USCB Financial Holdings, Inc. Portfolio Loss Restructuring

Core Viewpoint - USCB Financial Holdings, Inc. has sold $44.6 million in available-for-sale securities to enhance future earnings and profitability, despite a short-term decrease in net income for Q4 2025 [1][2]. Group 1: Financial Strategy - The company aims to improve its balance sheet by selling lower-yielding assets and reinvesting the proceeds into higher-yielding loans, particularly in commercial real estate [2]. - The sold AFS securities accounted for approximately 12.6% of the AFS portfolio as of November 30, 2025, with a weighted average yield of 1.70% [2]. - The restructuring is expected to yield a 3.5-year capital earn back and contribute approximately 7 basis points to annualized net interest margin starting in Q1 2026, leading to an estimated $0.08 EPS accretion over the next four quarters [2]. Group 2: Management Insights - The Chairman, President, and CEO of the company expressed confidence that the strategy will create significant opportunities for value delivery through stronger earnings and improved net interest margins [2][3]. - The company maintains a strong capital position, exceeding regulatory requirements for being categorized as "well-capitalized" [3]. Group 3: Company Background - USCB Financial Holdings, Inc. is the holding company for U.S. Century Bank, one of the largest community banks in Miami and Florida, established in 2002 [4]. - U.S. Century Bank is rated 5-Stars by BauerFinancial and offers a wide range of financial products and services while supporting various community organizations [4].