Core Points - USCB Financial Holdings, Inc. reported a net income of $8.1 million or $0.40 per fully diluted share for Q2 2025, an increase from $6.2 million or $0.31 per share in Q2 2024 [1][2] - The company achieved a net interest margin (NIM) of 3.28%, up from 2.94% in the same quarter last year, driven by healthy loan growth and disciplined deposit pricing [2][6] - The total assets increased to $2.7 billion, a rise of $261.2 million or 10.6% from the previous year [6][21] - Total loans held for investment reached $2.1 billion, reflecting a growth of $244.1 million or 13.1% year-over-year [6][21] - Total deposits grew to $2.3 billion, an increase of $279.0 million or 13.6% compared to the same period last year [6][21] - The efficiency ratio improved to 51.77% from 56.33% in Q2 2024, indicating better cost management [6][24] - Non-interest income was $3.4 million, a 5.0% increase from $3.2 million in Q2 2024 [13][20] - Non-interest expense rose to $12.6 million, up by 9.3% from $11.6 million in the same quarter last year [13][20] - The company declared a quarterly cash dividend of $0.10 per share, payable on September 5, 2025 [13][19] - The allowance for credit losses increased to $24.9 million, representing 1.18% of total loans [6][21] - The ratio of non-performing loans to total loans was 0.06%, up from 0.04% a year earlier, with non-performing loans totaling $1.4 million [7][21] Profitability - Annualized return on average assets for Q2 2025 was 1.22%, compared to 1.01% for Q2 2024 [6][24] - Annualized return on average stockholders' equity for Q2 2025 was 14.29%, up from 12.63% in Q2 2024 [6][24] Balance Sheet - Total stockholders' equity increased to $231.6 million, a rise of $30.6 million or 15.2% from the previous year [6][21] - Tangible book value per common share was $11.53, reflecting a 10.7% annualized increase from $11.23 at the end of Q1 2025 [13][21] Asset Quality - The allowance for credit losses increased by $2.7 million from the previous year [6][21] - The provision for credit loss was $1.0 million for Q2 2025, up from $786 thousand in Q2 2024 [6][21] - Non-performing loans totaled $1.4 million, an increase from $758 thousand a year earlier [7][21]

Executive Summary [Q2 2025 Financial Highlights](index=1&type=section&id=Q2%202025%20Financial%20Highlights) USCB Financial Holdings, Inc. reported record Q2 2025 net income of **$8.1 million** and diluted EPS of **$0.40**, driven by improved profitability and healthy growth - USCB Financial Holdings, Inc. reported **record fully diluted EPS** of **$0.40** for Q2 2025, an increase from **$0.31** in Q2 2024, reflecting continued improvement in profitability[1](index=1&type=chunk)[2](index=2&type=chunk) Q2 2025 vs. Q2 2024 Key Financial Highlights | Metric | Q2 2025 | Q2 2024 | Change (YoY) | | :----------------------------------- | :------ | :------ | :----------- | | Net Income | $8.1 million | $6.2 million | +$1.9 million (+30.6%) | | Fully Diluted EPS | $0.40 | $0.31 | +$0.09 (+29.0%) | | ROAA (Annualized) | 1.22% | 1.01% | +0.21 pp | | ROAE (Annualized) | 14.29% | 12.63% | +1.66 pp | | Efficiency Ratio | 51.77% | 56.33% | -4.56 pp | | Net Interest Margin | 3.28% | 2.94% | +0.34 pp | | Net Interest Income (before provision) | $21.0 million | $17.3 million | +$3.7 million (+21.5%) | | Total Assets (period-end) | $2.7 billion | $2.5 billion | +$261.2 million (+10.6%) | | Total Loans (period-end) | $2.1 billion | $1.9 billion | +$244.1 million (+13.1%) | | Total Deposits (period-end) | $2.3 billion | $2.1 billion | +$279.0 million (+13.6%) | | Total Stockholders' Equity (period-end) | $231.6 million | $201.0 million | +$30.6 million (+15.2%) | Financial Performance [Profitability Ratios](index=1&type=section&id=Profitability%20Ratios) Strong Q2 2025 profitability improvements, with significant increases in ROAA and ROAE, and a notable reduction in efficiency ratio Q2 2025 Profitability Ratios (YoY) | Metric | Q2 2025 | Q2 2024 | Change (YoY) | | :--------------------------------- | :------ | :------ | :----------- | | Annualized Return on Average Assets | 1.22% | 1.01% | +0.21 pp | | Annualized Return on Average Stockholders' Equity | 14.29% | 12.63% | +1.66 pp | | Efficiency Ratio | 51.77% | 56.33% | -4.56 pp | [Net Interest Income and Margin](index=1&type=section&id=Net%20Interest%20Income%20and%20Margin) Net interest income before provision for credit losses increased, driven by higher net interest margin, reflecting loan growth and deposit pricing Net Interest Income and Margin (YoY) | Metric | Q2 2025 | Q2 2024 | Change (YoY) | | :---------------------------------------- | :------ | :------ | :----------- | | Net Interest Income (before provision) | $21.0 million | $17.3 million | +$3.7 million (+21.5%) | | Net Interest Margin | 3.28% | 2.94% | +0.34 pp | | Net Interest Spread | 2.32% | 1.78% | +0.54 pp | - Total interest income increased to **$36.154 million** in Q2 2025 from **$32.617 million** in Q2 2024, primarily due to higher interest income from loans[18](index=18&type=chunk) - Total interest expense slightly decreased to **$15.120 million** in Q2 2025 from **$15.306 million** in Q2 2024, despite an increase in time deposit interest expense, due to lower costs on savings and money market deposits and FHLB advances[18](index=18&type=chunk) [Non-Interest Income and Expense](index=2&type=section&id=Non-Interest%20Income%20and%20Expense) Non-interest income modestly increased, while non-interest expense grew due to higher salaries, employee benefits, and other operating expenses Non-Interest Income and Expense (YoY) | Metric | Q2 2025 | Q2 2024 | Change (YoY) | | :---------------------- | :------ | :------ | :----------- | | Total Non-Interest Income | $3.4 million | $3.2 million | +$0.2 million (+5.0%) | | Total Non-Interest Expense | $12.6 million | $11.6 million | +$1.0 million (+9.3%) | | Service Fees | $2.402 million | $1.977 million | +$0.425 million (+21.5%) | | Salaries and Employee Benefits | $7.954 million | $7.353 million | +$0.601 million (+8.2%) | - Other operating expense increased to **$2.120 million** in Q2 2025 from **$1.723 million** in Q2 2024[18](index=18&type=chunk) [Income Statement Details](index=4&type=section&id=Income%20Statement%20Details) Consolidated statements of income provide a detailed breakdown of revenue and expenses, showing consistent net income growth for Q2 2025 Consolidated Statements of Income (Q2 2025 vs. Q2 2024) | Item | Three Months Ended June 30, 2025 (in thousands) | Three Months Ended June 30, 2024 (in thousands) | | :----------------------------------- | :------------------------------- | :------------------------------- | | Total interest income | $36,154 | $32,617 | | Total interest expense | $15,120 | $15,306 | | Net interest income before provision for credit losses | $21,034 | $17,311 | | Provision for credit losses | $1,031 | $786 | | Total non-interest income | $3,370 | $3,211 | | Total non-interest expense | $12,634 | $11,560 | | Net income before income tax expense | $10,739 | $8,176 | | Income tax expense | $2,599 | $1,967 | | Net income | $8,140 | $6,209 | | Net income per common share, diluted | $0.40 | $0.31 | Consolidated Statements of Income (Six Months Ended June 30, 2025 vs. 2024) | Item | Six Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | | :----------------------------------- | :----------------------------- | :----------------------------- | | Total interest income | $70,132 | $63,504 | | Total interest expense | $29,983 | $31,035 | | Net interest income before provision for credit losses | $40,149 | $32,469 | | Provision for credit losses | $1,712 | $1,196 | | Total non-interest income | $7,086 | $5,675 | | Total non-interest expense | $24,686 | $22,734 | | Net income before income tax expense | $20,837 | $14,214 | | Income tax expense | $5,039 | $3,393 | | Net income | $15,798 | $10,821 | | Net income per common share, diluted | $0.78 | $0.55 | Financial Position [Balance Sheet Overview](index=1&type=section&id=Balance%20Sheet%20Overview) Robust growth in total assets, loans, and deposits at June 30, 2025, indicates strong operational expansion for the Company Key Balance Sheet Data (YoY) | Metric | June 30, 2025 | June 30, 2024 | Change (YoY) | | :-------------------------------- | :------------ | :------------ | :----------- | | Total Assets | $2.7 billion | $2.5 billion | +$261.2 million (+10.6%) | | Total Loans Held for Investment | $2.1 billion | $1.9 billion | +$244.1 million (+13.1%) | | Total Deposits | $2.3 billion | $2.1 billion | +$279.0 million (+13.6%) | | Total Stockholders' Equity | $231.6 million | $201.0 million | +$30.6 million (+15.2%) | - Total securities increased to **$444.122 million** at June 30, 2025, from **$406.050 million** at June 30, 2024[20](index=20&type=chunk) - Non-interest-bearing demand deposits were **$584.895 million** at June 30, 2025, while interest-bearing deposits reached **$1,750.766 million**[20](index=20&type=chunk) [Capital Ratios and Equity](index=2&type=section&id=Capital%20Ratios%20and%20Equity) Strong capital ratios, well above regulatory requirements, demonstrate a solid capital position with significant year-over-year equity increase Capital Ratios (June 30, 2025) | Metric | Company | Bank | | :---------------------- | :------ | :------ | | Total Risk-Based Capital | 13.73% | 13.67% | | Common Equity Tier 1 Capital | 12.52% | N/A | | Tier 1 Risk-Based Capital | 12.52% | N/A | | Leverage Ratio | 9.72% | N/A | - Total stockholders' equity increased by **$30.6 million** or **15.2%** from **$201.0 million** at June 30, 2024, to **$231.6 million** at June 30, 2025[6](index=6&type=chunk) - Tangible book value per common share was **$11.53** at June 30, 2025, an annualized increase of **10.7%** from **$11.23** at March 31, 2025[12](index=12&type=chunk) [Loans and Deposits Composition](index=5&type=section&id=Loans%20and%20Deposits%20Composition) The loan portfolio is diversified, with commercial real estate as the largest segment, and deposits growing across interest-bearing categories Loans by Type (at period end, June 30, 2025) | Loan Type | Amount (in thousands) | | :---------------------- | :-------------------- | | Residential real estate | $307,020 | | Commercial real estate | $1,206,621 | | Commercial and industrial | $263,966 | | Correspondent banks | $110,155 | | Consumer and other | $218,426 | | **Total Loans Held for Investment** | **$2,113,318** | Deposits Composition (at period end, June 30, 2025) | Deposit Type | Amount (in thousands) | | :-------------------------------- | :-------------------- | | Non-interest-bearing demand deposits | $584,895 | | Interest-bearing deposits | $1,750,766 | | **Total Deposits** | **$2,335,661** | Asset Quality [Credit Loss Provision and Non-Performing Assets](index=1&type=section&id=Credit%20Loss%20Provision%20and%20Non-Performing%20Assets) Allowance for credit losses and provision for credit losses increased year-over-year, while non-performing loans and assets remained very low Asset Quality Data (YoY) | Metric | June 30, 2025 | June 30, 2024 | Change (YoY) | | :----------------------------------- | :------------ | :------------ | :----------- | | Allowance for Credit Losses (ACL) | $24.9 million | $22.2 million | +$2.7 million | | ACL as % of Total Loans | 1.18% | 1.19% | -0.01 pp | | Provision for Credit Losses (Q2) | $1.0 million | $786 thousand | +$245 thousand | | Total Non-Performing Loans | $1.4 million | $758 thousand | +$0.642 million | | Non-Performing Loans as % of Total Loans | 0.06% | 0.04% | +0.02 pp | | Non-Performing Assets as % of Total Assets | 0.05% | 0.03% | +0.02 pp | | Net Charge-offs (recoveries of) to average loans | 0.14% | (0.00)% | +0.14 pp | - The allowance for credit losses to non-performing loans ratio was **1825%** at June 30, 2025, compared to **2,933%** at June 30, 2024, indicating a **significant coverage** of non-performing loans[23](index=23&type=chunk) Dividend Declaration [Quarterly Cash Dividend](index=2&type=section&id=Quarterly%20Cash%20Dividend) The Board of Directors declared a quarterly cash dividend of **$0.10** per share, doubling the dividend from the previous year's second quarter - On July 21, 2025, the Board of Directors declared a quarterly cash dividend of **$0.10** per share of Class A common stock, payable on September 5, 2025, to shareholders of record on August 15, 2025[12](index=12&type=chunk) Cash Dividends Declared (YoY) | Metric | Q2 2025 | Q2 2024 | | :-------------------- | :------ | :------ | | Cash dividends declared | $0.10 | $0.05 | Corporate Information [About USCB Financial Holdings, Inc.](index=2&type=section&id=About%20USCB%20Financial%20Holdings%2C%20Inc.) USCB Financial Holdings, Inc. is the holding company for U.S. Century Bank, a prominent 5-Star rated community bank in Miami and Florida - U.S. Century Bank, established in 2002, is one of the largest community banks headquartered in Miami and in the State of Florida[10](index=10&type=chunk) - U.S. Century Bank is rated **5-Stars** by BauerFinancial, a leading independent bank rating firm[10](index=10&type=chunk) - The bank offers a wide range of financial products and services and supports numerous community organizations[10](index=10&type=chunk) Conference Call Details [Q2 2025 Earnings Conference Call](index=2&type=section&id=Q2%202025%20Earnings%20Conference%20Call) USCB Financial Holdings, Inc. will host a conference call and webcast on July 25, 2025, to discuss Q2 2025 financial results - The Company will host a conference call on Friday, July 25, 2025, at 11:00 a.m. Eastern Time[8](index=8&type=chunk) - To access the conference call, dial **(833) 816-1416** (U.S. toll-free) and ask to join the USCB Financial Holdings Call[8](index=8&type=chunk) - A live webcast and archived version will be available in the 'Investor Relations' section of the Company's website at www.uscentury.com[9](index=9&type=chunk) Forward-Looking Statements [Disclaimer and Risk Factors](index=2&type=section&id=Disclaimer%20and%20Risk%20Factors) This section outlines forward-looking statements, emphasizing that actual results may differ materially due to significant risks and uncertainties - The earnings release contains forward-looking statements identified by words such as 'may,' 'will,' 'anticipate,' 'expect,' and 'intend,' related to projected growth, future financial performance, and strategic goals[11](index=11&type=chunk) - Significant risks and uncertainties could cause actual results to differ materially, including managing interest rate, credit, and liquidity risks, economic strength, regulatory changes, and market conditions[12](index=12&type=chunk)[16](index=16&type=chunk) - The Company undertakes no obligation to update or revise any forward-looking statement unless required by federal securities laws, and cautions against undue reliance on these statements[13](index=13&type=chunk) Non-GAAP Financial Measures [Non-GAAP Reconciliations](index=3&type=section&id=Non-GAAP%20Reconciliations) The Company provides non-GAAP financial measures like PTPP income, operating net income, and tangible book value per share to evaluate operations and performance - Management uses non-GAAP measures to evaluate the Company's business and believes they provide useful supplemental information for evaluating operations and underlying performance trends[14](index=14&type=chunk) Key Non-GAAP Financial Measures (Q2 2025 vs. Q2 2024) | Metric | Q2 2025 (in thousands) | Q2 2024 (in thousands) | | :----------------------------------- | :------ | :------ | | PTPP income | $11,770 | $8,962 | | PTPP return on average assets | 1.76% | 1.45% | | Operating net income | $8,140 | $6,199 | | Operating return on average assets | 1.22% | 1.01% | | Operating return on average equity | 14.29% | 12.61% | | Operating revenue | $24,404 | $20,508 | | Operating efficiency ratio | 51.77% | 56.37% | | Tangible book value per common share | $11.53 | $10.24 | | Operating diluted net income per common share | $0.40 | $0.31 | | Tangible Common Equity/Tangible Assets | 8.52% | 8.18% | - Tangible book value per common share was negatively affected by accumulated comprehensive loss of **$41.8 million** (**$2.08** per share) at June 30, 2025, primarily due to changes in the market value of available-for-sale securities[12](index=12&type=chunk) Consolidated Financial Statements (Unaudited) [Consolidated Statements of Income](index=4&type=section&id=Consolidated%20Statements%20of%20Income) This section presents the unaudited consolidated statements of income for the three and six months ended June 30, 2025, and 2024, detailing key revenue and expense categories - The full Consolidated Statements of Income are provided on page 4, detailing all revenue and expense categories for the reported periods[17](index=17&type=chunk)[18](index=18&type=chunk) [Selected Financial Data](index=5&type=section&id=Selected%20Financial%20Data) This table presents a five-quarter trend of key income statement, balance sheet, and per share data, offering a comprehensive view of financial performance and position - The Selected Financial Data table on page 5 provides a quarterly breakdown of income statement, balance sheet, and per share information from Q2 2024 to Q2 2025[19](index=19&type=chunk)[20](index=20&type=chunk) [Average Balances, Ratios, and Other Data](index=6&type=section&id=Average%20Balances%2C%20Ratios%2C%20and%20Other%20Data) This section presents average balance sheet data, performance ratios, loan composition, asset quality, and interest rates over five quarters, detailing operational efficiency and portfolio characteristics - The Average Balances, Ratios, and Other Data table on page 6 includes annualized performance ratios such as Return on Average Assets (ROAA), Return on Average Equity (ROAE), and Net Interest Margin (NIM) across five quarters[22](index=22&type=chunk)[23](index=23&type=chunk) - Detailed asset quality data, including Allowance for Credit Losses to total loans and non-performing loans, is presented[23](index=23&type=chunk) [Net Interest Margin Analysis](index=7&type=section&id=Net%20Interest%20Margin%20Analysis) This table details average balances, interest income/expense, and annualized yields/rates for interest-earning assets and liabilities, illustrating components contributing to net interest margin and spread - The Net Interest Margin table on page 7 details average balances, interest, and annualized yields/rates for interest-earning assets and interest-bearing liabilities for Q2 2025 and Q2 2024[25](index=25&type=chunk)[26](index=26&type=chunk) - It shows the calculation of net interest spread and net interest margin, highlighting the increase in both metrics year-over-year[26](index=26&type=chunk)

Core Points - USCB Financial Holdings, Inc. declared a regular quarterly cash dividend of $0.10 per share of Class A common stock, payable on September 5, 2025, to shareholders of record as of August 15, 2025 [1] - Future dividend payments will be subject to quarterly review and approval by the Board of Directors [1] Company Overview - USCB Financial Holdings, Inc. is the bank holding company for U.S. Century Bank, established in 2002 [2] - U.S. Century Bank is one of the largest community banks headquartered in Miami and in the State of Florida [2] - The bank is rated 5-Stars by BauerFinancial, an independent bank rating firm [2] - U.S. Century Bank offers a wide range of financial products and services and supports various community organizations [2]

Core Viewpoint - USCB Financial Holdings, Inc. is set to report its financial results for the quarter ended June 30, 2025, on July 24, 2025, after market close [1] Group 1: Financial Reporting - The financial results will be discussed in a conference call on July 25, 2025, at 11:00 am Eastern Time [2] - The call will feature key executives including the Chairman, President, and CEO, Luis de la Aguilera, along with the CFO, Robert Anderson, and the Chief Credit Officer, William Turner [1] Group 2: Company Overview - USCB Financial Holdings, Inc. is the bank holding company for U.S. Century Bank, established in 2002 [4] - U.S. Century Bank is one of the largest community banks in Miami and Florida, rated 5-Stars by BauerFinancial [4] - The bank offers a wide range of financial products and services and supports various community organizations [4]

[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].