[PART I - FINANCIAL INFORMATION](index=3&type=section&id=PART%20I) [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) Presents unaudited consolidated financial statements, including balance sheets, income, equity, and cash flows, with detailed accounting notes [Consolidated Balance Sheets](index=3&type=section&id=Consolidated%20Balance%20Sheets%20as%20of%20March%2031%2C%202025%20(Unaudited)%20and%20December%2031%2C%202024) Presents the company's financial position, detailing assets, liabilities, and stockholders' equity at period-end **Consolidated Balance Sheet Highlights (Dollars in thousands):** | Item | March 31, 2025 | December 31, 2024 | | :------------------------------------ | :------------- | :---------------- | | Total assets | $2,677,382 | $2,581,216 | | Loans held for investment, net | $2,011,472 | $1,948,778 | | Total deposits | $2,309,569 | $2,174,004 | | Federal Home Loan Bank advances | $108,000 | $163,000 | | Total stockholders' equity | $225,088 | $215,388 | [Consolidated Statements of Operations](index=4&type=section&id=Consolidated%20Statements%20of%20Operations%20for%20three%20months%20ended%20March%2031%2C%202025%20and%202024%20(Unaudited)) Details the company's revenues, expenses, and net income over specific reporting periods **Consolidated Statements of Operations Highlights (Three Months Ended March 31, Dollars in thousands, except per share data):** | Item | 2025 | 2024 | | :------------------------------------------ | :----- | :----- | | Interest income: Loans, including fees | $30,245 | $26,643 | | Total interest income | $33,978 | $30,887 | | Total interest expense | $14,863 | $15,729 | | Net interest income before provision for credit losses | $19,115 | $15,158 | | Provision for credit losses | $681 | $410 | | Total non-interest income | $3,716 | $2,464 | | Total non-interest expense | $12,052 | $11,174 | | Net income | $7,658 | $4,612 | | Net income per share, basic | $0.38 | $0.23 | | Net income per share, diluted | $0.38 | $0.23 | | Cash dividends declared | $0.10 | $0.05 | [Consolidated Statements of Comprehensive Income](index=5&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income%20for%20the%20three%20months%20ended%20March%2031%2C%202025%20and%202024) Reports net income and other comprehensive income components, reflecting total changes in equity from non-owner sources **Consolidated Statements of Comprehensive Income Highlights (Three Months Ended March 31, Dollars in thousands):** | Item | 2025 | 2024 | | :-------------------------------------------------------------------------------- | :----- | :----- | | Net income | $7,658 | $4,612 | | Unrealized gain (loss) on investment securities | $4,673 | $(2,134) | | Total other comprehensive income (loss), net of tax | $3,421 | $(1,156) | | Total comprehensive income | $11,079 | $3,456 | [Consolidated Statements of Changes in Stockholders' Equity](index=6&type=section&id=Consolidated%20Statements%20of%20Changes%20in%20Stockholders'%20Equity%20for%20the%20three%20months%20ended%20March%2031%2C%202025%20and%202024%20(Unaudited)) Outlines changes in each component of stockholders' equity, including net income, dividends, and stock transactions **Consolidated Statements of Changes in Stockholders' Equity Highlights (Dollars in thousands):** | Item | Balance at Dec 31, 2024 | Net Income | Other Comprehensive Income | Repurchase of Class A common stock | Dividend Payment | Balance at Mar 31, 2025 | | :-------------------------- | :---------------------- | :--------- | :------------------------- | :------------------------- | :--------------- | :---------------------- | | Total Stockholders' Equity | $215,388 | $7,658 | $3,421 | $(174) | $(2,005) | $225,088 | [Consolidated Statements of Cash Flows](index=7&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows%20for%20the%20three%20months%20ended%20March%2031%2C%202025%20and%202024%20(Unaudited)) Summarizes cash inflows and outflows from operating, investing, and financing activities over the period **Consolidated Statements of Cash Flows Highlights (Three Months Ended March 31, Dollars in thousands):** | Item | 2025 | 2024 | | :------------------------------------ | :----- | :----- | | Net cash provided by operating activities | $14,628 | $8,093 | | Net cash used in investment activities | $(72,157) | $(66,491) | | Net cash provided by financing activities | $78,478 | $143,882 | | Net decrease in cash and cash equivalents | $20,949 | $85,484 | | Cash and cash equivalents at end of period | $97,984 | $126,546 | [Notes to the Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20the%20Consolidated%20Financial%20Statements%20(Unaudited)) Provides detailed explanations and disclosures supporting the consolidated financial statements, including accounting policies and estimates [1. Summary of Significant Accounting Policies](index=8&type=section&id=1.%20SUMMARY%20OF%20SIGNIFICANT%20ACCOUNTING%20POLICIES) Details the company's operational scope, adherence to U.S. GAAP, reliance on management estimates, and the impact of recent accounting standard adoptions - USCB Financial Holdings, Inc. is a bank holding company with U.S. Century Bank as its wholly-owned subsidiary, providing financial services in South Florida. The Bank also owns Florida Peninsula Title LLC, offering title insurance for real estate transactions since 2021[21](index=21&type=chunk)[22](index=22&type=chunk) - Significant estimates in the financial statements include the Allowance for Credit Losses (ACL) and income taxes[25](index=25&type=chunk) - The company adopted ASU 2023-09, 'Improvements to Income Tax Disclosures,' effective January 1, 2025, which did not have a material impact on its consolidated financial statements[27](index=27&type=chunk) [2. Investment Securities](index=8&type=section&id=2.%20INVESTMENT%20SECURITIES) Details investment securities, including AFS and HTM portfolios, CECL application, credit loss allowances, and pledged securities - The company applies the CECL methodology to held-to-maturity (HTM) debt securities, estimating a **$5 thousand Allowance for Credit Losses (ACL)** for the portion exposed to non-government credit risk as of March 31, 2025[28](index=28&type=chunk)[32](index=32&type=chunk) - All HTM securities held by the Company were rated investment grade as of March 31, 2025, and December 31, 2024[31](index=31&type=chunk) **Investment Securities Portfolio (Dollars in thousands):** | Category | Amortized Cost (Mar 31, 2025) | Fair Value (Mar 31, 2025) | Amortized Cost (Dec 31, 2024) | Fair Value (Dec 31, 2024) | | :-------------------------------- | :----------------------- | :--------------------- | :----------------------- | :--------------------- | | Available-for-sale | $321,170 | $275,139 | $310,925 | $260,221 | | Held-to-maturity (net of ACL) | $161,790 | $145,665 | $164,694 | $145,540 | - At March 31, 2025, the company had **$39.5 million (AFS)** and **$12.1 million (HTM)** of unrealized losses on mortgage-backed securities and collateralized mortgage obligations, primarily due to interest rate movements, not credit quality. Management expects to recover the entire amortized cost basis[40](index=40&type=chunk)[43](index=43&type=chunk) - As of March 31, 2025, **$51.1 million** in bonds were pledged to the State of Florida for public deposits[49](index=49&type=chunk) [3. Loans](index=12&type=section&id=3.%20LOANS) Details the loan portfolio composition, growth, Allowance for Credit Losses (ACL), non-accrual loans, and loan modification status **Loan Portfolio Composition (Dollars in thousands):** | Loan Type | March 31, 2025 (Total) | March 31, 2025 (Percent of Total) | December 31, 2024 (Total) | December 31, 2024 (Percent of Total) | | :------------------------ | :----------------------- | :-------------------------------- | :----------------------- | :-------------------------------- | | Residential Real Estate | $301,164 | 14.8% | $289,961 | 14.8% | | Commercial Real Estate | $1,150,129 | 56.7% | $1,136,417 | 57.8% | | Commercial and Industrial | $256,326 | 12.6% | $258,311 | 13.1% | | Correspondent Banks | $103,026 | 5.1% | $82,438 | 4.2% | | Consumer and Other | $218,711 | 10.8% | $198,091 | 10.1% | | **Total gross loans** | **$2,029,356** | **100.0%** | **$1,965,218** | **100.0%** | - The Allowance for Credit Losses (ACL) for loans increased by **$670 thousand** to **$24,740 thousand** at March 31, 2025, from **$24,070 thousand** at December 31, 2024, primarily due to loan growth[55](index=55&type=chunk) **Non-Accrual Loans (Dollars in thousands):** | Loan Type | March 31, 2025 | December 31, 2024 | | :-------------------------- | :------------- | :---------------- | | Residential real estate | $1,312 | $314 | | Commercial and industrial | $854 | $403 | | Consumer and other | $1,990 | $1,990 | | **Total Non-Accruals** | **$4,156** | **$2,707** | - No new loan modifications for borrowers experiencing financial difficulties were reported for the three months ended March 31, 2025[76](index=76&type=chunk) [4. Income Taxes](index=20&type=section&id=4.%20INCOME%20TAXES) Discusses income tax expense, effective tax rate, and changes in net deferred tax assets, including the impact of net operating loss carryforwards **Income Tax Expense (Three Months Ended March 31, Dollars in thousands):** | Item | 2025 | 2024 | | :---------------- | :----- | :----- | | Total tax expense | $2,440 | $1,426 | - The effective tax rate for the three months ended March 31, 2025, was **24.2%**, compared to **23.6%** for the same period in 2024[166](index=166&type=chunk) **Net Deferred Tax Assets (Dollars in thousands):** | Item | March 31, 2025 | December 31, 2024 | | :-------------------- | :------------- | :---------------- | | Net deferred tax assets | $26,045 | $29,646 | - The company has approximately **$23.7 million** of federal and **$46.4 million** of state net operating loss carryforwards expiring between 2031 and 2036[79](index=79&type=chunk) [5. Off-Balance Sheet Arrangements](index=21&type=section&id=5.%20OFF-BALANCE%20SHEET%20ARRANGEMENTS) Details the company's off-balance sheet commitments, including loan and letter of credit arrangements, and their associated risk management **Off-Balance Sheet Commitments (Dollars in thousands):** | Commitment Type | March 31, 2025 | December 31, 2024 | | :------------------------------------------ | :------------- | :---------------- | | Commitments to grant loans & unfunded lines | $132,466 | $122,578 | | Standby & commercial letters of credit | $3,346 | $5,389 | | **Total** | **$135,812** | **$127,967** | - The company uses the same credit policies for off-balance sheet commitments as it does for on-balance sheet instruments to manage credit and interest rate risk[84](index=84&type=chunk) [6. Derivatives](index=21&type=section&id=6.%20DERIVATIVES) Discusses the company's use of interest rate swaps for asset-liability management, including cash flow hedges and customer-related swaps - As of March 31, 2025, the company had two interest rate swap agreements with a notional aggregate amount of **$50 million** designated as cash flow hedges of certificates of deposit[89](index=89&type=chunk) - The company had 62 interest rate swaps with loan customers, with an aggregate notional amount of **$211.0 million** at March 31, 2025, which are not designated as hedging instruments[95](index=95&type=chunk) - During the quarter ended September 30, 2024, the company unwound four fair value interest rate swaps with a notional aggregate amount of **$200 million** due to changes in interest rate forecasts and asset-liability management strategies[94](index=94&type=chunk) [7. Fair Value Measurements](index=22&type=section&id=7.%20FAIR%20VALUE%20MEASUREMENTS) Explains the company's fair value measurement hierarchy for financial instruments, including Level 2 classifications and fair value disclosures - The company groups its financial assets and liabilities measured at fair value into three levels based on market activity and reliability of assumptions: Level 1 (quoted prices in active markets), Level 2 (observable inputs other than Level 1), and Level 3 (unobservable inputs)[100](index=100&type=chunk)[101](index=101&type=chunk)[102](index=102&type=chunk)[103](index=103&type=chunk) **Assets and Liabilities Measured at Fair Value on a Recurring Basis (March 31, 2025, Dollars in thousands):** | Category | Level 1 | Level 2 | Level 3 | Total | | :-------------------------------- | :------ | :------ | :------ | :------ | | Investment securities available for sale | $0 | $275,139 | $0 | $275,139 | | Derivative assets | $0 | $8,000 | $0 | $8,000 | | Derivative liabilities | $0 | $7,837 | $0 | $7,837 | - Loans held for investment, net, had a carrying amount of **$2,011,472 thousand** and an estimated fair value of **$2,022,078 thousand** as of March 31, 2025[109](index=109&type=chunk) [8. Stockholders' Equity](index=25&type=section&id=8.%20STOCKHOLDERS'%20EQUITY) Details changes in stockholders' equity, including common stock, restricted awards, repurchases, dividends, and regulatory capital status - Class A common stock outstanding increased to **20,048,385 shares** as of March 31, 2025, from **19,924,632 shares** as of December 31, 2024[115](index=115&type=chunk) - The company issued **124,424 shares** of Class A common stock as restricted stock awards in Q1 2025 and repurchased **9,671 shares** for approximately **$174 thousand**[113](index=113&type=chunk)[114](index=114&type=chunk) **Cash Dividends Declared (Class A Common Stock):** | Declaration Date | Record Date | Payment Date | Dividend Per Share | Dividend Amount (Millions) | | :--------------- | :---------- | :----------- | :----------------- | :----------------------- | | Jan 21, 2025 | Feb 14, 2025 | Mar 5, 2025 | $0.10 | $2.0 | | Jan 22, 2024 | Feb 15, 2024 | Mar 5, 2024 | $0.05 | $1.0 | - The Company and the Bank exceeded all regulatory capital requirements and remained above 'well-capitalized' guidelines as of March 31, 2025. However, the Bank must obtain prior FDIC approval for cash dividends due to negative retained earnings[117](index=117&type=chunk)[120](index=120&type=chunk) [9. Earnings Per Share](index=26&type=section&id=9.%20EARNINGS%20PER%20SHARE) Reports basic and diluted earnings per share for Class A common stock, reflecting net income available to common shareholders **Earnings Per Share (Three Months Ended March 31, Dollars in thousands, except per share amounts):** | Item | 2025 | 2024 | | :------------------------------------------ | :----- | :----- | | Net income available to common shares | $7,658 | $4,612 | | Basic EPS | $0.38 | $0.23 | | Diluted EPS | $0.38 | $0.23 | [10. Segment Reporting](index=27&type=section&id=10.%20SEGMENT%20REPORTING) Explains the company's single reportable segment structure, based on similar business activities and overall performance evaluation - The company has determined that it has only one reportable segment, as its business activities are similar and performance is evaluated on an overall company-wide basis by the CODM[128](index=128&type=chunk) - The company, through its subsidiary U.S. Century Bank, operates 10 banking centers in South Florida, offering a wide range of personal and business banking products and services, and title insurance[127](index=127&type=chunk) [11. Loss Contingencies](index=28&type=section&id=11.%20LOSS%20CONTINGENCIES) Assesses the potential impact of current loss contingencies, including legal claims, on the company's financial statements - Management's opinion is that none of the current loss contingencies, individually or in aggregate, are expected to have a material adverse effect on the Company's Consolidated Financial Statements[130](index=130&type=chunk) [12. Subsequent Events](index=28&type=section&id=12.%20SUBSEQUENT%20EVENTS) Reports significant events occurring after the balance sheet date, including the declaration of a quarterly cash dividend - On April 21, 2025, the Board of Directors declared a quarterly cash dividend of **$0.10 per share** of Class A common stock for Q2 2025, to be paid on June 5, 2025[131](index=131&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=29&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Analyzes the company's financial condition and operational results, covering performance drivers, balance sheet, asset quality, liquidity, and capital adequacy [Forward-Looking Statements](index=29&type=section&id=Forward-Looking%20Statements) Highlights statements regarding future expectations, growth, and performance, emphasizing inherent risks and uncertainties - This Form 10-Q contains forward-looking statements regarding projected growth, anticipated future financial performance, and management's long-term goals, identified by words such as 'may,' 'will,' 'anticipate,' and 'expect'[136](index=136&type=chunk) - These statements involve significant risks and uncertainties, including economic conditions, interest rate risk, credit risk, regulatory changes, and market fluctuations, which could cause actual results to differ materially from expectations[137](index=137&type=chunk) - Readers are cautioned not to place undue reliance on forward-looking statements, and the company undertakes no obligation to update or revise them unless required by federal securities laws[138](index=138&type=chunk) [Overview](index=30&type=section&id=Overview) Provides a high-level summary of the company's financial performance, highlighting key metrics and growth drivers - Net income for the three months ended March 31, 2025, increased by **66%** to **$7.7 million** (**$0.38 diluted EPS**) compared to **$4.6 million** (**$0.23 diluted EPS**) for the same period in 2024, driven by higher interest and fee income[139](index=139&type=chunk)[149](index=149&type=chunk) **Key Financial Highlights (Q1 2025 vs. Q1 2024 / Dec 31, 2024):** | Metric | March 31, 2025 | March 31, 2024 | Change (YoY) | Dec 31, 2024 | Change (QoQ Annualized) | | :------------------------------------ | :------------- | :------------- | :----------- | :----------- | :----------------------- | | Net interest income | $19.1 million | $15.2 million | +26.1% | N/A | N/A | | Net interest margin (NIM) | 3.10% | 2.62% | +48 bps | N/A | N/A | | Total assets | $2.68 billion | $2.49 billion | +7.6% | $2.58 billion | +15.1% | | Total loans (net of deferred cost/fees) | $2.04 billion | $1.82 billion | +11.8% | $1.97 billion | +13.0% | | Total deposits | $2.31 billion | $2.10 billion | +9.8% | $2.17 billion | +25.3% | | Annualized return on average assets | 1.19% | 0.76% | +0.43% | N/A | N/A | | Annualized return on average stockholders' equity | 14.15% | 9.61% | +4.54% | N/A | N/A | | ACL to total loans | 1.22% | N/A | N/A | 1.22% | 0% | | Non-performing loans to total loans | 0.20% | N/A | N/A | 0.14% | +0.06% | | Total risk-based capital ratio (Company) | 13.72% | N/A | N/A | N/A | N/A | | Total risk-based capital ratio (Bank) | 13.65% | N/A | N/A | N/A | N/A | | Tangible book value per common share | $11.23 | N/A | N/A | $10.81 | +15.6% annualized | [Critical Accounting Policies and Estimates](index=31&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) Discusses key accounting policies and estimates, such as ACL and income taxes, which require significant management judgment - The consolidated financial statements are prepared based on U.S. GAAP, requiring management to make estimates, assumptions, and judgments, particularly for the allowance for credit losses (ACL) and income taxes[143](index=143&type=chunk) - These estimates are based on available information, and actual results could differ from those reflected in the financial statements[143](index=143&type=chunk) [Non-GAAP Financial Measures](index=31&type=section&id=Non-GAAP%20Financial%20Measures) Explains the inclusion of non-GAAP financial measures to provide supplemental information for performance trend evaluation - The report includes non-GAAP financial measures to provide useful supplemental information for evaluating the company's underlying performance trends[144](index=144&type=chunk) - These measures are used by management but should be viewed in addition to, and not as an alternative or substitute for, measures determined in accordance with GAAP[144](index=144&type=chunk) [Segment Reporting](index=31&type=section&id=Segment%20Reporting) Confirms the company operates as a single reportable segment, with financial service operations aggregated for management evaluation - The company operates as a single reportable operating segment, as its financial service operations are aggregated and evaluated on an overall company-wide basis by management[145](index=145&type=chunk) [Results of Operations](index=31&type=section&id=Results%20of%20Operations) Analyzes the company's financial performance, focusing on key revenue and expense drivers and their impact on net income [General](index=31&type=section&id=General) Highlights the primary drivers of operational results, including net interest income, non-interest income, and overall profitability improvements - Net income increased to **$7.7 million** for Q1 2025 from **$4.6 million** for Q1 2024, a **$3.0 million** or **66%** increase[149](index=149&type=chunk) **Profitability Ratios (Three Months Ended March 31):** | Ratio | 2025 | 2024 | | :---------------- | :----- | :----- | | Efficiency ratio | 52.79% | 63.41% | | Net interest margin | 3.10% | 2.62% | [Net Interest Income](index=32&type=section&id=Net%20Interest%20Income) Examines the growth in net interest income and expansion of net interest margin, driven by loan portfolio and yield changes - Net interest income before the provision for credit losses increased by **$4.0 million**, or **26.1%**, to **$19.1 million** for Q1 2025 from **$15.2 million** for Q1 2024, primarily due to higher income from a larger loan portfolio and increased weighted average loan yield[157](index=157&type=chunk) - Net interest margin (NIM) expanded by **48 basis points** to **3.10%** for Q1 2025 from **2.62%** for Q1 2024, driven by increases in loan yields and average interest-earning assets, and a decrease in rates paid on interest-bearing liabilities[158](index=158&type=chunk) **Average Balances, Yields, and Rates (Three Months Ended March 31, Dollars in thousands):** | Item | 2025 Average Balance | 2025 Interest | 2025 Yield/Rate | 2024 Average Balance | 2024 Interest | 2024 Yield/Rate | | :-------------------------------- | :------------------- | :------------ | :-------------- | :------------------- | :------------ | :-------------- | | Loans | $1,986,856 | $30,245 | 6.17% | $1,781,528 | $26,643 | 6.01% | | Total interest-earning assets | $2,498,973 | $33,978 | 5.51% | $2,326,761 | $30,887 | 5.34% | | Total interest-bearing deposits | $1,652,147 | $13,591 | 3.34% | $1,473,831 | $14,057 | 3.84% | | Total interest-bearing liabilities | $1,791,091 | $14,863 | 3.37% | $1,638,018 | $15,729 | 3.86% | | Net interest spread | N/A | N/A | 2.14% | N/A | N/A | 1.48% | [Provision for Credit Losses](index=33&type=section&id=Provision%20for%20Credit%20Losses) Analyzes the increase in provision for credit losses, attributing it to loan growth and a slight deterioration in economic forecasts - The provision for credit losses increased to **$681 thousand** for Q1 2025, compared to **$410 thousand** for Q1 2024[161](index=161&type=chunk) - The increase was primarily driven by loan portfolio growth and a slight deterioration in the economic forecast under the CECL methodology[161](index=161&type=chunk) [Non-Interest Income](index=34&type=section&id=Non-Interest%20Income) Details the significant increase in non-interest income, driven by prepayment penalties, title insurance, and SBA loan sales - Non-interest income for Q1 2025 increased by **$1.3 million**, or **50.8%**, to **$3,716 thousand**, compared to **$2,464 thousand** for Q1 2024[163](index=163&type=chunk) - This increase was primarily driven by growth in prepayment penalties and title insurance income (under service fees) and higher gains on the sale of SBA 7a loans[163](index=163&type=chunk) **Components of Non-Interest Income (Three Months Ended March 31, Dollars in thousands):** | Item | 2025 | 2024 | | :-------------------------- | :----- | :----- | | Service fees | $2,331 | $1,651 | | Gain on sale of loans held for sale, net | $525 | $67 | | Other non-interest income | $860 | $746 | [Non-Interest Expense](index=34&type=section&id=Non-Interest%20Expense) Analyzes the increase in non-interest expense, primarily due to higher salaries and employee benefits, including compensation and payroll taxes - Non-interest expense for Q1 2025 increased by **$878 thousand**, or **7.9%**, to **$12,052 thousand**, compared to **$11,174 thousand** for Q1 2024[164](index=164&type=chunk) - The increase was primarily driven by a **$1.3 million** rise in salaries and employee benefits due to merit increases, management bonuses, stock-based compensation expense, and payroll taxes[164](index=164&type=chunk) **Components of Non-Interest Expense (Three Months Ended March 31, Dollars in thousands):** | Item | 2025 | 2024 | | :-------------------------------- | :----- | :----- | | Salaries and employee benefits | $7,636 | $6,310 | | Occupancy | $1,284 | $1,314 | | Regulatory assessment and fees | $421 | $433 | | Consulting and legal fees | $193 | $592 | | Network and information technology services | $505 | $507 | | Other operating | $2,013 | $2,018 | [Provision for Income Tax](index=34&type=section&id=Provision%20for%20Income%20Tax) Discusses the increase in income tax expense and the slight rise in the effective tax rate for the period - Income tax expense for Q1 2025 was **$2.4 million**, compared to **$1.4 million** for Q1 2024[166](index=166&type=chunk) - The effective tax rate for Q1 2025 was **24.2%**, slightly up from **23.6%** for Q1 2024[166](index=166&type=chunk) [Analysis of Financial Condition](index=35&type=section&id=Analysis%20of%20Financial%20Condition) Analyzes the company's balance sheet, including asset, liability, and equity changes, and their impact on financial health [General](index=35&type=section&id=General_Analysis) Provides an overview of balance sheet expansion, highlighting significant annualized growth in total assets, loans, and deposits - Total assets increased by **$96.2 million**, or **15.1% annualized**, to **$2.68 billion** at March 31, 2025, from **$2.58 billion** at December 31, 2024[169](index=169&type=chunk) - Total loans, net of deferred fees/costs, increased by **$63.4 million**, or **13.0% annualized**, to **$2.04 billion** at March 31, 2025, compared to **$1.97 billion** at December 31, 2024[169](index=169&type=chunk) - Total deposits increased by **$135.6 million**, or **25.3% annualized**, to **$2.31 billion** at March 31, 2025, compared to **$2.17 billion** at December 31, 2024[169](index=169&type=chunk) [Investment Securities](index=35&type=section&id=Investment%20Securities_Analysis) Analyzes the growth and composition of the investment portfolio, including AFS and HTM securities, credit risk, and pledged assets - AFS and HTM investment securities increased by **$12.0 million**, or **11.5% annualized**, to **$436.9 million** at March 31, 2025, from **$424.9 million** at December 31, 2024[175](index=175&type=chunk) - No allowance for credit losses was required on AFS securities as of March 31, 2025, as unrealized losses were attributed to interest rate risk, not credit quality, and management intends to hold these securities to maturity[173](index=173&type=chunk) - A **$5 thousand** allowance for credit losses (ACL) was estimated for the non-government credit risk portion of HTM corporate bonds as of March 31, 2025[174](index=174&type=chunk) - As of March 31, 2025, investment securities with a market value of **$51.1 million** were pledged to secure public deposits[175](index=175&type=chunk) [Loans](index=36&type=section&id=Loans_Analysis) Details the continued growth of the loan portfolio, emphasizing commercial real estate, interest rate sensitivity, and rate floors - Total loans, net of deferred fees/costs, increased by **$63.4 million**, or **13.0% annualized**, to **$2.04 billion** at March 31, 2025, compared to December 31, 2024[180](index=180&type=chunk) - Commercial real estate lending remains the primary focus, representing approximately **56.7%** of the total gross loan portfolio as of March 31, 2025[181](index=181&type=chunk) - Approximately **57.6%** of the loans have adjustable/variable rates, and **42.4%** have fixed rates, with most loans including interest rate floors[184](index=184&type=chunk) [Asset Quality](index=38&type=section&id=Asset%20Quality) Describes the company's internal credit risk grading system for loans, categorizing them from 'Pass' to 'Loss' based on repayment capability - The company grades loans based on the borrower's estimated repayment capability, using internal credit risk grades: Pass, Special Mention, Substandard, Doubtful, and Loss[187](index=187&type=chunk)[188](index=188&type=chunk)[189](index=189&type=chunk)[190](index=190&type=chunk) **Loan Credit Exposures by Internally Assigned Grades (March 31, 2025, Dollars in thousands):** | Loan Type | Pass | Special Mention | Substandard | Doubtful | Total | | :------------------------ | :--------- | :-------------- | :---------- | :------- | :---------- | | Residential Real Estate | $299,971 | $0 | $1,193 | $0 | $301,164 | | Commercial Real Estate | $1,143,041 | $4,643 | $2,445 | $0 | $1,150,129 | | Commercial and Industrial | $253,196 | $76 | $3,054 | $0 | $256,326 | | Correspondent Banks | $103,026 | $0 | $0 | $0 | $103,026 | | Consumer and Other | $216,721 | $0 | $1,990 | $0 | $218,711 | | **Total Loans** | **$2,015,955** | **$4,719** | **$8,682** | **$0** | **$2,029,356** | [Non-Performing Assets](index=39&type=section&id=Non-Performing%20Assets) Reports the increase in non-performing assets, primarily non-accrual loans, while noting the strong allowance for credit losses **Non-Performing Assets (Dollars in thousands, except ratios):** | Item | March 31, 2025 | December 31, 2024 | | :------------------------------------ | :------------- | :---------------- | | Total non-performing loans | $4,156 | $2,707 | | Total non-performing assets | $4,156 | $2,707 | | Non-performing loans to total loans | 0.20% | 0.14% | | Allowance for credit losses to non-performing loans | 595% | 889% | - Commercial loans are placed on non-accrual status after **90 days past due**, and residential loans after **120 days past due**[194](index=194&type=chunk) [Allowance for Credit Losses](index=39&type=section&id=Allowance%20for%20Credit%20Losses) Details the increase in ACL for loans, driven by portfolio growth and economic forecast changes, including sensitivity analysis on qualitative factors **Allowance for Credit Losses (ACL) on Loans (Dollars in thousands):** | Item | March 31, 2025 | December 31, 2024 | | :-------------------- | :------------- | :---------------- | | Ending Balance (ACL) | $24,740 | $24,070 | | Net charge-offs (recoveries) to average loans (annualized) | 0.00% | 0.00% | - The FOMC economic forecasts as of March 31, 2025, showed moderate deterioration in unemployment and real GDP, and the Fannie Mae House Price Index (HPI) forecast reflected a deterioration in national housing prices, influencing the ACL[201](index=201&type=chunk) - A sensitivity analysis showed that for every **100 basis points** increase in the HPI, the forecast reduces residential loan reserves by approximately **$334 thousand**. For commercial real estate, a change from no risk to high risk in qualitative factors resulted in a **$10.2 million (41.0%)** increase in the ACL[202](index=202&type=chunk)[203](index=203&type=chunk) [Bank-Owned Life Insurance](index=40&type=section&id=Bank-Owned%20Life%20Insurance) Reports the cash surrender value of Bank-Owned Life Insurance (BOLI) policies and how changes are recognized as non-interest income - As of March 31, 2025, the combined cash surrender value of all bank-owned life insurance (BOLI) policies was **$57.9 million**[204](index=204&type=chunk) - Changes in cash surrender value are recorded as non-interest income in the Consolidated Statements of Operations[204](index=204&type=chunk) [Deposits](index=41&type=section&id=Deposits) Analyzes the significant increase in customer deposits, detailing the granular portfolio composition and management of uninsured deposits - Total deposits increased by **$135.6 million**, or **25.3% annualized**, to **$2.31 billion** at March 31, 2025, compared to **$2.17 billion** at December 31, 2024[169](index=169&type=chunk) - The deposit portfolio is granular, with **55%** in commercial deposits, **32%** personal deposits, **5%** public funds, and **8%** brokered deposits as of March 31, 2025[207](index=207&type=chunk) - The estimated percentage of uninsured deposits was **54%** at March 31, 2025. The company offers Insured Cash Sweep (ICS) and Certificate of Deposit Account Registry Service (CDARS) products, with balances of **$158.5 million** at March 31, 2025, to fully insure clients[209](index=209&type=chunk) [Other Liabilities](index=41&type=section&id=Other%20Liabilities) Reports the significant increase in escrow balances held for real estate taxes and insurance for loan customers - Escrow balances totaled **$13.5 million** as of March 31, 2025, compared to **$6.1 million** at December 31, 2024[212](index=212&type=chunk) [Borrowings](index=41&type=section&id=Borrowings) Details the company's borrowing sources, including FHLB advances, Federal Funds lines, and Federal Reserve Discount Window access - As of March 31, 2025, the company had **$108.0 million** of fixed-rate advances outstanding from the FHLB, with a weighted average rate of **3.60%** and maturity dates ranging from 2025 to 2028[214](index=214&type=chunk)[216](index=216&type=chunk) - The company also has Federal Funds lines of credit and access to the Federal Reserve Bank of Atlanta Discount Window, with no outstanding balances as of March 31, 2025[217](index=217&type=chunk) - During Q3 2024, the company paid off an **$80.0 million** fixed-rate loan from the Bank Term Funding Program[216](index=216&type=chunk) [Off-Balance Sheet Arrangements](index=42&type=section&id=Off-Balance%20Sheet%20Arrangements_Analysis) Reports the increase in off-balance sheet commitments, including credit extensions and letters of credit, and associated risk management **Lending Related Commitments Outstanding (Dollars in thousands):** | Commitment Type | March 31, 2025 | December 31, 2024 | | :------------------------------------------ | :------------- | :---------------- | | Commitments to grant loans & unfunded lines | $132,466 | $122,578 | | Standby & commercial letters of credit | $3,346 | $5,389 | | **Total** | **$135,812** | **$127,967** | - An allowance for off-balance sheet credit risk of **$581 thousand** was recorded at March 31, 2025 (compared to **$415 thousand** at March 31, 2024)[218](index=218&type=chunk) [Asset and Liability Management Committee](index=42&type=section&id=Asset%20and%20Liability%20Management%20Committee) Describes the ALCO's role in overseeing interest rate risk management, utilizing income simulations and EVE assessments for monitoring exposures - The ALCO oversees the establishment, approval, implementation, and review of interest rate risk management strategies, policies, and risk tolerances[224](index=224&type=chunk) - Income simulations (static and dynamic) are used to assess the impact of changing rates on earnings, while Economic Value of Equity (EVE) is used to measure the long-term economic impact on capital[226](index=226&type=chunk)[227](index=227&type=chunk) [Market and Interest Rate Risk Management](index=43&type=section&id=Market%20and%20Interest%20Rate%20Risk%20Management) Assesses the company's balance sheet sensitivity to interest rate changes, indicating a favorable impact on net interest income from rising rates - As of March 31, 2025, the company had a neutral to slightly asset sensitive balance sheet for year one and an asset sensitive balance sheet for year two, using the static model[228](index=228&type=chunk) - Asset sensitivity implies that assets reprice faster than liabilities, leading to a favorable impact on net interest income when market interest rates increase[228](index=228&type=chunk) - Management can modify the balance sheet to adjust asset or liability duration to manage asset sensitivity[229](index=229&type=chunk) [Liquidity](index=43&type=section&id=Liquidity) Details the company's liquidity management, including funding sources, access to external lines, and comprehensive risk management processes - Liquidity is defined as the company's capacity to meet its cash and collateral obligations at a reasonable cost[231](index=231&type=chunk) - Primary funding sources include the core deposit base, repayment and maturity of loans, and investment portfolio cash flows[238](index=238&type=chunk) - Additional funding sources include Federal Funds purchased, brokered certificates of deposit, unsecured fed funds lines, and borrowings from the FHLB and Federal Reserve Bank of Atlanta discount window[238](index=238&type=chunk) - The company has established a comprehensive process for identifying, measuring, monitoring, and mitigating liquidity risk, integrated into its risk management processes and Contingency Funding Plan[236](index=236&type=chunk) [Capital Adequacy](index=44&type=section&id=Capital%20Adequacy) Assesses the company's and Bank's capital adequacy, confirming 'well capitalized' status and compliance with regulatory requirements - As of March 31, 2025, the Bank was 'well capitalized' under the FDIC's prompt corrective action framework, and both the Company and the Bank exceeded all regulatory capital requirements[239](index=239&type=chunk) **Bank Capital Ratios (Dollars in thousands, except ratios):** | Capital Ratio | March 31, 2025 (Actual Ratio) | December 31, 2024 (Actual Ratio) | Minimum Capital Requirements | Well Capitalized Provisions | | :---------------------- | :---------------------------- | :--------------------------- | :--------------------------- | :-------------------------- | | Total risk-based capital | 13.65% | 13.34% | 8.00% | 10.00% | | Tier 1 risk-based capital | 12.41% | 12.10% | 6.00% | 8.00% | | Common equity tier 1 capital | 12.41% | 12.10% | 4.50% | 6.50% | | Leverage ratio | 9.55% | 9.38% | 4.00% | 5.00% | - The Company is not subject to regulatory capital ratios imposed by Basel III on bank holding companies because it is deemed a small bank holding company[240](index=240&type=chunk) [Impact of Inflation](index=44&type=section&id=Impact%20of%20Inflation) Analyzes the impact of inflation on operating costs and emphasizes the greater influence of interest rates on company performance - The impact of inflation is mostly reflected in the increased cost of operations and overhead expenses[242](index=242&type=chunk) - Interest rates have a greater impact on the company's performance than the effects of inflation, as nearly all assets and liabilities are monetary in nature[242](index=242&type=chunk) [Recently Issued Accounting Pronouncements](index=45&type=section&id=Recently%20Issued%20Accounting%20Pronouncements) Refers to Note 1 for details on recently issued accounting pronouncements and their impact on financial reporting - Details on recently issued accounting pronouncements are discussed in Note 1 'Summary of Significant Accounting Policies' to the unaudited Consolidated Financial Statements in Part I of this Form 10-Q[243](index=243&type=chunk) [Reconciliation and Management Explanation of Non-GAAP Financial Measures](index=46&type=section&id=Reconciliation%20and%20Management%20Explanation%20of%20Non-GAAP%20Financial%20Measures) Provides reconciliation and management's explanation of non-GAAP financial measures, offering supplemental insights into performance trends - Management includes non-GAAP measures to provide useful supplemental information for evaluating the company's underlying performance trends[245](index=245&type=chunk) **Selected Non-GAAP Financial Measures (As of or For the Three Months Ended, Dollars in thousands, except per share data):** | Metric | Mar 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | | :------------------------------------------ | :----------- | :----------- | :----------- | :----------- | :----------- | | Pre-tax pre-provision ("PTPP") income | $10,779 | $10,131 | $10,093 | $8,962 | $6,448 | | Operating net income | $7,658 | $6,904 | $6,949 | $6,199 | $4,612 | | Operating efficiency ratio | 52.79% | 55.92% | 53.16% | 56.37% | 63.41% | | Tangible book value per common share | $11.23 | $10.81 | $10.90 | $10.24 | $9.92 | | Operating diluted net income per common share | $0.38 | $0.34 | $0.35 | $0.31 | $0.23 | | Tangible Common Equity/Tangible Assets | 8.41% | 8.34% | 8.54% | 8.18% | 7.83% | [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=48&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) States that as a smaller reporting company, the registrant is exempt from providing quantitative and qualitative market risk disclosures - As a smaller reporting company, the registrant is not required to provide quantitative and qualitative disclosures about market risk[252](index=252&type=chunk) [Item 4. Controls and Procedures](index=48&type=section&id=Item%204.%20Controls%20and%20Procedures) Details management's evaluation of disclosure controls and procedures, confirming their effectiveness and reporting no material changes in internal controls [Evaluation of Disclosure Controls and Procedures](index=48&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) Reports management's evaluation of disclosure controls and procedures, concluding their effectiveness as of March 31, 2025 - Management, including the President and CEO and CFO, evaluated the effectiveness of the company's disclosure controls and procedures as of March 31, 2025[253](index=253&type=chunk) - Based on this evaluation, management believes the disclosure controls and procedures were effective to collect, process, and disclose required information within the specified time periods[253](index=253&type=chunk) [Changes in Internal Control Over Financial Reporting](index=48&type=section&id=Changes%20in%20Internal%20Control%20Over%20Financial%20Reporting) Confirms no material changes in internal control over financial reporting occurred during the period covered by this Form 10-Q - There has been no change in the company's internal control over financial reporting during the period covered by this Form 10-Q that has materially affected, or is reasonably likely to materially affect, its internal control over financial reporting[254](index=254&type=chunk) [Limitations on Effectiveness of Controls and Procedures](index=48&type=section&id=Limitations%20on%20Effectiveness%20of%20Controls%20and%20Procedures) Acknowledges that all controls and procedures inherently provide only reasonable, not absolute, assurance of achieving objectives - Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable, not absolute, assurance of achieving desired control objectives[255](index=255&type=chunk) [PART II - OTHER INFORMATION](index=49&type=section&id=PART%20II) [Item 1. Legal Proceedings](index=49&type=section&id=Item%201.%20Legal%20Proceedings) Reports no material legal proceedings, but acknowledges routine claims and litigation, with potential future financial impacts - The company is not currently subject to any material legal proceedings[257](index=257&type=chunk) - The company is from time to time subject to claims and litigation arising in the ordinary course of business, including allegations of banking and other regulatory violations, labor laws, and consumer protection laws[257](index=257&type=chunk) - There is no assurance that future legal proceedings will not be decided adversely to the company's interests and have a material adverse effect on its financial condition and operations[258](index=258&type=chunk) [Item 1A. Risk Factors](index=49&type=section&id=Item%201A.%20Risk%20Factors) Refers readers to the 2024 Form 10-K for detailed information on risk factors that could materially affect the company's business - For detailed information about certain risk factors, refer to 'Part I, Item 1A – Risk Factors' of the 2024 Form 10-K[259](index=259&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=49&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) Reports the repurchase of Class A common stock during Q1 2025 and the remaining authorized shares under repurchase programs - The company repurchased **9,671 shares** of Class A common stock at a weighted average cost of **$17.91 per share**, totaling approximately **$174 thousand**, during the three months ended March 31, 2025[114](index=114&type=chunk)[262](index=262&type=chunk) - As of March 31, 2025, **528,309 shares** remained authorized for repurchase under the company's two stock repurchase programs[262](index=262&type=chunk) [Item 3. Defaults Upon Senior Securities](index=49&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) States that this item is not applicable to the company - This item is not applicable to the company[263](index=263&type=chunk) [Item 4. Mine Safety Disclosures](index=49&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) States that this item is not applicable to the company - This item is not applicable to the company[263](index=263&type=chunk) [Item 5. Other Information](index=49&type=section&id=Item%205.%20Other%20Information) Reports no adoption or termination of Rule 10b5-1 or non-Rule 10b5-1 trading arrangements by directors or Section 16 persons - During the three months ended March 31, 2025, none of the company's directors or Section 16 reporting persons adopted or terminated any Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement[264](index=264&type=chunk) [Item 6. Exhibit Index](index=50&type=section&id=Item%206.%20Exhibit%20Index) Lists all exhibits filed with the 10-Q report, including corporate governance documents, agreements, and certifications - The exhibit index includes corporate governance documents (Articles of Incorporation, Bylaws), various agreements, certifications from the Chief Executive Officer and Chief Financial Officer, and Inline XBRL formatted financial statements[265](index=265&type=chunk) [Signatures](index=51&type=section&id=Signatures) Identifies the key executives, Luis de la Aguilera and Robert Anderson, who signed the report on May 9, 2025 - The report was signed by Luis de la Aguilera (Chairman, President and Chief Executive Officer) and Robert Anderson (Executive Vice President and Chief Financial Officer) on May 9, 2025[266](index=266&type=chunk)

Exhibit 99.2 EARNINGS PRESENTATION FIRST QUARTER 2025 NASDAQ: USCB USCB FINANCIAL HOLDINGS This presentation may cortain statements that are not historical in nature and are intended to be; and are hereby identified as , forward-boking statements for provided by Securities Exchange Add di 1934, as amerbed. Forward-Iosking statements are Mose that are not historical facts. The world 5 'inay, ""will, " "shusid, " "shusld, " "shusld, "alm, " plan, " estimate," "continue," "seek," and "intend," then espal in of ...

Financial Data and Key Metrics Changes - The company reported a fully diluted EPS of $0.38, a 65% increase compared to the prior year [4][12] - Net income for the quarter was $0.38 per diluted share, up 65% over the prior year [12] - Return on average assets was 1.19% and return on average equity was 14.15% [13] - Net interest margin (NIM) was 3.10%, down slightly from the prior quarter [13][22] - Efficiency ratio improved to 52.79% [13] - Tangible book value per share increased by $0.42 to $11.23 [13] Business Line Data and Key Metrics Changes - Average loans increased by $205.3 million or 11.5% compared to Q1 2024 [7][18] - Average deposits grew by $166.6 million or 8.1% compared to the same quarter last year [7] - Loan production was robust, with end-of-period net loan growth of $63.4 million or 13% annualized compared to the prior quarter [19] - Non-interest income was 16.3% of total revenue, consistent with prior quarters and higher than Q1 2024 [34] Market Data and Key Metrics Changes - The Florida economy is forecasted to grow steadily in 2025, with a growing labor force and low unemployment [7][40] - The company anticipates high-single digit to low double-digit loan and deposit growth in the upcoming quarters [7][41] Company Strategy and Development Direction - The company emphasizes relationship-driven organic growth and has onboarded additional senior bankers to support business lending and deposit production [6][8] - The strategy includes cautious optimism regarding economic uncertainties and a focus on maintaining credit quality [6][41] - The company plans to continue disciplined expense control to improve operating leverage [41] Management's Comments on Operating Environment and Future Outlook - Management noted heightened volatility in the market due to recent tariff announcements but expressed cautious optimism about the diversified business lines [5][6] - The company is prepared for both upward and downward shifts in interest rates, reflecting a neutral balance sheet position [25] - The management expects to see improvements in non-performing assets and classified loans in the upcoming quarters [82] Other Important Information - The Board of Directors declared a cash dividend of $0.10 per share, to be paid on June 5, 2025 [9][10] - The company has a strong focus on maintaining a robust balance sheet while returning capital to investors [10] Q&A Session Summary Question: What drove the deposit growth in the quarter? - The deposit growth was seen in key areas like correspondent banking and business banking, with a balanced contribution from various segments [47] Question: What is the outlook for NIM? - The guidance for NIM is flat to slightly up, with expectations of rate cuts benefiting deposit costs [49][54] Question: What is the impact of specialty verticals on deposits? - New hires in production personnel for various verticals are expected to support continued deposit growth [60] Question: How should we think about the expense base moving forward? - The expense base is expected to gradually increase due to new hires and performance-based bonuses [65] Question: What is the focus regarding capital? - The focus remains on organic growth rather than buybacks, given solid growth prospects [66] Question: What is the outlook for credit quality? - Management anticipates improvements in non-performing and classified loans in the second quarter [82]

Financial Data and Key Metrics Changes - The company reported a fully diluted EPS of $0.38, a 65% increase over the prior year [4] - Net income for the quarter was $0.38 per diluted share, up 65% over the prior year [8] - Return on average assets was 1.19% and return on average equity was 14.15% [9] - Net interest margin (NIM) was 3.1%, down slightly from the prior quarter [9] - The efficiency ratio improved to 52.79% [9] - Tangible book value per share increased by $0.42 to $11.23 [9] Business Line Data and Key Metrics Changes - Average loans increased by $205.3 million or 11.5% compared to Q1 2024 [5] - Average deposits grew by $166.6 million or 8.1% compared to the same quarter last year [5] - The loan pipeline remains robust and diversified, with expectations for high single-digit to low double-digit loan and deposit growth in Q2 [6] Market Data and Key Metrics Changes - The Florida economy is forecasted to grow steadily in 2025, with a growing labor force and low unemployment [5] - The company surpassed the $2 billion loan mark, achieving a significant milestone [8] Company Strategy and Development Direction - The company emphasizes relationship-driven organic growth and has onboarded additional senior bankers to support business lending and deposit production [6][29] - The strategic focus is on maintaining credit quality and carefully vetting new loan production amid economic uncertainties [4][29] - The company plans for disciplined expense control to improve operating leverage [29] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding the economic environment, particularly in light of recent trade deal progress [4] - The company anticipates continued growth in loans and deposits, tempered by economic uncertainties related to trade policies [29] - The management team is focused on maintaining a strong balance sheet while returning capital to investors through dividends [6][28] Other Important Information - The Board of Directors declared a cash dividend of $0.10 per share, to be paid on June 5, 2025 [6] - Noninterest income was 16.3% of total revenue, consistent with prior quarters [25] Q&A Session Summary Question: What drove the deposit growth in the quarter? - Management noted positive growth in Correspondent Banking and business banking, contributing to balanced deposit growth [36] Question: What is the outlook for NIM given the current conditions? - Management expects NIM to be flat to slightly up, anticipating potential rate cuts that could benefit deposit costs [38][40] Question: What is the impact of specialty verticals on deposits? - New hires in various verticals are expected to enhance deposit growth, particularly in HOA and business banking [46][48] Question: How should the expense base be viewed moving forward? - The expense base is expected to gradually increase due to new hires and performance-based bonuses [50] Question: What is the focus regarding capital growth? - The focus remains on organic growth rather than buybacks, given solid growth prospects [52]

Group 1: Earnings Performance - USCB Financial Holdings, Inc. reported quarterly earnings of $0.38 per share, matching the Zacks Consensus Estimate and showing an increase from $0.23 per share a year ago [1] - The company had a previous expectation of $0.37 per share but reported $0.34, resulting in a surprise of -8.11% [1] - Over the last four quarters, USCB has surpassed consensus EPS estimates two times [1] Group 2: Revenue Performance - For the quarter ended March 2025, USCB Financial posted revenues of $22.83 million, missing the Zacks Consensus Estimate by 0.92% and increasing from $17.62 million year-over-year [2] - The company has topped consensus revenue estimates three times over the last four quarters [2] Group 3: Stock Performance and Outlook - USCB Financial shares have increased by approximately 2.1% since the beginning of the year, contrasting with the S&P 500's decline of -8.6% [3] - The future performance of the stock will depend on management's commentary during the earnings call and the company's earnings outlook [4][6] - The current consensus EPS estimate for the upcoming quarter is $0.39 on revenues of $23.8 million, and for the current fiscal year, it is $1.58 on revenues of $96.44 million [7] Group 4: Industry Context - The Banks - Southeast industry, to which USCB Financial belongs, is currently in the top 25% of over 250 Zacks industries, indicating a favorable outlook [8] - Research indicates that the top 50% of Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1 [8]

Core Viewpoint - USCB Financial Holdings, Inc. reported a record net income of $7.7 million or $0.38 per fully diluted share for Q1 2025, reflecting strong performance across strategic priorities and significant growth in loans and deposits compared to the same period in 2024 [1][2]. Profitability - Net income for Q1 2025 was $7.7 million, up from $4.6 million in Q1 2024, representing a 67.4% increase [1][20]. - The annualized return on average assets was 1.19% for Q1 2025, compared to 0.76% for Q1 2024 [7][25]. - The annualized return on average stockholders' equity was 14.15% for Q1 2025, up from 9.61% in Q1 2024 [7][25]. - The efficiency ratio improved to 52.79% in Q1 2025 from 63.41% in Q1 2024 [7][25]. Balance Sheet - Total assets increased to $2.7 billion as of March 31, 2025, a rise of $188.2 million or 7.6% from $2.5 billion a year earlier [7][22]. - Total loans held for investment reached $2.0 billion, up $215.0 million or 11.8% from $1.8 billion in Q1 2024 [7][22]. - Total deposits grew to $2.3 billion, an increase of $206.8 million or 9.8% from $2.1 billion in Q1 2024 [7][22]. - Total stockholders' equity was $225.1 million, reflecting a $30.1 million or 15.4% increase from $195.0 million in Q1 2024 [7][22]. Asset Quality - The allowance for credit losses increased by $3.3 million to $24.7 million, representing 1.22% of total loans as of March 31, 2025, compared to 1.18% a year earlier [7][22]. - The ratio of non-performing loans to total loans was 0.20% at March 31, 2025, up from 0.03% at March 31, 2024, with non-performing loans totaling $4.2 million compared to $456 thousand a year earlier [7][22]. Non-interest Income and Non-interest Expense - Non-interest income for Q1 2025 was $3.7 million, an increase of $1.3 million or 50.8% from $2.5 million in Q1 2024 [6][20]. - Non-interest expense rose to $12.1 million, an increase of $0.9 million or 7.9% compared to $11.2 million in Q1 2024 [8][20].

Financial Performance - USCB Financial Holdings reported a record fully diluted EPS of $0.38 for Q1 2025, a 65% increase from $0.23 in Q1 2024[1][2]. - Net income for Q1 2025 was $7.7 million, compared to $4.6 million in the same period last year, reflecting a significant year-over-year growth[1][2]. - Net income for Q1 2025 reached $7,658 million, compared to $4,612 million in Q1 2024, reflecting a significant increase of 66.4%[21]. - The company reported a pre-tax pre-provision (PTPP) income of $10,779,000 for Q1 2025, up from $6,448,000 in Q1 2024, a significant increase of 67.5%[30]. - The operating return on average assets for Q1 2025 was 1.19%, up from 0.76% in Q1 2024, indicating improved asset utilization[30]. Asset Growth - Total assets increased by $188.2 million or 7.6% to $2.7 billion as of March 31, 2025, compared to $2.5 billion a year earlier[6]. - Total assets as of March 31, 2025, were $2,677,382 million, up from $2,489,142 million a year earlier, indicating a growth of 7.6%[21]. - Total assets as of March 31, 2025, were $2,606,593,000, up from $2,436,103,000 as of March 31, 2024, indicating a growth of 7%[30]. - Average assets for Q1 2025 were $2,606,593,000, compared to $2,436,103,000 in Q1 2024, reflecting a year-over-year increase of 7%[30]. Loan and Deposit Growth - Total loans held for investment rose by $215.0 million or 11.8% to $2.0 billion in Q1 2025, compared to $1.8 billion in Q1 2024[6]. - Total deposits grew by $206.8 million or 9.8% to $2.3 billion as of March 31, 2025, compared to $2.1 billion a year earlier[6]. - Total deposits increased to $2,309,569 million as of March 31, 2025, compared to $2,102,794 million a year ago, marking a growth of 9.8%[21]. Income and Efficiency - Net interest income for Q1 2025 was $19,115 million, an increase from $15,158 million in Q1 2024, representing a year-over-year growth of 26.5%[21]. - The net interest margin improved to 3.10% in Q1 2025 from 2.62% in Q1 2024, reflecting enhanced profitability on interest-earning assets[27]. - The efficiency ratio improved to 52.79% in Q1 2025 from 63.41% in Q1 2024, reflecting better cost management[6]. - The operating efficiency ratio decreased to 52.79% in Q1 2025 from 63.41% in Q1 2024, indicating improved cost management[30]. Dividends and Shareholder Returns - The Company declared a quarterly cash dividend of $0.10 per share, up from $0.05 in the previous year, to be paid on June 5, 2025[13]. - Cash dividends declared increased to $0.10 per share in Q1 2025, compared to $0.05 per share in Q1 2024[21]. Credit Quality - The provision for credit losses was $681 thousand in Q1 2025, an increase of $271 thousand from $410 thousand in Q1 2024[13]. - The allowance for credit losses to total loans ratio remained stable at 1.22% as of March 31, 2025[24]. - Non-performing loans increased to $4,156 million as of March 31, 2025, from $456 million in Q1 2024, indicating a rise in asset quality concerns[24]. Capital Position - The leverage ratio improved to 9.61% as of March 31, 2025, compared to 8.91% a year earlier, reflecting a stronger capital position[21]. - The tangible book value per common share increased to $11.23 as of March 31, 2025, compared to $9.92 a year earlier, marking a growth of 13.2%[33].

Core Viewpoint - USCB Financial Holdings, Inc. is set to report its financial results for the quarter ended March 31, 2025, on April 24, 2025, after market close [1] Group 1: Financial Reporting - The financial results will be discussed in a conference call on April 25, 2025, at 11:00 am Eastern Time, featuring key executives including the Chairman, President, and CEO, Luis de la Aguilera [1][2] - A live audio webcast of the conference call will be available on the investor relations page of the Company's website [2] - A replay of the webcast will be archived shortly after the conference call concludes [3] Group 2: Company Overview - USCB Financial Holdings, Inc. is the bank holding company for U.S. Century Bank, established in 2002, and is one of the largest community banks in Miami and Florida [4] - U.S. Century Bank holds a 5-Star rating from BauerFinancial, indicating strong financial health [4] - The bank offers a wide range of financial products and services and actively supports community organizations [4]

Group 1 - USCB Financial Holdings, Inc. (USCB) shares increased by 5.5% to close at $19.33, following a solid trading volume, contrasting with a 4.5% loss over the past four weeks [1] - The stock rally is attributed to the Federal Reserve's decision to keep interest rates steady, which is expected to improve the company's net interest income and margin [2] - USCB is projected to report quarterly earnings of $0.38 per share, reflecting a year-over-year increase of 65.2%, with revenues anticipated at $23.04 million, up 30.8% from the previous year [2] Group 2 - The consensus EPS estimate for USCB has remained unchanged over the last 30 days, indicating that stock price movements may not sustain without trends in earnings estimate revisions [4] - USCB Financial holds a Zacks Rank of 3 (Hold), while another company in the same industry, Origin Bancorp (OBK), has a Zacks Rank of 1 (Strong Buy) [4] - Origin Bancorp's consensus EPS estimate is $0.68, which is a decrease of 6.9% compared to the previous year [5]

Regulatory Environment - The company operates in a highly regulated environment, subject to extensive regulation and supervision by federal and state agencies, which could adversely affect its operations and financial condition [230]. - The company is required to maintain a Common Equity Tier 1 (CET1) capital ratio of 7.0% or more, a Tier 1 capital ratio of 8.5% or more, and a total capital ratio of 10.5% or more under Basel III rules [238]. - The company currently meets the Basel III capital requirements but may face challenges in maintaining compliance in the future, which could impact growth initiatives and investor confidence [239]. - The company has dedicated significant resources to its anti-money laundering program due to increased regulatory scrutiny, especially in high-risk areas like South Florida [233]. - Regulatory changes, such as those from the Dodd-Frank Act, could impose additional compliance costs and operational restrictions on the company [232]. - The company may incur costs related to improving its internal control systems to comply with Section 404 of the Sarbanes-Oxley Act [228]. - The company faces risks of noncompliance with the Bank Secrecy Act, which could lead to significant penalties and reputational damage [233]. - The company is subject to periodic examinations by banking agencies, which could result in remedial actions that negatively impact its operations [241]. - The company must obtain regulatory approvals for many activities, and failure to do so could restrict its business operations [230]. - Heightened regulatory scrutiny following recent banking stresses could lead to increased compliance costs and operational risks for the company [236]. - The company is subject to numerous laws and regulations, including the Community Reinvestment Act, which could lead to sanctions if not complied with [243]. Financial Performance - Total assets increased to $2,581,216 thousand in 2024 from $2,339,093 thousand in 2023, representing a growth of 10.4% [456]. - Net income rose to $24,674 thousand in 2024, up 49% from $16,545 thousand in 2023 [459]. - Total interest income increased to $131,233 thousand in 2024, a 30% increase from $101,017 thousand in 2023 [459]. - Loans held for investment grew to $1,948,778 thousand in 2024, compared to $1,759,743 thousand in 2023, marking an increase of 10.7% [456]. - Total deposits reached $2,174,004 thousand in 2024, up 12.2% from $1,937,139 thousand in 2023 [456]. - Net interest income after provision for credit losses was $66,779 thousand in 2024, a 19% increase from $56,201 thousand in 2023 [459]. - Non-interest income increased to $12,740 thousand in 2024, up 72% from $7,403 thousand in 2023 [459]. - The provision for credit losses was $3,157 thousand in 2024, compared to $2,367 thousand in 2023, reflecting a 33.4% increase [459]. - Total stockholders' equity increased to $215,388 thousand in 2024 from $191,968 thousand in 2023, a rise of 12.1% [456]. - Net income per share, basic, increased to $1.25 in 2024 from $0.84 in 2023, representing a growth of 49% [459]. - Net cash provided by operating activities rose to $34,090 thousand in 2024, up from $22,546 thousand in 2023, an increase of 51.2% [471]. - The net increase in deposits for 2024 was $236,865 thousand, compared to $107,858 thousand in 2023, reflecting a growth of 119.5% [471]. - Cash and cash equivalents at the end of 2024 were $77,035 thousand, up from $41,062 thousand at the end of 2023, marking an increase of 87.6% [471]. - The net cash used in investing activities decreased to $211,861 thousand in 2024 from $273,002 thousand in 2023, a reduction of 22.4% [471]. - The company reported interest paid of $60,544 thousand in 2024, up from $41,306 thousand in 2023, an increase of 46.5% [471]. - The net cash provided by financing activities was $213,744 thousand in 2024, compared to $237,350 thousand in 2023, a decrease of 10.0% [471]. Loan Portfolio and Credit Quality - The Company had a concentration of risk with loans outstanding to the top ten lending relationships totaling $236.2 million, representing 12.0% of net loans outstanding as of December 31, 2024 [509]. - The Company segments its loan portfolio based on collateral codes to establish reserves, utilizing regression models based on peer data for loans of similar risk characteristics [502]. - The Company’s loan portfolio is concentrated largely in real estate and commercial loans in South Florida, which could be adversely impacted by negative conditions in the local economy [507]. - The Company applies qualitative adjustments to expected credit losses to account for risk factors not captured in quantitative analysis [503]. - The allowance for credit losses (ACL) was $24.1 million as of December 31, 2024, compared to $21.1 million in 2023, indicating a rise of 14.2% [573]. - The provision for credit losses for 2024 was $2,960 thousand, compared to $2,503 thousand in 2023, indicating a 18.2% increase year-over-year [578]. - Total loans outstanding increased from $1,778,644 thousand as of December 31, 2023, to $1,965,218 thousand as of December 31, 2024, reflecting a growth of 10.5% [590]. - The total balance of collectively evaluated loans rose from $20,811 thousand in 2023 to $23,352 thousand in 2024, marking a 12.9% increase [579]. - The company reported a total of $2,280 thousand in substandard loans as of December 31, 2024, compared to $9,481 thousand in 2023, indicating a decrease of 76.0% [590]. - The total charge-offs for 2024 were $19 thousand, compared to $57 thousand in 2023, showing a decrease of 66.7% [578]. - The company’s recoveries increased from $85 thousand in 2023 to $45 thousand in 2024, reflecting a decrease of 47.1% [578]. - As of December 31, 2024, total accruing loans amounted to $1,962,511 thousand, with non-accruing loans totaling $2,707 thousand [592]. - Non-accrual loans with related allowance as of December 31, 2024, were $2,393 thousand, compared to $468 thousand in 2023, reflecting a significant increase [596]. - The company had two collateral-dependent loans as of December 31, 2024, with a recorded investment of $1,990 thousand [599]. Securities and Investments - The total amortized cost of available-for-sale investment securities as of December 31, 2024, was $310.9 million, with unrealized losses amounting to $51.2 million, resulting in a fair value of $260.2 million [551]. - For the year ended December 31, 2024, the proceeds from sales and calls of available-for-sale securities were $34.8 million, with net realized gains of $14 thousand [556]. - The allowance for credit losses on securities held-to-maturity was reported as $(6) thousand, indicating a minimal impact on the overall financial position [551]. - The total unrealized losses retained in accumulated other comprehensive income (AOCI) for securities transferred from available-for-sale to held-to-maturity was $9.3 million as of December 31, 2024 [555]. - The company reported a total of $164.7 million in held-to-maturity securities, net of allowance for credit losses, as of December 31, 2024 [551]. - The company monitors credit quality of held-to-maturity securities quarterly, with all such securities rated investment grade as of December 31, 2024 [564]. - The unrealized losses on investment securities were attributed to changes in interest rates rather than credit quality, reflecting management's assessment [567]. - The company had $66.1 million in securities pledged to the State of Florida under the public funds program as of December 31, 2024, down from $86.9 million in 2023 [569]. Accounting and Reporting - The company has elected to use an extended transition period for complying with new accounting standards, which may affect the comparability of its financial statements with other public companies [256]. - The adoption of ASU 2016-13 on January 1, 2023, resulted in an increase to the allowance for credit losses (ACL) on loan receivables of $1.1 million and a reserve for unfunded commitments of $259 thousand, leading to a cumulative adjustment of $1.0 million in accumulated deficit [545]. - As of January 1, 2023, 84% or $1.3 billion of loan receivables were evaluated under the Discounted Cash Flow (DCF) method, while 16% or $251 million were evaluated under the Remaining Life method [543]. - The company implemented ASU 2022-02 concurrently with ASU 2016-13, enhancing disclosures related to troubled debt restructurings [546]. - The impact of adopting CECL included an increase in the allowance for credit losses and adjustments to the deferred tax asset, reflecting changes in credit loss measurement methodologies [545]. Corporate Governance and Ownership - Significant investors, including Patriot Financial Partners and Priam Capital Fund, own approximately 22.4% and 22.5% of the company's Class A common stock, respectively, influencing corporate governance and decision-making [257]. - The company's ability to pay dividends is subject to restrictions and depends on the profitability of its bank subsidiary, which is regulated by the FDIC [248]. - The market price and trading volume of the company's Class A common stock may be volatile, influenced by various external factors unrelated to its performance [249]. - The company's governing documents include provisions that may have an anti-takeover effect, potentially delaying or preventing acquisitions [260].