株探米国株
英語
エドガーで原本を確認する
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2024-12-31 0001901637 2025-10-31 iso4217:USD xbrli:pure xbrli:shares iso4217:USD xbrli:shares dummy:Item UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 
 
 
 
 
 
 
 
uscb-20250930p1i0
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
September 30, 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 October 31, 2025, the registrant had
18,110,385
 
shares of Class
A
common stock outstanding.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
3
 
USCB Financial Holdings, Inc.
 
Q3 2025 Form 10-Q
PART
 
I
Item 1.
 
Financial Statements
USCB FINANCIAL HOLDINGS, INC
Consolidated Balance Sheets – Unaudited
(Dollars in thousands, except share data)
September 30, 2025
December 31, 2024
ASSETS:
Cash and due from banks
$
9,988
$
6,986
Interest-bearing deposits in banks
46,823
70,049
Total cash and cash equivalents
56,811
77,035
Investment securities held to maturity, net of allowance of $
5
 
and $
6
, respectively (fair value of
$
143,299
 
and $
145,540
, respectively)
156,365
164,694
Investment securities available for sale, at fair value
324,179
260,221
Federal Home Loan Bank stock, at cost
2,328
9,379
Loans held for investment, net of allowance of
 
$
24,964
 
and $
24,070
, respectively
2,106,002
1,948,778
Accrued interest receivable
12,126
10,945
Premises and equipment, net
4,315
4,563
Bank owned life insurance
58,923
53,472
Deferred tax assets, net
19,457
29,646
Lease right-of-use asset
6,282
8,451
Other assets
21,157
14,032
Total assets
$
2,767,945
$
2,581,216
 
LIABILITIES:
 
Deposits:
 
Non-interest bearing demand deposits
$
584,240
$
575,159
Savings and money market deposits
1,291,283
1,180,809
Interest-bearing demand deposits
60,016
50,648
Time deposits
520,075
367,388
Total deposits
2,455,614
2,174,004
Federal Home Loan Bank advances
 
11,000
163,000
Subordinated notes
39,262
-
Lease liability
6,282
8,451
Accrued interest and other liabilities
46,692
20,373
Total liabilities
2,558,850
2,365,828
 
Commitments and contingencies (See Notes 5
 
and 10)
(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 September 30, 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 September 30, 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 September 30, 2025
 
and December 31, 2024
-
-
Common stock - Class A Voting; $
1.00
 
par value;
45,000,000
 
shares authorized;
18,107,385
 
issued and
outstanding as of September 30, 2025,
19,924,632
 
issued and outstanding as of December 31,
 
2024
 
18,107
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 September 30, 2025 and
 
December 31, 2024
 
-
-
Additional paid-in capital on common stock
277,888
307,810
Accumulated deficit
(49,094)
(67,813)
Accumulated other comprehensive loss
(37,806)
(44,534)
Total stockholders' equity
209,095
215,388
Total liabilities and stockholders' equity
$
2,767,945
$
2,581,216
 
The accompanying notes are an integral part of
 
these unaudited consolidated financial statements.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
4
 
USCB Financial Holdings, Inc.
 
Q3 2025 Form 10-Q
USCB FINANCIAL HOLDINGS, INC.
Consolidated Statements of Operations - Unaudited
(Dollars in thousands,
 
except per share data)
 
Three Months Ended September 30,
Nine Months Ended September 30,
2025
2024
2025
2024
Interest income:
 
Loans, including fees
$
32,866
$
29,819
$
95,057
 
$
84,479
 
Investment securities
3,522
2,754
9,978
 
8,634
 
Interest-bearing deposits in financial institutions
1,332
989
2,817
 
3,953
 
Total interest income
37,720
33,562
107,852
 
97,066
Interest expense:
 
 
 
Interest-bearing demand deposits
286
411
909
 
1,171
Savings and money market deposits
10,343
10,064
29,088
 
30,529
 
Time deposits
5,036
3,391
13,297
 
9,907
 
Federal Home Loan Bank advances
377
1,587
2,731
4,881
 
Subordinated notes
404
-
404
-
 
Total interest expense
16,446
15,453
46,429
46,488
 
Net interest income before provision for
 
credit losses
21,274
18,109
61,423
50,578
Provision for credit losses
105
931
1,817
2,127
 
Net interest income after provision for
 
credit losses
21,169
17,178
59,606
48,451
Non-interest income:
 
 
 
Service fees
2,661
2,544
7,394
6,172
 
(Loss) gain on sale of securities available for
 
sale, net
(28)
-
(28)
14
 
Gain on sale of loans held for sale, net
128
109
804
593
 
Other non-interest income
923
785
2,600
2,334
 
Total non-interest income
3,684
3,438
10,770
9,113
Non-interest expense:
 
 
 
Salaries and employee benefits
7,909
7,200
23,499
20,863
 
Occupancy
1,382
1,341
4,003
3,921
 
Regulatory assessments and fees
377
452
1,194
1,361
 
Consulting and legal fees
585
161
1,041
1,016
 
Network and information technology services
656
513
1,725
1,499
 
Other operating expense
2,139
1,787
6,272
5,528
 
Total non-interest expense
13,048
11,454
37,734
34,188
 
Income before income tax expense
11,805
9,162
32,642
23,376
Income tax expense
2,866
2,213
7,905
5,606
 
Net income
$
8,939
$
6,949
$
24,737
$
17,770
Per share information:
 
 
Net income per share, basic
$
0.46
$
0.35
$
1.25
$
0.90
Net income per share, diluted
$
0.45
$
0.35
$
1.23
$
0.90
Cash dividends declared
$
0.10
$
0.05
$
0.30
$
0.15
The accompanying notes are an integral part of
 
these unaudited consolidated financial statements.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
5
 
USCB Financial Holdings, Inc.
 
Q3 2025 Form 10-Q
USCB FINANCIAL HOLDINGS, INC.
Consolidated Statements of Comprehensive Income
 
- Unaudited
(Dollars in thousands)
 
Three Months Ended
 
September 30,
Nine Months Ended
 
September 30,
2025
2024
2025
2024
Net income
$
8,939
$
6,949
$
24,737
$
17,770
Other comprehensive income:
 
 
 
Unrealized gain on investment securities
5,315
9,848
 
9,093
8,624
Reclassification adjustment for amortization of net
 
unrealized losses on
securities transferred from available-for-sale to held-to-maturity
66
67
 
200
200
Reclassification adjustment for realized losses (gains)
 
included in net
income
28
-
28
(14)
Unrealized loss on cash flow hedge
(123)
(930)
(309)
(381)
Tax expense
(1,340)
(2,277)
(2,284)
(2,136)
Total other comprehensive income, net of tax
3,946
6,708
6,728
6,293
Total comprehensive income
$
12,885
$
13,657
$
31,465
$
24,063
The accompanying notes are an integral part of
 
these unaudited consolidated financial statements.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
6
 
USCB Financial Holdings, Inc.
 
Q3 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 June 30, 2025
20,078,385
$
20,078
$
309,282
$
(56,025)
$
(41,752)
$
231,583
Net income
-
-
-
8,939
-
8,939
Other comprehensive income
-
-
-
-
3,946
3,946
Repurchase of Class A common stock
(2,000,000)
(2,000)
(32,380)
-
-
(34,380)
Exercise of stock options
29,000
29
212
-
-
241
Dividend payment
-
-
-
(2,008)
-
(2,008)
Stock-based compensation
-
-
774
-
-
774
Balance at September 30, 2025
18,107,385
$
18,107
$
277,888
$
(49,094)
$
(37,806)
$
209,095
Balance at June 30, 2024
19,630,632
$
19,631
$
305,835
$
(79,760)
$
(44,686)
$
201,020
Net income
-
-
-
6,949
-
6,949
Other comprehensive income
-
-
-
-
6,708
6,708
Repurchase of Class A common stock
(10,000)
(10)
(111)
-
-
(121)
Dividend payment
-
-
-
(1,016)
-
(1,016)
Stock-based compensation
-
-
376
-
-
376
Balance at September 30, 2024
19,620,632
$
19,621
$
306,100
$
(73,827)
$
(37,978)
$
213,916
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
-
-
-
24,737
-
24,737
Other comprehensive income
-
-
-
-
6,728
6,728
Repurchase of Class A common stock
(2,009,671)
(2,010)
(32,544)
-
-
(34,554)
Restricted stock issued
124,424
124
(124)
-
-
-
Exercise of stock options
68,000
68
490
-
-
558
Dividend payment
-
-
-
(6,018)
-
(6,018)
Stock-based compensation
-
-
2,256
-
-
2,256
Balance at September 30, 2025
18,107,385
$
18,107
$
277,888
$
(49,094)
$
(37,806)
$
209,095
Balance at December 31, 2023
19,575,435
19,575
305,212
(88,548)
(44,271)
191,968
Net income
-
-
-
17,770
-
17,770
Other comprehensive income
-
-
-
-
6,293
6,293
Repurchase of Class A common stock
(42,100)
(42)
(459)
-
-
(501)
Restricted stock issued
57,922
58
(58)
-
-
-
Restricted stock forfeiture
(8,625)
(8)
8
-
-
-
Exercise of stock options
38,000
38
285
-
-
323
Dividend payment
-
-
-
(3,049)
-
(3,049)
Stock-based compensation
-
-
1,112
-
-
1,112
Balance at September 30, 2024
19,620,632
$
19,621
$
306,100
$
(73,827)
$
(37,978)
$
213,916
The accompanying notes are an integral
 
part of these consolidated financial statements.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
7
 
USCB Financial Holdings, Inc.
 
Q3 2025 Form 10-Q
USCB FINANCIAL HOLDINGS, INC.
Consolidated Statements of Cash Flows - Unaudited
(Dollars in thousands)
Nine Months Ended September 30,
2025
2024
Cash flows from operating activities:
Net income
 
$
24,737
$
17,770
Adjustments to reconcile net income
 
to net cash provided by operating activities:
 
Provision for credit losses
 
1,817
2,127
Depreciation and amortization
456
436
Accretion of premiums on securities, net
(1,136)
(365)
Amortization of deferred loan fees, net
723
660
Stock-based compensation
2,256
1,112
(Loss) gain on sale of available for sale securities,
 
net
28
(14)
Gain on sale of loans held for sale, net
(804)
(593)
Proceeds from the sale of loans held for sale
11,373
7,408
Origination of loans held for sale
(10,569)
(6,815)
Increase in cash surrender value of bank owned
 
life insurance
(1,451)
(1,257)
Decrease in deferred tax assets
7,905
5,129
Net change in operating assets and liabilities:
 
Accrued interest receivable
(1,181)
(77)
Other assets
(7,389)
(8,292)
Accrued interest and other liabilities
26,051
20,505
Net cash provided by operating activities
52,816
37,734
 
 
Cash flows from investing activities:
 
Proceeds from maturities and pay-downs of investment
 
securities held to maturity
8,469
8,110
Purchase of investment securities available
 
for sale
 
(101,486)
(70,996)
Proceeds from maturities and pay-downs of investment
 
securities available for sale
16,433
15,097
Proceeds from sales of investment securities
 
available for sale
31,384
34,753
Net increase in loans held for investment
(78,149)
(92,812)
Purchase of loans held for investment
(81,392)
(58,368)
Additions to premises and equipment
(208)
(256)
Purchase of bank owned life insurance
(4,000)
-
Proceeds from the redemption of Federal
 
Home Loan Bank stock
12,778
8,645
Purchase of Federal Home Loan Bank stock
(5,727)
(5,734)
Net cash used in investment activities
(201,898)
(161,561)
Cash flows from financing activities:
Proceeds from issuance of Class A common
 
stock, net
558
323
Cash dividends paid
(6,018)
(3,049)
Repurchase of Class A common stock
(34,554)
(501)
Net increase in deposits
281,610
189,478
Proceeds from subordinated notes
39,262
-
Proceeds from FHLB advances
117,000
197,000
Repayments on Federal Home Loan Bank advances
 
(269,000)
(262,000)
Net cash provided by financing activities
128,858
121,251
 
Net decrease in cash and cash equivalents
(20,224)
(2,576)
Cash and cash equivalents at beginning
 
of period
77,035
41,062
Cash and cash equivalents at end of period
$
56,811
$
38,486
 
Supplemental disclosure of cash flow
 
information:
 
Interest paid
$
45,751
$
46,058
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.
 
Q3 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
 
estimate
 
impacting
 
the
 
Company’s
 
consolidated
 
financial
 
statements
 
is
 
the
 
allowance
 
for
 
credit
 
losses
(“ACL”).
Reclassifications
Certain
 
amounts
 
in
 
prior
 
period
 
consolidated
 
financial
 
statements
 
have
 
been
 
reclassified
 
to
 
conform
 
to
 
the
 
current
presentation. Reclassifications had no impact on prior period
 
net income or stockholders’ equity.
 
Recently Issued Accounting Standards
Adoption of New Accounting Standards
Improvements to Income Tax
 
Disclosures
In December
 
2023,
 
the
 
Financial
 
Accounting
 
Standard
 
Board
 
(“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.
 
 
USCB FINANCIAL HOLDINGS, INC.
Notes to the Consolidated Financial Statements - Unaudited
 
 
9
 
USCB Financial Holdings, Inc.
 
Q3 2025 Form 10-Q
 
2.
 
INVESTMENT 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):
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
September 30, 2025
Available-for-sale:
Amortized
Cost
Unrealized
Gains
Unrealized
Losses
Fair Value
U.S. Government Agency
$
13,143
$
36
$
(1,214)
$
11,965
Collateralized mortgage obligations
100,830
-
(19,135)
81,695
Mortgage-backed securities - residential
60,915
118
(9,715)
51,318
Mortgage-backed securities - commercial
145,991
17
(7,491)
138,517
Municipal securities
22,838
-
(3,923)
18,915
Bank subordinated debt securities
22,046
162
(439)
21,769
$
365,763
$
333
$
(41,917)
$
324,179
Held-to-maturity:
Amortized
Cost
Unrecognized
Gains
Unrecognized
Losses
Fair Value
U.S. Government Agency
$
41,500
$
75
$
(3,529)
$
38,046
Collateralized mortgage obligations
52,766
566
(5,956)
47,376
Mortgage-backed securities - residential
37,880
558
(3,523)
34,915
Mortgage-backed securities - commercial
15,135
-
(1,133)
14,002
Corporate bonds
9,089
-
(129)
8,960
$
156,370
$
1,199
$
(14,270)
$
143,299
Allowance for credit losses - securities held-to-maturity
(5)
Securities held-to maturity, net of allowance for credit losses
$
156,365
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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:
Amortized
Cost
Unrecognized
Gains
Unrecognized
Losses
Fair Value
U.S. Government Agency
$
42,538
$
-
$
(5,094)
$
37,444
Collateralized mortgage obligations
56,987
57
(7,785)
49,259
Mortgage-backed securities - residential
40,681
53
(4,613)
36,121
Mortgage-backed securities - commercial
15,272
-
(1,385)
13,887
Corporate bonds
9,222
-
(393)
8,829
$
164,700
$
110
$
(19,270)
$
145,540
Allowance for credit losses - securities held-to-maturity
(6)
Securities held-to maturity, net of allowance for credit losses
$
164,694
Transfers of debt
 
securities into the held
 
-to-maturity (“HTM”) category
 
from the available for
 
sale (“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
 
accumulated
other comprehensive
 
loss (“AOCL”) and
 
in the carrying
 
value of the
 
HTM securities
 
and there is
 
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
 
September 30, 2025, there
 
were
no
investment securities that were transferred from AFS to 10 USCB Financial Holdings, Inc. Q3 2025 Form 10-Q
HTM.
 
For
 
the
 
three
 
months
 
ended
 
September 30,
 
2025,
 
total
 
amortization
 
out
 
of
 
AOCL
 
for
 
net
 
unrealized
 
losses
 
on
 
 
 
 
 
 
USCB FINANCIAL HOLDINGS, INC.
Notes to the Consolidated Financial Statements - Unaudited
 
 
 
securities transferred in
 
2022 from
 
AFS to
 
HTM was
 
$
66
 
thousand and
 
$
200
 
thousand for
 
the nine
 
months ended September
30, 2025. At September 30,
 
2025, the fair value of the
 
transferred securities was $
100.2
 
million and the balance of
 
the net
unrealized loss was $
9.1
 
million.
 
For the quarter
 
ended September 30,
 
2024, total amortization
 
out of AOCL
 
for the net
 
unrealized losses
 
on securities
transferred from
 
AFS to
 
HTM was
 
$
67
 
thousand
 
and
 
$
200
 
thousand
 
for the
 
nine month
 
ended September
 
30, 2024.
 
At
September 30,
 
2024, the
 
fair value
 
of the
 
transferred securities
 
was $
106.3
 
million and
 
the balance
 
of the
 
net unrealized
losses was $
9.3
 
million.
The measurement of expected credit losses under the current expected credit loss (“CECL”) methodology is applicable
to financial assets measured at amortized cost, including
 
loan receivables and HTM debt securities.
CECL requires a loss reserve for securities
 
classified as HTM. The reserve should reflect
 
historical credit performance
as well
 
as the impact
 
of projected
 
economic 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 September 30, 2025
 
and December 31, 2024,
 
all HTM securities held
by the Company were rated investment grade.
At September
 
30, 2025,
 
HTM securities
 
included $
147.3
 
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
 
$
9.1
 
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 September
 
30, 2025. The book value
 
for debt securities classified
 
as HTM represents amortized
cost less the ACL related to these securities.
 
The Company’s investment portfolio
 
includes AFS debt securities, which
 
are carried at fair value with unrealized
 
gains
and losses
 
recognized
 
in
 
AOCL, net
 
of applicable
 
taxes.
 
The Company
 
evaluates
 
whether the
 
declines
 
in fair
 
value
 
are
attributable to credit losses or other factors like interest rate risk, using both quantitative and qualitative
 
analyses, including
company performance analysis, review
 
of credit ratings, bond
 
vintage, remaining payment terms,
 
prepayment speeds and
analysis
 
of
 
macro-economic
 
conditions.
 
When
 
the
 
fair
 
value
 
of
 
an
 
AFS
 
security
 
is
 
less
 
than
 
its
 
amortized
 
cost
 
and
 
the
decline is attributable
 
to credit-related
 
factors, an ACL
 
is recorded. As
 
a result of
 
this evaluation, the
 
Company concluded
that no allowance was required on AFS securities as of
 
September 30, 2025.
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):
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
September 30, 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
$
511
$
(11)
$
8,237
$
(1,203)
$
8,748
$
(1,214)
Collateralized mortgage obligations
9,257
(34)
72,438
(19,101)
81,695
(19,135)
Mortgage-backed securities - residential
-
-
43,856
(9,715)
43,856
(9,715)
Mortgage-backed securities - commercial
81,800
(412)
51,918
(7,079)
133,718
(7,491)
Municipal securities
 
-
-
18,915
(3,923)
18,915
(3,923)
Bank subordinated debt securities
1,999
(1)
10,535
(438)
12,534
(439)
$
93,567
$
(458)
$
205,899
$
(41,459)
$
299,466
$
(41,917)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
USCB FINANCIAL HOLDINGS, INC.
Notes to the Consolidated Financial Statements - Unaudited
 
 
11
 
USCB Financial Holdings, Inc.
 
Q3 2025 Form 10-Q
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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)
The contractual
 
cash flows
 
associated with
 
U.S. Government
 
Agency securities,
 
collateralized
 
mortgage obligations,
and residential
 
and commercial
 
mortgage-backed
 
securities
 
are guaranteed
 
by U.S.
 
government-sponsored
 
enterprises,
thereby minimizing
 
credit risk.
 
Municipal bonds
 
are of
 
high credit
 
quality,
 
and the
 
observed declines
 
in fair
 
value are
 
not
attributable to deterioration in the
 
creditworthiness. Similarly, the decrease in fair value of bank
 
subordinated debt securities
is primarily driven
 
by changes
 
in market interest
 
rates rather
 
than credit
 
concerns. Based
 
on management’s
 
evaluation of
these factors,
 
management believes
 
that the
 
unrealized losses
 
on these
 
debt securities
 
are attributable
 
to fluctuations
 
in
market spreads and interest rate movements, rather than adverse
 
changes in the underlying credit quality of the issuers.
Gains
 
and
 
losses
 
on
 
the
 
sale
 
of
 
securities
 
are
 
recorded
 
on
 
the
 
trade
 
date
 
and
 
are
 
determined
 
on
 
the
 
specific
identification basis. The following table presents the proceeds, realized gross gains and realized gross losses on sales and
calls of AFS debt securities for the three and nine months
 
ended September 30, 2025 and 2024 (in thousands):
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended September 30,
Nine Months Ended September 30,
Available-for-sale:
2025
2024
2025
2024
Proceeds from sale and call of securities
$
31,384
$
-
$
31,384
$
34,753
Gross gains
$
335
$
-
$
335
$
195
Gross losses
(363)
-
(363)
(181)
Net realized gain (loss)
$
(28)
$
-
$
(28)
$
14
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
September 30, 2025:
Amortized
Cost
Fair Value
Amortized
Cost
Fair Value
Due within one year
$
-
$
-
$
9,089
$
8,960
Due after one year through five years
1,983
1,999
-
-
Due after five years through ten years
42,901
38,685
-
-
Due after ten years
-
-
-
-
U.S. Government Agency
13,143
11,965
41,500
38,046
Collateralized mortgage obligations
100,830
81,695
52,766
47,376
Mortgage-backed securities - residential
 
60,915
51,318
37,880
34,915
Mortgage-backed securities - commercial
 
145,991
138,517
15,135
14,002
$
365,763
$
324,179
$
156,370
$
143,299
At September 30,
 
2025, there
 
were no
 
securities held
 
in the
 
portfolio from
 
any one
 
issuer in
 
an amount
 
greater than
10% of total
 
stockholders’
 
equity other than
 
the U.S. Government
 
and U.S. Government
 
Agency issued securities.
 
All the
collateralized mortgage obligations
 
and mortgage-backed securities
 
at September 30, 2025 and
 
December 31, 2024 were
issued by U.S. Government entities.
 
The Bank is a Qualified Public Depository (“QPD”) with the State of Florida. As a QPD, the Bank has the legal authority 12 USCB Financial Holdings, Inc. Q3 2025 Form 10-Q
to
 
maintain
 
public
 
deposits
 
from
 
cities,
 
municipalities,
 
and
 
the
 
State
 
of
 
Florida.
 
These
 
public
 
deposits
 
are
 
secured
 
by
 
 
USCB FINANCIAL HOLDINGS, INC.
Notes to the Consolidated Financial Statements - Unaudited
 
 
 
securities
 
pledged
 
to
 
the
 
State
 
of
 
Florida
 
at
 
a
 
ratio
 
of
25
%
 
of
 
the
 
quarter
 
daily
 
average
 
balance
 
for
 
quarter
 
ended
September 30, 2025, and
50
% for the quarter daily average balance
 
for quarter ended December 31, 2024. The Bank must
also maintain a minimum amount of pledged securities
 
to be in the public funds program.
As
 
of
 
September 30,
 
2025,
 
the
 
Bank
 
had
 
a
 
total
 
of
 
$
151.4
 
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 $
49.7
 
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):
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
September 30, 2025
December 31, 2024
Total
Percent of
Total
Total
Percent of
Total
Residential real estate
$
316,557
14.9
%
$
289,961
14.8
%
Commercial real estate
1,226,121
57.7
%
1,136,417
57.8
%
Commercial and industrial
269,430
12.7
%
258,311
13.1
%
Correspondent banks
104,598
4.9
%
82,438
4.2
%
Consumer and other
 
207,939
9.8
%
198,091
10.1
%
Total
 
gross loans
2,124,645
100.0
%
1,965,218
100.0
%
Plus: Deferred fees/costs
6,321
 
7,630
Total
 
loans net of deferred fees/costs
2,130,966
1,972,848
Less: Allowance for credit losses
24,964
24,070
Total
 
net loans
$
2,106,002
$
1,948,778
 
At September 30, 2025
 
and December 31, 2024,
 
the Company had
 
$
592.0
 
million and $
518.8
 
million, respectively,
 
of
commercial real estate and residential mortgage
 
loans pledged as collateral for lines of
 
credit with the Federal Home Loan
Bank (“FHLB”) of Atlanta and the Federal Reserve Bank
 
of Atlanta.
Allowance for Credit Losses
In
 
general,
 
the
 
Company
 
utilizes
 
the
 
Discounted
 
Cash
 
Flow
 
(“DCF”)
 
method
 
or
 
the
 
Weighted-Average
 
Remaining
Maturity (“WARM”) methodology to estimate the
 
quantitative portion of the ACL
 
for loan pools. The
 
DCF method uses a loss
driver analysis (“LDA”)
 
and DCF 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 economic
 
conditions
•
 
Changes in nature and volume of the portfolio
•
 
Changes in the volume and severity of past due loans
 
and other similar conditions
•
 
Concentration risk
•
 
Changes in the value of underlying collateral
•
 
The effect of other external factors: e.g., competition,
 
legal, and regulatory requirements
•
Changes in lending management, among others 13 USCB Financial Holdings, Inc. Q3 2025 Form 10-Q
USCB FINANCIAL HOLDINGS, INC.
Notes to the Consolidated Financial Statements - Unaudited
 
 
 
Changes in the
 
ACL for the
 
three and nine
 
months ended September 30,
 
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 September 30,
2025
Beginning balance
$
5,477
$
9,491
$
4,508
$
874
$
4,583
$
24,933
Provision for credit losses
(1)
 
544
(102)
(118)
(45)
(252)
27
Recoveries
5
-
6
-
-
11
Charge-offs
-
-
-
-
(7)
(7)
Ending Balance
 
$
6,026
$
9,389
$
4,396
$
829
$
4,324
$
24,964
Nine Months Ended September 30, 2025
 
 
 
 
 
Beginning balance
$
5,121
$
8,788
$
4,633
$
654
$
4,874
$
24,070
Provision for credit losses
(2)
 
888
601
(249)
175
179
1,594
Recoveries
17
-
12
-
1
30
Charge-offs
-
-
-
-
(730)
(730)
Ending Balance
 
$
6,026
$
9,389
$
4,396
$
829
$
4,324
$
24,964
(1) Provision for credit losses excludes a $
80
 
thousand provision due to unfunded commitments included in accrued interest and other
liabilities and a $
2
 
thousand release related to investment securities held to maturity.
(2) Provision for credit losses excludes a $
224
 
thousand provision due to unfunded commitments included in accrued interest and
other liabilities and a $
1
 
thousand release related to investment securities held to maturity.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Residential
 
Real Estate
Commercial
 
Real Estate
Commercial
 
and
Industrial
Correspondent
Banks
Consumer
and Other
Total
Three Months Ended September 30,
2024
Beginning balance
$
3,193
$
10,272
$
4,747
$
892
$
3,126
$
22,230
Provision for credit losses
(1)
760
(86)
(96)
(69)
322
831
Recoveries
2
-
10
-
1
13
Charge-offs
-
-
-
-
(7)
(7)
Ending Balance
 
$
3,955
$
10,186
$
4,661
$
823
$
3,442
$
23,067
Nine Months Ended September 30, 2024
 
 
 
 
 
Beginning balance
$
2,695
$
10,366
$
3,974
$
911
$
3,138
$
21,084
Provision for credit losses
(2)
1,252
(180)
666
(88)
318
1,968
Recoveries
8
-
21
-
3
32
Charge-offs
-
-
-
-
(17)
(17)
Ending Balance
 
$
3,955
$
10,186
$
4,661
$
823
$
3,442
$
23,067
 
(1) Provision for credit losses excludes a $
101
 
thousand provision due to unfunded commitments included in accrued interest and
other liabilities and a $
1
 
thousand release related to investment securities held to maturity.
(2) Provision for credit losses excludes a $
159
 
thousand provision due to unfunded commitments included in accrued interest and
other liabilities.
At September
 
30,
 
2025, the
 
ACL
 
for loans
 
was
 
$
25.0
 
million compared
 
to $
24.1
 
million
 
at December
 
31,
 
2024. The
increase of $
894
 
thousand in the ACL was due to loan growth.
 
Charge offs related to loans for the three months ended September 30, 2025 were $ 14 USCB Financial Holdings, Inc. Q3 2025 Form 10-Q
7
 
thousand
 
originated
 
in 2025.
Charge
 
offs
 
for
 
the
 
nine
 
months
 
ended
 
September
 
30,
 
2025
 
were
 
$
709
 
thousand
 
originated
 
in
 
2022 and
 
$
21
 
thousand
originated in 2025.
 
 
 
 
 
 
 
USCB FINANCIAL HOLDINGS, INC.
Notes to the Consolidated Financial Statements - Unaudited
 
 
 
Charge-offs
 
for
 
the
 
three
 
months
 
ended
 
September
 
30,
 
2024
 
totaled
 
$
7
 
thousand
 
and
 
were
 
all
 
originated
 
in
 
2024.
Charge-offs for the nine months ended September
 
30, 2024 totaled $
17
 
thousand and were all originated in 2024.
The ACL and
 
the outstanding balances
 
in the specified
 
loan categories
 
as of September
 
30, 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
September 30, 2025:
Allowance for credit losses:
Individually evaluated
$
32
$
-
$
53
$
-
$
-
$
85
Collectively evaluated
5,994
9,389
4,343
829
4,324
24,879
Balances, end of period
$
6,026
$
9,389
$
4,396
$
829
$
4,324
$
24,964
 
 
 
 
 
Loans:
 
 
 
 
 
Individually evaluated
$
3,761
$
-
$
1,005
$
-
$
-
$
4,766
Collectively evaluated
312,796
1,226,121
268,425
104,598
207,939
2,119,879
Balances, end of period
$
316,557
$
1,226,121
$
269,430
$
104,598
$
207,939
$
2,124,645
 
 
 
 
 
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. Q3 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 September 30, 2025
Term Loans by Origination Year
Revolving
Loans
Total
 
2025
2024
2023
2022
2021
Prior
Residential real estate
Pass
$
61,481
$
95,490
$
33,220
$
25,812
$
21,418
$
60,492
$
16,032
$
313,945
Special Mention
-
592
1,468
-
-
-
-
2,060
Substandard
-
434
-
-
-
118
-
552
Total
61,481
96,516
34,688
25,812
21,418
60,610
16,032
316,557
Commercial real estate
Pass
196,195
182,297
113,450
284,214
135,835
293,746
6,315
1,212,052
Special Mention
-
-
8,474
-
-
3,182
-
11,656
Substandard
-
-
-
-
1,735
678
-
2,413
Total
196,195
182,297
121,924
284,214
137,570
297,606
6,315
1,226,121
Commercial and
industrial
Pass
34,112
64,047
72,949
32,776
28,646
13,020
21,251
266,801
Special Mention
-
72
-
-
864
-
-
936
Substandard
-
-
-
-
460
758
475
1,693
Total
34,112
64,119
72,949
32,776
29,970
13,778
21,726
269,430
Correspondent banks
Pass
98,192
6,406
-
-
-
-
-
104,598
Total
98,192
6,406
-
-
-
-
-
104,598
Consumer and other
loans
 
Pass
49,530
37,792
37,068
54,155
26,435
1,133
1,826
207,939
Total
49,530
37,792
37,068
54,155
26,435
1,133
1,826
207,939
Total
 
Loans
Pass
439,510
386,032
256,687
396,957
212,334
368,391
 
45,424
2,105,335
Special Mention
-
664
9,942
-
864
3,182
-
14,652
Substandard
-
434
-
-
2,195
1,554
475
4,658
Doubtful
-
-
-
-
-
-
-
-
Total
$
439,510
$
387,130
$
266,629
$
396,957
$
215,393
$
373,127
$
45,899
$
2,124,645
 
 
 
 
 
 
 
 
 
USCB FINANCIAL HOLDINGS, INC.
Notes to the Consolidated Financial Statements - Unaudited
 
 
16
 
USCB Financial Holdings, Inc.
 
Q3 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.
 
Q3 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 loans.
 
The following
 
tables include
 
an aging
 
analysis of
 
accruing loans
 
and total
 
non-accruing
 
loans as
 
of September 30,
 
2025
and December 31, 2024 (in thousands):
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Accruing
As of September 30, 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 lines of credit and other
$
1,268
$
-
$
-
$
1,268
$
-
$
1,268
1-4 family residential
251,453
3,548
-
255,001
434
255,435
Condo residential
59,615
121
-
59,736
118
59,854
312,336
3,669
-
316,005
552
316,557
Commercial real estate:
Land and construction
87,417
1,587
-
89,004
-
89,004
Multi-family residential
237,215
1,969
-
239,184
-
239,184
Condo commercial
57,108
-
-
57,108
-
57,108
Commercial property
839,925
900
-
840,825
-
840,825
1,221,665
4,456
-
1,226,121
-
1,226,121
Commercial and industrial:
Secured
245,445
-
-
245,445
758
246,203
Unsecured
23,227
-
-
23,227
-
23,227
268,672
-
-
268,672
758
269,430
Correspondent banks
104,598
-
-
104,598
-
104,598
Consumer and other
207,939
-
-
207,939
-
207,939
Total
$
2,115,210
$
8,125
$
-
$
2,123,335
$
1,310
$
2,124,645
 
 
 
 
 
 
 
 
 
USCB FINANCIAL HOLDINGS, INC.
Notes to the Consolidated Financial Statements - Unaudited
 
 
18
 
USCB Financial Holdings, Inc.
 
Q3 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 lines 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
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 as of
 
September 30, 2025 and as
of December 31, 2024 (in thousands):
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
September 30, 2025
Non-accrual
Loans With No
Related Allowance
Non-accrual
Loans With
Related Allowance
Total Non-
accruals
Residential real estate
$
552
$
-
$
552
Commercial and industrial
 
712
 
46
 
758
Total
$
1,264
$
46
$
1,310
December 31, 2024
Non-accrual
Loans With No
Related Allowance
Non-accrual
Loans With
Related Allowance
Total Non-
accruals
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
 
and
 
nine
 
months
 
ended
 
September 30,
 
2025
 
and
 
2024.
Interest income on these loans for the three months ended September 30, 2025 and 2024, would have been
 
approximately
$
28
 
thousand and $
24
 
thousand, respectively,
 
had these loans
 
performed in accordance
 
with their original
 
terms. Interest
income on
 
these loans
 
for the
 
nine months
 
ended September
 
30, 2025
 
and 2024,
 
would have
 
been approximately
 
$
108
thousand and $
44
 
thousand, respectively,
 
had these loans performed in accordance with their
 
original terms.
 
 
 
 
 
 
 
 
 
 
USCB FINANCIAL HOLDINGS, INC.
Notes to the Consolidated Financial Statements - Unaudited
 
 
19
 
USCB Financial Holdings, Inc.
 
Q3 2025 Form 10-Q
 
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 September
 
30, 2025 and December 31, 2024 (in thousands):
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
September 30, 2025
Collateral Type
Residential Real Estate
Specific Reserve
Residential real estate
$
575
$
-
Total
$
575
$
-
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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
 
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 and
 
nine months
ended
 
September 30,
 
2025
 
and
 
three
 
months
 
ended
 
September
 
30,
 
2024.
 
The
 
Company
 
had
 
one
 
new
 
modification
 
to
borrowers experiencing
 
financial difficulties
 
for the
 
nine months
 
ended September
 
30, 2024.
 
The following
 
table presents
newly restructured
 
loans, by
 
type of
 
modification, which
 
occurred during
 
the nine
 
months ended
 
September 30,
 
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
 
September 30,
 
2024 included
 
a combination
of rate and maturity modifications.
 
The rate was modified
 
from a variable rate
 
to a fixed rate
 
of
8.0
%. The original maturity
of September 2029 was extended to January
 
2034.
There were
no
 
existing loan modifications that subsequently defaulted during either the three or the
 
nine months ended
September 30, 2025 and 2024.
 
 
 
 
 
 
 
USCB FINANCIAL HOLDINGS, INC.
Notes to the Consolidated Financial Statements - Unaudited
 
 
20
 
USCB Financial Holdings, Inc.
 
Q3 2025 Form 10-Q
 
4.
 
INCOME TAXES
 
The Company’s income tax expense is presented
 
in the following table for the periods indicated (in thousands):
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Nine Months Ended September 30,
2025
2024
Current:
Federal
$
401
$
-
State
-
-
Total
 
current
401
-
Deferred:
Federal
5,782
4,384
State
1,722
1,222
Total
 
deferred
7,504
5,606
Total
 
tax expense
$
7,905
$
5,606
The actual income tax expense for the nine months ended
 
September 30, 2025 and 2024 differs from
 
the statutory tax
expense for the periods (computed by applying the U.S.
 
federal corporate tax rate of
21
% for both 2025 and 2024
 
periods
to income before income tax expense) as follows (in thousands):
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Nine Months Ended September 30,
2025
2024
Federal taxes at statutory rate
$
6,855
$
4,909
State income taxes, net of federal tax benefit
1,418
1,016
Bank owned life insurance
(368)
(319)
Total
 
tax expense
$
7,905
$
5,606
The Company’s deferred tax assets and deferred
 
tax liabilities as of the dates indicated were (in thousands):
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
September 30, 2025
December 31, 2024
Deferred tax assets:
Net operating loss
$
906
$
9,276
Allowance for credit losses
6,327
6,100
Lease liability
1,592
2,142
Unrealized losses on available for sale securities
12,838
15,200
Depreciable property
4
38
Equity compensation
1,072
686
Accruals
446
520
Other, net
-
65
Deferred tax assets:
23,185
34,027
Deferred tax liabilities:
Deferred loan cost
(1,602)
(1,934)
Lease right of use asset
(1,592)
(2,142)
Deferred expenses
(245)
(224)
Cash flow hedge
(3)
(81)
Other, net
(286)
-
Deferred tax liabilities
(3,728)
(4,381)
Net deferred tax assets
$
19,457
$
29,646
The Company
 
has approximately
 
$
20.8
 
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
upon the generation of
 
future taxable income
 
during the periods
 
in which those temporary
 
differences become deductible.
 
 
USCB FINANCIAL HOLDINGS, INC.
Notes to the Consolidated Financial Statements - Unaudited
 
 
21
 
USCB Financial Holdings, Inc.
 
Q3 2025 Form 10-Q
 
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 nine
 
months ended
 
September 30, 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.
On
 
July
 
4,
 
2025,
 
the
 
One
 
Big
 
Beautiful
 
Bill
 
Act
 
(“OBBBA”)
 
was
 
enacted
 
in
 
the
 
United
 
States.
 
The
 
OBBBA
 
includes
significant provisions, such as the permanent extension of certain expiring provisions of
 
the Tax Cuts and Jobs Act enacted
in 2017, modifications to the international
 
tax framework and the restoration of
 
favorable tax treatment for certain business
provisions, in particular the depreciation
 
of capital asset additions. The
 
legislation has multiple effective
 
dates, with certain
provisions effective
 
in 2025
 
and others
 
implemented through
 
2027. The
 
Company is
 
currently assessing
 
its impact
 
on its
consolidated
 
financial
 
statements
 
but
 
preliminarily
 
does
 
not
 
believe
 
the
 
OBBBA
 
provisions
 
will
 
significantly
 
modify
 
its
effective income tax rate.
 
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,
 
and
 
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
September 30, 2025 and December 31, 2024 (in thousands):
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
September 30, 2025
December 31, 2024
Commitments to grant loans and unfunded lines of credit
$
140,146
$
122,578
Standby and commercial letters of credit
3,855
5,389
Total
$
144,001
$
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.
 
USCB FINANCIAL HOLDINGS, INC.
Notes to the Consolidated Financial Statements - Unaudited
 
 
22
 
USCB Financial Holdings, Inc.
 
Q3 2025 Form 10-Q
 
Interest Rate Swaps Designated as a Cash Flow Hedge
In July
 
2025, the
 
Company entered into
 
a two-year costless
 
collar hedge
 
with a
 
notional amount of
 
$
50
 
million to
 
manage
exposure to interest
 
rate volatility on
 
a three-month brokered CD.
 
The derivative is
 
based on the
 
USD SOFR overnight index
and establishes a
 
cap rate of
4.50
% and a
 
floor rate of
1.875
%, effectively creating a
 
defined range of
 
interest rate outcomes
without requiring
 
an upfront
 
premium. The
 
hedge was
 
designated as
 
a cash
 
flow hedge
 
under ASC
 
815, Derivatives
 
and
Hedging,
 
and
 
will
 
be
 
accounted
 
for
 
accordingly.
 
Changes
 
in
 
the
 
fair
 
value
 
of
 
the
 
derivative
 
will
 
be
 
recorded
 
in
 
other
comprehensive income (loss) to the extent the hedge remains
 
effective.
In August
 
2025, the
 
Company entered
 
into a
 
two-year
 
costless collar
 
hedge with
 
a notional
 
amount of
 
$
50
 
million to
manage
 
exposure
 
to
 
interest
 
rate
 
volatility
 
on
 
a
 
three-month
 
brokered
 
CD.
 
The
 
derivative
 
is
 
based
 
on
 
the
 
USD
 
SOFR
overnight
 
index
 
and
 
establishes
 
a
 
cap
 
rate
 
of
4.50
%
 
and
 
a
 
floor
 
rate
 
of
1.965
%,
 
effectively
 
creating
 
a
 
defined
 
range
 
of
interest rate outcomes without requiring
 
an upfront premium. The hedge was
 
designated as a cash flow hedge
 
under ASC
815,
 
Derivatives
 
and
 
Hedging,
 
and
 
will
 
be
 
accounted
 
for
 
accordingly.
 
Changes
 
in
 
the
 
fair
 
value
 
of
 
the
 
derivative
 
will
 
be
recorded in other comprehensive income (loss) to the extent the
 
hedge remains effective.
As of September 30, 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
average
 
maturity
 
of
0.63
 
years,
 
a
 
weighted
 
average
 
fixed-rate
 
paid
 
of
3.59
%,
 
and
 
with
 
a
 
weighted
 
average
 
3-month
compound USD SOFR being received.
 
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 USD SOFR being received.
The changes
 
in fair
 
value of
 
these interest
 
rate swaps
 
are recorded
 
in other
 
assets or
 
accrued interest
 
and 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
The Company had
no
 
interest rate swap
 
agreements designated
 
as fair value
 
hedges at September
 
30, 2025. 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
 
loans.
 
The
 
amortization
 
of
 
the
termination
 
fee
 
is reflected
 
in the
 
loan interest
 
income
 
line in
 
the
 
Consolidated
 
Statement
 
of Operations
 
.
 
The remaining
unamortized termination fee as
 
of September 30, 2025
 
was $
3.0
 
million. 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.
 
Interest Rate Swaps
The Company enters into interest rate swaps with its loan customers. The Company had
82
 
and
60
 
interest rate swaps
with loan
 
customers with
 
an aggregate
 
notional amount
 
of $
277.9
 
million and
 
$
206.3
 
million at
 
September 30,
 
2025 and
December 31, 2024, respectively.
 
At September 30, 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.
USCB FINANCIAL HOLDINGS, INC.
Notes to the Consolidated Financial Statements - Unaudited
 
 
23
 
USCB Financial Holdings, Inc.
 
Q3 2025 Form 10-Q
 
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
September 30, 2025:
Derivatives designated as cash flow hedges:
Interest rate swaps
$
150,000
$
-
Other assets/Accrued interest and
other liabilities
$
56
$
44
Derivatives not designated as hedging instruments:
Interest rate swaps related to customer loans
$
277,924
$
5,074
Other assets/Accrued interest and
other liabilities
$
10,033
$
10,033
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/Accrued interest and
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
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 24 USCB Financial Holdings, Inc. Q3 2025 Form 10-Q
significant
 
to
 
the
 
fair
 
value
 
of
 
the
 
assets
 
or
 
liabilities.
 
Level
 
3
 
assets
 
and
 
liabilities
 
include
 
financial
 
instruments
 
 
 
 
 
 
 
 
USCB FINANCIAL HOLDINGS, INC.
Notes to the Consolidated Financial Statements - Unaudited
 
 
 
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.
The
 
following
 
table
 
represents
 
the
 
Company's
 
assets
 
and
 
liabilities
 
measured
 
at
 
fair
 
value
 
on
 
a
 
recurring
 
basis
 
at
September 30, 2025 and December 31, 2024 for each
 
of the fair value hierarchy levels (in thousands):
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
September 30, 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
$
-
$
11,965
$
-
$
11,965
$
-
$
12,625
$
-
$
12,625
Collateralized mortgage obligations
-
81,695
-
81,695
-
78,905
-
78,905
Mortgage-backed securities - residential
 
-
51,318
-
51,318
-
46,933
-
46,933
Mortgage-backed securities - commercial
-
138,517
-
138,517
-
78,739
-
78,739
Municipal securities
-
18,915
-
18,915
-
19,311
-
19,311
Bank subordinated debt securities
-
21,769
-
21,769
-
23,708
-
23,708
Total
-
324,179
-
324,179
-
260,221
-
260,221
Derivative assets
-
10,089
-
10,089
-
7,190
-
7,190
Total assets at fair value
$
-
$
334,268
$
-
$
334,268
$
-
$
267,411
$
-
$
267,411
Derivative liabilities
$
-
$
10,077
$
-
$
10,077
$
-
$
6,869
$
-
$
6,869
Total liabilities at fair value 25 USCB Financial Holdings, Inc. Q3 2025 Form 10-Q
$
-
$
10,077
$
-
$
10,077
$
-
$
6,869
$
-
$
6,869
USCB FINANCIAL HOLDINGS, INC.
Notes to the Consolidated Financial Statements - Unaudited
 
 
Fair Value Measurements
 
on a Nonrecurring Basis
During
 
the
 
three
 
and
 
nine
 
months
 
ended
 
September
 
30,
 
2025
 
and
 
2024,
 
the
 
Company
 
did
 
not
 
have
 
any
 
assets
 
or
liabilities measured at fair value on a nonrecurring basis.
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 September 30, 2025 and December 31, 2024
 
(in thousands):
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fair Value Hierarchy
Carrying
Amount
Level 1
Level 2
Level 3
Fair Value
Amount
September 30, 2025:
Financial Assets:
Cash and due from banks
$
9,988
$
9,988
$
-
$
-
$
9,988
Interest-bearing deposits in banks
$
46,823
$
46,823
$
-
$
-
$
46,823
Investment securities held to maturity, net
$
156,365
$
-
$
143,299
$
-
$
143,299
Loans held for investment, net
$
2,106,002
$
-
$
-
$
2,143,816
$
2,143,816
Accrued interest receivable
$
12,126
$
-
$
1,634
$
10,492
$
12,126
Financial Liabilities:
Non-interest bearing demand deposits
$
584,240
$
584,240
$
-
$
-
$
584,240
Savings and money market deposits
$
1,291,283
$
1,291,283
$
-
$
-
$
1,291,283
Interest-bearing demand deposits
$
60,016
$
60,016
$
-
$
-
$
60,016
Time deposits
$
520,075
$
-
$
519,740
$
-
$
519,740
FHLB advances
$
11,000
$
-
$
11,045
 
$
-
$
11,045
Subordinated notes
$
39,262
$
39,262
$
-
$
$
39,262
Accrued interest payable
$
3,184
$
-
$
3,184
$
-
$
3,184
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:
Non-interest bearing demand deposits
$
575,159
$
575,159
$
-
$
-
$
575,159
Savings and money market deposits
$
1,180,809
$
1,180,809
$
-
$
-
$
1,180,809
Interest-bearing demand deposits
$
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
$
-
$
2,125
$
-
$
2,125
 
8.
 
STOCKHOLDERS’ EQUITY
Common Stock
During the three months ended September 30 2025, the
 
Company repurchased
2.0
 
million shares of Class A common
stock from
 
certain institutional shareholders
 
through privately negotiated
 
transactions, at a
 
weighted average price
 
per share
of $
17.19
. The
 
aggregate purchase
 
price for
 
these transactions
 
was approximately
 
$
34.4
 
million. The
 
repurchases
 
were
supplemental and not
 
part of the
 
Company’s two previously announced
 
stock repurchase programs. During
 
the nine months
ended
 
September
 
30,
 
2025
 
pursuant
 
to
 
the
 
Company’s
 
publicly
 
announced
 
repurchase
 
programs
 
the
 
Company
repurchased
9,671
 
shares
 
of
 
Class
 
A
 
common
 
stock
 
at
 
a
 
weighted
 
average
 
price
 
per
 
share
 
of
 
$
17.91
.
 
The
 
aggregate
purchase price for
 
these transactions
 
was approximately $
174
 
thousand including
 
transaction costs.
 
As of September
 
30,
2025,
528,309
 
shares remained authorized for repurchase under the
 
Company’s two stock repurchase programs.
USCB FINANCIAL HOLDINGS, INC.
Notes to the Consolidated Financial Statements - Unaudited
 
 
26
 
USCB Financial Holdings, Inc.
 
Q3 2025 Form 10-Q
 
During the
 
three months
 
ended September
 
30, 2024,
 
the Company
 
repurchased
10,000
 
shares of
 
Class
 
A common
stock
 
at
 
a
 
weighted
 
average
 
price
 
per
 
share
 
of
 
$
11.99
.
 
The
 
aggregate
 
purchase
 
price
 
for
 
these
 
transactions
 
was
approximately $
120
 
thousand, including
 
transaction costs.
 
During the nine
 
months ended September
 
30, 2024, Company
repurchased
42,100
 
shares
 
of Class
 
A common
 
stock
 
at a
 
weighted
 
average
 
price per
 
share
 
of $
11.90
. The
 
aggregate
purchase price for these transactions was approximately $
501
 
thousand, including transaction costs
There were
no
 
restricted stock awards issued in the three months ended September
 
30, 2025. During the nine months
ended September
 
30,
 
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.
 
There
 
were
no
 
restricted
 
stock
 
awards
 
issued
 
in
 
the
 
three
 
months
 
ended
 
September
 
30,
 
2024.
 
For
 
the
 
nine
 
month
ended September 30, 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.
 
The number of shares of the Company’s Class A common
 
stock issued and outstanding as of September 30, 2025 and
December 31, 2024 were
18,107,385
 
and
19,924,632
, respectively.
 
Dividends
Declaration of
 
dividends by
 
the Board
 
of Directors
 
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 legally declare. In addition, bank regulators
 
have the authority to prohibit
banks and bank holding companies from paying dividends if they
 
deem such payment to be an unsafe or
 
unsound practice.
As of
 
September
 
30,
 
2025,
 
the
 
Company
 
was
 
not
 
subject
 
to any
 
formal
 
supervisory
 
restrictions
 
on
 
its
 
ability
 
to pay
dividends
 
but
 
will
 
notify
 
the
 
Federal
 
Reserve
 
Bank
 
of
 
Atlanta
 
in
 
advance
 
of
 
any
 
proposed
 
dividend
 
to
 
the
 
Company's
stockholders 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 from the Bank to the
 
Company.
The following table details the dividends declared and paid by
 
the Company for the periods presented:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Nine Months Ended September 30, 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
April 21, 2025
May 15, 2025
June 5, 2025
$
0.10
 
$
2.0
 
million
July 21, 2025
August 15, 2025
September 5, 2025
 
$
0.10
 
$
2.0
 
million
Nine Months Ended September 30, 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
April 22, 2024
May 15, 2024
June 5, 2024
$
0.05
 
$
1.0
 
million
July 22, 2024
August 15, 2024
September 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 September 30, 2025 and December 31,
 
2024. At September 30, 2025, the total risk-based
 
capital ratio for
the
 
Bank
 
was
13.93
%.
 
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 12, Subsequent Events, for information regarding
 
dividends declared in October 2025.
 
 
 
 
 
USCB FINANCIAL HOLDINGS, INC.
Notes to the Consolidated Financial Statements - Unaudited
 
 
27
 
USCB Financial Holdings, Inc.
 
Q3 2025 Form 10-Q
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
 
and
 
nine
months ended September 30, 2025 and 2024 (in thousands):
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
September 30,
Nine Months Ended
 
September 30,
2025
2024
2025
2024
Net Income
$
8,939
$
6,949
$
24,737
$
17,770
Net income available to common shareholders
$
8,939
$
6,949
$
24,737
$
17,770
The following table reflects the calculation of basic and diluted earnings per common share class for the three and nine
months ended September 30, 2025 and 2024 (in thousands,
 
except share amounts):
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended September 30,
Nine Months Ended September 30,
2025
2024
2025
2024
Class A
Class A
Basic EPS
Numerator:
Net income available to common shares
 
$
8,939
$
6,949
$
24,737
$
17,770
Denominator:
Weighted average shares outstanding
19,524,798
19,621,447
19,866,514
19,653,103
Earnings per share, basic
$
0.46
$
0.35
$
1.25
$
0.90
Diluted EPS
Numerator:
Net income available to common shares
$
8,939
$
6,949
$
24,737
$
17,770
Denominator:
Weighted average shares outstanding for basic EPS
19,524,798
19,621,447
19,866,514
19,653,103
Add: Dilutive effects of assumed exercises of stock
 
options
231,022
203,764
239,536
108,139
Weighted avg. shares including dilutive potential common
 
shares
19,755,820
19,825,211
20,106,050
19,761,242
Earnings per share, diluted
$
0.45
$
0.35
$
1.23
$
0.90
Anti-dilutive stock options excluded from diluted
 
EPS
-
-
-
15,000
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.
 
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.
USCB FINANCIAL HOLDINGS, INC.
Notes to the Consolidated Financial Statements - Unaudited
 
 
28
 
USCB Financial Holdings, Inc.
 
Q3 2025 Form 10-Q
 
11.
 
RELATED PARTY
 
TRANSACTIONS
 
In the ordinary course of business, principal officers,
 
directors, and affiliates may engage in transactions
 
with the
Company.
Loan Purchases
During the nine months ended September 30, 2025,
 
the Bank purchased $
79.6
 
million from entities that deemed to be
related parties. The Bank paid those entities net fees of
 
$
447
 
thousand.
 
During the nine months ended September 30, 2024,
 
the Bank purchased $
73.8
 
million of loans from entities that are
deemed to be related parties. The Bank paid those entities
 
fees of $
2.5
 
million.
Loan Originations
During the nine months ended September 30, 2025, the
 
Bank acted as the lead arranger in a $
40.0
 
million syndicated
loan extended to an entity deemed to be a related party.
 
As of September 30, 2025, the Bank held an outstanding
 
balance
of $
15.0
 
million related to this transaction. In connection with the syndication,
 
the Bank received a
50
-basis point
commitment fee and will earn a
25
-basis point annual servicing fee. The other two financial
 
institutions participating in the
syndication were also deemed to be related parties. Although
 
originating loans to related parties is not part of the
Company’s standard policy,
 
this transaction was reviewed by the appropriate departments
 
in accordance with Company
procedures. Detailed analyses were presented to the Board of Directors
 
and the Audit and Risk Committee, and all
necessary approvals were obtained. Additional analysis
 
was conducted to determine that the transaction was executed
 
in
the ordinary course of business and on arm’s-length terms,
 
consistent with the requirements of Regulation O.
There were
no
 
loan originations or syndications extended to entities deemed
 
to be related parties for the year ended
December 31, 2024.
 
12.
 
SUBSEQUENT EVENTS
 
Dividends
 
On October
 
21, 2025,
 
the Company
 
announced that
 
its Board
 
of Directors
 
declared its
 
quarterly cash
 
dividend. The
quarterly dividend for
 
the fourth quarter
 
of 2025
 
was $
0.10
 
per share of
 
Class A common
 
stock and will
 
be paid
 
on December
5, 2025, to stockholders of record as of the close of business
 
on November 14, 2025.
 
 
29
 
USCB Financial Holdings, Inc.
 
Q3 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 and
the nine
 
months ended
 
September 30, 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 and potential balance sheet restructuring.
These forward-looking statements involve significant risks and uncertainties that could cause our actual results to differ
materially from those anticipated in such statements.
 
Potential risks and uncertainties include, but are not
 
limited to:
•
 
the strength of the United States economy
 
in general and the strength of the local
 
economies in which we conduct
operations;
•
 
our ability to successfully manage interest rate risk, credit
 
risk, liquidity risk, and other risks inherent to our industry;
•
 
the accuracy of our financial statement estimates and assumptions, including the estimates used for our allowance
for credit losses 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, including the enactment
 
of the One Big Beautiful Bill, 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 our concentration
 
in the South Florida
 
market, including the
risks
 
of geographic,
 
depositor,
 
and
 
industry concentrations,
 
including our
 
concentration
 
in
 
loans secured
 
by real
estate, in particular, commercial real
 
estate;
•
 
the effects of climate change;
•
 
the concentration of ownership of our common stock;
•
 
fluctuations in the price of our common stock;
•
 
our ability to fund or access the capital markets at attractive
 
rates and terms and manage our growth, both organic
growth as well as growth through other means, such as
 
future acquisitions;
•
 
inflation, interest rate, unemployment rate, market and monetary
 
fluctuations;
•
 
the effects of potential new or increased tariffs
 
,
 
retaliatory tariffs, and trade restrictions;
•
 
the effects of
 
the current federal
 
government shutdown, including,
 
but not limited
 
to, the ability
 
to sell Small
 
Business
Administration loans;
•
 
the 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; 30 USCB Financial Holdings, Inc. Q3 2025 Form 10-Q
 
 
•
 
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.
 
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 has filed or will file with the SEC.
Overview
The Company
 
reported net
 
income of
 
$8.9 million
 
or $0.45
 
per diluted
 
share of
 
common stock
 
for the
 
three
 
months
ended
 
September
 
30,
 
2025
 
compared
 
to
 
$6.9
 
million
 
or
 
$0.35 per
 
diluted
 
share
 
of
 
common
 
stock
 
for
 
the
 
three
 
months
ended September 30,
 
2024.
 
For nine months
 
ended September 30,
 
2025, the Company
 
reported net income
 
of $24.7 million
or $1.23 per diluted
 
share of common stock
 
compared to $17.8 million
 
or $0.90 per diluted
 
share of common stock
 
for the
nine months ended September 30, 2024.
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
September 30,
 
2025
 
compared
 
to
 
at
 
or
 
for
 
the
 
quarter
 
ended
 
September 30,
 
2024
 
and
 
as
 
of
 
December
 
31,
 
2024
 
and
annualized where appropriate:
•
 
Net interest
 
income for
 
the three
 
months ended September
 
30, 2025
 
increased $3.2 million
 
or 17.5%
 
to $21.3 million
from $18.1 million for the quarter ended September
 
30, 2024.
•
 
Net interest
 
margin (“NIM”) expanded
 
to 3.14%
 
for the
 
three months ended
 
September 30, 2025
 
compared to 3.03%
for the three months ended September 30, 2024.
•
 
Total assets
 
were $2.77
 
billion at
 
September 30,
 
2025, representing
 
an increase
 
of $264.0
 
million or
 
10.5% from
September 30,
 
2024 and an increase of $186.7 million or 9.7%
 
annualized from December 31, 2024.
 
•
 
Total loans held
 
for investment (net
 
of deferred cost/fees)
 
were $2.13 billion
 
at September 30,
 
2025, representing
an
 
increase
 
of
 
$199.6
 
million
 
or
 
10.3%
 
from
 
September
 
30,
 
2024
 
and
 
an
 
increase
 
of
 
$158.1
 
million
 
or
 
10.7%
annualized from December 31, 2024.
•
 
Total deposits were $2.46 billion at September
 
30, 2025, representing an increase of $329.0
 
million or 15.5% from
September 30,
 
2024 and an increase of $281.6 million or 17.3%
 
annualized from December 31, 2024.
 
•
 
Annualized return on average assets for the quarter ended September 30, 2025 was
 
1.27% compared to 1.11% for
the quarter ended September 30, 2024.
 
•
 
Annualized
 
return
 
on
 
average
 
stockholders’
 
equity
 
for
 
the
 
quarter
 
ended
 
September
 
30,
 
2025
 
was
 
15.74%
compared to 13.38% for quarter ended September 30, 2024.
 
•
 
The ACL to total loans was 1.17% at September 30, 2025 compared to 1.22% at December 31, 2024.
 
•
 
Non-performing loans to total loans was 0.06% at September
 
30, 2025 and 0.14% at December 31, 2024.
 
•
 
At September 30, 2025, the total
 
risk-based capital ratios
 
for the Company and
 
the Bank were 14.20% and
 
13.93%,
respectively.
•
 
Tangible book value per
 
common share (a
 
non-GAAP measure) was $11.55
 
at September 30,
 
2025, representing
an increase of $0.74 or
 
9.1% annualized from $10.81 at December
 
31, 2024.
 
At September 30, 2025, tangible
 
book
value per common
 
share was
 
negatively affected by
 
($2.09) due to
 
an accumulated
 
comprehensive loss
 
of $37.8
million. At December 31, 2024, tangible book value per common share was negatively affected by ($2.24) due to 31 USCB Financial Holdings, Inc. Q3 2025 Form 10-Q
 
 
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 reconciliation
 
of this non-GAAP financial measure.
•
 
On August 14,
 
2025, the
 
Company entered
 
into a
 
Subordinated Note
 
Purchase Agreement
 
with certain
 
qualified
institutional buyers pursuant to which the
 
Company sold and issued $40.0 million
 
in aggregate principal amount of
its 7.625%
 
fixed-to-floating rate
 
subordinated notes
 
due August 15,
 
2035 in
 
a private
 
placement transaction.
 
This
transaction was
 
conducted under
 
the provisions
 
of Regulation
 
D promulgated
 
under the
 
Securities Act 1933. The
subordinated notes were issued by
 
the Company to the
 
purchasers at a price equal
 
to 100% of their face
 
amount.
The majority of
 
the net proceeds
 
were used to
 
repurchase 2.0 million
 
shares of Class
 
A
 
common stock in
 
September
2025, from certain institutional shareholders through privately negotiated transactions, at a weighted average price
per share
 
of $17.19.
 
The aggregate
 
purchase
 
price for
 
these transactions
 
was
 
approximately
 
$34.4 million.
 
The
repurchases
 
were
 
supplemental
 
and
 
not
 
part
 
of
 
the
 
Company’s
 
two
 
previously
 
announced
 
stock
 
repurchase
programs.
 
 
Critical Accounting Policies and Estimates
The consolidated
 
financial statements
 
are prepared
 
based on
 
the application
 
of U.S.
 
Generally Accepted
 
Accounting
Practices (“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
 
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 32 USCB Financial Holdings, Inc. Q3 2025 Form 10-Q
segment.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Results of Operations
General
The following tables present selected
 
balance sheet, income statement, and
 
profitability ratios for the dates
 
and periods
indicated (in thousands, except ratios):
September 30, 2025
December 31, 2024
Consolidated Balance Sheets:
Total
 
assets
$
2,767,945
$
2,581,216
Total
 
loans
(1)
$
2,130,966
$
1,972,848
Total
 
deposits
$
2,455,614
$
2,174,004
Total
 
stockholders' equity
$
209,095
$
215,388
(1)
 
Loan amounts include deferred fees/costs.
Three Months Ended
September 30,
Nine Months Ended
 
September 30,
2025
2024
2025
2024
Consolidated Statements of Operations:
Net interest income before provision for credit losses
$
21,274
$
18,109
$
61,423
$
50,578
Total
 
non-interest income
$
3,684
$
3,438
$
10,770
$
9,113
Total
 
non-interest expense
$
13,048
$
11,454
$
37,734
$
34,188
Net income
 
$
8,939
$
6,949
$
24,737
$
17,770
Profitability:
Efficiency ratio
52.28%
53.16%
52.27%
57.27%
Net interest margin
 
3.14%
3.03%
3.17%
2.87%
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 September 30, 2025 compared to the
 
three months ended September 30, 2024.
Net income increased $2.0 million to $8.9
 
million for the three months ended September
 
30, 2025 from $6.9 million for
the same period in
 
2024. The $2.0 million
 
or 28.6% increase
 
in net income was
 
primarily driven by
 
an improvement in
 
net
interest margin due to reduction in rates paid on interest-bearing liabilitie
 
s
 
between periods and a decrease in provision for
credit losses for the third quarter ended September 30, 2025.
 
Nine months ended September 30, 2025 compared to
 
the nine months ended September 30, 2024
 
Net income
 
increased $7.0
 
million to
 
$24.7 million
 
for the
 
nine months
 
ended September 30,
 
2025
from $17.8
 
million
for the same period in 2024. The $7.0
 
million or 39.2% increase in the net income
 
was primarily driven by an improvement
in net interest margin due to reduction in rates paid on interest-bearing liabilities between periods. However, the increase in
net interest
 
income
 
was
 
partially
 
offset
 
by
 
an
 
increase
 
in non-interest
 
expense
 
between
 
periods.
 
Additionally,
 
increased
activity
 
in
 
fee
 
generating
 
transactions
 
(gain
 
on
 
sale
 
of
 
SBA
 
7a
 
loans,
 
prepayment
 
penalties,
 
title
 
insurance
 
income)
contributed to the increase 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-33 USCB Financial Holdings, Inc. Q3 2025 Form 10-Q
 
 
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.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
34
 
USCB Financial Holdings, Inc.
 
Q3 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 September 30,
2025
2024
Average
(1)
Balance
Interest
Yield/Rate
(2)
Average
(1)
Balance
Interest
Yield/Rate
(2)
Assets
Interest-earning assets:
Loans
(3)
$
2,099,043
$
32,866
6.21%
$
1,878,230
$
29,819
6.32%
Investment securities
(4)
461,303
3,522
3.03%
419,315
2,754
2.61%
Other interest-earnings assets
130,740
1,332
4.04%
80,378
989
4.89%
Total interest-earning assets
2,691,086
37,720
5.56%
2,377,923
33,562
5.61%
Non-interest-earning assets
107,029
 
 
107,511
 
 
Total assets
$
2,798,115
$
2,485,434
Liabilities and stockholders' equity
 
 
 
 
 
 
Interest-bearing liabilities:
Interest-bearing demand deposits
$
47,338
286
2.40%
$
57,925
411
2.82%
Saving and money market deposits
1,319,862
10,343
3.11%
1,084,562
10,064
3.69%
Time deposits
520,345
5,036
3.84%
325,580
3,391
4.14%
Total interest-bearing deposits
1,887,545
15,665
3.29%
1,468,067
13,866
3.76%
FHLB advances and other borrowings
40,065
377
3.73%
156,043
1,587
4.05%
Subordinated notes
26,029
404
6.16%
-
-
- %
Total interest-bearing liabilities
1,953,639
16,446
3.34%
1,624,110
15,453
3.79%
Non-interest-bearing demand deposits
569,522
609,456
 
Other non-interest-bearing liabilities
49,638
 
 
45,227
 
 
Total liabilities
2,572,799
2,278,793
Stockholders' equity
225,316
 
 
206,641
 
 
Total liabilities and stockholders' equity
$
2,798,115
$
2,485,434
Net interest income
$
21,274
 
$
18,109
 
Net interest spread
(5)
2.22%
1.82%
Net interest margin
(6)
3.14%
3.03%
(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.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
35
 
USCB Financial Holdings, Inc.
 
Q3 2025 Form 10-Q
Nine Months Ended September 30,
2025
2024
Average
Balance
(1)
Interest
Yield/Rate
(2)
Average
Balance
(1)
Interest
Yield/Rate
(2)
Assets
Interest-earning assets:
Loans
(3)
$
2,048,192
$
95,057
6.21
%
$
1,829,593
$
84,479
6.17
%
Investment securities
(4)
449,376
9,978
2.97
%
426,594
8,634
2.70
%
Other interest-earnings assets
90,169
2,817
4.18
%
101,919
3,953
5.18
%
Total interest-earning assets
2,587,737
107,852
5.57
%
2,358,106
97,066
5.50
%
Non-interest earning assets
106,933
108,902
Total assets
$
2,694,670
$
2,467,008
$
Liabilities and stockholders' equity
Interest-bearing liabilities:
Interest-bearing demand deposits
$
49,191
909
2.47
%
$
55,887
$
1,171
2.80
%
Saving and money market deposits
1,243,911
29,088
3.13
%
1,094,433
30,529
3.73
%
Time deposits
457,847
13,297
3.88
%
321,470
9,907
4.12
%
Total interest-bearing deposits
1,750,949
43,294
3.31
%
1,471,790
41,607
3.78
%
FHLB advances
 
98,151
2,731
3.72
%
160,726
4,881
4.06
%
Subordinated notes
8,771
404
6.16
%
-
-
-
Total interest-bearing liabilities
1,857,871
46,429
3.34
%
1,632,516
46,488
3.80
%
Non-interest bearing demand deposits
570,918
598,294
Other non-interest-bearing liabilities
41,422
37,045
Total liabilities
2,470,211
2,267,855
Stockholders' equity
224,459
199,153
Total liabilities and stockholders' equity
$
2,694,670
$
2,467,008
Net interest income
$
61,423
$
50,578
Net interest spread
(5)
2.23
%
1.70
%
Net interest margin
(6)
3.17
%
2.87
%
(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 September 30, 2025 compared to the
 
three months ended September 30, 2024.
Net interest income before the provision
 
for credit losses was $21.3
 
million for the three months
 
ended September 30,
2025 as compared to $18.1 million for the same period 2024. The increase of $3.2 million or 17.5% was primarily driven by
higher
 
income
 
from
 
an
 
expanded
 
loan
 
portfolio,
 
and
 
a
 
reduction
 
in
 
rates
 
paid
 
on
 
interest-bearing
 
liabilities
 
between
 
the
periods.
 
 
Net interest margin (“NIM”) was 3.14%
 
for the three months ended September 30, 2025 and 3.03%
 
for the same period
in 2024.
 
The
 
11-basis-point
 
increase primarily
 
reflects
 
a reduction
 
in the
 
weighted
 
average rate
 
paid on
 
interest-bearing
liabilities
 
that outweighed
 
the
 
decline in
 
the yield
 
on
 
interest-bearing
 
assets. Additionally,
 
the
 
balance of
 
interest-bearing
assets grew more rapidly than the balance of interest-bearing
 
liabilities.
 
Nine months ended September 30, 2025 compared to the nine months
 
ended September 30, 2024
 
Net interest income
 
before the provision
 
for credit losses
 
was $61.4 million
 
for the nine
 
months ended September
 
30,
2025, an increase
 
of $10.8 million
 
or 21.4%, from
 
$50.6 million for
 
the same period
 
in 2024. This
 
growth was primarily
 
driven
by higher income
 
from an expanded
 
loan portfolio
 
and a reduction
 
in the weighted
 
average rates
 
paid on interest
 
-bearing
liabilities between periods.
 
 
The NIM was 3.17% for the nine months
 
ended September 30, 2025 and 2.87% for
 
the same period in 2024. The NIM
expansion of 30 basis points reflects both
 
higher loan yields and growth in the loan average
 
balance, along with a decrease
in interest rate paid on interest-bearing liabilities.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
36
 
USCB Financial Holdings, Inc.
 
Q3 2025 Form 10-Q
Provision for Credit Losses
The provision for credit losses represents a charge to
 
earnings necessary to maintain an allowance for
 
credit losses at
a level 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 September 30, 2025 compared to the
 
three months ended September 30, 2024.
The provision
 
for credit
 
loss was
 
$105 thousand
 
for the
 
three months
 
ended September
 
30, 2025
 
compared to
 
$931
thousand for
 
the same
 
period in
 
2024. The
 
significant decrease
 
in provision
 
expense was
 
primarily attributable
 
to slower
loan portfolio growth during the third quarter of 2025.
Nine months ended September 30, 2025 compared to the nine months
 
ended September 30, 2024
 
The provision for credit loss was
 
$1.8 million for the nine months
 
ended September 30, 2025 compared
 
to $2.1 million
for
 
the
 
same
 
period
 
in
 
2024.
 
The
 
decrease
 
in
 
the
 
provision
 
for
 
credit
 
losses
 
was
 
due
 
to
 
release
 
of
 
reserves
 
related
 
to
individually evaluated loans, following two charge-offs
 
recorded during the nine months ended September
 
30, 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
 
the SBA
 
7a loan
 
program and
 
the monetization
 
fees earned
 
through our
 
loan
swap program.
 
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 September 30,
Nine Months Ended September 30,
2025
2024
2025
2024
Service fees
$
2,661
$
2,544
$
7,394
$
6,172
(Loss) gain on sale of securities available for sale, net
(28)
-
(28)
14
Gain on sale of loans held for sale, net
128
109
804
593
Other non-interest income
923
785
2,600
2,334
Total
 
non-interest income
$
3,684
$
3,438
$
10,770
$
9,113
Three months ended September 30, 2025 compared to the
 
three months ended September 30, 2024.
Non-interest income for the
 
three months ended September
 
30, 2025 increased $246
 
thousand or 7.2%, compared
 
to
the
 
same
 
period
 
in
 
2024.
 
This
 
increase
 
was
 
primarily
 
driven
 
by
 
growth
 
in
 
prepayment
 
penalties
 
and
 
wire
 
transfer
 
fees
reported
 
under
 
the
 
service
 
fees category
 
and
 
income
 
from bank
 
owned
 
life
 
insurance
 
reported
 
under
 
other
 
non-interest
income.
 
Nine months ended September 30, 2025 compared to the nine months
 
ended September 30, 2024
 
Non-interest income for the nine months ended September
 
30, 2025 increased $1.7 million or 18.2%, compared to
 
the
same
 
period
 
in
 
2024. This
 
increase
 
was
 
primarily
 
driven
 
by
 
growth
 
in
 
prepayment
 
penalties
 
and
 
title
 
insurance
 
income
reported under
 
the service
 
fees category
 
combined with
 
an increase
 
in the
 
gain on
 
sale of
 
loans as
 
well as
 
income from
bank owned life insurance reported under other non-interest
 
income.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
37
 
USCB Financial Holdings, Inc.
 
Q3 2025 Form 10-Q
Non-Interest Expense
The following table presents the components of non-interest
 
expense for the dates indicated (in thousands):
Three Months Ended September 30,
Nine Months Ended September 30,
2025
2024
2025
2024
Salaries and employee benefits
$
7,909
$
7,200
$
23,499
$
20,863
Occupancy
1,382
1,341
4,003
3,921
Regulatory assessment and fees
377
452
1,194
1,361
Consulting and legal fees
585
161
1,041
1,016
Network and information technology services
656
513
1,725
1,499
Other operating
2,139
1,787
6,272
5,528
Total
 
non-interest expense
$
13,048
$
11,454
$
37,734
$
34,188
Three months ended September 30, 2025 compared to the
 
three months ended September 30, 2024.
Non-interest expense for the three
 
months ended September 30, 2025,
 
increased $1.6 million, or 13.9%,
 
compared to
the same
 
period in
 
2024. The
 
increase was
 
primarily
 
driven by
 
a $709
 
thousand
 
rise in
 
salaries and
 
employee
 
benefits,
reflecting merit increases,
 
new hires and
 
higher stock-based compensation
 
expense. Consulting
 
and legal fees
 
increased
$424 thousand due to
 
the administration expense
 
related to the interest
 
rate collars and the
 
third quarter of 2024
 
included
a legal
 
expense
 
reimbursement,
 
which
 
reduced
 
expenses
 
in that
 
period
 
and contributed
 
to
 
the year-over-year
 
increase.
Additionally,
 
other operating
 
expense increased
 
by $352
 
thousand,
 
primarily due
 
to the
 
absence of
 
a reimbursement
 
for
force-placed insurance that was
 
received in the third quarter
 
of 2024. These prior-period reimbursements
 
had the effect of
lowering reported expenses, making the current period’s
 
expenses appear higher by comparison.
 
Nine months ended September 30, 2025 compared to the nine months
 
ended September 30, 2024
 
Non-interest expense for the nine
 
months ended September 30, 2025 increased $3.5 million
 
or 10.4%, compared to the
same period
 
in 2024.
 
The increase
 
was primarily
 
driven by
 
an increase
 
of $2.6
 
million in
 
salaries and
 
employee benefits
due to an
 
increase of $1.0
 
million in merit
 
increases and new
 
full-time employee
 
salaries, and
 
$1.5 million in
 
stock-based
compensation expenses.
 
Additionally, other operating
 
expenses increased $744
 
thousand due to
 
increase of $276
 
thousand
due
 
to
 
item
 
processing
 
and
 
internet
 
banking
 
fees,
 
$160
 
thousand
 
in
 
board
 
of
 
directors’
 
expenses,
 
$147
 
thousand
 
in
shareholders expense and $103 thousand in forced placed insurance.
 
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 September 30, 2025 compared to the
 
three months ended September 30, 2024.
Income tax expense for the
 
three months ended September
 
30, 2025 was $2.9
 
million as compared to
 
$2.2 million for
the same period
 
in 2024 and
 
reflected the increased
 
level of pre-tax
 
net income experienced
 
during the 2025
 
period. The
effective tax rate for the three months ended September 30, 2025 was 24.28% compared to 24.15% for the same period
 
in
2024.
 
Nine months ended September 30, 2025 compared to the nine months
 
ended September 30, 2024
 
Income tax expense
 
for the
 
nine months ended
 
September 30, 2025
 
was $7.9 million
 
as compared to
 
$5.6 million for
the same period in 2024 and
 
reflected the substantially increased
 
level of pre-tax net income
 
experienced during the 2025
period. The effective
 
tax rate for
 
the nine months
 
ended September 30, 2025
 
was 24.22% compared to
 
23.98% for the
 
same
period in 2024.
 
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.
 
 
38
 
USCB Financial Holdings, Inc.
 
Q3 2025 Form 10-Q
Analysis of Financial Condition
Total
 
assets at
 
September 30, 2025
 
were $2.77
 
billion, an
 
increase of
 
$186.7 million,
 
or 9.7%
 
annualized, over
 
total
assets of
 
$2.58 billion
 
at December 31,
 
2024. Total
 
loans, net
 
of deferred
 
fees/costs, increased
 
$158.1 million,
 
or 10.7%
annualized,
 
to
 
$2.13
 
billion
 
at
 
September 30,
 
2025
 
compared
 
to
 
$1.97
 
billion
 
at
 
December 31,
 
2024.
 
Total
 
deposits
increased
 
by
 
$281.6
 
million,
 
or
 
17.3%
 
annualized,
 
to
 
$2.46
 
billion
 
at
 
September 30,
 
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
 
obligations,
 
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 Company’s
 
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.
 
As
 
a
 
result
 
of
 
this
 
evaluation,
 
the
 
Company
 
concluded
 
that
 
no
 
allowance
 
was
required on AFS securities as of September 30, 2025.
At
 
quarter
 
end,
 
HTM
 
securities
 
included
 
$147.3
 
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 $9.1
 
million in investment
grade corporate
 
bonds. 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 September 30,
 
2025. The
 
book value
 
for debt
 
securities
 
classified as
HTM represents amortized cost less ACL.
Aggregate
 
AFS
 
and
 
HTM
 
investment
 
securities
 
increased
 
$55.6 million,
 
or
 
17.5%
 
annualized,
 
to
 
$480.5 million
 
at
September 30,
 
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
 
investment securities to increase the
Company’s profitability and modify the Company
 
’s balance sheet duration according to the ALM
 
policy.
 
As of
 
September 30,
 
2025,
 
investment securities
 
with a
 
market value
 
of $49.7 million
 
were pledged
 
to secure
 
public
deposits. The investment portfolio does not contain any
 
tax-exempt securities.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
39
 
USCB Financial Holdings, Inc.
 
Q3 2025 Form 10-Q
The following table
 
presents the amortized
 
cost and fair
 
value of investment
 
securities for
 
the dates indicated
 
(dollars
in thousands):
September 30, 2025
December 31, 2024
Available-for-sale:
Amortized
Cost
Fair Value
Amortized
Cost
Fair Value
U.S. Government Agency
$
13,143
$
11,965
$
14,279
$
12,625
Collateralized mortgage obligations
100,830
81,695
101,808
78,905
Mortgage-backed securities - residential
60,915
51,318
58,995
46,933
Mortgage-backed securities - commercial
145,991
138,517
86,604
78,739
Municipal securities
22,838
18,915
24,925
19,311
Bank subordinated debt securities
22,046
21,769
24,314
23,708
$
365,763
$
324,179
$
310,925
$
260,221
Held-to-maturity:
U.S. Government Agency
$
41,500
$
38,046
$
42,538
$
37,444
Collateralized mortgage obligations
52,766
47,376
56,987
49,259
Mortgage-backed securities - residential
37,880
34,915
40,681
36,121
Mortgage-backed securities - commercial
15,135
14,002
15,272
13,887
Corporate bonds
9,089
8,960
9,222
8,829
$
156,370
$
143,299
$
164,700
$
145,540
Allowance for credit losses - securities held-to-maturity
(5)
(6)
 
Securities held-to maturity, net of allowance for credit losses
$
156,365
$
164,694
The following
 
table shows
 
the weighted
 
average yields,
 
categorized by
 
contractual maturity,
 
for investment
 
securities
as of September 30, 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
$
-
-
$
-
-
$
2,390
2.90%
$
10,753
2.62%
$
13,143
2.68%
Collateralized mortgage obligations
-
-
-
-
-
-
100,830
1.46%
100,830
1.46%
MBS - residential
-
-
-
-
-
-
60,915
1.86%
60,915
1.86%
MBS - commercial
-
-
-
-
-
-
145,991
3.67%
145,991
3.67%
Municipal securities
 
-
-
-
-
22,838
1.45%
-
-
22,838
1.45%
Bank subordinated debt securities
-
-
1,983
7.97%
20,063
5.26%
-
-
22,046
5.52%
$
-
-
$
1,983
7.97%
$
45,291
3.21%
 
$
318,489
2.59%
$
365,763
2.70%
Held-to-maturity:
U.S. Government Agency
$
2,998
0.64%
$
13,873
1.22%
$
10,885
1.59%
$
13,744
2.07%
$
41,500
1.56%
Collateralized mortgage obligations
-
-
-
-
-
-
52,766
1.64%
52,766
1.64%
MBS - residential
-
-
4,597
1.85%
5,052
1.62%
28,231
2.33%
37,880
2.18%
MBS - commercial
-
-
3,046
1.63%
-
-
12,089
2.57%
15,135
2.38%
Corporate bonds
9,089
2.82%
-
-
-
-
-
-
9,089
2.82%
$
12,087
2.28%
$
21,516
1.42%
$
15,937
1.60%
$
106,830
1.98%
$
156,370
1.89%
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.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
40
 
USCB Financial Holdings, Inc.
 
Q3 2025 Form 10-Q
The following table shows the loan portfolio composition
 
as of the dates indicated (in thousands):
 
September 30, 2025
December 31, 2024
Total
Percent of
Total
Total
Percent of
Total
Residential real estate
$
316,557
14.9
%
$
289,961
14.8
%
Commercial real estate
1,226,121
57.7
%
1,136,417
57.8
%
Commercial and industrial
269,430
12.7
%
258,311
13.1
%
Correspondent banks
104,598
4.9
%
82,438
4.2
%
Consumer and other
 
207,939
9.8
%
198,091
10.1
%
Total
 
gross loans
2,124,645
100.0
%
1,965,218
100.0
%
Plus: Deferred fees/costs
6,321
 
7,630
Total
 
loans net of deferred fees/costs
2,130,966
1,972,848
Less: Allowance for credit losses
24,964
24,070
Total
 
net loans
$
2,106,002
$
1,948,778
 
Total
 
loans,
 
net
 
of
 
deferred
 
fees/costs,
 
increased
 
by
 
$158.1 million,
 
or
 
10.7%
 
annualized
 
to
 
$2.13
 
billion,
 
at
September 30, 2025 compared
 
to December 31, 2024.
 
The commercial real
 
estate loan segment
 
had the most
 
significant
balance increase compared to December 31, 2024.
 
Our
 
loan
 
portfolio
 
continues
 
to
 
grow,
 
with
 
commercial
 
real
 
estate
 
lending
 
as
 
the
 
primary
 
focus
 
which
 
represented
approximately 57.7%
 
of the
 
total gross
 
loan portfolio
 
as of
 
September 30, 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.
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
September 30, 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
$
15,515
$
51,018
$
68,095
$
181,929
$
316,557
Commercial real estate
83,082
463,653
673,810
5,576
1,226,121
Commercial and industrial
10,968
109,875
104,382
44,205
269,430
Correspondent banks
104,598
-
-
-
104,598
Consumer and other
2,519
1,307
22,547
181,566
207,939
Total
 
gross loans
$
216,682
$
625,853
$
868,834
$
413,276
$
2,124,645
Interest rate sensitivity:
Fixed interest rates
$
170,510
$
180,720
$
146,407
$
315,912
$
813,549
Floating or adjustable rates
46,172
445,133
722,427
97,364
1,311,096
Total
 
gross loans
$
216,682
$
625,853
$
868,834
$
413,276
$
2,124,645
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
 
September 30, 2025,
 
approximately 61.7%
 
of the
 
loan portfolio
 
has adjustable/variable
 
rates and
 
38.3% of
 
the
loan portfolio has 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.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
41
 
USCB Financial Holdings, Inc.
 
Q3 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):
 
September 30, 2025
Pass
Special Mention
Substandard
Doubtful
Total
Residential real estate
$
313,945
$
2,060
$
552
$
-
$
316,557
Commercial real estate
1,212,052
11,656
2,413
-
1,226,121
Commercial and industrial
266,801
936
1,693
-
269,430
Correspondent banks
104,598
-
-
-
104,598
Consumer and other
 
207,939
-
-
-
207,939
$
2,105,335
$
14,652
$
4,658
$
-
$
2,124,645
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
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
42
 
USCB Financial Holdings, Inc.
 
Q3 2025 Form 10-Q
Non-Performing Assets
The following table presents non-performing assets as
 
of the dates shown (in thousands,
 
except ratios):
September 30, 2025
December 31, 2024
Non-accrual loans
$
1,310
$
2,707
Loans past due over 90 days and still accruing
-
-
Total
 
non-performing loans
$
1,310
$
2,707
Other real estate owned
-
-
Total
 
non-performing assets
$
1,310
$
2,707
Asset quality ratios:
Allowance for credit losses to total loans
1.17%
1.22%
Allowance for credit losses to non-performing loans
1,906%
889%
Non-performing loans to total loans
0.06%
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 of 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.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
43
 
USCB Financial Holdings, Inc.
 
Q3 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 September 30,
2025
 
 
 
 
 
 
 
 
 
 
 
 
Beginning balance
$
5,477
$
9,491
$
4,508
$
874
$
4,583
$
24,933
Provision for credit losses
(1)
544
(102)
(118)
(45)
(252)
27
Recoveries
5
-
6
-
-
11
Charge-offs
-
-
-
-
(7)
(7)
Ending Balance
 
$
6,026
$
9,389
$
4,396
$
829
$
4,324
$
24,964
Average loans
 
$
316,701
$
1,184,145
$
269,204
$
103,210
$
225,783
$
2,099,043
Net charge-offs (recoveries) to average
 
loans
(2)
 
(0.01)%
-
(0.01)%
-
0.01%
(0.00)%
Nine Months Ended September 30,
2025
 
 
 
 
 
 
 
 
 
 
 
 
Beginning balance
$
5,121
$
8,788
$
4,633
$
654
$
4,874
$
24,070
Provision for credit losses
(3)
888
601
(249)
175
 
179
1,594
Recoveries
17
-
12
-
 
1
30
Charge-offs
-
-
-
-
 
(730)
(730)
Ending Balance
 
$
6,026
$
9,389
$
4,396
$
829
$
4,324
$
24,964
Average loans
$
304,401
$
1,170,204
$
264,718
$
95,724
$
213,145
$
2,048,192
Net charge-offs (recoveries) to average
 
loans
(2)
(0.01)%
-
(0.00)%
-
0.69%
0.07%
(1) Provision for credit losses excludes a $80 thousand provision due to unfunded commitments included in accrued interest and other
liabilities and a $2 thousand release related to investment securities held to maturity.
(2) Annualized.
(3) Provision for credit losses excludes a $224 thousand provision due to unfunded commitments included in accrued interest and
other liabilities and a $1 thousand release related to investment securities held to maturity.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
44
 
USCB Financial Holdings, Inc.
 
Q3 2025 Form 10-Q
Residential
Real Estate
Commercial
Real Estate
Commercial
and
Industrial
Correspondent
 
Banks
Consumer
and Other
Total
Three Months Ended September 30,
2024
 
 
 
 
 
 
Beginning balance
$
3,193
$
10,272
$
4,747
$
892
$
3,126
$
22,230
Provision for credit losses
(1)
760
(86)
(96)
(69)
322
831
Recoveries
2
-
10
-
1
13
Charge-offs
-
-
-
-
(7)
(7)
Ending Balance
 
$
3,955
$
10,186
$
4,661
$
823
$
3,442
$
23,067
Average loans
$
238,113
$
1,093,599
$
238,331
$
105,388
$
202,799
$
1,878,230
Net charge-offs (recoveries) to average
loans
 
(2)
(0.01)%
-
(0.02)%
-
0.01%
0.00%
Nine Months Ended September 30,
2024
 
 
 
 
 
 
 
Beginning balance
$
2,695
$
10,366
$
3,974
$
911
$
3,138
$
21,084
Provision for credit losses
(3)
1,252
(180)
666
(88)
318
1,968
Recoveries
8
-
21
-
3
32
Charge-offs
-
-
-
-
(17)
(17)
Ending Balance
 
$
3,955
$
10,186
$
4,661
$
823
$
3,442
$
23,067
 
Average loans
$
231,947
$
1,065,280
$
232,160
$
102,659
$
197,547
$
1,829,593
Net charge-offs (recoveries) to average
loans
 
(2)
(0.01)%
-
(0.02)%
-
0.01%
0.00%
(1) Provision for credit losses excludes a $101 thousand provision due to unfunded commitments included in accrued interest and other
liabilities and a $1 thousand release related to investment securities held to maturity.
(2) Annualized.
(3) Provision for credit losses excludes $159 thousand provision due to unfunded commitments included in accrued interest.
The
 
Federal
 
Open
 
Market
 
Committee
 
(“FOMC”)
 
economic
 
forecasts
 
as
 
of
 
September
 
30,
 
2025,
 
showed
 
moderate
improvement
 
in
 
the forecast
 
for real
 
GDP
 
an slight
 
improvement
 
in unemployment
 
rate.
 
Fannie
 
Mae House
 
Price Index
(“HPI”) forecast reflected a
 
deterioration in national housing
 
prices. 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 September 30, 2025, for every 100 basis
 
points increase in the HPI,
the forecast
 
reduces
 
reserves
 
by approximately
 
$380
 
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 September 30,
 
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
 
$9.1 million
 
or
35.5% 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 September 30,
 
2025, the combined
 
cash surrender
 
value of all
 
bank-owned life
 
insurance (“BOLI”)
 
policies was
$58.9 million.
 
Changes in
 
cash surrender
 
value are
 
recorded to
 
other 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 45 USCB Financial Holdings, Inc. Q3 2025 Form 10-Q
these policies.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Deposits
Customer deposits are the
 
primary funding source for
 
the Bank’s growth.
 
Through our network of
 
banking centers, we
offer a competitive array of deposit
 
accounts and treasury management services designed
 
to meet our customers’ business
needs. Our primary
 
deposit customers
 
are small-to-medium
 
sized businesses (“SMBs”),
 
and the personal
 
business of the
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 September 30,
2025
2024
Average Balance
Average Rate
Paid
Average Balance
Average Rate
Paid
Non-interest bearing demand deposits
$
569,522
0.00%
$
609,456
0.00%
Interest-bearing demand deposits
47,338
2.40%
57,925
2.82%
Saving and money market deposits
1,319,862
3.11%
1,084,562
3.69%
Time deposits
520,345
3.84%
325,580
4.14%
Total
$
2,457,067
2.53%
$
2,077,523
2.66%
The Company
 
has a
 
granular deposit
 
portfolio with
 
outstanding balances
 
comprised of
 
57% in
 
commercial
 
deposits,
27% in personal
 
deposits, 6% in
 
public funds (which
 
are partially collateralized)
 
and 10% in
 
brokered deposits. The
 
brokered
deposits balance at
 
September 30, 2025 was
 
$235.5 million and
 
$133.0 million at
 
December 31, 2024.
 
This increase was
primarily driven
 
by a
 
$100 million
 
aggregate notional
 
amount associated
 
with two
 
costless collar
 
hedges executed
 
during
the
 
third
 
quarter
 
of
 
2025.These
 
costless
 
hedges
 
enhance
 
the
 
Company’s
 
interest
 
rate
 
risk
 
management
 
strategy
 
by
mitigating the impact of rate movements on future cash flows.
As of September 30,
 
2025, the Company
 
has approximately 21
 
thousand deposit accounts
 
with the majority
 
of
 
which
were personal accounts, approximately 13 thousand or 61.7%. The estimated average account size in our deposit portfolio
was approximately $119
 
thousand as of September 30, 2025.
 
The
 
amount
 
of
 
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 53% at
September 30,
 
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 $183.9 million at September 30, 2025 and
 
was $129.5 million at December 31, 2024.
The following table shows scheduled maturities of uninsured
 
time deposits as of September 30, 2025 (in thousands):
September 30, 2025
Three months or less
$
68,923
Over three through six months
24,033
Over six though twelve months
9,923
Over twelve months
38,097
$
140,976
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 accrued interest and other
 
liabilities in the
consolidated balance sheet.
 
As of September 30, 2025, escrow balances totaled
 
$29.2 million compared to $6.1 million at December
 
31, 2024.
The increase reflects the normal growth in escrow accounts
 
pending tax and insurance payments.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
46
 
USCB Financial Holdings, Inc.
 
Q3 2025 Form 10-Q
Borrowings
FHLB Advances
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
 
September 30,
 
2025, we
 
had $11.0
 
million
 
of fixed-rate
 
advances
 
outstanding
 
from the
 
FHLB with
 
a weighted
average rate of 3.76% maturing in 2028 as detailed in the table
 
below.
 
The following table presents the FHLB advances as of
 
September 30, 2025 (in thousands):
Interest Rate
Type of Rate
Maturity Date
Amount
3.76%
Fixed
January 24, 2028
11,000
$
11,000
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
September 30, 2025, there were no outstanding balances
 
with any of these liquidity sources.
Subordinated Notes
On
 
August
 
14,
 
2025,
 
the
 
Company
 
entered
 
into
 
a
 
Subordinated
 
Note
 
Purchase
 
Agreement
 
with
 
certain
 
qualified
institutional
 
buyers
 
pursuant
 
to
 
which
 
the
 
Company
 
sold
 
and
 
issued
 
$40.0
 
million
 
in
 
aggregate
 
principal
 
amount
 
of
 
its
7.625% Fixed-to-Floating Rate
 
Subordinated Notes due 2035.
 
The Notes were issued by
 
the Company to the purchasers
at a price equal to
 
100% of their face amount. The
 
subordinated debt was originally issued at a
 
cost of $760 thousand. After
two
 
months
 
of
 
amortization,
 
the
 
carrying
 
value
 
has
 
been
 
reduced
 
to
 
$738
 
thousand,
 
reflecting
 
the
 
scheduled
 
expense
recognition over the
 
term of the
 
instrument. The subordinated
 
notes are presented
 
net of these
 
costs on the
 
consolidated
balance
 
sheet.
 
The
 
Notes
 
were
 
offered
 
and
 
sold
 
by
 
the
 
Company
 
in
 
a
 
private
 
placement
 
transaction
 
in
 
reliance
 
on
exemptions from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”), pursuant to
Section
 
4(a)(2)
 
of
 
the
 
Securities
 
Act
 
and
 
Rule
 
506(b)
 
of
 
Regulation
 
D
 
thereunder.
 
For
 
additional
 
information,
 
see
 
the
Company Form 8-K filed on August 14, 2025.
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
 
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
 
September 30,
 
2025 was
 
$795 thousand
 
and at
 
December 31,
 
2024 was
 
$571 thousand.
 
The increase
was primarily driven by an increase in unfunded commitments.
 
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
 
):
September 30, 2025
December 31, 2024
Commitments to grant loans and unfunded lines of credit
$
140,146
$
122,578
Standby and commercial letters of credit
3,855
5,389
Total
$
144,001
$
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 47 USCB Financial Holdings, Inc. Q3 2025 Form 10-Q
 
 
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.
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 interest rates
 
scenarios,
yield curve
 
shapes
 
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,
 
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 September
 
30, 2025,
 
we had
 
a slightly
 
liability sensitive
 
balance sheet
 
for year
one, and
 
a neutral balance
 
sheet for
 
year two, using
 
the static model.
 
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. 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.
 
Neutral
 
denotes
 
minimal
 
or
 
no
 
effect
 
on
 
net
 
interest
income as a
 
result of changes in
 
interest rates. 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 48 USCB Financial Holdings, Inc. Q3 2025 Form 10-Q
to increase asset sensitivity.
 
 
According to our model, as of
 
September 30, 2025, our balance sheet is
 
liability sensitive for year one and
 
more neutral
 
in year two under static interest rate scenarios
 
(an increase or decrease of 400 basis
 
points). 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.
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 Federal Funds lines of
credit with other
 
banking institutions and
 
draws from the
 
Federal Reserve Bank
 
of Atlanta Discount Window, and
 
borrowings
from the FHLB Atlanta. Accordingly, we believe our liquidity resources are adequate to fund loans and meet other cash 49 USCB Financial Holdings, Inc. Q3 2025 Form 10-Q
needs as necessary.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Capital Adequacy
As of
 
September 30,
 
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 September 30, 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
September 30, 2025
Total
 
risk-based capital
$
299,147
13.93
%
$
171,861
8.00
%
$
214,826
10.00
%
Tier 1 risk-based capital
$
273,382
12.73
%
$
128,896
6.00
%
$
171,861
8.00
%
Common equity tier 1 capital
$
273,382
12.73
%
$
96,672
4.50
%
$
139,637
6.50
%
Leverage ratio
$
273,382
9.63
%
$
113,507
4.00
%
$
141,883
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
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 and other variable 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.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
50
 
USCB Financial Holdings, Inc.
 
Q3 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
9/30/2025
6/30/2025
3/31/2025
12/31/2024
9/30/2024
Pre-tax pre-provision ("PTPP") income:
(1)
Net income
$
8,939
$
8,140
$
7,658
$
6,904
$
6,949
Plus: Income tax expense
2,866
2,599
2,440
2,197
2,213
Plus: Provision for credit losses
105
1,031
681
1,030
931
PTPP income
$
11,910
$
11,770
$
10,779
$
10,131
$
10,093
 
 
PTPP return on average assets:
(1)
 
 
PTPP income
$
11,910
$
11,770
$
10,779
$
10,131
$
10,093
Average assets
$
2,798,115
$
2,677,198
$
2,606,593
$
2,544,592
$
2,485,434
PTPP return on average assets
(2)
1.69%
1.76%
1.68%
1.58%
1.62%
 
 
Operating net income:
(1)
 
 
Net income
$
8,939
$
8,140
$
7,658
$
6,904
$
6,949
Less: Net losses on sale of securities
(28)
-
-
-
-
Less: Tax effect on sale of securities
7
-
-
-
-
Operating net income
$
8,960
$
8,140
$
7,658
$
6,904
$
6,949
 
 
Operating PTPP income:
(1)
 
 
PTPP income
$
11,910
$
11,770
$
10,779
$
10,131
$
10,093
Less: Net losses on sale of securities
(28)
-
-
-
-
Operating PTPP income
$
11,938
$
11,770
$
10,779
$
10,131
$
10,093
 
 
Operating PTPP return on average assets:
(1)
 
 
Operating PTPP income
$
11,938
$
11,770
$
10,779
$
10,131
$
10,093
Average assets
$
2,798,115
$
2,677,198
$
2,606,593
$
2,544,592
$
2,485,434
Operating PTPP return on average assets
(2)
1.69%
1.76%
1.68%
1.58%
1.62%
 
 
Operating return on average assets:
(1)
 
 
Operating net income
$
8,960
$
8,140
$
7,658
$
6,904
$
6,949
Average assets
$
2,798,115
$
2,677,198
$
2,606,593
$
2,544,592
$
2,485,434
Operating return on average assets
(2)
1.27%
1.22%
1.19%
1.08%
1.11%
 
 
Operating return on average equity:
(1)
 
 
Operating net income
$
8,960
$
8,140
$
7,658
$
6,904
$
6,949
Average equity
$
225,316
$
228,492
$
219,505
$
215,715
$
206,641
Operating return on average equity
(2)
15.78%
14.29%
14.15%
12.73%
13.38%
 
Operating Revenue:
(1)
 
 
Net interest income
$
21,274
 
$
21,034
 
$
19,115
 
$
19,358
 
$
18,109
 
Plus: Non-interest income
 
3,684
3,370
3,716
 
3,627
 
3,438
 
Less: Net losses on sale of securities
(28)
-
-
-
-
 
Operating revenue
$
24,986
$
24,404
$
22,831
$
22,985
$
21,547
 
Operating Efficiency Ratio:
(1)
 
 
Total non-interest expense
$
13,048
 
$
12,634
 
$
12,052
 
$
12,854
 
$
11,454
 
Operating revenue
$
24,986
$
24,404
$
22,831
$
22,985
$
21,547
 
Operating efficiency ratio
52.22%
51.77%
52.79%
55.92%
53.16%
(1)
 
The Company believes these non-GAAP measurements are
 
key indicators of the ongoing earnings power
 
of the Company.
(2)
 
Annualized.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
51
 
USCB Financial Holdings, Inc.
 
Q3 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
9/30/2025
6/30/2025
3/31/2025
12/31/2024
9/30/2024
Tangible book value per common share (at period-end):
(1)
Total stockholders' equity
$
209,095
$
231,583
$
225,088
$
215,388
$
213,916
Less: Intangible assets
-
-
-
-
-
Tangible stockholders' equity
(3)
$
209,095
$
231,583
$
225,088
$
215,388
$
213,916
Total shares issued and outstanding (at period-end):
Total common shares issued and outstanding
18,107,385
20,078,385
20,048,385
19,924,632
19,620,632
Tangible book value per common share
(2)
$
11.55
$
11.53
$
11.23
$
10.81
$
10.90
Operating diluted net income per common share:
(1)
Operating net income
$
8,960
$
8,140
$
7,658
$
6,904
$
6,949
Total weighted average diluted shares of common stock
19,755,820
20,295,794
20,319,535
20,183,731
19,825,211
Operating diluted net income per common share:
$
0.45
$
0.40
$
0.38
$
0.34
$
0.35
Tangible Common Equity/Tangible Assets
(1)
 
Tangible stockholders' equity
$
209,095
$
231,583
$
225,088
$
215,388
$
213,916
 
Tangible total assets
(3)
$
2,767,945
$
2,719,474
$
2,677,382
 
$
2,581,216
$
2,503,954
Tangible Common Equity/Tangible
 
Assets
7.55%
8.52%
8.41%
8.34%
8.54%
(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 stockholders’ equity and tangible
 
total assets are the same amounts as stockholders’
 
equity
and total assets, respectively, as calculated under GAAP.
 
 
52
 
USCB Financial Holdings, Inc.
 
Q3 2025 Form 10-Q
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
 
September 30,
 
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.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
53
 
USCB Financial Holdings, Inc.
 
Q3 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 three months ended September 30, 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
 
July 1 - 31, 2025
-
$
-
-
528,309
August 1 - 31, 2025
 
-
$
-
-
 
 
528,309
September 1 - 30, 2025
2,000,000
$
17.19
-
 
528,309
Total
2,000,000
(2)
$
17.19
-
(1) As of September 30, 2025 there were
 
528,309 number of shares available for repurchase under
 
the 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.
(2) Reflects the repurchase of shares pursuant
 
to stock repurchase agreements entered into
 
with certain institutional investors on September 2, 2025.
 
For additional information regarding such repurchases,
 
please see the Current Report on Form 8-K filed
 
with the SEC on September 5, 2025.
 
Item 3. Defaults Upon Senior Securities 54 USCB Financial Holdings, Inc. Q3 2025 Form 10-Q
(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
 
September
 
30,
 
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).
 
 
 
 
55
 
USCB Financial Holdings, Inc.
 
Q3 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
 
September 30,
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.
 
 
 
 
 
 
 
56
 
USCB Financial Holdings, Inc.
 
Q3 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
 
November 7, 2025
Luis de la Aguilera
(Principal Executive Officer)
/s/ Robert Anderson
Executive Vice President and Chief Financial
Officer
 
November 7, 2025
Robert Anderson
(Principal Financial Officer and Principal Certification of Chief Executive Officer
Accounting Officer)
EX-31.1 8 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: November 7, 2025
EX-31.2 9 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: November 7, 2025
EX-32.1 10 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 September 30, 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: November 7, 2025
EX-32.2 11 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 September
 
30,
 
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: November 7, 2025