Net income
$
7,658
$
4,612
Other comprehensive income (loss):
 
 
Unrealized gain (loss) on investment securities
4,673
(2,134)
Amortization of net unrealized gain on securities transferred
 
from available-for-sale to held-to-maturity
67
67
Unrealized gain (loss) on cash flow hedge
(158)
519
Tax effect
(1,161)
392
Total other comprehensive income (loss), net of tax
3,421
(1,156)
Total comprehensive income
$
11,079
$
3,456
The accompanying notes are an integral part of
 
these unaudited consolidated financial statements.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
6
 
USCB Financial Holdings, Inc.
 
Q1 2025 Form 10-Q
USCB FINANCIAL HOLDINGS, INC.
Consolidated Statements of Changes in Stockholders’
 
Equity - Unaudited
(Dollars in thousands,
 
except per share data)
Common Stock
Additional Paid-in
Capital on Common
Stock
Accumulated
Deficit
Accumulated Other
Comprehensive
Loss
Shares
Par Value
Total
 
Stockholders'
Equity
Balance at December 31, 2024
19,924,632
$
19,925
$
307,810
$
(67,813)
$
(44,534)
$
215,388
Net income
-
-
-
7,658
-
7,658
Other comprehensive income
-
-
-
-
3,421
3,421
Repurchase of Class A common stock
(9,671)
(10)
(164)
-
-
(174)
Restricted stock issued
124,424
124
(124)
-
-
-
Exercise of stock options
9,000
9
83
-
-
92
Dividend payment
-
-
-
(2,005)
-
(2,005)
Stock-based compensation
-
-
708
-
-
708
Balance at March 31, 2025
20,048,385
$
20,048
$
308,313
$
(62,160)
$
(41,113)
$
225,088
Balance at December 31, 2023
19,575,435
$
19,575
$
305,212
$
(88,548)
$
(44,271)
$
191,968
Net income
-
-
-
4,612
-
4,612
Other comprehensive loss
-
-
-
-
(1,156)
(1,156)
Repurchase of Class A common stock
(7,100)
(7)
(72)
-
-
(79)
Restricted stock issued
52,753
53
(53)
-
-
-
Restricted stock forfeiture
(8,625)
(9)
9
-
-
-
Exercise of stock options
38,000
38
284
-
-
322
Dividend payment
-
-
-
(1,016)
-
(1,016)
Stock-based compensation
-
-
360
-
-
360
Balance at March 31, 2024
19,650,463
$
19,650
$
305,740
$
(84,952)
$
(45,427)
$
195,011
The accompanying notes are an integral
 
part of these consolidated financial statements.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
7
 
USCB Financial Holdings, Inc.
 
Q1 2025 Form 10-Q
USCB FINANCIAL HOLDINGS, INC.
Consolidated Statements of Cash Flows - Unaudited
(Dollars in thousands)
Three Months Ended March 31,
2025
2024
Cash flows from operating activities:
Net income
 
$
7,658
$
4,612
Adjustments to reconcile net income
 
to net cash provided by operating activities:
 
Provision for credit losses
 
681
410
Depreciation and amortization
148
140
Accretion of premiums on securities, net
(212)
(135)
Amortization (accretion) of deferred loan
 
fees, net
126
(3)
Stock-based compensation
708
360
Gain on sale of loans held for sale, net
(525)
(67)
Proceeds from the sale of loans held for sale
7,719
787
Origination of loans held for sale
(7,194)
(720)
Increase in cash surrender value of bank owned
 
life insurance
(471)
(411)
Decrease in deferred tax assets
2,440
1,424
Net change in operating assets and liabilities:
 
Accrued interest receivable
(79)
(891)
Other assets
(3,005)
(464)
Accrued interest and other liabilities
6,634
3,051
Net cash provided by operating activities
14,628
8,093
 
 
Cash flows from investing activities:
 
Proceeds from maturities and pay-downs of investment
 
securities held to maturity
2,955
1,987
Purchase of investment securities available
 
for sale
 
(14,123)
(36,927)
Proceeds from maturities and pay-downs of investment
 
securities available for sale
4,106
4,278
Net increase in loans held for investment
(43,503)
(15,110)
Purchase of loans held for investment
(19,989)
(25,249)
Additions to premises and equipment
(46)
(91)
Purchase of bank owned life insurance
(4,000)
-
Proceeds from the redemption of Federal
 
Home Loan Bank stock
2,612
4,798
Purchase of Federal Home Loan Bank stock
(169)
(177)
Net cash used in investment activities
(72,157)
(66,491)
Cash flows from financing activities:
Proceeds from issuance of Class A common
 
stock, net
92
322
Cash dividends paid
(2,005)
(1,016)
Repurchase of Class A common stock
(174)
(79)
Net increase in deposits
135,565
165,655
Proceeds from other borrowings
-
80,000
Repayments on Federal Home Loan Bank advances
 
(55,000)
(101,000)
Net cash provided by financing activities
78,478
143,882
 
Net decrease in cash and cash equivalents
20,949
85,484
Cash and cash equivalents at beginning
 
of period
77,035
41,062
Cash and cash equivalents at end of period
$
97,984
$
126,546
 
Supplemental disclosure of cash flow
 
information:
 
Interest paid
$
14,454
$
14,624
The accompanying notes are an integral
 
part of these unaudited consolidated financial
 
statements.
 
 
USCB FINANCIAL HOLDINGS, INC.
Notes to the Consolidated Financial Statements - Unaudited
 
 
8
 
USCB Financial Holdings, Inc.
 
Q1 2025 Form 10-Q
 
1.
 
SUMMARY OF SIGNIFICANT ACCOUNTING
 
POLICIES
Overview
USCB Financial Holdings,
 
Inc.,
 
a Florida corporation
 
incorporated in 2021,
 
is a bank
 
holding company with
 
one direct
wholly owned subsidiary,
 
U.S. Century Bank (the “Bank”), together referred to as “the Company”.
 
The Bank, established in
2002, is a Florida state-chartered,
 
non-member financial institution providing
 
financial services through its
 
banking centers
located in South Florida.
The Bank
 
owns a
 
subsidiary,
 
Florida Peninsula
 
Title LLC,
 
that offers
 
our clients
 
title insurance
 
policies for
 
real estate
transactions closed at the Bank. Licensed in the State of Florida and approved by the Department of Insurance Regulation,
Florida Peninsula Title LLC began operations
 
in 2021.
Basis of Presentation
The accompanying unaudited consolidated financial statements have been prepared in accordance with instructions to
Form 10-Q and
 
do not include all
 
the information and
 
footnotes required by U.S.
 
generally accepted accounting
 
principles
(“U.S.
 
GAAP”)
 
for
 
complete
 
financial
 
statements.
 
All
 
adjustments
 
consisting
 
of
 
normally
 
recurring
 
accruals
 
that,
 
in
 
the
opinion
 
of
 
management,
 
are
 
necessary
 
for
 
a
 
fair
 
presentation
 
of
 
the
 
financial
 
position
 
and
 
results
 
of
 
operations
 
for
 
the
periods presented
 
have been
 
included. These
 
unaudited consolidated
 
financial statements
 
should be
 
read in
 
conjunction
with the Company’s audited
 
consolidated financial statements and
 
related notes appearing in
 
the Company’s Annual Report
on Form 10-K for the year ended December 31, 2024.
Principles of Consolidation
The
 
Company
 
consolidates
 
entities
 
in
 
which
 
it
 
has
 
a
 
controlling
 
financial
 
interest.
 
Intercompany
 
transactions
 
and
balances are eliminated in consolidation.
 
Use of Estimates
To prepare
 
financial statements in conformity with U.S. GAAP,
 
management makes estimates and assumptions based
on available
 
information. These
 
estimates and
 
assumptions affect
 
the amounts
 
reported in
 
the financial
 
statements. The
most significant
 
estimates impacting
 
the Company’s
 
consolidated financial
 
statements are
 
the allowance
 
for credit
 
losses
(“ACL”) and income taxes.
Reclassifications
Certain amounts in the consolidated financial statements have been reclassified to conform
 
to the current presentation.
Reclassifications had no impact on the net income or stockholders’
 
equity of the Company.
 
Recently Issued Accounting Standards
Adoption of New Accounting Standards
Improvements to Income Tax
 
Disclosures
In
 
December
 
2023,
 
the
 
FASB
 
issued
 
Accounting
 
Standards
 
Update
 
(ASU)
 
2023-09,
 
Income
 
Taxes
 
(Topic
 
740):
Improvements to Income Tax
 
Disclosures. This ASU pertains to
 
disclosures regarding effective
 
tax rates and cash income
taxes paid with the goal of providing stakeholders with more transparent
 
and relevant information. This ASU is effective for
public business
 
entities for
 
annual periods
 
beginning after
 
December 15,
 
2024. The Company
 
adopted this
 
ASU 2023-09
effective January 1, 2025, the adoption of this ASU did not have a material impact on the
 
Company’s consolidated financial
statements.
2.
 
INVESTMENT SECURITIES
 
The measurement of expected credit losses under the current expected credit loss (“CECL”) methodology is applicable 9 USCB Financial Holdings, Inc. Q1 2025 Form 10-Q
to
 
financial
 
assets
 
measured
 
at
 
amortized
 
cost,
 
including
 
loan
 
receivables
 
and
 
held-to-maturity
 
debt
 
securities.
 
The
 
USCB FINANCIAL HOLDINGS, INC.
Notes to the Consolidated Financial Statements - Unaudited
 
 
 
accounting for available-for-sale
 
debt securities (“AFS”)
 
credit losses is
 
presented as an
 
allowance rather than
 
as a write-
down. Management does not intend to sell or believes
 
that it is more likely they will not be required to sell
 
AFS securities.
CECL requires a loss reserve for
 
securities classified as held-to-maturity
 
(“HTM”). The reserve should reflect
 
historical
credit performance
 
as well
 
as the
 
impact of
 
projected economic
 
forecasts.
 
For U.S.
 
Government bonds
 
and U.S.
 
Agency
issued bonds
 
classified as
 
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
 
the
 
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 March 31, 2025
 
and December 31, 2024, all HTM securities held by
 
the
Company were rated investment grade.
At
 
quarter
 
end,
 
HTM
 
securities
 
included
 
$
152.6
 
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
 
$
9.2
 
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 $
5
 
thousand ACL as of March
 
31, 2025. The book value
 
for debt securities classified
 
as HTM represents amortized
 
cost
less the ACL related to these securities.
The following
 
tables present
 
a summary
 
of the amortized
 
cost, unrealized
 
or unrecognized
 
gains and
 
losses,
 
and fair
value of investment securities at the dates indicated (in
 
thousands):
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
March 31, 2025
Available-for-sale:
Amortized
Cost
Unrealized
Gains
Unrealized
Losses
Fair Value
U.S. Government Agency
$
13,986
$
17
$
(1,398)
$
12,605
Collateralized mortgage obligations
99,775
16
(21,235)
78,556
Mortgage-backed securities - residential
63,115
17
(10,913)
52,219
Mortgage-backed securities - commercial
95,033
109
(7,331)
87,811
Municipal securities
24,905
-
(5,013)
19,892
Bank subordinated debt securities
24,356
445
(745)
24,056
$
321,170
$
604
$
(46,635)
$
275,139
Held-to-maturity:
 
 
 
U.S. Government Agency
$
42,095
$
24
$
(4,297)
$
37,822
Collateralized mortgage obligations
55,781
206
(6,865)
49,122
Mortgage-backed securities - residential
39,514
370
(4,091)
35,793
Mortgage-backed securities - commercial
15,227
-
(1,190)
14,037
Corporate bonds
9,178
-
(287)
8,891
$
161,795
$
600
$
(16,730)
$
145,665
Allowance for credit losses - securities held-to-maturity
(5)
Securities held-to maturity, net of allowance for credit losses
$
161,790
 
USCB FINANCIAL HOLDINGS, INC.
Notes to the Consolidated Financial Statements - Unaudited
 
 
10
 
USCB Financial Holdings, Inc.
 
Q1 2025 Form 10-Q
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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
Held-to-maturity:
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
Transfers
 
of
 
debt
 
securities
 
into
 
the
 
HTM
 
category
 
from
 
the
 
AFS
 
category
 
are
 
made
 
at
 
fair
 
value
 
as
 
of
 
the
 
date
 
of
transfer.
 
The
 
unrealized
 
gain or
 
loss at
 
the
 
date
 
of transfer
 
is retained
 
in
 
AOCI and
 
in the
 
carrying
 
value
 
of the
 
held-to-
maturity securities.
 
There was no impact to net income. Such amounts
 
are amortized over the remaining life of the security.
The Company made
two
 
transfers from AFS to HTM portfolios in 2022.
 
During the quarter ended March 31, 2025 there were
no
 
investment securities that were transferred from
 
AFS to HTM.
For
 
the
 
three
 
months
 
ended
 
March 31,
 
2025,
 
total
 
amortization
 
out
 
of
 
AOCI
 
for
 
net
 
unrealized
 
losses
 
on
 
securities
transferred in
 
2022 from
 
AFS to
 
HTM was
 
$
67
 
thousand.
 
At March
 
31, 2025,
 
the fair
 
value of
 
the securities
 
was $
101.4
million and the balance of the net unrealized loss was $
9.2
 
million.
 
For
 
the
 
quarter
 
ended
 
March
 
31,
 
2024
 
total
 
amortization
 
out
 
of
 
AOCI
 
for
 
the
 
net
 
unrealized
 
losses
 
on
 
securities
transferred from AFS to HTM was $
67
 
thousand, At March 31, 2025, the fair value of the securities
 
was $
104.8
 
million and
the balance of the net unrealized losses retained in AOCI
 
was $
9.5
 
million at March 31, 2024.
When evaluating
 
AFS debt
 
securities under
 
ASC Topic
 
326, the
 
Company
 
has evaluated
 
whether the
 
decline in
 
fair
value is attributable
 
to credit losses
 
or other factors
 
like interest rate risk,
 
using both quantitative
 
and qualitative analyses,
including
 
company
 
performance
 
analysis,
 
review
 
of
 
credit
 
ratings,
 
bond
 
vintage,
 
remaining
 
payment
 
terms,
 
prepayment
speeds and analysis
 
of macro-economic conditions.
 
Each investment is
 
expected to recover
 
its price depreciation
 
over its
holding period
 
as it
 
moves
 
to maturity
 
and
 
the
 
Company
 
has the
 
intent
 
and
 
ability
 
to hold
 
these securities
 
to maturity
 
if
necessary.
 
As a result of
 
this evaluation, the Company
 
concluded that no allowance
 
was required on AFS
 
securities as of
March 31, 2025.
At
 
March 31,
 
2025,
 
the
 
Company
 
had
 
$
39.5
 
million
 
and
 
$
12.1
 
million
 
of
 
unrealized
 
losses
 
on
 
mortgage-backed
securities and collateralized
 
mortgage obligations of
 
U.S. government sponsored
 
entities, in the
 
AFS and HTM categories
respectively.
 
The
 
fair
 
value
 
of
 
these
 
securities
 
was
 
$
218.6
 
million
 
and
 
$
99.0
 
million
 
for
 
the
 
AFS
 
and
 
HTM
 
categories
respectively. The unrealized losses for both AFS and HTM portfolios were attributable to a combination of factors, including
relative changes in interest rates since the
 
time of purchase.
At December
 
31,
 
2024, the
 
Company
 
had
 
$
42.9
 
million
 
and
 
$
13.8
 
million
 
of
 
unrealized
 
losses
 
on
 
mortgage-backed
securities and
 
collateralized mortgage
 
obligations of
 
U.S. government
 
sponsored entities
 
in the
 
AFS and HTM
 
categories
respectively.
 
The
 
fair
 
value
 
of
 
these
 
securities
 
was
 
$
204.6
 
million
 
and
 
$
99.3
 
million
 
for
 
the
 
AFS
 
and
 
HTM
 
categories
respectively. The unrealized losses for both AFS and HTM portfolios were attributable to a combination of factors, including
relative changes in interest rates since the time of purchase.
The contractual cash
 
flows for these securities
 
are guaranteed by U.S.
 
government sponsored entities.
 
The municipal
bonds are of high
 
credit quality and the declines
 
in fair value are
 
not due to credit
 
quality. Based on the assessment of these
mitigating factors, management believed that the unrealized losses on these debt security holdings are a function of changes 11 USCB Financial Holdings, Inc. Q1 2025 Form 10-Q
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
USCB FINANCIAL HOLDINGS, INC.
Notes to the Consolidated Financial Statements - Unaudited
 
 
 
in investment spreads and interest
 
rate movements and not changes
 
in credit quality.
 
Management expects to recover the
entire amortized cost basis of these securities.
Information pertaining
 
to investment
 
securities with
 
gross unrealized
 
losses, aggregated
 
by investment
 
category
 
and
length of
 
time that
 
those
 
individual securities
 
have been
 
in a
 
continuous
 
loss position,
 
are presented
 
as of
 
the following
dates (in thousands):
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
March 31, 2025
Less than 12 months
12 months or more
Total
Available-for-Sale:
Fair Value
Unrealized
Losses
Fair Value
Unrealized
Losses
Fair Value
Unrealized
Losses
U.S. Government Agency
$
2,761
$
(2)
$
8,418
$
(1,396)
$
11,179
$
(1,398)
Collateralized mortgage obligations
1,712
(11)
72,814
(21,225)
74,526
(21,236)
Mortgage-backed securities - residential
-
-
44,824
(10,913)
44,824
(10,913)
Mortgage-backed securities - commercial
36,457
(887)
30,623
(6,443)
67,080
(7,330)
Municipal securities
 
-
-
19,892
(5,013)
19,892
(5,013)
Bank subordinated debt securities
466
(3)
14,229
(742)
14,695
(745)
$
41,396
$
(903)
$
190,800
$
(45,732)
$
232,196
$
(46,635)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
December 31, 2024
Less than 12 months
12 months or more
Total
Available-for-sale:
Fair Value
Unrealized
Losses
Fair Value
Unrealized
Losses
Fair Value
Unrealized
Losses
U.S. Government Agency
$
4,468
$
(76)
$
7,451
$
(1,592)
$
11,919
$
(1,668)
Collateralized mortgage obligations
3,101
(23)
72,952
(22,895)
76,053
(22,918)
Mortgage-backed securities - residential
972
(11)
44,600
(12,052)
45,572
(12,063)
Mortgage-backed securities - commercial
44,411
(1,265)
27,874
(6,640)
72,285
(7,905)
Municipal securities
 
-
-
19,311
(5,614)
19,311
(5,614)
Bank subordinated debt securities
-
-
14,352
(1,044)
14,352
(1,044)
$
52,952
$
(1,375)
$
186,540
$
(49,837)
$
239,492
$
(51,212)
Gains
 
and
 
losses
 
on
 
the
 
sale
 
of
 
securities
 
are
 
recorded
 
on
 
the
 
trade
 
date
 
and
 
are
 
determined
 
on
 
the
 
specific
identification basis.
 
There were
no
 
sales or
 
calls of
 
securities during
 
the three
 
months ended
 
March 31,
 
2025 and
 
March
31, 2024; therefore, there were
no
 
gains or losses during these periods.
The amortized
 
cost
 
and
 
fair
 
value of
 
investment
 
securities,
 
by contractual
 
maturity,
 
are shown
 
below
 
as of
 
the date
indicated (in thousands). Actual
 
maturities may differ
 
from contractual maturities
 
because borrowers may have
 
the right to
call or prepay
 
obligations with or
 
without call or
 
prepayment penalties. Securities not
 
due at a
 
single maturity date are
 
shown
separately.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Available-for-sale
Held-to-maturity
March 31, 2025:
Amortized
Cost
Fair Value
Amortized
Cost
Fair Value
Due within one year
$
-
$
-
$
1,015
$
984
Due after one year through five years
2,935
3,098
8,163
7,907
Due after five years through ten years
42,083
37,552
-
-
Due after ten years
4,243
3,298
-
-
U.S. Government Agency
13,986
12,605
42,095
37,822
Collateralized mortgage obligations
99,775
78,556
55,781
49,122
Mortgage-backed securities - residential
 
63,115
52,219
39,514
35,793
Mortgage-backed securities - commercial
 
95,033
87,811
15,227
14,037
$
321,170
$
275,139
$
161,795
$
145,665
At March 31, 2025, there were no securities held in the portfolio from any one issuer in an amount greater than 10% of 12 USCB Financial Holdings, Inc. Q1 2025 Form 10-Q
total
 
stockholders’
 
equity
 
other
 
than
 
the
 
U.S.
 
Government
 
and
 
Government
 
Agency
 
securities.
 
All
 
the
 
collateralized
 
 
 
USCB FINANCIAL HOLDINGS, INC.
Notes to the Consolidated Financial Statements - Unaudited
 
 
 
mortgage
 
obligations
 
and
 
mortgage-backed
 
securities
 
at
 
March 31,
 
2025
 
and
 
December 31,
 
2024
 
were
 
issued
 
by
 
U.S.
Government entities.
 
The Bank is a Qualified Public Depository (“QPD”) with the State of Florida. As a QPD, the
 
Bank has the legal authority
to
 
maintain
 
public
 
deposits
 
from
 
cities,
 
municipalities,
 
and
 
the
 
State
 
of
 
Florida.
 
These
 
public
 
deposits
 
are
 
secured
 
by
securities pledged
 
to the
 
State of
 
Florida at
 
a ratio
 
of
25
% of
 
the outstanding
 
uninsured deposits
 
at March 31,
 
2025 and
50
% at December 31, 2024. The
 
Bank must also maintain a
 
minimum amount of pledged securities
 
to be in the public
 
funds
program.
As of March 31,
 
2025, the Bank
 
had a total
 
of $
122.9
 
million in deposits
 
under the public
 
funds program
 
and pledged
to the State of Florida for these public funds were
sixteen
 
bonds with an aggregate fair value of $
51.1
 
million.
As of
 
December 31, 2024, the
 
Bank had
 
a total
 
of $
110.5
 
million in
 
deposits under the
 
public funds program
 
and pledged
to the State of Florida for these public funds were
twenty-one
 
bonds with an aggregate fair value of $
66.1
 
million.
 
3.
 
LOANS
The following table is a summary of the distribution of
 
loans held for investment by type (dollars in thousands):
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
March 31, 2025
December 31, 2024
Total
Percent of
Total
Total
Percent of
Total
Residential Real Estate
$
301,164
14.8
%
$
289,961
14.8
%
Commercial Real Estate
1,150,129
56.7
%
1,136,417
57.8
%
Commercial and Industrial
256,326
12.6
%
258,311
13.1
%
Correspondent Banks
103,026
5.1
%
82,438
4.2
%
Consumer and Other
 
218,711
10.8
%
198,091
10.1
%
Total
 
gross loans
2,029,356
100.0
%
1,965,218
100.0
%
Plus: Deferred fees/costs
6,856
 
7,630
Total
 
loans net of deferred fees/costs
2,036,212
1,972,848
Less: Allowance for credit losses
24,740
24,070
Total
 
net loans
$
2,011,472
$
1,948,778
 
At
 
March 31,
 
2025
 
and
 
December 31,
 
2024,
 
the
 
Company
 
had
 
$
517.2
 
million
 
and
 
$
518.8
 
million,
 
respectively,
 
of
commercial real estate
 
and residential mortgage loans
 
pledged as collateral
 
for lines of
 
credit with the
 
FHLB and the
 
Federal
Reserve Bank of Atlanta.
Allowance for Credit Losses
In
 
general,
 
the
 
Company
 
utilizes
 
the
 
Discounted
 
Cash
 
Flow
 
(“DCF”)
 
method
 
or
 
the
 
Remaining
 
Life
 
(“WARM”)
methodology to
 
estimate the
 
quantitative portion
 
of the
 
ACL for
 
loan pools.
 
The DCF
 
method uses
 
a loss
 
driver analysis
(“LDA”) and discounted cash flow analyses. Management engaged
 
advisors and consultants with expertise in CECL model
development to
 
assist in
 
development of
 
a LDA
 
based on
 
regression models
 
and supportable
 
forecast. Peer
 
group data
obtained
 
from
 
FFIEC
 
Call
 
Report
 
filings
 
is
 
used to
 
inform
 
regression
 
analyses
 
to
 
quantify
 
the
 
impact
 
of reasonable
 
and
supportable
 
forecasts
 
in
 
projective
 
models.
 
Economic
 
forecasts
 
applied
 
to
 
regression
 
models
 
to
 
estimate
 
probability
 
of
default for loan receivables use at least
 
one of the following economic indicators: civilian unemployment rate (national), real
gross domestic
 
product growth
 
(national GDP)
 
or the
 
House Price
 
Index (“HPI”).
 
For each
 
of the
 
segments
 
in which
 
the
WARM methodology is used,
 
the long-term average
 
loss rate is
 
calculated and applied
 
on a quarterly
 
basis for the
 
remaining
life of the pool. Adjustments for economic expectations are
 
made through qualitative factors.
Qualitative factors (“Q-Factors”) used in the ACL methodology
 
include:
•
 
Changes in lending policies, procedures, and strategies
•
 
Changes in international, national, regional, and local conditions
•
 
Changes in nature and volume of portfolio
•
 
Changes in the volume and severity of past due loans
 
and other similar conditions
•
 
Concentration risk
•
Changes in the value of underlying collateral 13 USCB Financial Holdings, Inc. Q1 2025 Form 10-Q
USCB FINANCIAL HOLDINGS, INC.
Notes to the Consolidated Financial Statements - Unaudited
 
 
 
•
 
The effect of other external factors: e.g., competition,
 
legal, and regulatory requirements
•
 
Changes in lending management, among others
Changes in the ACL for the three months ended March
 
31, 2025 and 2024 were as follows (in thousands):
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Residential
 
Real Estate
Commercial
 
Real Estate
Commercial
 
and
Industrial
Correspondent
Banks
Consumer
and Other
Total
Three Months Ended March 31, 2025
Beginning balance
$
5,121
$
8,788
$
4,633
$
654
$
4,874
$
24,070
Provision for credit losses
(1)
 
(12)
409
(204)
163
316
672
Recoveries
6
-
5
-
-
11
Charge-offs
-
-
-
-
(13)
(13)
Ending Balance
 
$
5,115
$
9,197
$
4,434
$
817
$
5,177
$
24,740
(1) Provision for credit losses excludes a $
10
 
thousand charge due to unfunded commitments included in accrued interest and other
liabilities and a $
1
 
thousand release related to investment securities held to maturity.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Residential
 
Real Estate
Commercial
 
Real Estate
Commercial
 
and
Industrial
Correspondent
Banks
Consumer
and Other
Total
Three Months Ended March 31, 2024
Beginning balance
$
2,695
$
10,366
$
3,974
$
911
$
3,138
$
21,084
Provision for credit losses
(1)
235
(64)
288
(117)
21
363
Recoveries
-
-
10
-
2
12
Charge-offs
-
-
-
-
(5)
(5)
Ending Balance
 
$
2,930
$
10,302
$
4,272
$
794
$
3,156
$
21,454
 
(1) Provision for credit losses excludes a $
43
 
thousand charge due to unfunded commitments included in accrued interest and other
liabilities and a $
4
 
thousand charge related to investment securities held to maturity.
At March 31, 2025, the ACL for loans
 
was $
24.7
 
million compared to $
24.1
 
million at December 31, 2024. The increase
of $
670
 
thousand in the ACL was due to loan growth.
 
The Company had
 
charge-offs totaling
 
$
13
 
thousand for the
 
quarter ended March
 
31, 2025 related
 
to loans that
 
were
all originated in 2025.
 
The Company had charge-offs totaling $
5
thousand for the quarter ended March 31, 2024 related to loans that were all 14 USCB Financial Holdings, Inc. Q1 2025 Form 10-Q
originated in 2024.
 
 
 
 
 
 
USCB FINANCIAL HOLDINGS, INC.
Notes to the Consolidated Financial Statements - Unaudited
 
 
 
The ACL and the outstanding
 
balances in the specified
 
loan categories as of March
 
31, 2025 and December 31,
 
2024
are as follows (in thousands):
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Residential
 
Real Estate
Commercial
 
Real Estate
Commercial
and Industrial
Correspondent
Banks
Consumer
and Other
Total
March 31, 2025:
Allowance for credit losses:
Individually evaluated
$
37
$
-
$
33
$
-
$
576
$
646
Collectively evaluated
5,078
9,197
4,401
817
4,601
24,094
Balances, end of period
$
5,115
$
9,197
$
4,434
$
817
$
5,177
$
24,740
 
 
 
 
 
Loans:
 
 
 
 
 
Individually evaluated
$
7,729
$
-
$
1,130
$
-
$
1,990
$
10,849
Collectively evaluated
293,435
1,150,129
255,196
103,026
216,721
2,018,507
Balances, end of period
$
301,164
$
1,150,129
$
256,326
$
103,026
$
218,711
$
2,029,356
 
 
 
 
 
December 31, 2024:
 
 
 
 
 
Allowance for credit losses:
 
 
 
 
 
Individually evaluated
$
40
$
-
$
27
$
-
$
651
$
718
Collectively evaluated
5,081
8,788
4,606
654
4,223
23,352
Balances, end of period
$
5,121
$
8,788
$
4,633
$
654
$
4,874
$
24,070
 
 
 
 
 
Loans:
 
 
 
 
 
Individually evaluated
$
6,788
$
-
$
690
$
-
$
1,990
$
9,468
Collectively evaluated
283,173
1,136,417
257,621
82,438
196,101
1,955,750
Balances, end of period
$
289,961
$
1,136,417
$
258,311
$
82,438
$
198,091
$
1,965,218
Credit Quality Indicators
The Company grades loans based on the estimated capability of the borrower to repay the contractual obligation of the
loan agreement based
 
on relevant information
 
which may include:
 
current financial information
 
on the borrower,
 
historical
payment
 
experience,
 
credit
 
documentation
 
and
 
other
 
current
 
economic
 
trends.
 
Internal
 
credit
 
risk
 
grades
 
are
 
evaluated
periodically.
 
The Company's internally assigned credit risk grades are as follows:
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 15 USCB Financial Holdings, Inc. Q1 2025 Form 10-Q
facts, conditions, and values, highly questionable and improbable.
 
Loss
– Loans classified as loss are considered uncollectible.
 
 
 
 
 
 
 
 
USCB FINANCIAL HOLDINGS, INC.
Notes to the Consolidated Financial Statements - Unaudited
 
 
 
Loan credit exposures by internally assigned grades are
 
presented below for the periods indicated (in thousands):
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
As of March 31, 2025
Term Loans by Origination Year
Revolving
Loans
Total
 
2025
2024
2023
2022
2021
Prior
Residential real estate
Pass
$
22,560
$
105,659
$
37,624
$
34,174
$
22,658
$
68,534
$
8,762
$
299,971
Substandard
-
108
543
-
-
542
-
1,193
Total
22,560
105,767
38,167
34,174
22,658
69,076
8,762
301,164
Commercial real estate
Pass
50,845
179,335
121,993
314,165
147,130
324,348
5,225
1,143,041
Special Mention
-
-
4,643
-
-
-
-
4,643
Substandard
-
-
-
-
1,762
683
-
2,445
Total
50,845
179,335
126,636
314,165
148,892
325,031
5,225
1,150,129
Commercial and
industrial
Pass
3,572
65,801
78,610
33,310
30,021
14,573
27,309
253,196
Special Mention
-
76
-
-
-
-
-
76
Substandard
-
-
-
-
502
1,508
1,044
3,054
Total
3,572
65,877
78,610
33,310
30,523
16,081
28,353
256,326
Correspondent banks
Pass
70,325
32,701
-
-
-
-
-
103,026
Total
70,325
32,701
-
-
-
-
-
103,026
Consumer and other
loans
 
Pass
30,715
39,005
45,627
65,030
33,184
1,298
1,862
216,721
Substandard
-
-
-
-
1,990
-
-
1,990
Total
30,715
39,005
45,627
65,030
35,174
1,298
1,862
218,711
Total
 
Loans
Pass
178,017
422,501
283,854
446,679
232,993
408,753
 
43,158
2,015,955
Special Mention
-
76
4,643
-
-
-
-
4,719
Substandard
-
108
543
-
4,254
2,733
1,044
8,682
Doubtful
-
-
-
-
-
-
-
-
Total
$
178,017
$
422,685
$
289,040
$
446,679
$
237,247
$
411,486
$
44,202
$
2,029,356
 
 
 
 
 
 
 
 
 
USCB FINANCIAL HOLDINGS, INC.
Notes to the Consolidated Financial Statements - Unaudited
 
 
16
 
USCB Financial Holdings, Inc.
 
Q1 2025 Form 10-Q
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
As of December 31, 2024
Term Loans by Origination Year
Revolving
Loans
Total
 
2024
2023
2022
2021
2020
Prior
Residential real estate
Pass
$
109,590
$
39,666
$
34,315
$
23,039
$
5,791
$
66,115
$
10,885
$
289,401
Substandard
-
-
-
-
-
560
-
560
Total
109,590
39,666
34,315
23,039
5,791
66,675
10,885
 
289,961
Commercial real estate
Pass
175,023
130,503
317,971
175,535
98,695
231,558
4,680
1,133,965
Substandard
-
-
-
1,765
687
-
-
2,452
Total
175,023
130,503
317,971
177,300
99,382
231,558
4,680
 
1,136,417
Commercial and
industrial
Pass
68,405
80,644
33,962
30,495
3,891
11,839
26,795
256,031
Substandard
-
-
-
519
-
1,093
668
2,280
Total
68,405
80,644
33,962
31,014
3,891
12,932
27,463
 
258,311
Correspondent banks
Pass
82,438
-
-
-
-
-
-
82,438
Total
82,438
-
-
-
-
-
-
 
82,438
Consumer and other
loans
 
Pass
40,921
51,392
65,603
35,181
491
815
1,698
196,101
Substandard
-
-
1,990
-
-
-
-
1,990
Total
40,921
51,392
67,593
35,181
491
815
1,698
 
198,091
Total
 
Loans
Pass
476,377
302,205
451,851
264,250
108,868
310,327
 
44,058
1,957,936
Special Mention
-
-
-
-
-
-
-
-
Substandard
-
-
1,990
2,284
687
1,653
668
7,282
Doubtful
-
-
-
-
-
-
-
-
Total
$
476,377
$
302,205
$
453,841
$
266,534
$
109,555
$
311,980
$
44,726
$
1,965,218
 
 
 
 
 
 
USCB FINANCIAL HOLDINGS, INC.
Notes to the Consolidated Financial Statements - Unaudited
 
 
17
 
USCB Financial Holdings, Inc.
 
Q1 2025 Form 10-Q
Loan Aging
The Company
 
also considers the
 
performance of loans
 
in grading
 
and in
 
evaluating the
 
credit quality
 
of the
 
loan portfolio.
The Company
 
analyzes credit
 
quality and
 
loan grades
 
based on
 
payment performance
 
and the
 
aging status
 
of the
 
loan.
 
The following
 
tables include
 
an aging
 
analysis
 
of accruing
 
loans and
 
total non-accruing
 
loans as
 
of March 31,
 
2025 and
December 31, 2024 (in thousands):
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Accruing
As of March 31, 2025
Current
Past Due 30-
89 Days
Past Due 90
Days or >
and Still
Accruing
Total
Accruing
Non-Accrual
Total Loans
Residential real estate:
Home equity line of credit and other
$
1,319
$
-
$
-
$
1,319
$
-
$
1,319
1-4 family residential
237,187
609
-
237,796
998
238,794
Condo residential
59,190
1,547
-
60,737
314
61,051
297,696
2,156
-
299,852
1,312
301,164
Commercial real estate:
Land and construction
51,601
-
-
51,601
-
51,601
Multi-family residential
210,331
-
-
210,331
-
210,331
Condo commercial
58,353
-
-
58,353
-
58,353
Commercial property
825,039
4,805
-
829,844
-
829,844
1,145,324
4,805
-
1,150,129
-
1,150,129
Commercial and industrial:
Secured
230,799
103
-
230,902
854
231,756
Unsecured
24,570
-
-
24,570
-
24,570
255,369
103
-
255,472
854
256,326
Correspondent banks
103,026
-
-
103,026
-
103,026
Consumer and other
216,721
-
-
216,721
1,990
218,711
Total
$
2,018,136
$
7,064
$
-
$
2,025,200
$
4,156
$
2,029,356
 
 
 
 
 
 
 
 
 
 
USCB FINANCIAL HOLDINGS, INC.
Notes to the Consolidated Financial Statements - Unaudited
 
 
18
 
USCB Financial Holdings, Inc.
 
Q1 2025 Form 10-Q
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Accruing
As of December 31, 2024:
Current
Past Due
30-89 Days
Past Due 90
Days or >
and Still
Accruing
Total
Accruing
Non-Accrual
Total Loans
Residential real estate:
Home equity line of credit and other
$
1,120
$
-
$
-
$
1,120
$
-
$
1,120
1-4 family residential
225,334
2,886
-
228,220
-
228,220
Condo residential
58,956
1,351
-
60,307
314
60,621
285,410
4,237
-
289,647
314
289,961
Commercial real estate:
 
 
 
 
Land and construction
40,090
-
-
40,090
-
40,090
Multi-family residential
214,912
-
-
214,912
-
214,912
Condo commercial
57,402
-
-
57,402
-
57,402
Commercial property
823,326
687
-
824,013
-
824,013
Leasehold improvements
-
-
-
-
-
-
1,135,730
687
-
1,136,417
-
1,136,417
Commercial and industrial:
 
 
 
 
Secured
232,779
521
-
233,300
403
233,703
Unsecured
24,608
-
-
24,608
-
24,608
257,387
521
-
257,908
403
258,311
 
 
 
 
Correspondent banks
82,438
-
-
82,438
-
82,438
Consumer and other
196,101
-
-
196,101
1,990
198,091
 
 
Total
$
1,957,066
$
5,445
$
-
$
1,962,511
$
2,707
$
1,965,218
Non-accrual Status
 
The following table
 
includes the amortized
 
cost basis of
 
loans on non-accrual
 
status and loans
 
past due over
 
90 days
and still accruing as of March 31, 2025 and as of December
 
31, 2024 (in thousands):
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
March 31, 2025
Non-accrual
Loans With
No Related
Allowance
Non-accrual
Loans With
Related
Allowance
Total Non-
accruals
Loans Past
Due Over 90
Days and Still
Accruing
Residential real estate
$
1,312
$
-
$
1,312
$
-
Commercial and industrial
 
-
 
854
 
854
 
-
Consumer and other
-
1,990
1,990
-
Total
$
1,312
$
2,844
$
4,156
$
-
December 31, 2024
Non-accrual
Loans With
No Related
Allowance
Non-accrual
Loans With
Related
Allowance
Total Non-
accruals
Loans Past
Due Over 90
Days and Still
Accruing
Residential real estate
$
314
$
-
$
314
$
-
Commercial and industrial
-
403
403
-
Consumer and other
-
1,990
1,990
-
Total
$
314
$
2,393
$
2,707
$
-
Accrued interest
 
receivable is
 
excluded from
 
the estimate
 
of credit
 
losses. There
 
was
no
 
interest income
 
recognized
attributable to non-accrual loans outstanding during the three months ended March 31, 2025 and 2024. Interest income on 19 USCB Financial Holdings, Inc. Q1 2025 Form 10-Q
 
 
 
 
 
 
 
 
 
 
 
 
USCB FINANCIAL HOLDINGS, INC.
Notes to the Consolidated Financial Statements - Unaudited
 
 
 
these loans for
 
the three months
 
ended March 31,
 
2025 and 2024,
 
would have been
 
approximately $
52
 
thousand and $
9
thousand, respectively,
 
had these loans performed in accordance with their
 
original terms.
Collateral-Dependent Loans
A
 
loan
 
is
 
collateral
 
dependent
 
when
 
the
 
borrower
 
is
 
experiencing
 
financial
 
difficulty
 
and
 
repayment
 
of
 
the
 
loan
 
is
expected to be provided substantially through the sale
 
or operation of the collateral.
 
The following
 
table includes
 
the amortized cost
 
basis of
 
collateral dependent
 
loans related
 
to borrowers
 
experiencing
financial difficulty by type of collateral as of March
 
31, 2025 and December 31, 2024 (in thousands):
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
March 31, 2025
Collateral Type
Residential Real
Estate
Boat
Total
Specific Reserve
Residential real estate
$
1,312
$
-
$
1,312
$
-
Consumer and other
-
1,990
1,990
576
Total
$
1,312
$
1,990
$
3,302
$
576
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
December 31, 2024
Collateral Type
 
Boat
Specific Reserve
Consumer and other
$
1,990
$
651
Total
$
1,990
$
651
Management evaluates
 
on an individual
 
basis collateral
 
dependent loans
 
using the fair
 
value of the
 
collateral method
to determine
 
if a
 
credit loss
 
reserve is
 
necessary.
 
The ACL
 
is measured
 
based on
 
the difference
 
of the
 
fair
 
value of
 
the
collateral and
 
the recorded
 
investment
 
(amortized
 
cost basis
 
of the
 
loan). If
 
the final
 
collateral
 
valuation
 
is less
 
than the
recorded investment
 
of the
 
loan a
 
reserve amount
 
is calculated.
 
If the
 
collateral
 
valuation is
 
equal to
 
or greater
 
than the
recorded investment of the loan, no reserve is determined.
Loan Modifications to Borrowers Experiencing Financial
 
Difficulties
 
The
 
Company
 
had
 
no
 
new
 
modifications
 
to
 
borrowers
 
experiencing
 
financial
 
difficulties
 
for
 
the
 
three
 
months
 
ended
March 31, 2025 and one new modification
 
for the three months ended March 31,
 
2024. The following table presents newly
restructured loans, by type of modification, which occurred
 
during the three months ended March 31, 2024 (in
 
thousands):
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Recorded Investment Prior to Modification
Recorded Investment After Modification
Number of
Loans
Combination
Modifications
Total
Modifications
Number of
Loans
Combination
Modifications
Total
Modifications
Commercial and industrial
1
$
468
$
468
1
$
468
$
468
Total
1
$
468
 
$
468
1
$
468
$
468
The loan modification for the borrower experiencing financial difficulty at March 31, 2024
 
included
 
a combination of rate
and maturity modifications.
 
There were
no
 
existing loan modifications that
 
subsequently defaulted during the
 
three months ended March 31,
 
2025
and March 31, 2024.
 
 
 
 
 
 
 
 
USCB FINANCIAL HOLDINGS, INC.
Notes to the Consolidated Financial Statements - Unaudited
 
 
20
 
USCB Financial Holdings, Inc.
 
Q1 2025 Form 10-Q
4.
 
INCOME TAXES
 
The Company’s provision for income taxes is presented
 
in the following table for the periods indicated (in thousands):
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended March 31,
2025
2024
Current:
Federal
$
-
$
-
State
-
-
Total
 
current
-
-
Deferred:
Federal
1,914
1,114
State
526
312
Total
 
deferred
2,440
1,426
Total
 
tax expense
$
2,440
$
1,426
The actual
 
income
 
tax
 
expense
 
for
 
the
 
three
 
months
 
ended March
 
31,
 
2025 and
 
2024 differs
 
from
 
the
 
statutory
 
tax
expense for the periods (computed by applying the U.S.
 
federal corporate tax rate of
21
% for both 2025 and 2024
 
periods
to income before provision for income taxes) as follows
 
(in thousands):
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended March 31,
2025
2024
Federal taxes at statutory rate
$
2,120
$
1,268
State income taxes, net of federal tax benefit
439
262
Bank owned life insurance
(119)
(104)
Other, net
-
-
Total
 
tax expense
$
2,440
$
1,426
The Company’s deferred tax assets and deferred
 
tax liabilities as of the dates indicated were (in thousands):
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
March 31, 2025
December 31, 2024
Deferred tax assets:
Net operating loss
$
6,993
$
9,276
Allowance for credit losses
6,270
6,100
Lease liability
1,954
2,142
Unrealized losses on available for sale securities
13,999
15,200
Depreciable property
35
38
Equity compensation
694
686
Accruals
158
520
Other, net
67
65
Deferred tax assets:
30,170
34,027
Deferred tax liabilities:
Deferred loan cost
(1,738)
(1,934)
Lease right of use asset
(1,954)
(2,142)
Deferred expenses
(392)
(224)
Cash flow hedge
(41)
(81)
Deferred tax liabilities
(4,125)
(4,381)
Net deferred tax assets
$
26,045
$
29,646
The Company
 
has approximately
 
$
23.7
 
million of
 
federal
 
and $
46.4
 
million of
 
state net
 
operating
 
loss carryforwards
expiring in various amounts between
 
2031 and 2036 and which
 
are limited to offset,
 
to the extent permitted, future
 
taxable
earnings of the Company.
In assessing the realizability of deferred tax assets, management considers
 
whether it is more likely than not that some
portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent 21 USCB Financial Holdings, Inc. Q1 2025 Form 10-Q
 
 
 
 
USCB FINANCIAL HOLDINGS, INC.
Notes to the Consolidated Financial Statements - Unaudited
 
 
 
upon the generation of
 
future taxable income
 
during the periods
 
in which those temporary
 
differences become deductible.
Management considers the scheduled reversal
 
of deferred tax liabilities, projected future taxable
 
income, and tax planning
strategies in making this assessment.
The major tax
 
jurisdictions where the
 
Company files income
 
tax returns are
 
the U.S. federal
 
jurisdiction and
 
the State
of Florida. With few exceptions, the Company is no longer subject to U.S. federal and state income tax return examinations
by tax authorities for years before 2022.
For the three months ended
 
March 31, 2025 and 2024, the
 
Company did
no
t have any unrecognized
 
tax benefits as a
result of
 
tax positions
 
taken during
 
a prior
 
period or
 
during the
 
current period.
 
Additionally,
no
 
interest or
 
penalties
 
were
recorded as a result of tax uncertainties.
5.
 
OFF-BALANCE SHEET ARRANGEMENTS
The Company is a party to financial instruments with off-balance-sheet risk in the normal course of business in order to
meet the financial
 
needs of
 
its customers
 
and to reduce
 
its own
 
exposure to
 
fluctuations in
 
interest rates.
 
These financial
instruments include
 
unfunded commitments
 
under lines
 
of credit,
 
commitments to
 
extend credit,
 
standby and
 
commercial
letters of
 
credit. Those
 
instruments involve,
 
to varying
 
degrees, elements
 
of credit
 
and interest
 
rate risk
 
in excess
 
of the
amount recognized in the Company’s Consolidated Balance Sheets. The Company uses the
 
same credit policies in making
commitments and conditional obligations as it does for on-balance
 
sheet instruments.
The Company's
 
exposure to credit
 
loss in the
 
event of nonperformance
 
by the other
 
party to the
 
financial instruments
for unused lines of credit, and standby letters of credit
 
is represented by the contractual amount of these commitments.
A
 
summary
 
of
 
the
 
amounts
 
of
 
the
 
Company's
 
financial
 
instruments
 
with
 
off-balance
 
sheet
 
risk
 
are
 
shown
 
below
 
at
March 31, 2025 and December 31, 2024 (in thousands):
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
March 31, 2025
December 31, 2024
Commitments to grant loans and unfunded lines of credit
$
132,466
$
122,578
Standby and commercial letters of credit
3,346
5,389
Total
$
135,812
$
127,967
Commitments to
 
extend credit
 
are agreements
 
to lend
 
to a
 
customer as
 
long as
 
there is
 
no violation
 
of any
 
condition
established in the contract. Commitments generally have
 
fixed expiration dates or other termination clauses.
Unfunded lines of
 
credit and revolving
 
credit lines are
 
commitments for possible
 
future extensions
 
of credit to
 
existing
customers. These lines of
 
credit are uncollateralized and
 
usually do not contain
 
a specified maturity date
 
and ultimately may
not be drawn upon to the total extent to which the Company
 
committed.
Standby
 
and
 
commercial
 
letters
 
of
 
credit
 
are
 
conditional
 
commitments
 
issued
 
by
 
the
 
Company
 
to
 
guarantee
 
the
performance of a
 
customer to
 
a third
 
party. Those letters of
 
credit are
 
primarily issued to
 
support public and
 
private borrowing
arrangements. Essentially all letters of credit have fixed maturity dates and since
 
many of them expire without being drawn
upon, they do not generally present a significant liquidity
 
risk to the Company.
6.
 
DERIVATIVES
 
The Company utilizes interest rate swap agreements
 
as part of its asset-liability management strategy to help
 
manage
its interest rate
 
risk exposure. The notional
 
amount of the interest
 
rate swaps does not
 
represent actual amounts exchanged
by the
 
parties.
 
The amounts
 
exchanged
 
are determined
 
by reference
 
to the
 
notional amount
 
and the
 
other
 
terms
 
of the
individual interest rate swap agreements.
 
Interest Rate Swaps Designated as a Cash Flow Hedge
As of March 31,
 
2025, the Company
 
had
two
 
interest rate swap
 
agreements with
 
a notional aggregate
 
amount of $
50
million that were designated as cash flow hedges of certificates of deposit. The interest rate swap agreements have an 22 USCB Financial Holdings, Inc. Q1 2025 Form 10-Q
average
 
maturity
 
of
1.13
 
years,
 
a
 
weighted
 
average
 
fixed-rate
 
paid
 
of
3.59
%,
 
and
 
with
 
a
 
weighted
 
average
 
3-month
compound SOFR being received.
 
USCB FINANCIAL HOLDINGS, INC.
Notes to the Consolidated Financial Statements - Unaudited
 
 
 
As of December
 
31, 2024,
 
the Company had
two
 
interest rate swap
 
agreements with
 
a notional aggregate
 
amount of
$
50
 
million that were designated as cash flow hedges of certificates of deposit. The interest rate swap agreements have an
average
 
maturity
 
of
1.38
 
years,
 
a
 
weighted
 
average
 
fixed-rate
 
paid
 
of
3.59
%,
 
and
 
with
 
a
 
weighted
 
average
 
3-month
compound SOFR being received.
The
 
changes
 
in
 
fair
 
value
 
on
 
these
 
interest
 
rate
 
swaps
 
are
 
recorded
 
in
 
other
 
assets
 
or
 
other
 
liabilities
 
with
 
a
corresponding recognition
 
in other comprehensive
 
income (loss)
 
and subsequently reclassified
 
to earnings when
 
gains or
losses are realized.
Interest Rate Swaps Designated as Fair Value
 
Hedge
As of March 31, 2024, the Company had
four
 
interest rate swap agreements with a notional aggregate amount of $
200
million that were designated as fair value hedges on loans. The interest
 
rate swap agreements have an average maturity of
1.98
 
years,
 
the
 
weighted
 
average
 
fixed-rate
 
paid
 
is
4.74
%,
 
with
 
the
 
weighted
 
average
 
3-month
 
compound
 
SOFR
 
being
received.
During the quarter
 
ended September 30, 2024,
 
the Company unwound
four
 
fair value interest rate
 
swaps with a
 
notional
aggregate amount
 
of $
200
 
million. The
 
decision to
 
unwind these
 
swaps was
 
driven by
 
changes in
 
interest rate
 
forecasts
and asset-liability management strategies. The early
 
termination fee to unwind the
 
fair value swaps totaled $
3.7
 
million. The
termination fee allocated
 
to each
 
loan category
 
is being amortized
 
over the remining
 
life of the
 
hedge loans
 
on a monthly
straight-line basis with full recognition of the unamortized
 
cost upon the early payoff of the hedge
 
loan. The amortization of
the termination
 
fee is
 
reflected in
 
the loan
 
interest income
 
line in
 
the Consolidated
 
Statement of
 
Operations.
 
The original
maturities of
 
these fair
 
value interest
 
swaps were
 
between 2025
 
and 2026.
 
The fair
 
value interest
 
rate swap
 
agreements
had an average maturity of
1.51
 
years at the date of their termination. The Company had no interest rate swap agreements
designated as fair value hedges at March 31, 2025.
Interest Rate Swaps
The Company enters into interest rate swaps with its loan customers. The Company had
62
 
and
60
 
interest rate swaps
with
 
loan
 
customers
 
with
 
an
 
aggregate
 
notional
 
amount
 
of
 
$
211.0
 
million
 
and
 
$
206.3
 
million
 
at
 
March 31,
 
2025
 
and
December 31,
 
2024,
 
respectively.
 
At
 
March
 
31,
 
2025,
 
these
 
interest
 
rate
 
swaps
 
mature
 
between
 
2025
 
and
 
2051.
 
The
Company entered
 
into corresponding
 
and offsetting
 
derivatives with
 
third parties.
 
The fair
 
value of
 
the liability
 
created by
these derivatives requires the Company to
 
provide the counterparty with funds to be
 
held as collateral which the Company
reports as other assets under the Consolidated Balance
 
Sheets. While these derivatives represent economic
 
hedges, they
do not qualify as hedges for accounting purposes.
The following table reflects the Company’s
 
interest rate swaps at the dates indicated (in thousands):
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fair Value
Notional
Amount
Collateral
Amount
Balance Sheet Location
Asset
Liability
March 31, 2025:
Derivatives designated as cash flow hedges:
Interest rate swaps
$
50,000
$
-
Other assets
$
163
$
-
Derivatives not designated as hedging instruments:
Interest rate swaps related to customer loans
$
211,016
$
4,981
Other assets/Other liabilities
$
7,837
$
7,837
December 31, 2024:
Derivatives designated as cash flow hedges:
Interest rate swaps
$
50,000
$
-
Other assets
$
321
$
-
Derivatives not designated as hedging instruments:
Interest rate swaps related to customer loans
$
206,258
$
4,943
Other assets/Other liabilities
$
6,869
$
6,869
 
7.
 
FAIR VALUE
 
MEASUREMENTS
 
Determination of Fair Value
The Company
 
uses
 
fair value
 
measurements
 
to record
 
fair-value
 
adjustments
 
to certain
 
assets
 
and liabilities
 
and to
determine fair value disclosures. In accordance with the fair value measurements accounting guidance, the fair value of a 23 USCB Financial Holdings, Inc. Q1 2025 Form 10-Q
USCB FINANCIAL HOLDINGS, INC.
Notes to the Consolidated Financial Statements - Unaudited
 
 
 
financial instrument is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction
between market
 
participants
 
at the
 
measurement
 
date.
 
Fair value
 
is best
 
determined based
 
upon quoted
 
market prices.
However, in
 
many instances, there
 
are no quoted
 
market prices for the
 
Company's various financial
 
instruments. In cases
where quoted
 
market prices
 
are not
 
available, fair
 
values are
 
based on
 
estimates using
 
present value
 
or other
 
valuation
techniques. Those techniques are significantly affected by the assumptions used, including the discount rate and estimates
of future cash flows. Accordingly, the fair value estimates may not be realized in
 
an immediate settlement of the instrument.
The fair
 
value guidance provides
 
a consistent definition
 
of fair
 
value, which focuses
 
on exit
 
price in
 
an orderly transaction
(that is,
 
not a
 
forced
 
liquidation
 
or distressed
 
sale) between
 
market participants
 
at the
 
measurement
 
date
 
under current
market conditions.
 
If there
 
has been
 
a significant
 
decrease
 
in the
 
volume
 
and level
 
of activity
 
for the
 
asset
 
or liability,
 
a
change in
 
valuation technique or
 
the use
 
of multiple
 
valuation techniques may
 
be appropriate.
 
In such
 
instances, determining
the
 
price
 
at
 
which
 
willing
 
market
 
participants
 
would
 
transact
 
at
 
the
 
measurement
 
date
 
under
 
current
 
market
 
conditions
depends on the facts
 
and circumstances and
 
requires the use of
 
significant judgment. The fair
 
value is a reasonable
 
point
within the range that is most representative of fair value under
 
current market conditions.
Fair Value Hierarchy
In accordance with
 
this guidance, the
 
Company groups its
 
financial assets
 
and financial liabilities
 
generally measured
at fair
 
value in
 
three
 
levels, based
 
on the
 
markets
 
in which
 
the assets
 
and liabilities
 
are traded,
 
and the
 
reliability
 
of the
assumptions used to determine fair value.
Level 1
 
- Valuation
 
is based
 
on quoted
 
prices in
 
active markets
 
for identical
 
assets or
 
liabilities that
 
the reporting
entity has
 
the ability
 
to access
 
at the measurement
 
date. Level
 
1 assets
 
and liabilities
 
generally include
 
debt and
equity securities that
 
are traded in
 
an active exchange
 
market. Valuations are obtained from
 
readily available pricing
sources for market transactions involving identical assets
 
or liabilities.
Level 2
 
- Valuation
 
is based on inputs other
 
than quoted prices included
 
within Level 1 that are
 
observable for the
asset
 
or
 
liability,
 
either
 
directly
 
or
 
indirectly.
 
The
 
valuation
 
may
 
be
 
based
 
on
 
quoted
 
prices
 
for
 
similar
 
assets
 
or
liabilities; quoted
 
prices in
 
markets that are
 
not active;
 
or other inputs
 
that are observable
 
or can be
 
corroborated
by observable market data for substantially the full term of the
 
asset or liability.
Level 3
 
- Valuation
 
is based on
 
unobservable inputs that
 
are supported
 
by little or
 
no market activity
 
and that are
significant
 
to
 
the
 
fair
 
value
 
of
 
the
 
assets
 
or
 
liabilities.
 
Level
 
3
 
assets
 
and
 
liabilities
 
include
 
financial
 
instruments
whose value
 
is determined
 
using pricing
 
models, discounted
 
cash
 
flow
 
methodologies,
 
or similar
 
techniques,
 
as
well as instruments for which determination of fair value
 
requires significant management judgment or estimation.
A
 
financial
 
instrument's
 
categorization
 
within
 
the
 
valuation
 
hierarchy
 
is
 
based
 
upon
 
the
 
lowest
 
level
 
of
 
input
 
that
 
is
significant to the fair value measurement.
Items Measured at Fair Value
 
on a Recurring Basis
AFS investment securities:
 
When instruments are traded in
 
secondary markets and quoted market
 
prices do not exist
for such securities,
 
management generally relies
 
on prices obtained
 
from independent vendors
 
or third-party broker-dealers.
Management reviews pricing methodologies provided by the vendors and third-party broker-dealers in order to determine if
observable market information is being utilized. Securities measured with pricing provided by independent vendors or
 
third-
party broker-dealers
 
are classified within
 
Level 2 of
 
the hierarchy and
 
often involve using
 
quoted market
 
prices for similar
securities, pricing models or discounted cash flow analyses
 
utilizing inputs observable in the market where available.
Derivatives:
 
The
 
fair
 
value
 
of
 
derivatives
 
are
 
measured
 
with
 
pricing
 
provided
 
by
 
third-party
 
participants
 
and
 
are
classified within Level 2 of the hierarchy.
 
 
 
 
 
 
 
 
USCB FINANCIAL HOLDINGS, INC.
Notes to the Consolidated Financial Statements - Unaudited
 
 
24
 
USCB Financial Holdings, Inc.
 
Q1 2025 Form 10-Q
 
The
 
following
 
table
 
represents
 
the
 
Company's
 
assets
 
and
 
liabilities
 
measured
 
at
 
fair
 
value
 
on
 
a
 
recurring
 
basis
 
at
March 31, 2025 and December 31, 2024 for each of the
 
fair value hierarchy levels (in thousands):
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
March 31, 2025
December 31, 2024
Level 1
Level 2
Level 3
Total
Level 1
Level 2
Level 3
Total
Investment securities available for sale:
U.S. Government Agency
$
-
$
12,605
$
-
$
12,605
$
-
$
12,625
$
-
$
12,625
Collateralized mortgage obligations
-
78,556
-
78,556
-
78,905
-
78,905
Mortgage-backed securities - residential
 
-
52,219
-
52,219
-
46,933
-
46,933
Mortgage-backed securities - commercial
-
87,811
-
87,811
-
78,739
-
78,739
Municipal securities
-
19,892
-
19,892
-
19,311
-
19,311
Bank subordinated debt securities
-
24,056
-
24,056
-
23,708
-
23,708
Total
-
275,139
-
275,139
-
260,221
-
260,221
Derivative assets
-
8,000
-
8,000
-
7,190
-
7,190
Total assets at fair value
$
-
$
283,139
$
-
$
283,139
$
-
$
267,411
$
-
$
267,411
Derivative liabilities
$
-
$
7,837
$
-
$
7,837
$
-
$
6,869
$
-
$
6,869
Total liabilities at fair value
$
-
$
7,837
$
-
$
7,837
$
-
$
6,869
$
-
$
6,869
Items Not Measured at Fair Value
The following table
 
presents the carrying
 
amounts and estimated
 
fair values of
 
financial instruments
 
not carried at fair
value as of March 31, 2025 and December 31, 2024 (in
 
thousands):
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fair Value Hierarchy
Carrying
Amount
Level 1
Level 2
Level 3
Fair Value
Amount
March 31, 2025:
Financial Assets:
Cash and due from banks
$
6,726
$
6,726
$
-
$
-
$
6,726
Interest-bearing deposits in banks
$
91,258
$
91,258
$
-
$
-
$
91,258
Investment securities held to maturity, net
$
161,790
$
-
$
145,665
$
-
$
145,665
Loans held for investment, net
$
2,011,472
$
-
$
-
$
2,022,078
$
2,022,078
Accrued interest receivable
$
11,024
$
-
$
1,537
$
9,487
$
11,024
Financial Liabilities:
Demand deposits
$
605,489
$
605,489
$
-
$
-
$
605,489
Money market and savings accounts
$
1,207,303
$
1,207,303
$
-
$
-
$
1,207,303
Interest-bearing checking accounts
$
49,951
$
49,951
$
-
$
-
$
49,951
Time deposits
$
446,826
$
-
$
-
$
446,080
$
446,080
FHLB advances and other borrowings
$
108,000
$
-
$
107,488
 
$
-
$
107,488
Accrued interest payable
$
2,534
$
-
$
482
$
2,052
$
2,534
December 31, 2024:
Financial Assets:
Cash and due from banks
$
6,986
$
6,986
$
-
$
-
$
6,986
Interest-bearing deposits in banks
$
70,049
$
70,049
$
-
$
-
$
70,049
Investment securities held to maturity
$
164,694
$
-
$
145,540
$
-
$
145,540
Loans held for investment, net
$
1,948,778
$
-
$
-
$
1,950,646
$
1,950,646
Accrued interest receivable
$
10,945
$
-
$
1,372
$
9,573
$
10,945
Financial Liabilities:
Demand deposits
$
575,159
$
575,159
$
-
$
-
$
575,159
Money market and savings accounts
$
1,180,809
$
1,180,809
$
-
$
-
$
1,180,809
Interest-bearing checking accounts
$
50,648
$
50,648
$
-
$
-
$
50,648
Time deposits
$
367,388
$
-
$
-
$
366,479
$
366,479
FHLB advances
$
163,000
$
-
$
161,375
$
-
$
161,375
Accrued interest payable
$
2,125
$
-
$
622
$
1,503
$
2,125
USCB FINANCIAL HOLDINGS, INC.
Notes to the Consolidated Financial Statements - Unaudited
 
 
25
 
USCB Financial Holdings, Inc.
 
Q1 2025 Form 10-Q
 
8.
 
STOCKHOLDERS’ EQUITY
Common Stock
In July
 
2021, the
 
Bank completed
 
the initial
 
public offering
 
of its
 
Class
 
A common
 
stock, in
 
which it
 
issued
 
and sold
4,600,000
 
shares of Class A
 
common stock at a
 
price of $
10.00
 
per share. The Bank
 
received total net proceeds
 
of $
40.0
million after deducting underwriting discounts and expenses.
In December 2021,
 
the Company acquired
 
all the issued
 
and outstanding shares
 
of the Class
 
A common stock
 
of the
Bank, which at the time were
 
the only issued and outstanding shares
 
of the Bank’s capital stock,
 
in a share exchange (the
“Reorganization”)
 
effected
 
under
 
the
 
Florida
 
Business
 
Corporation
 
Act.
 
Each
 
outstanding
 
share
 
of
 
the
 
Bank’s
 
Class
 
A
common stock,
 
par value
 
$
1.00
 
per share,
 
formerly held
 
by its
 
shareholders
 
was
 
converted into
 
and exchanged
 
for
one
newly
 
issued
 
share
 
of
 
the
 
Company’s
 
Class
 
A
 
common
 
stock,
 
par
 
value
 
$
1.00
 
per
 
share,
 
and
 
the
 
Bank
 
became
 
the
Company’s wholly owned subsidiary.
 
In the
 
Reorganization,
 
each
 
shareholder
 
of the
 
Bank
 
received securities
 
of
 
the same
 
class,
 
having
 
substantially
 
the
same designations,
 
rights,
 
powers, preferences,
 
qualifications,
 
limitations
 
and restrictions,
 
as those
 
that the
 
shareholder
held in the Bank,
 
and the Company’s
 
then current shareholders
 
owned the same
 
percentages of the
 
Company’s common
stock as they previously owned of the Bank’s common
 
stock.
During the first quarter
 
2025, the Company issued
124,424
 
shares of Class A
 
common stock to employees as
 
restricted
stock awards
 
pursuant to
 
the Company’s
 
2015 equity
 
incentive plan
 
.
 
During
 
the first
 
quarter 2024,
 
the Company
 
issued
52,753
 
shares of Class A
 
common stock to employees
 
as restricted stock awards
 
pursuant to the Company’s
 
2015 equity
incentive plan.
 
During the three months ended
 
March 31, 2025, the Company
 
repurchased
9,671
 
shares of Class A common stock at
a weighted average cost per
 
share of $
17.91
. The aggregate purchase
 
price for these transactions was
 
approximately $
174
thousand,
 
including
 
transaction
 
costs.
 
These
 
repurchases
 
were
 
made
 
pursuant
 
to
 
the
 
Company’s
 
publicly
 
announced
repurchase programs.
 
As of
 
March 31,
 
2025,
528,309
 
shares remained
 
authorized
 
for repurchase
 
under the
 
Company’s
two stock repurchase programs.
 
Shares of the
 
Company’s Class A common stock
 
issued and outstanding as
 
of March 31, 2025 and
 
December 31, 2024
were
20,048,385
 
and
19,924,632
, respectively.
 
Dividends
Declaration of dividends
 
by the Board
 
is required before
 
dividend payments
 
are made. The
 
Company is
 
limited in the
amount of
 
cash dividends
 
that it
 
may pay.
 
Payment of
 
dividends is
 
generally limited
 
to the
 
Company’s
 
net income
 
of the
current
 
year
 
combined
 
with
 
the
 
Company’s
 
retained
 
income
 
for
 
the
 
preceding
 
two
 
years,
 
as
 
defined
 
by
 
state
 
banking
regulations. However,
 
for any
 
dividend declaration,
 
the Company
 
must consider
 
additional factors
 
such as
 
the amount
 
of
current period net income, liquidity,
 
asset quality,
 
capital adequacy and economic conditions
 
at the Bank since the Bank is
the primary source
 
of funds to fund
 
dividends by the Company.
 
It is likely that
 
these factors would
 
further limit the
 
amount
of dividends which
 
the Company could
 
declare. In addition,
 
bank regulators have
 
the authority to
 
prohibit banks and
 
bank
holding companies from paying dividends if they deem
 
such payment to be an unsafe or unsound practice.
As of March 31, 2025,
 
the Company was not subject to any
 
formal supervisory restrictions on its ability to
 
pay dividends
but will notify the Federal Reserve
 
Bank of Atlanta in advance of any
 
proposed dividend to the Company's
 
shareholders in
light of the Bank's negative retained earnings. In addition, under applicable FDIC regulations and policy,
 
because the Bank
has negative retained
 
earnings, it must
 
obtain the prior
 
approval of the
 
FDIC before effecting a
 
cash dividend or other
 
capital
distribution.
On January
 
21,
 
2025,
 
the
 
Board of
 
Directors
 
declared
 
a quarterly
 
cash
 
dividend.
 
The
 
quarterly
 
dividend
 
for the
 
first
quarter of 2025 was $
0.10
 
per share of Class A common
 
stock, paid on March 5, 2025,
 
to stockholders of record as
 
of the
close of business
 
on February 14,
 
2025. The aggregate
 
distribution in connection
 
with the first quarter
 
2025 dividend was
$
2.0
 
million.
 
 
On January
 
22,
 
2024, the
 
Board of
 
Directors
 
declared
 
a quarterly
 
cash
 
dividend.
 
The
 
quarterly
 
dividend
 
for the
 
first
quarter of 2024 was $
0.05
per share of Class A common stock, paid on March 5, 2024, to stockholders of record as of the 26 USCB Financial Holdings, Inc. Q1 2025 Form 10-Q
 
 
 
USCB FINANCIAL HOLDINGS, INC.
Notes to the Consolidated Financial Statements - Unaudited
 
 
 
close of business
 
on February 15,
 
2024. The aggregate
 
distribution in connection
 
with the first quarter
 
2024 dividend was
$
1.0
 
million.
 
The following table details the dividends
 
declared and paid by the Company during
 
the three months ended March 31,
2025 and 2024:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
As of March 31, 2025
Declaration Date
Record Date
 
Payment Date
Dividend Per Share
Dividend Amount
January 21, 2025
February 14, 2025
 
March 5, 2025
 
 
$
0.10
-
$
2.0
 
million
As of March 31, 2024
Declaration Date
Record Date
 
Payment Date
Dividend Per Share
Dividend Amount
January 22, 2024
 
February 15, 2024
 
March 5, 2024
 
 
$
0.05
-
$
1.0
 
million
The
 
Company
 
and
 
the
 
Bank
 
exceeded
 
all
 
regulatory
 
capital
 
requirements
 
and
 
remained
 
above
 
“well-capitalized”
guidelines as of March 31, 2025 and December 31, 2024.
 
At March 31, 2025, the total risk-based capital
 
ratios for the Bank
was
13.65
%.
 
The
 
Company
 
is
 
not
 
subject
 
to
 
regulatory
 
capital
 
ratios
 
imposed
 
by
 
Basel
 
III
 
on
 
bank
 
holding
 
companies
because the Company is deemed to be a small bank holding
 
company.
See Note 11, Subsequent
 
Events, for information regarding dividends declared in April 2025.
9.
 
EARNINGS PER SHARE
Earnings
 
per
 
share
 
(“EPS”)
 
for
 
common
 
stock
 
is
 
calculated
 
using
 
the
 
two-class
 
method
 
required
 
for
 
participating
securities.
 
Basic
 
EPS
 
is
 
calculated
 
by
 
dividing
 
net
 
income
 
available
 
to
 
common
 
shareholders
 
by
 
the
 
weighted-average
number of common shares outstanding for
 
the period, without consideration for common
 
stock equivalents. Diluted EPS is
computed by dividing
 
net income available
 
to common
 
shareholders by the
 
weighted-average number
 
of common shares
outstanding for
 
the period
 
and the
 
weighted-average number of
 
dilutive common stock
 
equivalents outstanding
 
for the
 
period
determined using the treasury-stock
 
method. For purposes of this
 
calculation, common stock equivalents
 
include common
stock options and are only included in the calculation of diluted
 
EPS when their effect is dilutive.
 
The following table reflects the calculation of net income
 
available to common shareholders for the three months ended
March 31, 2025 and 2024 (in thousands):
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended March 31,
2025
2024
Net Income
$
7,658
$
4,612
Net income available to common shareholders 27 USCB Financial Holdings, Inc. Q1 2025 Form 10-Q
$
7,658
$
4,612
USCB FINANCIAL HOLDINGS, INC.
Notes to the Consolidated Financial Statements - Unaudited
 
 
The following table reflects
 
the calculation of basic and
 
diluted earnings per common
 
share class for the
 
three months
ended March 31, 2025 and 2024 (in thousands, except
 
per share amounts):
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended March 31,
2025
2024
Class A
Class A
Basic EPS
Numerator:
Net income available to common shares
 
$
7,658
$
4,612
Denominator:
Weighted average shares outstanding
20,020,933
19,633,330
Earnings per share, basic
$
0.38
$
0.23
Diluted EPS
Numerator:
Net income available to common shares
$
7,658
$
4,612
Denominator:
Weighted average shares outstanding for basic EPS
20,020,933
19,633,330
Add: Dilutive effects of assumed exercises of stock options
298,602
64,928
Weighted avg. shares including dilutive potential common shares
20,319,535
19,698,258
Earnings per share, diluted
$
0.38
$
0.23
Anti-dilutive stock options excluded from diluted EPS
-
502,500
Net income has not been allocated to unvested restricted
 
stock awards that are participating securities
 
because the amounts that would be allocated are
not material to net income per share of common
 
stock. Unvested restricted stock awards that are participating
 
securities represent less than one percent
of all of the outstanding shares of common stock
 
for each of the periods presented.
 
10.
 
SEGMENT REPORTING
Operating segments are components of an enterprise about which
 
separate financial information is available that is
evaluated regularly by the chief operating decision maker
 
(“CODM”) in assessing performance and in deciding how to
allocate resources. The Company’s CODM is the
 
President, Chief Executive Officer,
 
and Chairman of the Board.
The Company through the Bank, its sole direct subsidiary,
 
operates
10
 
banking centers in South Florida providing a
wide range of personal and business banking products and services,
 
and through a subsidiary of the Bank, offers clients
title insurance policies for real estate transactions closed
 
at the Bank. The Company’s business activities
 
are similar in
their nature, operations and economic characteristics, largely serving
 
commercial and specialty banking clients with
products and services that are offered through similar
 
processes and platforms. Accounting policies for the products
 
and
services referenced here are the same as those described
 
in Note 1, “Summary of Significant Accounting Policies”
 
in this
From 10-Q. The Company’s segment revenue is
 
driven primarily by interest income on loans as well as fee
 
income from
the origination of loans and from fees charged on loans
 
and deposit accounts. Lending activities include loans
 
to
individuals, which primarily consist of home equity lines
 
of credit, residential real estate loans, yacht loans, and
 
consumer
loans, and loans to commercial clients, which include
 
commercial and industrial loans, commercial real estate
 
loans,
investor residential real estate loans, correspondent banking
 
loans, and letters of credit.
The CODM regularly reviews consolidated income and
 
expenses, as presented on the Consolidated Statements
 
of
Operations, in addition to consolidated assets presented on the
 
Consolidated Balance Sheets. The significant segment
expenses that the CODM reviews regularly are interest
 
expense, provision for credit losses, salaries and wages,
employee benefits, and occupancy expense. The CODM
 
evaluates the performance of the segment and allocates
resources based on net income that is also reported on
 
the Consolidated Statements of Operations as consolidated
 
net
income to maximize shareholder value. Additionally,
 
consolidated internal financial information is used by the
 
CODM to
monitor credit quality and credit loss expense. Furthermore,
 
net income, as the measure of profit or loss, is used
 
to
monitor budget versus actual results and to perform competitive
 
analyses that benchmark the Company to competitors.
As a result, the Company has determined that it has only one
 
reportable segment.
USCB FINANCIAL HOLDINGS, INC.
Notes to the Consolidated Financial Statements - Unaudited
 
 
28
 
USCB Financial Holdings, Inc.
 
Q1 2025 Form 10-Q
 
11.
 
LOSS CONTINGENCIES
 
Loss contingencies,
 
including claims
 
and legal actions
 
may arise in
 
the ordinary
 
course of
 
business. In
 
the opinion
 
of
management, none
 
of these
 
actions, either
 
individually or
 
in the aggregate,
 
is expected to
 
have a
 
material adverse
 
effect
on the Company’s Consolidated Financial Statements.
 
12.
 
SUBSEQUENT EVENTS
 
Dividends
 
On
 
April
 
21,
 
2025,
 
the
 
Company
 
announced
 
that
 
its
 
Board
 
of
 
Directors
 
declared
 
its
 
quarterly
 
cash
 
dividend.
 
The
quarterly dividend for
 
the second quarter
 
of 2025 was
 
$
0.10
 
per share of Class
 
A common stock
 
and will be paid
 
on June
5, 2025, to stockholders of record as of the close of business
 
on May 15, 2025.
 
 
29
 
USCB Financial Holdings, Inc.
 
Q1 2025 Form 10-Q
Item 2.
 
Management's Discussion and Analysis of Financial Condition
 
and Results of Operations
 
The
 
following
 
discussion
 
and
 
analysis
 
is
 
designed
 
to
 
provide
 
a
 
better
 
understanding
 
of
 
the
 
consolidated
 
financial
condition and results
 
of operations of
 
the Company and
 
the Bank, its
 
wholly owned subsidiary,
 
as of
 
and for the
 
three months
ended March 31,
 
2025. This
 
discussion and analysis
 
is best read
 
in conjunction
 
with the unaudited
 
consolidated financial
statements and related
 
notes included in
 
this Quarterly
 
Report on Form
 
10-Q (“Form 10-Q”)
 
and the audited
 
consolidated
financial
 
statements
 
and
 
related
 
notes
 
included
 
in
 
the
 
Annual
 
Report
 
on
 
Form
 
10-K
 
(“2024
 
Form
 
10-K”)
 
filed
 
with
 
the
Securities and Exchange Commission (“SEC”) for the year ended
 
December 31, 2024.
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"
 
below
 
in Part II
 
hereof and in
 
the 2024
Form 10-K filed with the SEC which is available at the
 
SEC’s website www.sec.gov.
Throughout
 
this
 
document,
 
references
 
to
 
“we,”
 
“us,”
 
“our,”
 
and
 
“the
 
Company”
 
generally
 
refer
 
to
 
USCB
 
Financial
Holdings, Inc.
Forward-Looking Statements
This Form 10
 
-Q 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,” “continue,”
 
and “intend,”
 
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.
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 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
 
in accounting
 
principles, policies,
 
practices or guidelines,
 
including
the on-going effects of the Current Expected Credit
 
Losses (“CECL”) standard;
•
 
the lack of a
 
significantly diversified loan
 
portfolio and the 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
 
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 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 Form 10-Q, the 2024 Form
 
10-K and other filings we make with the SEC.
 
 
 
30
 
USCB Financial Holdings, Inc.
 
Q1 2025 Form 10-Q
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 Form
 
10-Q 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
 
the 2024 Form 10-K
 
and in the
 
reports
the Company filed or will file with the SEC.
Overview
The Company
 
reported net
 
income of
 
$7.7 million
 
or $0.38
 
per diluted
 
share of
 
common stock
 
for the
 
three
 
months
ended March
 
31, 2025
 
compared to
 
$4.6 million
 
or $0.23
 
per diluted
 
share of
 
common stock
 
for the
 
three months
 
ended
March 31, 2024.
 
On January 21, 2025,
 
the Company’s Board of
 
Directors declared a quarterly
 
cash dividend of $0.10
 
per share on the
Company’s
 
Class A
 
common
 
stock.
 
The
 
dividend
 
was
 
paid
 
on
 
March
 
5,
 
2025
 
to
 
shareholders
 
of
 
record
 
at
 
the
 
close
 
of
business on February 14, 2025. The aggregate amount distributed in
 
connection with the quarterly cash dividend paid was
$2.0 million.
In evaluating our financial
 
performance, the Company
 
considers the level of
 
and trends in net
 
interest income, the
 
net
interest
 
margin,
 
the
 
cost
 
of
 
deposits
 
and
 
borrowings,
 
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.
Unless otherwise
 
stated, all
 
period comparisons
 
in the
 
bullet points
 
below are
 
calculated
 
at or
 
for the
 
quarter ended
March 31, 2025
 
compared
 
to at
 
or for
 
the quarter
 
ended March
 
31, 2024
 
and as
 
of December
 
31, 2024
 
and annualized
where appropriate:
•
 
Net interest
 
income for
 
the three
 
months ended
 
March 31,
 
2025 increased
 
$4.0 million
 
or 26.1%
 
to $19.1 million
from $15.2 million for the quarter ended March 31,
 
2024.
•
 
Net interest margin (“NIM”)
 
was 3.10% for
 
the three months ended
 
March 31,
 
2025 compared to 2.62%
 
for the three
months ended March 31,
 
2024.
•
 
Total assets were
 
$2.68 billion at
 
March 31, 2025,
 
representing an increase
 
of $188.2 million
 
or 7.6% from
 
March
31, 2024 and an increase of $96.2 million or 15.1% annualized
 
from December 31, 2024.
 
•
 
Total loans
 
(net of
 
deferred
 
cost/fees)
 
were
 
$2.04 billion
 
at March
 
31,
 
2025, representing
 
an increase
 
of $215.0
million or
 
11.8% from
 
March 31,
 
2024 and
 
an increase
 
of $63.4
 
million or
 
13.0% annualized
 
from December
 
31,
2024.
•
 
Total deposits were $2.31 billion at March 31, 2025, representing an increase of $206.8 million or 9.8% from March
31, 2024 and an increase of $135.6 million or 25.3%
 
annualized from December 31, 2024.
 
•
 
Annualized return on average assets for the quarter
 
ended March 31, 2025 was 1.19% compared to 0.76%
 
for the
quarter ended March 31, 2024.
 
•
 
Annualized return on average stockholders’ equity for the quarter ended March 31, 2025 was 14.15% compared to
9.61% for quarter ended March 31, 2024.
 
•
 
The ACL to total loans was 1.22% at both March 31, 2025 and December 31, 2024.
 
•
 
Non-performing loans to total loans was 0.20% at March
 
31, 2025 and 0.14% at December 31, 2024.
 
•
 
At March 31,
 
2025, the
 
total risk
 
-based capital
 
ratios
 
for the
 
Company
 
and
 
the
 
Bank were
 
13.72%
 
and 13.
 
65%,
respectively.
•
 
Tangible book
 
value per
 
common share
 
(a non-GAAP
 
measure) was
 
$11.23 at
 
March 31,
 
2025, representing
 
an
increase of $0.42 or 15.6% annualized from $10.81 at December 31, 2024.
 
At March 31, 2025, tangible book value
per common share
 
was negatively affected
 
by $2.05 due
 
to an accumulated
 
comprehensive loss
 
of $41.1 million.
At
 
December
 
31,
 
2024,
 
tangible
 
book
 
value
 
per
 
common
 
share
 
was
 
negatively
 
affected
 
by
 
$2.24
 
due
 
to
 
an
accumulated comprehensive loss
 
of $44.5
 
million. See
 
“Reconciliation and Management
 
Explanation for
 
Non-GAAP
Financial Measures” included in this Form 10-Q for a reconciliati
 
on of this non-GAAP financial measure.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
31
 
USCB Financial Holdings, Inc.
 
Q1 2025 Form 10-Q
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”
 
in
 
the
 
Company’s
 
2024
 
Form
 
10-K
 
and
“Summary of Significant Accounting Policies” in Part I
 
in this Form 10-Q . To prepare financial statements in conformity with
US 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
 
to
 
an
 
understanding
 
of
 
our
 
financial
 
statements.
 
Management
 
has
presented the application of these policies to the Audit
 
and Risk Committee of our Board of Directors.
 
Non-GAAP Financial Measures
This Form 10-Q
 
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
 
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
 
section
 
“Reconciliation
 
and
 
Management
 
Explanation
 
of
 
Non-GAAP
 
Financial
Measures” included in this Form 10-Q.
Segment Reporting
Management monitors the revenue streams for all its various
 
products and services. The identifiable segments are not
material
 
and
 
operations
 
are
 
managed
 
and
 
financial
 
performance
 
is
 
evaluated
 
on
 
an
 
overall
 
Company-wide
 
basis.
Accordingly, all
 
the financial service
 
operations are
 
considered by management
 
to be
 
aggregated in one
 
reportable operating
segment.
Results of Operations
General
The following
 
tables present
 
selected balance
 
sheet, income
 
statement, and
 
profitability ratios
 
for the
 
dates indicated
(in thousands, except ratios):
March 31, 2025
December 31, 2024
Consolidated Balance Sheets:
Total
 
assets
$
2,677,382
$
2,581,216
Total
 
loans
(1)
$
2,036,212
$
1,972,848
Total
 
deposits
$
2,309,569
$
2,174,004
Total
 
stockholders' equity
$
225,088
$
215,388
(1)
 
Loan amounts include deferred fees/costs.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
32
 
USCB Financial Holdings, Inc.
 
Q1 2025 Form 10-Q
Three Months Ended March 31,
2025
2024
Consolidated Statements of Operations:
Net interest income before provision for credit losses
$
19,115
$
15,158
Total
 
non-interest income
$
3,716
$
2,464
Total
 
non-interest expense
$
12,052
$
11,174
Net income
 
$
7,658
$
4,612
Profitability:
Efficiency ratio
52.79%
63.41%
Net interest margin
 
3.10%
2.62%
The Company’s
 
results
 
of
 
operations
 
depend
 
substantially
 
on
 
the
 
levels
 
of
 
our
 
net
 
interest
 
income
 
and
 
non-interest
income. Other factors contributing
 
to the results of
 
operations include our provision for
 
credit losses, the level
 
of non-interest
expense, and the provision for income taxes.
Three months ended March 31, 2025 compared to the three
 
months ended March 31, 2024
 
Net income increased to $7.7
 
million for the three months ended March
 
31, 2025
from $4.6 million for the same period
in 2024.
 
The $3.0 million
 
or 66% increase
 
in net income
 
was attributable to
 
higher interest income
 
from a larger
 
loan portfolio
and increased
 
activity in fee
 
generating transactions
 
(gain on sale
 
of SBA 7a
 
loans, prepayment
 
penalties, title
 
insurance
income) between periods.
Net Interest Income
Net interest income
 
is the difference
 
between interest
 
earned on interest-earning
 
assets and interest
 
paid 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 yields earned on interest-earning assets and rates paid on interest-bearing liabilities. Net interest
margin is
 
equal to
 
the annualized
 
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 indirect benefit of these
 
non-interest-bearing funding sources.
Changes
 
in
 
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.
 
Our
asset liability committee
 
(“ALCO”) has
 
in place asset-liability
 
management techniques
 
to manage major
 
factors that
 
affect
net interest income and net interest margin.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
33
 
USCB Financial Holdings, Inc.
 
Q1 2025 Form 10-Q
The following
 
table contains
 
information related
 
to average
 
balances, average
 
yields earned
 
on assets,
 
and average
costs of liabilities for the periods indicated (dollars in
 
thousands):
Three Months Ended March 31,
2025
2024
Average
(1)
Balance
Interest
Yield/Rate
(2)
Average
(1)
Balance
Interest
Yield/Rate
(2)
Assets
Interest-earning assets:
Loans
(3)
$
1,986,856
$
30,245
6.17%
$
1,781,528
$
26,643
6.01%
Investment securities
(4)
436,935
3,024
2.81%
419,989
2,811
2.69%
Other interest-earnings assets
75,182
709
3.82%
125,244
1,433
4.60%
Total interest-earning assets
2,498,973
33,978
5.51%
2,326,761
30,887
5.34%
Non-interest-earning assets
107,620
 
 
109,342
 
 
Total assets
$
2,606,593
$
2,436,103
Liabilities and stockholders' equity
 
 
 
 
 
 
Interest-bearing liabilities:
Interest-bearing checking
$
53,611
338
2.56%
$
53,344
369
2.78%
Saving and money market deposits
1,199,027
9,335
3.16%
1,097,575
10,394
3.81%
Time deposits
399,509
3,918
3.98%
322,912
3,294
4.10%
Total interest-bearing deposits
1,652,147
13,591
3.34%
1,473,831
14,057
3.84%
FHLB advances and other borrowings
138,944
1,272
3.71%
164,187
1,672
4.10%
Total interest-bearing liabilities
1,791,091
14,863
3.37%
1,638,018
15,729
3.86%
Non-interest-bearing demand deposits
563,040
 
 
574,760
 
 
Other non-interest-bearing liabilities
32,957
30,233
Total liabilities
2,387,088
 
 
2,243,011
 
 
Stockholders' equity
219,505
193,092
Total liabilities and stockholders' equity
$
2,606,593
 
 
$
2,436,103
 
 
Net interest income
$
19,115
$
15,158
Net interest spread
(5)
2.14%
1.48%
Net interest margin
(6)
3.10%
2.62%
(1)
 
Average balances - Daily average balances are used
 
to calculate yields/rates.
(2)
 
Annualized.
(3)
 
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.
(4)
 
At fair value except for securities held to maturity. This amount includes
 
FHLB stock.
(5)
 
Net interest spread is the weighted average
 
yield on total interest-earning assets minus the weighted
 
average rate on total interest-bearing liabilities.
(6)
 
Net interest margin is the ratio of net interest
 
income to average total interest-earning assets.
Three months ended March 31, 2025 compared to the three months ended
 
March 31, 2024
 
Net interest income before the provision for
 
credit losses was $19.1 million for the
 
three months ended March 31, 2025,
an increase of $4.0 million
 
or 26.1%, from $15.2 million
 
for the same period in
 
2024. This increase was
 
primarily attributable
to higher income from a larger loan portfolio combined with
 
an increase in the weighted average loan yield.
 
 
Net interest margin
 
(“NIM”) was
 
3.10% for the
 
three months ended
 
March 31, 2025
 
and 2.62% for
 
the same period
 
in
2024. NIM expansion
 
of 48 basis
 
points was due
 
to increases
 
in both loan
 
yields and the
 
average balance of
 
interest-earning
assets, and also a decrease on rates paid on interest-bearing
 
liabilities between periods.
 
Provision for Credit Losses
The provision
 
for credit
 
losses represents
 
a charge
 
to earnings
 
necessary to
 
maintain an
 
allowance for
 
credit losses
that, in
 
management's evaluation,
 
is adequate
 
to provide
 
coverage for
 
all expected
 
credit losses.
 
The provision
 
for credit
losses is impacted
 
by variations in
 
the size and
 
composition of our
 
loan and debt
 
securities portfolio, recent
 
historical and
projected future economic conditions, our internal assessment of the credit quality of the loan and debt
 
securities portfolios
and net charge-offs.
Three months ended March 31, 2025 compared to the three months ended
 
March 31, 2024
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
34
 
USCB Financial Holdings, Inc.
 
Q1 2025 Form 10-Q
The provision
 
for credit
 
loss was
 
$681 thousand
 
for the
 
three months
 
ended March 31, 2025
 
compared to
 
$410 thousand
for the
 
same period
 
in 2024.
 
Growth in
 
the loan
 
portfolio was
 
the primary
 
driver of
 
the increase
 
in the
 
provision expense,
and to a lesser degree the
 
slight deterioration in the economic
 
forecast under the CECL methodology
 
to calculate the ACL
during the three months ended March 31, 2025.
Non-Interest Income
Our services and products generate service charges and fees, mainly from our depository
 
accounts. We also generate
income from gain
 
on sale of
 
loans though our
 
swap and
 
SBA loan programs. In
 
addition, we own
 
and are beneficiaries
 
of
the
 
life
 
insurance
 
policies
 
on
 
some
 
of
 
our
 
employees,
 
which
 
policies
 
generate
 
income
 
from
 
the
 
increase
 
in
 
the
 
cash
surrender values.
The following table presents the components of non-interest
 
income for the dates indicated (in thousands):
Three Months Ended March 31,
2025
2024
Service fees
$
2,331
$
1,651
Gain on sale of loans held for sale, net
525
67
Other non-interest income
860
746
Total
 
non-interest income
$
3,716
$
2,464
Three months ended March 31, 2025 compared to the three months ended
 
March 31, 2024
 
Non-interest
 
income
 
for
 
the
 
three
 
months
 
ended
 
March 31,
 
2025
 
increased
 
$1.3
 
million
 
or
 
50.8%,
 
compared
 
to
 
the
same
 
period
 
in
 
2024. This
 
increase
 
was
 
primarily
 
driven
 
by
 
growth
 
in
 
prepayment
 
penalties
 
and
 
title
 
insurance
 
income
reported under service
 
fees category combined with
 
an increase in the
 
gain on sale of
 
loans. Gain on sale
 
of loans during
the first quarter of 2025 was greater than the first quarter
 
of 2024 due to higher loan amounts in new SBA 7a loans.
Non-Interest Expense
The following table presents the components of non-interest
 
expense for the dates indicated (in thousands):
Three Months Ended March 31,
2025
2024
Salaries and employee benefits
$
7,636
$
6,310
Occupancy
1,284
1,314
Regulatory assessment and fees
421
433
Consulting and legal fees
193
592
Network and information technology services
505
507
Other operating
2,013
2,018
Total
 
non-interest expense
$
12,052
$
11,174
Three months ended March 31, 2025 compared to the three months ended
 
March 31, 2024
 
Non-interest expense for the three
 
months ended March 31, 2025
 
increased $878 thousand or 7.9%,
 
compared to the
same period
 
in 2024.
 
The increase
 
was primarily
 
driven by
 
an increase
 
of $1.3
 
million in
 
salaries and
 
employee benefits
due to merit increases, management
 
bonuses, stock-based compensation expense,
 
and an increase in payroll
 
taxes for the
first quarter 2025.
 
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 expenses for
 
income tax purposes.
 
Therefore, future
 
decisions on the
 
investments we choose
 
will affect our
 
effective
tax rate.
 
The cash
 
surrender value
 
of bank-owned
 
life insurance
 
policies covering
 
key employees,
 
purchasing municipal
bonds, and overall levels of taxable income will be important
 
elements in determining our effective tax rate.
Three months ended March 31, 2025 compared to the three months ended
 
March 31, 2024
 
Income tax expense
 
for the three
 
months ended
 
March 31, 2025
 
was $2.4 million
 
as compared to
 
$1.4 million
 
for the
same period in 2024. The effective tax rate for the three months ended
 
March 31, 2025 was 24.2% compared to 23.6% for
the same period in 2024.
 
 
 
35
 
USCB Financial Holdings, Inc.
 
Q1 2025 Form 10-Q
For
 
a
 
further
 
discussion
 
of
 
income
 
taxes,
 
see
 
Note
 
4
 
“Income
 
Taxes”
 
to
 
the
 
unaudited
 
Consolidated
 
Financial
Statements in Item 1 of Part I of this Form 10-Q.
Analysis of Financial Condition
Total
 
assets at March 31, 2025 were $2.68
 
billion, an increase of $96.2
 
million, or 15.1% annualized, over
 
total assets
of $2.58 billion at
 
December 31, 2024. Total loans, net of deferred fees/costs, increased
 
$63.4 million, or 13.0% annualized,
to $2.04
 
billion at
 
March 31, 2025
 
compared
 
to $1.97
 
billion
 
at December
 
31, 2024.
 
Total
 
deposits
 
increased
 
by $135.6
million, or 25.3% annualized, to $2.31 billion at March
 
31, 2025 compared to $2.17 billion 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
 
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 Board approved
 
Asset and Liability
 
Management (“ALM”)
policy,
 
which
 
includes
 
investment
 
guidelines.
 
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 objective directed
by
 
the
 
Asset-Liability
 
Committee
 
(“ALCO”).
 
The
 
portfolio
 
of
 
investments
 
also
 
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 the U.S.
 
Government and U.S. Government Agencies
and
 
mortgage-backed
 
securities,
 
collateralized
 
mortgage
 
obligation,
 
corporate
 
bonds,
 
municipal
 
securities,
 
other
 
debt
securities
 
all
 
with
 
varying
 
contractual
 
maturities
 
and
 
coupons.
 
Due
 
to
 
the
 
optionality
 
embedded
 
in
 
these
 
securities,
 
the
contractual maturities do not necessarily represent the
 
expected life of the portfolio. Some of these securities
 
will be called
or paid down
 
prior to maturity
 
depending on capital market
 
conditions and expectations. The
 
investment portfolio is
 
regularly
reviewed by the Chief Financial Officer,
 
Treasurer,
 
and the ALCO of the Company to ensure an appropriate risk and return
profile as well as for adherence to the investment policy.
When evaluating AFS
 
debt securities under
 
ASC Topic
 
326, the Company
 
evaluates
 
whether the decline
 
in fair value
is attributable
 
to credit losses
 
or other
 
factors like interest
 
rate risk,
 
using both quantitative
 
and qualitative
 
analyses, including
company performance analysis, review of credit ratings, vintage bonds, remaining payment terms, prepayment speeds and
analysis of macro-economic conditions. Each investment is expected to recover its unrealized loss position over its holding
period as it approaches
 
to maturity and the Company has the intent and ability to hold these securities maturity.
 
As a result
of this evaluation, the Company concluded that no allowance
 
was required on AFS securities as of March
 
31, 2025.
At
 
quarter
 
end,
 
HTM
 
securities
 
included
 
$152.6
 
million
 
of
 
U.S.
 
Government
 
and
 
U.S.
 
Government
 
Agencies
 
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 $9.2
 
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 $5
 
thousand
 
allowance for
 
credit
 
losses
 
(“ACL”)
 
as of
 
March 31,
 
2025. The
 
book value
 
for debt
 
securities
classified as HTM represents amortized cost less ACL.
AFS and HTM investment securities increased $12.0 million,
 
or 11.5%
 
annualized, to $436.9 million at March 31, 2025
from $424.9 million at December 31, 2024. Investment
 
securities increased due to reinvestment of payments
 
received and
investment of excess
 
in cash
 
balances into high
 
credit quality investments
 
to increase the
 
Company’s profitability and
 
modify
the Company ’s balance sheet duration according to the ALM policy. As of March 31, 2025, investment securities with a 36 USCB Financial Holdings, Inc. Q1 2025 Form 10-Q
market
 
value
 
of
 
$51.1 million
 
were
 
pledged
 
to
 
secure
 
public
 
deposits.
 
The
 
investment
 
portfolio
 
does
 
not
 
have
 
any
 
tax-
exempt securities.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
The following table
 
presents the amortized
 
cost and fair
 
value of investment
 
securities for
 
the dates indicated
 
(dollars
in thousands):
March 31, 2025
December 31, 2024
Available-for-sale:
Amortized
Cost
Fair Value
Amortized
Cost
Fair Value
U.S. Government Agency
$
13,986
$
12,605
$
14,279
$
12,625
Collateralized mortgage obligations
99,775
78,556
101,808
78,905
Mortgage-backed securities - residential
63,115
52,219
58,995
46,933
Mortgage-backed securities - commercial
95,033
87,811
86,604
78,739
Municipal securities
24,905
19,892
24,925
19,311
Bank subordinated debt securities
24,356
24,056
24,314
23,708
$
321,170
$
275,139
$
310,925
$
260,221
Held-to-maturity:
U.S. Government Agency
$
42,095
$
37,822
$
42,538
$
37,444
Collateralized mortgage obligations
55,781
49,122
56,987
49,259
Mortgage-backed securities - residential
39,514
35,793
40,681
36,121
Mortgage-backed securities - commercial
15,227
14,037
15,272
13,887
Corporate bonds
9,178
8,891
9,222
8,829
$
161,795
$
145,665
$
164,700
$
145,540
Allowance for credit losses - securities held-to-maturity
(5)
(6)
 
Securities held-to maturity, net of allowance for credit losses
$
161,790
$
164,694
The following
 
table shows
 
the weighted
 
average yields,
 
categorized by
 
contractual maturity,
 
for investment
 
securities
as of March 31, 2025 (in thousands, except yields):
 
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
$
-
-
$
-
$
2,383
3.14%
$
11,603
2.62%
$
13,986
2.70%
Collateralized mortgage obligations
-
-
-
-
99,775
1.62%
99,775
1.62%
MBS - residential
-
-
-
-
63,115
2.12%
63,115
2.12%
MBS - commercial
-
-
1,595
4.41%
4,094
4.71%
89,344
3.26%
95,033
3.62%
Municipal securities
 
-
-
-
20,662
1.73%
4,243
1.86%
24,905
1.75%
Bank subordinated debt securities
-
-
2,935
9.10%
21,421
5.10%
-
-
24,356
5.58%
$
-
-
$
4,530
7.45%
$
48,560
3.49%
$
268,080
2.44%
$
321,170
2.67%
Held-to-maturity:
U.S. Government Agency
$
-
-
$
7,958
1.02%
$
19,854
1.38%
$
14,283
1.99%
$
42,095
1.52%
Collateralized mortgage obligations
-
-
-
-
-
-
55,781
1.66%
55,781
1.66%
MBS - residential
-
-
3,844
1.70%
5,874
1.74%
29,796
2.31%
39,514
2.17%
MBS - commercial
-
-
3,053
1.62%
-
-
12,174
2.57%
15,227
2.38%
Corporate bonds
1,015
2.59%
8,163
2.84%
-
-
-
-
9,178
2.81%
$
1,015
2.59%
$
23,018
1.86%
$
25,728
1.46%
$
112,034
1.98%
$
161,795
1.88%
Loans
Loans are the
 
largest category of
 
interest-earning assets
 
on the unaudited
 
Consolidated Balance
 
Sheets, and usually
provide higher yields than the
 
remainder of the interest
 
-earning assets. Higher yields
 
typically carry greater
 
inherent credit
and liquidity risks in comparison to lower yield assets. The Company manages and mitigates such risks in accordance with
the credit and ALM policies, risk tolerance and balance
 
sheet composition.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
37
 
USCB Financial Holdings, Inc.
 
Q1 2025 Form 10-Q
The following table shows the loan portfolio composition
 
as of the dates indicated (in thousands):
 
March 31, 2025
December 31, 2024
Total
Percent of
Total
Total
Percent of
Total
Residential Real Estate
$
301,164
14.8
%
$
289,961
14.8
%
Commercial Real Estate
1,150,129
56.7
%
1,136,417
57.8
%
Commercial and Industrial
256,326
12.6
%
258,311
13.1
%
Correspondent Banks
103,026
5.1
%
82,438
4.2
%
Consumer and Other
 
218,711
10.8
%
198,091
10.1
%
Total
 
gross loans
2,029,356
100.0
%
1,965,218
100.0
%
Plus: Deferred fees/costs
6,856
 
7,630
Total
 
loans net of deferred fees/costs
2,036,212
1,972,848
Less: Allowance for credit losses
24,740
24,070
Total
 
net loans
$
2,011,472
$
1,948,778
 
Total
 
loans, net
 
of deferred
 
fees/costs, increased
 
by $63.4 million,
 
or 13.0%
 
annualized to
 
$2.04 billion,
 
at March 31,
2025 compared to December 31, 2024. The correspondent
 
banks loan segment had the most significant growth
 
.
 
Our
 
loan
 
portfolio
 
continues
 
to
 
grow,
 
with
 
commercial
 
real
 
estate
 
lending
 
as
 
the
 
primary
 
focus
 
which
 
represented
approximately 56.7%
 
of the
 
total gross
 
loan portfolio
 
as of
 
March 31, 2025.
 
Our loan
 
growth strategy
 
since inception
 
has
been reflective of the market in which we operate and
 
of our strategic plan as approved by the Board.
Most of the
 
commercial real estate
 
exposure represents
 
loans to commercial
 
businesses secured
 
by owner-occupied
real estate.
 
The growth
 
experienced in
 
recent years
 
is primarily
 
due to
 
implementation of
 
our relationship-based
 
banking
model and
 
the success
 
of our
 
relationship managers
 
in competing
 
for new
 
business
 
in a
 
highly competitive
 
metropolitan
area. Many
 
of our
 
larger loan
 
clients have
 
long-term relationships
 
with members
 
of our
 
senior management
 
team or
 
our
relationship managers that date back to former institutions.
 
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 of the loan portfolio at March 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
$
15,598
$
56,635
$
66,212
$
162,719
$
301,164
Commercial Real Estate
71,483
413,144
660,122
5,380
1,150,129
Commercial and Industrial
8,921
93,182
109,616
44,607
256,326
Correspondent Banks
103,026
-
-
-
103,026
Consumer and Other
2,125
1,694
21,710
193,182
218,711
Total
 
gross loans
$
201,153
$
564,655
$
857,660
$
405,888
$
2,029,356
Interest rate sensitivity:
Fixed interest rates
$
174,592
$
208,718
$
158,136
$
319,980
$
861,426
Floating or adjustable rates
26,561
355,937
699,524
85,908
1,167,930
Total
 
gross loans
$
201,153
$
564,655
$
857,660
$
405,888
$
2,029,356
The information
 
presented
 
in the
 
table above
 
is based
 
upon the
 
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
 
/rate modifications are discussed as well.
 
As of
 
March 31, 2025,
 
approximately 57.6%
 
of the
 
loans have
 
adjustable/variable rates
 
and 42.4%
 
of the
 
loans have
fixed rates. The adjustable/variable
 
rate loans re-price
 
to different benchmarks
 
and tenors and
 
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 below the floor and positions us to gain in the scenario
 
of higher interest rates.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
38
 
USCB Financial Holdings, Inc.
 
Q1 2025 Form 10-Q
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 reviewed
 
at least once a
 
year, and
 
more frequently as
 
needed. 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.
Loan credit exposures by internally assigned grades are
 
as follows for the dates indicated (in thousands):
 
March 31, 2025
Pass
Special Mention
Substandard
Doubtful
Total
Residential Real Estate
$
299,971
$
-
$
1,193
$
-
$
301,164
Commercial Real Estate
1,143,041
4,643
2,445
-
1,150,129
Commercial and Industrial
253,196
76
3,054
-
256,326
Correspondent Banks
103,026
-
-
-
103,026
Consumer and Other
 
216,721
-
1,990
-
218,711
$
2,015,955
$
4,719
$
8,682
$
-
$
2,029,356
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
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
39
 
USCB Financial Holdings, Inc.
 
Q1 2025 Form 10-Q
Non-Performing Assets
The following table presents non-performing assets as
 
of the dates shown (in thousands,
 
except ratios):
March 31, 2025
December 31, 2024
Non-accrual loans
$
4,156
$
2,707
Loans past due over 90 days and still accruing
-
-
Total
 
non-performing loans
$
4,156
$
2,707
Other real estate owned
-
-
Total
 
non-performing assets
$
4,156
$
2,707
Asset quality ratios:
Allowance for credit losses to total loans
1.22%
1.22%
Allowance for credit losses to non-performing loans
595%
889%
Non-performing loans to total loans
0.20%
0.14%
Non-performing
 
assets
 
include
 
all
 
loans
 
categorized
 
as
 
non-accrual,
 
other
 
real
 
estate
 
owned
 
(“OREO”)
 
and
 
other
repossessed assets. Problem loans for
 
which the collection or
 
liquidation in full is
 
reasonably uncertain are placed on
 
a 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
 
surface
 
regarding
 
the
 
borrower’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 of
 
non-performing loans and
 
borrowers experiencing financial
 
difficulties, see
 
Note 3 “Loans” to
the unaudited Consolidated Financial Statements in Item
 
1 of Part 1 this Form 10-Q.
Allowance for Credit Losses
The
 
ACL
 
on
 
loans
 
represents
 
an
 
amount
 
that,
 
in
 
management's
 
evaluation,
 
is
 
adequate
 
to
 
provide
 
coverage
 
for
 
all
expected future credit losses on outstanding loans. 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” in Item 1 of Part 1 of
 
this Form 10-Q for more information on the ACL.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
40
 
USCB Financial Holdings, Inc.
 
Q1 2025 Form 10-Q
The following
 
table presents
 
ACL on
 
loans 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
Three Months Ended March 31, 2025
 
 
 
 
 
 
 
 
 
 
 
 
Beginning balance
$
5,121
$
8,788
$
4,633
$
654
$
4,874
$
24,070
Provision for credit losses
(1)
(12)
409
(204)
163
316
672
Recoveries
6
-
5
-
-
11
Charge-offs
-
-
-
-
(13)
(13)
Ending Balance
 
$
5,115
$
9,197
$
4,434
$
817
$
5,177
$
24,740
Average loans
 
$
301,230
$
1,142,985
$
257,241
$
87,214
$
198,186
$
1,986,856
Net charge-offs (recoveries) to average
loans
(3)
 
(0.01)%
-
(0.01)%
-
0.03%
0.00%
Three Months Ended March 31, 2024
 
 
 
 
 
 
Beginning balance
$
2,695
$
10,366
$
3,974
$
911
$
3,138
$
21,084
Provision for credit losses
(2)
235
(64)
288
(117)
21
363
Recoveries
-
-
10
-
2
12
Charge-offs
-
-
-
-
(5)
(5)
Ending Balance
 
$
2,930
$
10,302
$
4,272
$
794
$
3,156
$
21,454
Average loans
$
217,117
$
1,048,870
$
221,804
$
102,150
$
191,587
$
1,781,528
Net charge-offs (recoveries) to average
loans
(3)
-
-
0.02%
-
0.01%
0.00%
(1) Provision for credit losses excludes a $10 thousand expense due to unfunded commitments included in accrued interest and other
liabilities and a $1 thousand release related to investment securities held to maturity.
(2) Provision for credit losses excludes a $43 thousand expense due to unfunded commitments included in accrued interest and other
liabilities and a $4 thousand charge related to investment securities held to maturity.
(3) Annualized.
The
 
Federal
 
Open
 
Market
 
Committee
 
(“FOMC”)
 
economic
 
forecasts
 
as
 
of
 
March
 
31,
 
2025,
 
showed
 
moderate
deterioration
 
in
 
unemployment
 
and
 
forecast
 
for
 
real
 
GDP.
 
Fannie
 
Mae
 
House
 
Price
 
Index
 
(“HPI”)
 
forecast
 
reflected
 
a
deterioration in
 
national housing
 
prices as
 
well. The
 
Company continued
 
to adjust
 
the HPI
 
index effect
 
on the
 
1-4 Family
loan portfolio
 
with
 
a
 
qualitative
 
factor
 
because
 
Florida
 
housing prices
 
are
 
performing
 
better
 
than
 
national
 
levels.
 
The Q-
factor scorecard was updated based on the latest portfolio stress
 
test and the resulting maximum loss calculation.
 
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 March 31,
 
2025, for every 100 basis points increase in the HPI, the
forecast
 
reduces
 
reserves
 
by
 
approximately
 
$334
 
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 March 31,
 
2025, we stress tested two
 
qualitative factors in our commercial
 
real estate loan pool,
 
as it is 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
 
from no risk
 
to high risk
 
resulted in a $10.2
 
million or 41.0%
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.
Bank-Owned Life Insurance
As of March 31, 2025, the combined cash surrender value of all bank-owned life insurance (“BOLI”) policies was
 
$57.9
million. Changes in cash surrender value are recorded to non-interest income in the unaudited Consolidated Statements of
Operations. The Company has BOLI policies with five insurance carriers. The Company is the beneficiary of these policies.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
41
 
USCB Financial Holdings, Inc.
 
Q1 2025 Form 10-Q
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
 
small-to-medium
 
sized
 
businesses
 
(“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.
 
The following table
 
presents the daily
 
average balance and
 
average rate paid
 
on deposits by
 
category for
 
the periods
presented (in thousands, except ratios):
Three Months Ended March 31,
2025
2024
Average Balance
Average Rate
Paid
Average Balance
Average Rate
Paid
Non-interest-bearing checking
$
563,040
0.00%
$
574,760
0.00%
Interest-bearing checking
53,611
2.56%
53,344
2.78%
Money market and savings deposits
1,199,027
3.16%
1,097,575
3.81%
Time deposits
399,509
3.98%
322,912
4.10%
Total
$
2,215,187
2.49%
$
2,048,591
2.76%
The Company
 
has a
 
granular deposit
 
portfolio with
 
outstanding balances
 
comprised of
 
55% in
 
commercial
 
deposits,
32%
 
personal
 
deposits,
 
5%
 
public
 
funds
 
(which
 
are
 
partially
 
collateralized)
 
and
 
8%
 
brokered
 
deposits.
 
The
 
brokered
deposits balance at March 31, 2025 was $178.0 million
 
and $133.0 million at December 31, 2024.
 
As of
 
March
 
31,
 
2025, the
 
Company
 
has approximately
 
21 thousand
 
deposit accounts
 
with
 
the
 
majority
 
in
 
personal
accounts,
 
approximately
 
13
 
thousand
 
or
 
63.8%.
 
The
 
estimated
 
average
 
account
 
size
 
of
 
our
 
deposit
 
portfolio
 
was
approximately $112
 
thousand as of March 31, 2025.
 
The uninsured deposits are estimated based on
 
the FDIC deposit insurance limit of $250 thousand
 
per account holder
for all deposit accounts at the Company. The total estimated percentage of uninsured deposits was 54% at March 31, 2025
and
 
55%
 
at
 
December 31,
 
2024.
 
The
 
Company
 
offers
 
Insured
 
Cash
 
Sweep
 
(“ICS”)
 
and
 
Certificate
 
of
Deposit Account
Registry Service
 
(“CDARS”)
 
deposit products
 
to fully
 
insure our
 
clients. The
 
deposit balance
 
in ICS/CDARS
 
was $158.5
million at March 31, 2025 and $125.5 million at December
 
31, 2024.
The following table shows scheduled maturities of uninsured
 
time deposits as of March 31, 2025 (in thousands):
March 31, 2025
Three months or less
$
58,048
Over three through six months
15,450
Over six though twelve months
13,316
Over twelve months
40,537
$
127,351
Other Liabilities
The Company collects from commercial and residential loan
 
customers funds which are held in escrow for future
payment of real estate taxes and insurance. These escrow
 
funds are disbursed by the Company directly to the
 
insurance
companies and taxing authority of the borrower.
 
Escrow funds are recorded as other liabilities.
 
As of March 31, 2025, escrow balances totaled $13.5
 
million compared to $6.1 million at December 31, 2024.
Borrowings
As
 
a
 
member
 
of
 
the
 
FHLB
 
of
 
Atlanta,
 
we
 
are
 
eligible
 
to
 
obtain
 
advances
 
with
 
various
 
terms
 
and
 
conditions.
 
This
accessibility to 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.
As of March 31,
 
2025, we had
 
$108.0 million of
 
fixed-rate advances outstanding
 
from the FHLB
 
with a weighted
 
average
rate of 3.60%. Maturity dates for the advances range
 
between 2025 to 2028 as detailed in the table below.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
42
 
USCB Financial Holdings, Inc.
 
Q1 2025 Form 10-Q
The following table presents the FHLB advances as of
 
March 31, 2025 (in thousands):
Interest Rate
Type of Rate
Maturity Date
Amount
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
$
108,000
During the third
 
quarter 2024, the
 
Company paid off
 
the $80.0 million
 
fixed-rate loan outstanding
 
from the Bank
 
Term
Funding Program with an original maturity date of January
 
10, 2025.
 
The
 
Company
 
has
 
also
 
established
 
Federal
 
Funds
 
lines
 
of
 
credit
 
with
 
our
 
upstream
 
correspondent
 
banks
 
and
 
the
Federal
 
Reserve
 
Bank
 
of
 
Atlanta
 
Discount
 
Window
 
to
 
manage
 
temporary
 
fluctuations
 
in
 
our
 
daily
 
cash
 
balances.
 
As
 
of
March 31, 2025, there were no outstanding balances with
 
any of these liquidity sources.
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 than
 
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 unaudited Consolidated
 
Balance Sheets. The
 
ACL related to unfunded
 
commitments at
March 31, 2025 was $581 thousand and at March 31, 2024 was
 
$415 thousand.
 
Since commitments associated with letters of
 
credit and commitments to extend
 
credit may expire unused, the
 
amounts
shown
 
do
 
not
 
necessarily
 
reflect
 
actual
 
future
 
cash
 
funding
 
requirements.
 
The
 
following
 
table
 
presents
 
lending
 
related
commitments outstanding as of the dates indicated (in thousands
 
):
March 31, 2025
December 31, 2024
Commitments to grant loans and unfunded lines of credit
$
132,466
$
122,578
Standby and commercial letters of credit
3,346
5,389
Total
$
135,812
$
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 amount
 
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
Members
 
of
 
senior
 
management
 
and
 
our
 
Board
 
make
 
up
 
the
 
asset
 
and
 
liability
 
management
 
committee,
 
or
 
ALCO.
Senior management
 
is responsible
 
for ensuring
 
that Board
 
approved strategies
 
and policies
 
for managing
 
and mitigating
risks are appropriately executed within the designated lines of
 
authority and responsibility in a timely manner.
 
 
43
 
USCB Financial Holdings, Inc.
 
Q1 2025 Form 10-Q
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”) is inherent to the banking business, we believe our ALCO implements
sound risk management practices to identify,
 
quantify,
 
monitor, and limit IRR exposures.
When assessing
 
the scope
 
of IRR
 
exposure
 
and
 
impact on
 
the consolidated
 
balance sheet,
 
cash
 
flows and
 
income
statement,
 
management
 
considers
 
both
 
earnings
 
and
 
economic
 
impacts.
 
Asset
 
price
 
variations,
 
deposit
 
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 steepening)
 
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
 
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
 
(“EVE”).
 
This
assessment
 
allows
 
us
 
to
 
measure
 
the
 
degree
 
to
 
which
 
the
 
economic
 
values
 
will
 
change
 
under
 
different
 
interest
 
rate
scenarios (parallel and non-parallel). The economic value 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
According to our ALCO model, as of March
 
31, 2025, we had a neutral to slightly asset
 
sensitive balance sheet both for
year one,
 
and an
 
asset sensitivity
 
balance sheet
 
for year
 
two, using
 
the static
 
model. Asset
 
sensitivity indicates
 
that our
assets generally
 
reprice faster
 
than our
 
liabilities, which
 
results in
 
a favorable
 
impact to
 
net interest
 
income when
 
market
interest rates increase. Liability sensitivity indicates that our liabilities generally reprice faster than our assets, which results
in a favorable impact to net interest
 
income when market interest rates decrease.
 
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 (betas), 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 EVE
 
do not include actions that management
 
may
undertake to manage the risks in response to anticipated changes in interest rates or customer deposit behavior. As part of
our ALM strategy and policy, management
 
has the ability to modify the balance sheet to either increase asset duration and
decrease liability
 
duration to reduce
 
asset sensitivity,
 
or to decrease
 
asset duration and
 
increase liability duration
 
in order
to increase asset sensitivity.
According to our model, as of March 31, 2025, our balance sheet is neutral to slightly asset sensitive
 
for year one more
asset sensitivity and year two
 
under interest static rate scenarios (an
 
increase or decrease of 400 basis
 
points). This means
that the impact of rates variations will be minimal to our NIM. 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 in
interest rates will have a
 
negative impact on the EVE
 
and lower rates, a positive
 
impact. Results and analysis are presented
quarterly to the ALCO, and strategies are reviewed and defined.
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.
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 relatively adequate funding. 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 and the cash flow profiles of our on-
 
and off-balance sheet obligations.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
44
 
USCB Financial Holdings, Inc.
 
Q1 2025 Form 10-Q
In managing
 
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),
 
pledging assets and contingent liquidity events.
Changes in macroeconomic conditions, as well as exposure to credit, market, operational, legal,
 
cybersecurity risk and
reputational
 
risks,
 
could
 
have
 
an
 
unexpected
 
impact
 
on
 
the
 
Company’s
 
liquidity
 
risk
 
profile
 
and
 
are
 
factored
 
into
 
the
assessment of liquidity and the 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
 
active involvement
 
of 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; active 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
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
 
the investment
 
portfolio cash flows.
 
Other potential
 
funding sources
 
include Federal
Funds purchased,
 
brokered
 
certificates
 
of deposit,
 
listing
 
services
 
certificates
 
of
 
deposit, unsecured
 
fed funds
 
lines with
other banking institutions
 
and draws from the
 
Federal Reserve Bank
 
of Atlanta discount
 
window, and
 
borrowings from the
FHLB. Accordingly, we believe our liquidity resources are adequate
 
to fund loans and meet
 
other cash needs as necessary.
 
Capital Adequacy
As of
 
March 31, 2025,
 
the Bank
 
was well
 
capitalized
 
under the
 
FDIC’s
 
prompt corrective
 
action framework.
 
We also
follow the capital conservation buffer framework, and as of March 31, 2025, we exceeded the capital conversation buffer
 
in
all capital
 
ratios,
 
according
 
to
 
our actual
 
ratios.
 
The
 
following
 
table
 
presents
 
the
 
capital
 
ratios
 
for
 
the
 
Bank
 
at the
 
dates
indicated (in thousands, except ratios).
Actual
Minimum Capital
Requirements
 
To be Well Capitalized
Under Prompt Corrective
Action Provisions
Amount
Ratio
Amount
Ratio
Amount
Ratio
March 31, 2025
Total
 
risk-based capital
$
277,832
13.65
%
$
162,795
8.00
%
$
203,494
10.00
%
Tier 1 risk-based capital
$
252,506
12.41
%
$
122,096
6.00
%
$
162,795
8.00
%
Common equity tier 1 capital
$
252,506
12.41
%
$
91,572
4.50
%
$
132,271
6.50
%
Leverage ratio
$
252,506
9.55
%
$
105,814
4.00
%
$
132,267
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
%
The Company is
 
not subject to
 
regulatory capital ratios
 
imposed by Basel
 
III on bank
 
holding companies because
 
the
Company is deemed to be a small bank holding company.
Impact of Inflation
Our
 
Consolidated
 
Financial
 
Statements
 
and
 
related
 
notes
 
have
 
been
 
prepared
 
in
 
accordance
 
with
 
U.S.
 
GAAP,
which require the measurement of financial position and operating results in terms of historical dollars, without considering 45 USCB Financial Holdings, Inc. Q1 2025 Form 10-Q
 
 
the changes in the relative purchasing power of money over time
 
due to inflation. The impact of inflation is mostly reflected
in the increased cost
 
of operations, inflation
 
can negatively impact
 
overhead expenses. 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 the effects 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.
Recently Issued Accounting Pronouncements
 
Recently issued accounting
 
pronouncements are discussed
 
in Note 1 “Summary
 
of Significant Accounting Policies”
 
to
the unaudited Consolidated Financial Statements in Part
 
1 of this Form 10-Q.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
46
 
USCB Financial Holdings, Inc.
 
Q1 2025 Form 10-Q
Reconciliation and Management Explanation of Non
 
-GAAP Financial 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
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 following table reconciles the non-GAAP financial measurement
of operating net income available to
 
common shareholders for the periods presented (in
 
thousands,
 
except per share data):
USCB FINANCIAL HOLDINGS, INC.
NON-GAAP FINANCIAL MEASURES (UNAUDITED)
(Dollars in thousands)
As of or For the Three Months Ended
3/31/2025
12/31/2024
9/30/2024
6/30/2024
3/31/2024
Pre-tax pre-provision ("PTPP") income:
(1)
Net income
$
7,658
$
6,904
$
6,949
$
6,209
$
4,612
Plus: Provision for income taxes
2,440
2,197
2,213
1,967
1,426
Plus: Provision for credit losses
681
1,030
931
786
410
PTPP income
$
10,779
$
10,131
$
10,093
$
8,962
$
6,448
 
 
PTPP return on average assets:
(1)
 
 
PTPP income
$
10,779
$
10,131
$
10,093
$
8,962
$
6,448
Average assets
$
2,606,593
$
2,544,592
$
2,485,434
$
2,479,222
$
2,436,103
PTPP return on average assets
(2)
1.68%
1.58%
1.62%
1.45%
1.06%
 
 
Operating net income:
(1)
 
 
Net income
$
7,658
$
6,904
$
6,949
$
6,209
$
4,612
Less: Net gains (losses) on sale of securities
-
-
-
14
-
Less: Tax effect on sale of securities
-
-
-
(4)
-
Operating net income
$
7,658
$
6,904
$
6,949
$
6,199
$
4,612
 
 
Operating PTPP income:
(1)
 
 
PTPP income
$
10,779
$
10,131
$
10,093
$
8,962
$
6,448
Less: Net gains (losses) on sale of securities
-
-
-
14
-
Operating PTPP income
$
10,779
$
10,131
$
10,093
$
8,948
$
6,448
 
 
Operating PTPP return on average assets:
(1)
 
 
Operating PTPP income
$
10,779
$
10,131
$
10,093
$
8,948
$
6,448
Average assets
$
2,606,593
$
2,544,592
$
2,485,434
$
2,479,222
$
2,436,103
Operating PTPP return on average assets
(2)
1.68%
1.58%
1.62%
1.45%
1.06%
 
 
Operating return on average assets:
(1)
 
 
Operating net income
$
7,658
$
6,904
$
6,949
$
6,199
$
4,612
Average assets
$
2,606,593
$
2,544,592
$
2,485,434
$
2,479,222
$
2,436,103
Operating return on average assets
(2)
1.19%
1.08%
1.11%
1.01%
0.76%
 
 
Operating return on average equity:
(1)
 
 
Operating net income
$
7,658
$
6,904
$
6,949
$
6,199
$
4,612
Average equity
$
219,505
$
215,715
$
206,641
$
197,755
$
193,092
Operating return on average equity
(2)
14.15%
12.73%
13.38%
12.61%
9.61%
 
Operating Revenue:
(1)
 
 
Net interest income
$
19,115
 
$
19,358
 
$
18,109
 
$
17,311
 
$
15,158
 
Plus: Non-interest income
 
3,716
3,627
3,438
 
3,211
 
2,464
 
Less: Net gains (losses) on sale of
 
securities
-
-
-
14
-
 
Operating revenue
$
22,831
$
22,985
$
21,547
$
20,508
$
17,622
 
Operating Efficiency Ratio:
(1)
 
 
Total non-interest expense
$
12,052
 
$
12,854
 
$
11,454
 
$
11,560
 
$
11,174
 
Operating revenue
$
22,831
$
22,985
$
21,547
$
20,508
$
17,622
 
Operating efficiency ratio
52.79%
55.92%
53.16%
56.37%
63.41%
(1)
 
The Company believes these non-GAAP measurements
 
are key indicators of the ongoing earnings
 
power of the Company.
(2)
 
Annualized.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
47
 
USCB Financial Holdings, Inc.
 
Q1 2025 Form 10-Q
USCB FINANCIAL HOLDINGS, INC.
NON-GAAP FINANCIAL MEASURES (UNAUDITED)
(Dollars in thousands, except per share data)
As of or For the Three Months Ended
3/31/2025
12/31/2024
9/30/2024
6/30/2024
3/31/2024
Tangible book value per common share (at period-end):
(1)
Total stockholders' equity
$
225,088
$
215,388
$
213,916
$
201,020
$
195,011
Less: Intangible assets
-
-
-
-
-
Tangible stockholders' equity
$
225,088
$
215,388
$
213,916
$
201,020
$
195,011
Total shares issued and outstanding (at period-end):
Total common shares issued and outstanding
20,048,385
19,924,632
19,620,632
19,630,632
19,650,463
Tangible book value per common share
(2)
$
11.23
$
10.81
$
10.90
$
10.24
$
9.92
Operating diluted net income per common share:
(1)
Operating net income
$
7,658
$
6,904
$
6,949
$
6,199
$
4,612
Total weighted average diluted shares of common stock
20,319,535
20,183,731
19,825,211
19,717,167
19,698,258
Operating diluted net income per common share:
$
0.38
$
0.34
$
0.35
$
0.31
$
0.23
Tangible Common Equity/Tangible Assets
(1)
 
Tangible stockholders' equity
$
225,088
$
215,388
$
213,916
$
201,020
$
195,011
 
Tangible total assets
(3)
$
2,677,382
$
2,581,216
$
2,503,954
 
$
2,458,270
$
2,489,142
Tangible Common Equity/Tangible
 
Assets
8.41%
8.34%
8.54%
8.18%
7.83%
(1)
 
The Company believes these non-GAAP measurements
 
are key indicators of the ongoing earnings
 
power of the Company.
(2)
 
Excludes the dilutive effect, if any, of shares of common stock issuable upon exercise
 
of outstanding stock options.
(3) Since the Company has no intangible assets, tangible total assets is the same amount as total assets calculated under GAA 48 USCB Financial Holdings, Inc. Q1 2025 Form 10-Q
P.
 
 
Item 3.
 
Quantitative and Qualitative Disclosures About Market Risk
As a smaller reporting company,
 
we are not required to provide the information required
 
by this item.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Under the
 
supervision and with
 
the participation of
 
our management, including
 
our President and
 
Chief Executive Officer
and our
 
Chief Financial
 
Officer,
 
we evaluated
 
the effectiveness
 
of the
 
design and
 
operation of
 
the Company’s
 
disclosure
controls
 
and
 
procedures
 
(as
 
defined
 
in
 
Rules
 
13a-15(e)
 
and
 
15d-15(e)
 
under
 
the
 
Securities
 
Exchange
 
Act
 
of
 
1934
(“Exchange Act”)) as
 
of March 31, 2025.
 
Based on that
 
evaluation, management believes
 
that, as of the
 
end of the period
covered
 
by
 
this
 
Form
 
10-Q,
 
the
 
Company's
 
disclosure
 
controls
 
and
 
procedures
 
were
 
effective
 
to
 
collect,
 
process,
 
and
disclose the information required
 
to be disclosed in
 
the reports filed or
 
submitted under the Exchange
 
Act within the
 
required
time periods.
Changes in Internal Control Over Financial Reporting
There has been
 
no change in
 
our internal control
 
over financial reporting
 
(as defined in
 
Rules 13a-15(f) and
 
15d-15(f)
under the Exchange Act) during the period covered by this Form 10-Q that has
 
materially affected, or is reasonably likely to
materially affect, our internal control over financial
 
reporting.
 
Limitations on Effectiveness of Controls and Procedures
In
 
designing
 
and
 
evaluating
 
the
 
disclosure
 
controls
 
and
 
procedures,
 
management
 
recognizes
 
that
 
any
 
controls
 
and
procedures, no matter how well designed and operated, can provide only reasonable, not absolute, assurance of achieving
the desired control objectives.
 
In addition, the design
 
of disclosure controls and
 
procedures must reflect the
 
fact that there
are resource constraints and that management is required to apply
 
judgment in evaluating the benefits of possible controls
and procedures relative to their costs.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
49
 
USCB Financial Holdings, Inc.
 
Q1 2025 Form 10-Q
PART II
Item 1.
 
Legal Proceedings
We are not currently subject to any material legal proceedings. We are from time to time subject to claims and litigation
arising
 
in
 
the
 
ordinary
 
course
 
of
 
business.
 
These
 
claims
 
and
 
litigation
 
may
 
include,
 
among
 
other
 
things,
 
allegations
 
of
violation of banking and other applicable regulations, competition
 
law, labor laws and consumer
 
protection laws, as well as
claims or
 
litigation
 
relating
 
to intellectual
 
property,
 
securities, breach
 
of contract
 
and tort.
 
We
 
intend to
 
defend ourselves
vigorously against any pending or future claims and litigation.
There can be no
 
assurance that any
 
future legal proceedings
 
to which we are
 
a party will not
 
be decided adversely
 
to
our interests and have a material adverse effect
 
on our financial condition and operations.
Item 1A. Risk Factors
For detailed information about certain risk factors that could materially affect our business, financial
 
condition, or future
results, see “Part I, Item 1A – Risk Factors” of the
 
2024 Form 10-K.
Item 2.
 
Unregistered Sales of Equity Securities and Use of Proceeds
(a) None.
(b) Not applicable.
(c) The Company’s repurchases of equity securities
 
for the quarter ended March 31,
 
2025 were as follows:
Total
Number of
Shares
Purchased
Average
Price Paid
Per Share
Total Number of Shares Purchased
as Part of Publicly Announced Plans
or Programs (1)
Maximum Number
of Shares that May
Yet Be Purchased
Under Plans or
Programs (1)
Period
 
January 1 - 31, 2025
2,031
$
18.27
2,031
535,949
February 1 -28, 2025
 
-
$
-
-
 
 
535,949
March 1 - 31, 2025
7,640
$
17.81
7,640
 
528,309
(1) As of March 31, 2025 there were 528,309
 
number of shares available for repurchase. As of
 
March 31, 2025 there are two outstanding share
repurchase programs:
 
- On January 24, 2022, the Company announced
 
its initial stock repurchase program to repurchase
 
up to 750,000 shares of Class A common
 
stock.
- On April 22, 2024, the Company announced the
 
adoption of a second repurchase program to repurchase
 
up to 500,000 share of Class A common
stock to commence upon completion of its first
 
repurchase program.
Item 3.
 
Defaults Upon Senior Securities
(a)
 
Not applicable
(b)
 
Not applicable
Item 4.
 
Mine Safety Disclosures
Not applicable.
Item 5. Other Information
(a)
 
Not applicable
(b)
 
Not applicable
(c)
 
During the three months ended
 
March 31, 2025, none of the
 
Company’s directors or Section
 
16 reporting persons
adopted
 
or
terminated
 
any
 
Rule
 
10b5-1
 
trading
 
arrangement
 
or
non-Rule
10b5-1
 
trading
 
arrangement
 
(as
 
such
terms are defined in Item 408 of the SEC’s Regulation
 
S-K).
 
 
 
 
50
 
USCB Financial Holdings, Inc.
 
Q1 2025 Form 10-Q
Item 6. Exhibits
Exhibit No.
Description of Exhibit
**
**
***
***
101
The following
 
financial statements
 
from the
 
Company’s Quarterly
 
Report on
 
Form 10-Q
 
for the
 
quarter ended
 
March 31,
2025 formatted
 
in Inline
 
XBRL: (i)
 
Consolidated Balance
 
Sheets (unaudited),
 
(ii) Consolidated
 
Statements of
 
Operations
(unaudited), (iii) Consolidated
 
Statements
 
of Comprehensive
 
Income (unaudited), (iv)
 
Consolidated Statements
 
of Changes
in Stockholders’
 
Equity (unaudited),
 
(v) Consolidated
 
Statements of
 
Cash Flows
 
(unaudited), (vi)
 
Notes to
 
Consolidated
Financial Statements (unaudited).
104
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)
*
**
Management Contract or Compensatory plan or arrangement.
Filed herewith.
***
Furnished hereby.
 
 
 
 
 
 
 
51
 
USCB Financial Holdings, Inc.
 
Q1 2025 Form 10-Q
SIGNATURES
Pursuant to the
 
requirements of
 
the Securities Exchange
 
Act of 1934,
 
the registrant has
 
duly caused this
 
report to be
signed on its behalf by the undersigned thereunto duly authorized.
USCB FINANCIAL HOLDINGS, INC.
(Registrant)
Signature
Title
Date
/s/ Luis de la Aguilera
Chairman, President and Chief Executive
Officer
 
May 9, 2025
Luis de la Aguilera
(Principal Executive Officer)
/s/ Robert Anderson
Executive Vice President and Chief Financial
Officer
 
May 9, 2025
Robert Anderson
(Principal Financial Officer and Principal 1 USCB Financial Holdings, Inc. Q1 2025 Form 10-Q
Accounting Officer)
EX-10.1 8 exhibit101.htm EX-10.1 exhibit101
 
 
 
Table
 
of Contents
Exhibit 10.1
CHANGE
IN
CONTROL AGREEMENT
THIS
 
CHANGE
 
IN
 
CONTROL
 
AGREEMENT
 
(the "Agreement")
 
is
 
made
as
 
of the
25
th]
day
 
of
 
Marc
h
 
2025
by and between U.S.
 
Century Bank, with Corporate Offices
 
located at
 
2301 NW
 
87
th
 
Ave.,
 
Doral, FL 33172
(hereinafter called the
 
"Bank")
 
and Ms. Maricarmen Logrono ("Executive").
WHEREAS,
as consideration for
 
Executive's continued
 
employment with
 
the Bank as
 
Executive Vice
President/Chief Risk Officer,
 
the parties hereto,
 
intending to be
 
legally bound, agree
 
as follows:
1.
Payment Upon
 
Change in
 
Control.
 
In the event
 
of a
 
Change in
 
Control (as defined
 
herein) during
the term
 
of this
 
Agreement,
 
the Bank
 
agrees
 
to pay
 
Executive
 
a cash payment
 
equal to one
 
times
the
 
Base
 
Annual
 
Salary of
 
Executive received
 
during the
 
one (1)
 
year period
 
prior to
 
the Change
in Control, to
 
be paid within
 
thirty (30) days
 
of the consummation
 
of the Change
 
in Control.
The
Bank's provision of this benefit
 
to Executive is made
 
without regard to whether,
 
or for
how long, Executive remains
 
employed with the surviving
 
company subsequent to the
 
Change
in Control.
2.
Change in
 
Control.
 
"Change in
 
Control” shall mean the
 
occurrence of
 
an event described
 
in (i),
(ii), (iii), or (iv) below:
(i)
Any person or
 
group (within
 
the meaning
 
of Sections
 
13(d) and
 
14(d) of
 
the Securities
Exchange Act
 
of 1934,
 
as amended
 
(the "Exchange
 
Act"),
 
other than
 
USCB Financial
Holdings, Inc. (the
 
"Company"),
 
an affiliate
 
of the Company
 
or a
 
trustee or
 
other fiduciary
holding
 
securities
 
under
 
an
 
employee
 
benefit
 
plan
 
of
 
the
Company
 
or
 
the
Bank
 
or
 
a
corporation
 
owned
 
directly
 
or
 
indirectly
 
by
 
the
 
stockholders
 
of
 
the
Company
in
substantially the same proportions as their ownership of stock of the Company,
 
becomes
the
 
beneficial
 
owner
 
(within
 
the
 
meaning
 
of
 
Rule
 
13(d)(3)
 
under
 
the
 
Exchange
 
Act,
directly or indirectly (which shall include
 
securities issuable upon
 
conversion, exchange
or otherwise) or
 
securities representing 50% or
 
more of
 
the combined voting power of
 
the
Company’s or the
 
Bank’s
 
then-outstanding
 
securities
 
entitled
 
generally
 
to vote
 
for
 
the
election of directors.
(ii)
Consummation of an agreement to merge or consolidate with
 
another entity (other than a
majority-controlled
 
subsidiary
 
of
 
the
 
Company)
 
unless
 
the
 
Company's
 
stockholders
immediately
 
before
 
the
 
merger
 
or consolidation
 
own
 
more
 
than
 
50%
 
of the
 
combined
voting power of the resulting entity's voting securities (giving effect to the conversion or
exchange of
 
securities issued
 
in the
 
merger or
 
consolidation to
 
the other
 
entity that
 
are
convertible or exchangeable
 
for voting
 
securities) entitled
 
generally to
 
vote for
 
the election
of directors.
(iii)
Consummation
 
of
 
an
 
agreement
 
(including,
 
without
 
limitation,
 
an
 
agreement
 
of
liquidation) to sell or otherwise dispose of
 
all or substantially all of the business or assets
of the Company or the Bank; or
(iv)
Individuals who, as of the date hereof, constitute the Board of Directors of
 
the Company
(the
 
"Incumbent
Board")
 
cease
 
for
 
any
 
reason
 
during
 
any
 
12
 
month
 
period to
constitute at least a
 
majority of the Board,
 
provided that any person
 
becoming a director
subsequent
 
to
 
the
 
date
 
hereof
 
whose
 
election
 
or
 
nomination
 
for
 
election
 
by
 
the
stockholders
of the Company
is approved by a vote of at least a majority of directors then
constituting the
Incumbent
 
Board shall
 
be, for
 
purposes of
 
this Agreement,
 
considered
as though such person were a member of the Incumbent Board.
Notwithstanding
 
the foregoing,
 
no event shall
 
constitute
 
a Change in Control
 
unless such
 
event
shall also constitute a change in control as defined in Section 409A of the Internal Revenue Code 2 USCB Financial Holdings, Inc. Q1 2025 Form 10-Q
of 1986, as amended.
 
 
 
 
 
 
 
 
Table
 
of Contents
3.
Severability.
 
Should any provision of this
 
Agreement be declared or determined by any court
of competent
 
jurisdiction to
 
be
 
unenforceable
 
or
 
invalid
 
for any
 
reason,
 
the validity
 
of the
remaining
 
parts, term or provisions
 
of this Agreement
 
shall
 
not
 
be affected
 
thereby and
 
the
invalid or
 
unenforceable
 
part,
 
term
 
or
 
provision
 
shall
 
be
 
deemed
 
not
 
to
 
be
 
a
 
part
 
of
 
this
Agreement.
4.
Applicable Law/Forum.
 
This Agreement has been entered into and
 
shall be governed by and
construed under the internal
 
laws of the State of
 
Florida, without regard to conflicts
 
of laws or
principles. All suits, proceedings and other actions relating to, arising out of
 
or in connection
with this
 
Agreement
 
will be
 
submitted solely
 
to
 
the in
 
personam jurisdiction
 
of
 
the
 
United States
District Court for the Southern
 
District of Florida ("Federal Court") or to the Circuit Court in
Broward
 
County
 
or
 
Miami­Dade County.
 
Executive
 
hereby
 
waives
 
any
 
claims
 
against
 
or
objections to such in
 
personam jurisdiction and venue.
5.
Notice.
 
All
 
notices
 
and
 
other
 
communications
 
hereunder
 
shall
 
be in
 
writing
 
and
 
shall
 
be
deemed
 
to have been
 
given only if and when
 
personally delivered
 
or three (3) business days
after mailing, postage
 
prepaid, registered
 
or certified mail,
 
or when delivered
 
(and receipted
for) by an express delivery service, addressed in each case as follows. As to
 
notices provided
to the Bank, notices shall
 
be sent to the Human
 
Resources
 
Department
 
at
 
the address
 
of the
Bank listed
 
in the
 
introductory paragraph of this Agreement.
 
As
 
to
 
notices
 
to
 
Executive,
 
notices
shall be
 
sent to
the
address provided
 
below in the
 
signature block hereto.
 
Executive and
 
Bank may
change the address
 
for the giving of notices.
6.
Complete Agreement. This Agreement represents the complete
 
agreement between Executive
and the
 
Bank regarding
 
the subject matter
 
of this
 
Agreement.
 
This Agreement is
 
in no
 
way
dependent upon
 
the performance of
 
any other
 
contract or
 
agreement that
 
may have
 
been or
 
may
be entered into
 
between Executive and Bank and remains in
 
effect during the
 
pendency of this
Agreement.
 
As such, the
 
breach or
 
alleged breach
 
of any
 
other contract
 
or agreement
 
is no
defense to enforcement of this
 
Agreement.
All prior agreements, if
 
any, between the Bank and
Executive with respect
 
to the matters
 
agreed to herein
 
are hereby superseded
 
and shall have
 
no
force or effect.
7.
Amendments
 
in
 
Writing.
 
No
 
amendment,
 
modification,
 
waiver,
 
or
 
other
 
change
 
to
 
this
Agreement shall
 
in any
 
event
 
be effective
 
unless the same
 
shall
 
be in
 
writing, specifically
identifying this Agreement
 
and the provision intended
 
to be
 
changed and signed by
 
Bank and
Executive,
 
and
 
each
 
such
 
change shall be effective only in the
 
specific instance and for the
specific
 
purpose
 
for which
 
it
 
is given.
 
No
 
provision
 
of
 
this
 
Agreement
 
shall
 
be
 
varied,
contradicted or
 
explained by
 
any oral
 
agreement, course
 
of dealing
 
or
 
performance
 
or
 
any
 
other
matter not set
 
forth in an
 
agreement in writing and signed by Executive and the
 
Bank.
8.
Term of the
 
Agreement.
Subject to
 
the terms
 
hereof, the
 
term of
 
this Agreement
 
shall commence
on the date
 
hereof and terminate
 
on December 31,
 
2027 (the
"Initial
Term
").
 
Prior to December
31, 2025
 
(the “Extension Anniversary Date”)
 
and each annual
 
anniversary thereafter of the
Extension
 
Anniversary
 
Date,
 
the
 
Board
 
of
 
Directors
 
of
 
the
 
Bank
 
or
 
the
 
Compensation
Committee
 
thereof
 
shall
 
consider
 
and
 
review
 
(with
 
appropriate
 
corporate
 
documentation
thereof, and after taking into account all
 
relevant factors, including Executive’s performance
hereunder) a one-year extension of
 
the term of this
 
Agreement. If the Board
 
of Directors or
the
 
Compensation
 
Committee
 
thereof
 
approve
 
such
 
an
 
extension,
 
then
 
the
 
term
 
of
 
this
Agreement shall be so extended
 
as of the Extension
 
Anniversary Date or any
 
relevant annual
anniversary
 
of
 
such
 
date
 
unless
 
the
 
Executive
 
gives
 
written
 
notice
 
to
 
the
 
Bank
 
of
 
the
Executive’s election not to extend the
 
term, with such written
 
notice to be given
 
not less than
thirty (30) days prior
 
to the Extension Anniversary Date
 
or any relevant annual
 
anniversary
of such
 
date. If
 
the Board
 
of Directors
 
elects not
 
to extend
 
the term,
 
it shall
 
give written
 
notice
of
 
such
 
decision
 
to
 
the
 
Executive
 
not
 
less
 
than
 
thirty
 
(30)
 
days
 
prior
 
to
 
the
 
Extension
Anniversary Date or any annual anniversary of such date. If any party gives timely notice anniversary of such date, then this Agreement and the rights and obligations provided herein
that
 
the
 
term
 
will
 
not
 
be
 
extended
 
as
 
of
 
the
 
Extension
 
Anniversary
 
Date
 
or
 
any
 
annual
 
 
 
 
 
 
 
 
 
 
Table
 
of Contents
3
 
USCB Financial Holdings, Inc.
 
Q1 2025 Form 10-Q
shall terminate at the conclusion of its remaining term.
 
References herein to the term of this
Agreement
 
shall
 
refer
 
both
 
to
 
the
 
Initial
 
Term
 
and
 
successive
 
terms
 
as
 
the
 
term
 
of
 
this
Agreement is extended in accordance with the terms
 
hereof.
9.
Regulatory Actions
.
 
The following provisions
 
shall be applicable
 
to the parties
 
hereto or any
successor thereto, and shall be controlling in the event of a conflict with any other provision
of this Agreement, including without limitation
 
Section 1 hereof:
(i)
If Executive is
 
suspended from office
 
and/or temporarily prohibited from
 
participating
in the
 
conduct of
 
the Bank’s
 
affairs pursuant
 
to notice
 
served under
 
Section 8(e)(3) or
Section 8(g)(1) of the Federal Deposit Insurance Act (“FDIA”)(12 U.S.C. §§1818(e)(3)
and 1818(g)(1)), the Bank’s
 
obligations under this Agreement shall be
 
suspended as of
the date of
 
service, unless
 
stayed by
 
appropriate proceedings.
 
If the charges
 
in the notice
are dismissed, the Bank will:
 
(i) pay Executive all or part
 
of the compensation withheld
while its obligations under this Agreement were
 
suspended, and (ii) reinstate (in whole
or in part) any of its obligations which were suspended.
(ii)
If Executive is removed
 
from office and/or permanently
 
prohibited from participating
 
in
the conduct
 
of the
 
Bank’s
 
affairs by
 
an order
 
issued under
 
Section 8(e)(4)
 
or Section
8(g)(1) of
 
the
 
FDIA
 
(12 U.S.C.
 
§§1818(e)(4) and
 
(g)(1)), all
 
obligations of
 
the
 
Bank
under
 
this Agreement
 
shall terminate
 
as
 
of
 
the
 
effective
 
date
 
of
 
the
 
order,
 
but
 
vested
rights of Executive and the Bank as of the date
 
of termination shall not be affected.
(iii)
If
 
the
 
Bank
 
is
 
in
 
default,
 
as
 
defined
 
in
 
Section
 
3(x)(1)
 
of
 
the
 
FDIA
 
(12
 
U.S.C.
§1813(x)(1)),
 
all
 
obligations
 
under
 
this
 
Agreement
 
shall
 
terminate
 
as
 
of
 
the
 
date
 
of
default, but vested
 
rights of Executive
 
and the Bank
 
as of the
 
date of termination
 
shall
not be affected.
(iv)
Notwithstanding any
 
other provision
 
of this
 
Agreement to
 
the contrary,
 
any payments
made
 
to
 
Executive
 
pursuant
 
to
 
this
 
Agreement,
 
or
 
otherwise,
 
are
 
subject
 
to
 
and
conditioned upon
 
their compliance
 
with Section
 
18(k) of the
 
FDIA (12
 
U.S.C. §1828(k))
and 12 C.F.R.
 
Part 359.
10.
Nature
 
of
 
Obligations.
Nothing
 
contained
 
herein
 
shall
 
be
 
deemed
 
to
 
create
 
other
 
than
 
a
terminable at will
 
employment relationship between
 
the Bank and
 
Executive, and the
 
Bank may
terminate
 
Executive’s
 
employment
 
at
 
any
 
time,
 
subject
 
to
 
providing
 
any
 
payments
 
specified
herein in accordance with the terms
 
hereof.
11.
Acknowledgment. Executive acknowledges that Executive has read this
 
Agreement in full and
completely understands all of its terms and obligations
 
and enters into this Agreement freely
and voluntarily, and
 
after having
 
the
 
opportunity to
 
consult with
 
representatives
 
of
Executive's
own choosing and that Executive's
 
agreement is freely given.
IN WITNESS WHEREOF, the parties
 
hereto have duly
 
executed this Agreement
 
as of the date
 
first
above mentioned.
 
U.S. Century Bank
 
Executive
 
By: /s/Luis de la Aguilera
 
/s/Maricarmen Logrono
 
Title: President and Chief Executive Officer Print Name: Maricarmen Logrono Certification of Chief Executive Officer
 
Address:
 
[•]
 
 
EX-31.1 9 exhibit311.htm EX-31.1 exhibit311
 
 
 
Exhibit 31.1
Pursuant to Section 302 of the Sarbanes-Oxley Act
 
of 2002
I, Luis de la Aguilera, certify that:
1.
 
I have reviewed this Quarterly Report on Form
 
10-Q of USCB Financial Holdings, Inc.;
2.
 
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact
necessary
 
to
 
make
 
the
 
statements
 
made,
 
in
 
light
 
of
 
the
 
circumstances
 
under
 
which
 
such
 
statements
 
were
 
made,
 
not
misleading with respect to the period covered by this report;
3.
 
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all
material respects
 
the financial
 
condition, results
 
of operations
 
and cash
 
flows of
 
the registrant
 
as of,
 
and for,
 
the periods
presented in this report;
4.
 
The
 
registrant’s
 
other
 
certifying
 
officer
 
and
 
I
 
are
 
responsible
 
for
 
establishing
 
and
 
maintaining
 
disclosure
 
controls
 
and
procedures (as
 
defined in
 
Exchange Act
 
Rules 13a-15(e)
 
and 15d-15(e))
 
and internal
 
control over
 
financial reporting
 
(as
defined in Exchange
 
Act Rules 13a-15(f) and 15d-15(f)) for the registrant and
 
have:
a)
 
designed
 
such
 
disclosure
 
controls
 
and
 
procedures,
 
or
 
caused
 
such
 
disclosure
 
controls
 
and
 
procedures
 
to
 
be
designed
 
under
 
our
 
supervision,
 
to
 
ensure
 
that
 
material
 
information
 
relating
 
to
 
the
 
registrant,
 
including
 
its
consolidated subsidiaries, is
 
made known
 
to us by
 
others within those
 
entities, particularly during
 
the period in
 
which
this report is being prepared;
b)
 
designed such internal control over financial reporting, or caused such
 
internal control over financial reporting to be
designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and
the
 
preparation
 
of
 
financial
 
statements
 
for
 
external
 
purposes
 
in
 
accordance
 
with
 
generally
 
accepted
 
accounting
principles;
c)
 
evaluated the effectiveness
 
of the registrant’s
 
disclosure controls and
 
procedures and presented
 
in this report our
conclusions about the effectiveness of the
 
disclosure controls and procedures, as of the
 
end of the period covered
by this report based on such evaluation; and
d)
 
disclosed in this
 
report any
 
change in the
 
registrant’s internal
 
control over
 
financial reporting
 
that occurred
 
during
the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an Annual Report) that
has
 
materially
 
affected,
 
or
 
is
 
reasonably
 
likely
 
to
 
materially
 
affect,
 
the
 
registrant’s
 
internal
 
control
 
over
 
financial
reporting; and
5.
 
The registrant’s
 
other certifying
 
officer
 
and I
 
have disclosed,
 
based on
 
our most
 
recent evaluation
 
of internal
 
control over
financial
 
reporting,
 
to
 
the
 
registrant’s
 
auditors
 
and
 
the
 
audit
 
committee
 
of
 
the
 
registrant’s
 
board
 
of
 
directors
 
(or
 
persons
performing the equivalent functions):
a)
 
All
 
significant
 
deficiencies
 
and
 
material
 
weaknesses
 
in
 
the
 
design
 
or
 
operation
 
of
 
internal
 
control
 
over
 
financial
reporting which are
 
reasonably likely
 
to adversely affect
 
the registrant’s ability
 
to record, process,
 
summarize and
report financial information; and
b)
 
Any fraud, whether or not material,
 
that involves management or other employees who
 
have a significant role in
 
the
registrant’s internal control over financial reporting.
/s/ Luis de la Aguilera
Luis de la Aguilera
Chairman, President and Chief Executive Officer
Date: May 9, 2025
EX-31.2 10 exhibit312.htm EX-31.2 exhibit312
 
 
 
Exhibit 31.2
Certification of Chief Financial Officer
Pursuant to Section 302 of the Sarbanes-Oxley Act
 
of 2002
I, Robert Anderson, certify that:
1.
 
I have reviewed this Quarterly Report on Form 10-Q of
 
USCB Financial Holdings, Inc.;
2.
 
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact
necessary
 
to
 
make
 
the
 
statements
 
made,
 
in
 
light
 
of
 
the
 
circumstances
 
under
 
which
 
such
 
statements
 
were
 
made,
 
not
misleading with respect to the period covered by this report;
3.
 
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all
material respects
 
the financial
 
condition, results
 
of operations
 
and cash
 
flows of
 
the registrant
 
as of,
 
and for,
 
the periods
presented in this report;
4.
 
The
 
registrant’s
 
other
 
certifying
 
officer
 
and
 
I
 
are
 
responsible
 
for
 
establishing
 
and
 
maintaining
 
disclosure
 
controls
 
and
procedures (as
 
defined in
 
Exchange Act
 
Rules 13a-15(e)
 
and 15d-15(e))
 
and internal
 
control over
 
financial reporting
 
(as
defined in Exchange Act Rules 13a-15(f) and 15d-15(f))
 
for the registrant and have:
a)
 
designed
 
such
 
disclosure
 
controls
 
and
 
procedures,
 
or
 
caused
 
such
 
disclosure
 
controls
 
and
 
procedures
 
to
 
be
designed
 
under
 
our
 
supervision,
 
to
 
ensure
 
that
 
material
 
information
 
relating
 
to
 
the
 
registrant,
 
including
 
its
consolidated subsidiaries, is
 
made known
 
to us by
 
others within those
 
entities, particularly during
 
the period in
 
which
this report is being prepared;
b)
 
designed such internal control over financial reporting, or caused such
 
internal control over financial reporting to be
designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and
the
 
preparation
 
of
 
financial
 
statements
 
for
 
external
 
purposes
 
in
 
accordance
 
with
 
generally
 
accepted
 
accounting
principles;
c)
 
evaluated the effectiveness
 
of the registrant’s
 
disclosure controls and
 
procedures and presented
 
in this report our
conclusions about the effectiveness of the
 
disclosure controls and procedures, as of the
 
end of the period covered
by this report based on such evaluation; and
d)
 
disclosed in this
 
report any
 
change in the
 
registrant’s internal
 
control over
 
financial reporting
 
that occurred
 
during
the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an Annual Report) that
has
 
materially
 
affected,
 
or
 
is
 
reasonably
 
likely
 
to
 
materially
 
affect,
 
the
 
registrant’s
 
internal
 
control
 
over
 
financial
reporting; and
5.
 
The registrant’s
 
other certifying
 
officer
 
and I
 
have disclosed,
 
based on
 
our most
 
recent evaluation
 
of internal
 
control over
financial
 
reporting,
 
to
 
the
 
registrant’s
 
auditors
 
and
 
the
 
audit
 
committee
 
of
 
the
 
registrant’s
 
board
 
of
 
directors
 
(or
 
persons
performing the equivalent functions):
a)
 
All
 
significant
 
deficiencies
 
and
 
material
 
weaknesses
 
in
 
the
 
design
 
or
 
operation
 
of
 
internal
 
control
 
over
 
financial
reporting which are
 
reasonably likely
 
to adversely affect
 
the registrant’s ability
 
to record, process,
 
summarize and
report financial information; and
b)
 
Any fraud, whether or not material, that involves
 
management or other employees who have a significant role
 
in the
registrant’s internal control over financial reporting.
/s/ Robert Anderson
Robert Anderson
Chief Financial Officer
Date: May 9, 2025
EX-32.1 11 exhibit321.htm EX-32.1 exhibit321
 
 
 
Exhibit 32.1
Certification of Chief Executive Officer Pursuant to
 
18 U.S.C. Section 1350
as Adopted Pursuant to Section 906 of the Sarbanes
 
-Oxley Act of 2002
In connection with the Quarterly
 
Report of USCB Financial Holdings, Inc. (the
 
“Company”) on Form 10-Q for the
 
quarter
ended March 31, 2025, as filed with
 
the Securities and Exchange Commission
 
on the date hereof (the “Report”),
 
I, Luis de
la Aguilera, as President and
 
Chief Executive Officer of
 
the Company,
 
certify,
 
to the best of my knowledge,
 
pursuant to 18
U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes
 
-Oxley Act of 2002, that:
1)
 
The
 
Report
 
fully
 
complies
 
with
 
the
 
requirements
 
of
 
Section 13(a) or
 
15(d),
 
as
 
applicable,
 
of
 
the
 
Securities
Exchange Act of 1934; and
2)
 
The
 
information
 
contained
 
in
 
the
 
Report
 
fairly
 
presents,
 
in
 
all
 
material
 
respects,
 
the
 
financial
 
condition
 
and
results of operations of the Company.
/s/ Luis de la Aguilera
Luis de la Aguilera
Chairman, President and Chief Executive Officer
Date: May 9, 2025
EX-32.2 12 exhibit322.htm EX-32.2 exhibit322
 
 
 
Exhibit 32.2
Certification of Chief Financial Officer Pursuant to
 
18 U.S.C. Section 1350
as Adopted Pursuant to Section 906 of the Sarbanes
 
-Oxley Act of 2002
In connection with the Quarterly
 
Report of USCB Financial Holdings, Inc. (the
 
“Company”) on Form 10-Q for the
 
quarter
ended March 31, 2025,
 
as filed with the
 
Securities and Exchange
 
Commission on the
 
date hereof (the “Report”),
 
I, Robert
Anderson,
 
as Chief Financial Officer of the Company, certify, to the best of my knowledge, pursuant to 18 U.S.C. §1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley
 
Act of 2002, that:
1)
 
The
 
Report
 
fully
 
complies
 
with
 
the
 
requirements
 
of
 
Section 13(a) or
 
15(d),
 
as
 
applicable,
 
of
 
the
 
Securities
Exchange Act of 1934; and
2)
 
The
 
information
 
contained
 
in
 
the
 
Report
 
fairly
 
presents,
 
in
 
all
 
material
 
respects,
 
the
 
financial
 
condition
 
and
results of operations of the Company.
/s/ Robert Anderson
Robert Anderson
Chief Financial Officer
Date: May 9, 2025