USCB Financial Q3 net income rises to $9.53M
Net interest margin expanded to 3.37%, and the Bank remained above well-capitalized guidelines at September 30, 2026.
Sentiment and the balance of points
Rhea-AI Sentiment reads the wording of the document, how positive or negative its language is on a 1 to 5 scale. The balance of points shown with the takes weighs what the document actually discloses, so the two can disagree, for example when a trial that missed its main goal is described in upbeat language.
Form Type
10-Q
Rhea-AI Filing Summary
USCB Financial Holdings, Inc. reported third-quarter 2026 net income of $9.528 million, compared with $8.939 million a year earlier; diluted earnings per share were $0.51 versus $0.45. Net interest income before provision for credit losses rose 14.2% to $24.3 million from $21.3 million, and net interest margin was 3.37%, compared with 3.14%.
At September 30, 2026, total assets were $3.011 billion, loans held for investment, net of the allowance for credit losses, were $2.295 billion, and deposits totaled $2.446 billion. The allowance for loan credit losses was $27.018 million, compared with $25.500 million at December 31, 2025. Other comprehensive loss was $11.948 million for the quarter, and total comprehensive loss was $2.420 million. Unrealized losses on available-for-sale securities were $16.243 million. The Bank exceeded regulatory capital requirements and remained above well-capitalized guidelines; its total risk-based capital ratio was 13.93% at September 30, 2026.
On October 19, 2026, the board declared a quarterly cash dividend of $0.125 per share, payable December 4, 2026, to stockholders of record November 16, 2026.
2 points · 0 major0 major · 1 point
How this balance works
Rhea-AI gives every point it takes from this document a weight. Minor counts 1, Moderate 3 and Major 9, so one Major point outweighs several Minor ones. The bar adds up the weights on each side, and when neither side holds more than 65% of the total the balance reads Mixed.
It reads the document as published, with the same rules for every company, and it does not look at what the market expected or at how the stock traded, so a point can be objectively good on a day the stock falls.
Rhea-AI Sentiment measures something else, the tone of the wording.
Positive
- Moderate pointNet interest income before provision rose 14.2% to $24.3 million in Q3.
- Moderate pointQ3 net income rose from $8.939 million to $9.528 million year over year.
Negative
- Moderate pointQ3 total comprehensive loss: $2.420 million, versus $12.885 million income in 2025.
Key Figures
Net income: $9.528 million
Net interest income before provision for credit losses: $24.3 million
Net interest margin: 3.37%
+5 more
8 metrics
Net income
$9.528 million
Three months ended September 30, 2026; $8.939 million in 2025
Net interest income before provision for credit losses
$24.3 million
Q3 2026; $21.3 million in Q3 2025; increase of 14.2%
Net interest margin
3.37%
Three months ended September 30, 2026; 3.14% in 2025
Diluted earnings per share
$0.51 per share
Three months ended September 30, 2026; $0.45 in 2025
Total comprehensive loss
$2.420 million loss
Three months ended September 30, 2026; $12.885 million income in 2025
Loans held for investment, net
$2.295 billion
As of September 30, 2026
Total deposits
$2.446 billion
As of September 30, 2026
Quarterly cash dividend
$0.125 per share
Declared October 19, 2026
Key Terms
Net interest margin, Allowance for credit losses, CECL, Collateral-Dependent Loans, +1 more
5 terms
Net interest margin financial
"Net interest margin (“NIM”) expanded to 3.37%"
Net interest margin measures how much a bank earns from lending and investing compared with what it pays for funding, expressed as a percentage of its interest-earning assets. Think of it like a grocery store’s markup: it shows the gap between buying cost and selling price per dollar of goods — here, the cost is interest paid and the sale is interest received. Investors watch it because a higher margin usually means a bank is more profitable and better at managing interest rate and credit conditions.
Allowance for credit losses financial
"the ACL for loans was $27.0 million"
Allowance for credit losses is a reserve set aside by a financial institution to cover potential losses from borrowers who may not repay their loans. It acts like a safety net, helping the institution prepare for loans that might turn sour. For investors, it signals how cautious the institution is about the quality of its loans and potential risks to its financial health.
CECL financial
"CECL methodology is applicable to financial assets measured at amortized cost"
An accounting standard that requires banks and other lenders to estimate and record expected credit losses for loans and similar financial assets up front, based on historical experience, current conditions and reasonable forecasts. It matters to investors because it changes how much a firm must set aside as a loss reserve, which directly affects reported profits, capital levels and perceived financial strength—think of it as stocking a reserve for future bad loans before the rain starts.
Collateral-Dependent Loans financial
"Collateral-Dependent Loans"
Costless collar hedges financial
"two costless collar hedges with a notional amount of $100 million"
FAQ
AI-generated questions and answers. How Rhea-AI works. Not financial advice.
What were USCB's Q3 2026 earnings?
USCB reported net income of $9.528 million for the three months ended September 30, 2026, compared with $8.939 million in 2025. Diluted earnings per share were $0.51, versus $0.45.
When is USCB's $0.125 dividend payable?
The quarterly cash dividend of $0.125 per share is payable December 4, 2026, to stockholders of record at the close of business November 16, 2026.
AI-generated analysis. How Rhea-AI works. Not financial advice.
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _____to_____
Commission File Number:
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification No.)
,
,
(Address of principal executive offices) (zip code)
Registrant’s telephone number, including area code:
)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol(s)
Name of each exchange on which registered
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days.
☒
☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant
to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant
was required to submit such files).
☒
☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting
company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “non-accelerated filer,”
“smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
☐
☒
☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes
☐
☒
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
As of October 31, 2026, the registrant had
A
common stock outstanding.
FORM 10-Q
September 30, 2026
TABLE OF CONTENTS
PART I
3
Item 1.
Financial Statements
3
Consolidated Balance Sheets as of September 30, 2026 (Unaudited) and December 31, 2025
3
Consolidated Statements of Operations for the three and nine months ended September 30, 2026 and 2025
(Unaudited)
4
Consolidated Statements of Comprehensive Income (Loss) for the three and nine months ended
September 30, 2026 and 2025 (Unaudited)
5
Consolidated Statements of Changes in Stockholders’ Equity for the three and nine months ended
September 30, 2026 and 2025 (Unaudited)
6
Consolidated Statements of Cash Flows for the nine months ended September 30, 2026 and 2025
(Unaudited)
8
Notes to the Consolidated Financial Statements (Unaudited)
9
Item 2.
Management's Discussion and Analysis of Financial Condition and Results of Operations
31
Item 3.
Quantitative and Qualitative Disclosures About Market Risk
54
Item 4.
Controls and Procedures
54
PART II
55
Item 1.
Legal Proceedings
55
Item 1A.
Risk Factors
55
Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds
55
Item 3.
Defaults Upon Senior Securities
55
Item 4.
Mine Safety Disclosures
55
Item 5.
Other Information
55
Item 6.
Exhibit Index
57
Signatures
Table of Contents
3 USCB Financial Holdings, Inc. Q3 2026 Form 10-Q
PART I
Item 1. Financial Statements
USCB FINANCIAL HOLDINGS, INC
Consolidated Balance Sheets
(Dollars in thousands, except share data)
(Unaudited)
September 30, 2026
December 31, 2025
ASSETS:
Cash and due from banks
$
$
Interest -bearing deposits in banks
Total cash and cash equivalents
Investment securities held to maturity, net of allowance of $
, respectively (fair value of
$
, respectively)
Investment securities available for sale, at fair value
Federal Home Loan Bank stock, at cost
Loans held for investment, net of allowance of $
, respectively
Accrued interest receivable
Premises and equipment, net
Bank owned life insurance
Deferred tax assets, net
Lease right -of-use asset
Other assets
Total assets
$
$
LIABILITIES:
Deposits:
Non-interest bearing demand deposits
$
$
Savings and money market deposits
Interest -bearing demand deposits
Time deposits
Total deposits
Federal Home Loan Bank advances
Subordinated notes, net
Lease liability
Accrued interest and other liabilities
Total liabilities
Commitments and contingencies (See Notes 6 and 11)
(nil)
(nil)
STOCKHOLDERS' EQUITY:
Preferred stock - Class C; $
authorized;
Preferred stock - Class D; $
authorized;
Preferred stock - Class E; $
authorized;
Common stock - Class A Voting; $
outstanding as of September 30, 2026,
Common stock - Class B Non-voting; $
outstanding as of September 30, 2026 and December 31, 2025
Additional paid-in capital on common stock
Accumulated deficit
(28,470 )
(49,542 )
Accumulated other comprehensive loss
(43,343 )
(30,265 )
Total stockholders' equity
Total liabilities and stockholders' equity
$
$
The accompanying notes are an integral part of these unaudited consolidated financial statements.
Table of Contents
4 USCB Financial Holdings, Inc. Q3 2026 Form 10-Q
USCB FINANCIAL HOLDINGS, INC.
Consolidated Statements of Operations - Unaudited
(Dollars in thousands , except per share data)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2026
2025
2026
2025
Interest income:
$
$
$
$
Interest expense:
Interest -bearing demand deposits
Savings and money market deposits
Provision for credit losses
Non-interest income:
(28 )
(28 )
Non-interest expense:
Income tax expense
$
$
$
$
Per share information:
Earnings per share, basic
$
$
$
$
Earnings per share, diluted
$
$
$
$
Cash dividends declared
$
$
$
$
The accompanying notes are an integral part of these unaudited consolidated financial statements.
Table of Contents
5 USCB Financial Holdings, Inc. Q3 2026 Form 10-Q
USCB FINANCIAL HOLDINGS, INC.
Consolidated Statements of Comprehensive Income (Loss) - Unaudited
(Dollars in thousands )
Three Months Ended
September 30,
Nine Months Ended
September 30,
2026
2025
2026
2025
Net income
$
$
$
$
Other comprehensive (loss) income:
Unrealized gain (loss) on investment securities available for sale
(16,243 )
(18,164 )
Reclassification adjustment for amortization of net unrealized losses
on securities transferred from available-for -sale to held-to-maturity
Reclassification adjustment for realized loss (gain) included in net
income
(14 )
Unrealized gain (loss) on cash flow hedge
(123 )
(309 )
Income tax benefit (expense)
(1,340 )
(2,284 )
Total other comprehensive (loss) income, net of tax
(11,948 )
(13,078 )
Total comprehensive (loss) income
$
(2,420 )
$
$
$
The accompanying notes are an integral part of these unaudited consolidated financial statements.
Table of Contents
6 USCB Financial Holdings, Inc. Q3 2026 Form 10-Q
USCB FINANCIAL HOLDINGS, INC.
Consolidated Statements of Changes in Stockholders’ Equity - Unaudited
(Dollars in thousands , except per share data)
Common Stock
Additional Paid-in
Capital on Common
Stock
Accumulated
Deficit
Accumulated Other
Comprehensive
Loss
Shares
Par Value
Total
Stockholders'
Equity
Balance at June 30, 2026
$
$
$
(35,690 )
$
(31,395 )
$
Net income
-
Other comprehensive loss
-
(11,948 )
(11,948 )
Restricted stock issued
(15 )
Restricted stock forfeiture
(9,393 )
(9 )
Dividend payment
-
(2,308 )
(2,308 )
Stock-based compensation
-
Balance at September 30, 2026
$
$
$
(28,470 )
$
(43,343 )
$
Balance at June 30, 2025
$
$
$
(56,025 )
$
(41,752 )
$
Net income
-
Other comprehensive income
-
Repurchase of Class A common stock
(2,000,000 )
(2,000 )
(32,380 )
(34,380 )
Exercise of stock options
Dividend payment
-
(2,008 )
(2,008 )
Stock-based compensation
-
Balance at September 30, 2025
$
$
$
(49,094 )
$
(37,806 )
$
The accompanying notes are an integral part of these consolidated financial statements.
Table of Contents
7 USCB Financial Holdings, Inc. Q3 2026 Form 10-Q
Common Stock
Additional Paid-in
Capital on Common
Stock
Accumulated
Deficit
Accumulated Other
Comprehensive
Loss
Shares
Par Value
Total
Stockholders'
Equity
Balance at December 31, 2025
$
$
$
(49,542 )
$
(30,265 )
$
Net income
-
Other comprehensive loss
-
(13,078 )
(13,078 )
Repurchase of Class A common stock
(53,475 )
(53 )
(948 )
(1,001 )
Restricted stock issued
(162 )
Restricted stock forfeiture
(9,393 )
(9 )
Exercise of stock options
Dividend payment
-
(6,885 )
(6,885 )
Stock-based compensation
-
Balance at September 30, 2026
$
$
$
(28,470 )
$
(43,343 )
$
Balance at December 31, 2024
$
$
$
(67,813 )
$
(44,534 )
$
Net income
-
Other comprehensive income
-
Repurchase of Class A common stock
(2,009,671 )
(2,010 )
(32,544 )
(34,554 )
Restricted stock issued
(124 )
Exercise of stock options
Dividend payment
-
(6,018 )
(6,018 )
Stock-based compensation
-
Balance at September 30, 2025
$
$
$
(49,094 )
$
(37,806 )
$
The accompanying notes are an integral part of these consolidated financial statements.
Table of Contents
8 USCB Financial Holdings, Inc. Q3 2026 Form 10-Q
USCB FINANCIAL HOLDINGS, INC.
Consolidated Statements of Cash Flows - Unaudited
(Dollars in thousands )
Nine Months Ended September 30,
2026
2025
Cash flows from operating activities:
Net income
$
$
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for credit losses
Depreciation and amortization
Accretion of premiums on investment securities, net
(1,143 )
(1,136 )
Amortization of deferred loan fees, net
Stock-based compensation
(Gain) loss on sale of available for sale securities, net
(14 )
Gain on sale of loans held for sale, net
(271 )
(804 )
Proceeds from the sale of loans held for sale
Origination of loans held for sale
(3,112 )
(10,569 )
Increase in cash surrender value of bank owned life insurance
(1,519 )
(1,451 )
Amortization of subordinated debt issuance costs
Deferred income tax expense
Net change in operating assets and liabilities:
Accrued interest receivable
(797 )
(1,181 )
Other assets
(3,097 )
(7,389 )
Accrued interest and other liabilities
Net cash provided by operating activities
Cash flows from investing activities:
Proceeds from maturities and pay-downs of investment securities held to maturity
Purchase of investment securities available for sale
(108,171 )
(101,486 )
Proceeds from maturities and pay-downs of investment securities available for sale
Proceeds from sales of investment securities available for sale
Net increase in loans held for investment
(89,736 )
(78,149 )
Purchase of loans held for investment
(44,090 )
(81,392 )
Additions to premises and equipment
(831 )
(208 )
Purchase of bank owned life insurance
(4,000 )
Proceeds from the redemption of Federal Home Loan Bank stock
Purchase of Federal Home Loan Bank stock
(32,446 )
(5,727 )
Net cash used in investment activities
(169,351 )
(201,898 )
Cash flows from financing activities:
Proceeds from issuance of Class A common stock, net
Cash dividends paid
(6,885 )
(6,018 )
Repurchase of Class A common stock
(1,001 )
(34,554 )
Net increase in deposits
Proceeds from subordinated notes
Proceeds from Federal Home Loan Bank advances
Repayments on Federal Home Loan Bank advances
(631,750 )
(269,000 )
Net cash provided by financing activities
Net increase (decrease) in cash and cash equivalents
(20,224 )
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period
$
$
Supplemental disclosure of cash flow information:
Interest paid
$
$
Taxes paid
$
$
Lease liabilities
$
$
The accompanying notes are an integral part of these unaudited consolidated financial statements.
Table of Contents
USCB FINANCIAL HOLDINGS, INC.
Notes to the Consolidated Financial Statements - Unaudited
9 USCB Financial Holdings, Inc. Q3 2026 Form 10-Q
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Overview
USCB Financial Holdings, Inc., a Florida corporation incorporated in 2021, is a bank holding company with
wholly owned subsidiary, U.S. Century Bank (the “Bank”), together referred to as “the Company”. The Bank, established in
2002, is a Florida state-chartered, non-member financial institution providing financial services through its banking centers
located in South Florida.
The Bank owns a subsidiary, Florida Peninsula Title LLC, that offers our clients title insurance policies for real estate
transactions closed at the Bank. Licensed in the State of Florida and approved by the Department of Insurance Regulation,
Florida Peninsula Title LLC began operations in 2021.
Basis of Presentation
The accompanying unaudited consolidated financial statements have been prepared in accordance with instructions to
Form 10-Q and do not include all the information and footnotes required by U.S. generally accepted accounting principles
(“U.S. GAAP”) for complete financial statements. All adjustments consisting of normally recurring accruals that, in the
opinion of management, are necessary for a fair presentation of the financial position and results of operations for the
periods presented have been included. These unaudited consolidated financial statements should be read in conjunction
with the Company’s audited consolidated financial statements and related notes appearing in the Company’s Annual Report
on Form 10-K for the year ended December 31, 2025.
Principles of Consolidation
The Company consolidates entities in which it has a controlling financial interest. Intercompany transactions and
balances are eliminated in consolidation.
Use of Estimates
To prepare consolidated financial statements in conformity with U.S. GAAP, management makes estimates and
assumptions based on available information. These estimates and assumptions affect the amounts reported in the
consolidated financial statements. The most significant estimate impacting the Company’s consolidated financial statements
is the allowance for credit losses (“ACL”).
Reclassifications
Certain amounts in the prior period consolidated financial statements have been reclassified to conform to the current
presentation. Reclassifications had no impact on prior period net income or stockholders’ equity.
Recently Issued Accounting Standards
There were no recently issued accounting standards adopted or issued during the period that are expected to have a
material impact on the Company’s consolidated financial statements.
Table of Contents
USCB FINANCIAL HOLDINGS, INC.
Notes to the Consolidated Financial Statements - Unaudited
10 USCB Financial Holdings, Inc. Q3 2026 Form 10-Q
2. INVESTMENT SECURITIES
The following tables present a summary of the amortized cost, unrealized or unrecognized gains and losses , and fair
value of investment securities at the dates indicated (in thousands):
September 30, 2026
Available-for-sale:
Amortized
Cost
Unrealized
Gains
Unrealized
Losses
Fair Value
U.S. Government Agency
$
$
$
(1,416 )
$
Collateralized mortgage obligations
(20,093 )
Mortgage-backed securities - residential
(7,654 )
Mortgage-backed securities - commercial
(18,458 )
Municipal securities
(1,226 )
Bank subordinated debt securities
(1,006 )
$
$
$
(49,853 )
$
September 30, 2026
Held-to-maturity:
Amortized
Cost
Unrecognized
Gains
Unrecognized
Losses
Fair Value
U.S. Government Agency
$
$
$
(4,098 )
$
Collateralized mortgage obligations
(6,696 )
Mortgage-backed securities - residential
(4,352 )
Mortgage-backed securities - commercial
(1,774 )
$
$
$
(16,920 )
$
Allowance for credit losses - securities held-to-maturity
Securities held-to maturity, net of allowance for credit losses
$
December 31, 2025
Available-for-sale:
Amortized
Cost
Unrealized
Gains
Unrealized
Losses
Fair Value
U.S. Government Agency
$
$
$
(1,043 )
$
Collateralized mortgage obligations
(17,043 )
Mortgage-backed securities - residential
(6,083 )
Mortgage-backed securities - commercial
(6,861 )
Municipal securities
(933 )
Bank subordinated debt securities
(243 )
$
$
$
(32,206 )
$
December 31, 2025
Held-to-maturity:
Amortized
Cost
Unrecognized
Gains
Unrecognized
Losses
Fair Value
U.S. Government Agency
$
$
$
(3,279 )
$
Collateralized mortgage obligations
(5,499 )
Mortgage-backed securities - residential
(3,263 )
Mortgage-backed securities - commercial
(1,037 )
Corporate bonds
(62 )
$
$
$
(13,140 )
$
Allowance for credit losses - securities held-to-maturity
(2 )
Securities held-to maturity, net of allowance for credit losses
$
Transfers of debt securities into the held-to-maturity (“HTM”) category from the available for sale (“AFS”) category are
made at fair value as of the date of transfer. The unrealized gain or loss as of the date of transfer is retained in accumulated
other comprehensive loss (“AOCL”) and in the carrying value of the HTM securities and there is no impact to net income.
Table of Contents
USCB FINANCIAL HOLDINGS, INC.
Notes to the Consolidated Financial Statements - Unaudited
11 USCB Financial Holdings, Inc. Q3 2026 Form 10-Q
Such amounts are amortized over the remaining life of the security. The Company made
portfolios in 2022.
During the quarter ended September 30, 2026, there were
HTM. For the three months ended September 30, 2026, total amortization out of AOCL for net unrealized losses on
securities transferred in 2022 from AFS to HTM was $
September 30, 2025. At September 30, 2026, the fair value of the transferred securities was $
of the remaining unamortized loss was $
During the nine months ended September 30, 2026, there were
AFS to HTM. During the nine months ended September 30, 2026 and 2025 total amortization out of AOCL for net unrealized
losses on securities transferred in 2022 from AFS to HTM was $
The measurement of expected credit losses under the current expected credit loss (“CECL”) methodology is applicable
to financial assets measured at amortized cost, including loan receivables and HTM debt securities.
CECL requires a loss reserve for securities classified as HTM. The reserve should reflect historical credit performance
as well as the impact of projected economic forecasts. For U.S. Government bonds and U.S. Agency issued bonds classified
as HTM, the explicit guarantee of the U.S. Government is sufficient to conclude that an allowance for credit loss reserve is
not required. The reserve requirement is for three primary assets groups: municipal bonds, corporate bonds, and non-
agency securitizations. The Company calculates quarterly the loss reserve utilizing Moody’s ImpairmentStudio. The CECL
measurement for investment securities incorporates historical data, containing defaults and recoveries information, and
Moody’s baseline economic forecast. The solution uses the probability of default/loss given default (“PD/LGD”) approach.
PD represents the likelihood a borrower will default. Within the Moody’s model, this is determined using historical default
data, adjusted for the current economic environment. LGD projects the expected loss if a borrower were to default.
The Company monitors the credit quality of HTM securities through the use of credit ratings. Credit ratings are monitored
by the Company on at least a quarterly basis. As of September 30, 2026 and December 31, 2025, all HTM securities held
by the Company were rated investment grade.
At September 30, 2026, the Company's HTM securities portfolio consisted entirely of U.S. government and U.S. agency-
issued bonds and mortgage-backed securities with an amortized cost of $
guarantees associated with these securities, management determined that no ACL was required as of September 30, 2026
.
The Company utilizes a PD/LGD methodology to estimate expected credit losses for HTM securities exposed to non-
government credit risk. As of December 31, 2025, the ACL for HTM securities was $
securities represents amortized cost less the related ACL.
The Company’s investment portfolio includes AFS debt securities, which are carried at fair value with unrealized gains
and losses recognized in AOC L, net of applicable taxes. The Company evaluates whether the declines in fair value are
attributable to credit losses or other factors like interest rate risk, using both quantitative and qualitative analyses, including
company performance analysis, review of credit ratings, bond vintage, remaining payment terms, prepayment speeds and
analysis of macro-economic conditions. When the fair value of an AFS security is less than its amortized cost and the
decline is attributable to credit-related factors, an ACL is recorded. As a result of this evaluation, the Company concluded
that no allowance was required on AFS securities as of September 30, 2026 or December 31, 2025.
Table of Contents
USCB FINANCIAL HOLDINGS, INC.
Notes to the Consolidated Financial Statements - Unaudited
12 USCB Financial Holdings, Inc. Q3 2026 Form 10-Q
Information pertaining to investment securities with gross unrealized losses, aggregated by investment category and
length of time that those individual securities have been in a continuous loss position, are presented as of the following
dates (in thousands):
September 30, 2026
Less than 12 months
12 months or more
Total
Available-for-Sale:
Fair Value
Unrealized
Losses
Fair Value
Unrealized
Losses
Fair Value
Unrealized
Losses
U.S. Government Agency
$
$
(282 )
$
$
(1,134 )
$
$
(1,416 )
Collateralized mortgage obligations
(304 )
(19,789 )
(20,093 )
Mortgage-backed securities - residential
(282 )
(7,372 )
(7,654 )
Mortgage-backed securities - commercial
(8,138 )
(10,320 )
(18,458 )
Municipal securities
(1,226 )
(1,226 )
Bank subordinated debt securities
(937 )
(69 )
(1,006 )
$
$
(9,943 )
$
$
(39,910 )
$
$
(49,853 )
December 31, 2025
Less than 12 months
12 months or more
Total
Available-for-sale:
Fair Value
Unrealized
Losses
Fair Value
Unrealized
Losses
Fair Value
Unrealized
Losses
U.S. Government Agency
$
$
(59 )
$
$
(984 )
$
$
(1,043 )
Collateralized mortgage obligations
(93 )
(16,950 )
(17,043 )
Mortgage-backed securities - residential
(6,083 )
(6,083 )
Mortgage-backed securities - commercial
(477 )
(6,384 )
(6,861 )
Municipal securities
(933 )
(933 )
Bank subordinated debt securities
(4 )
(239 )
(243 )
$
$
(633 )
$
$
(31,573 )
$
$
(32,206 )
The contractual cash flows associated with U.S. Government Agency securities, collateralized mortgage obligations,
and residential and commercial mortgage -backed securities are guaranteed by U.S. government-sponsored enterprises,
thereby minimizing credit risk. Municipal bonds are of high credit quality, and the observed declines in fair value are not
attributable to a deterioration in the creditworthiness of the issuers. Similarly, the decrease in fair value of bank subordinated
debt securities is primarily driven by changes in market interest rates rather than credit concerns. Based on management’s
evaluation of these factors, management believes that the unrealized losses on these debt securities are attributable to
fluctuations in market spreads and interest rate movements, rather than adverse changes in the underlying credit quality of
the issuers. The Company does not intend to sell the investments before recovery of its amortized cost basis, which may
be at maturity, and it is more likely than not that the Company will not be required to sell the securities before maturity.
Table of Contents
USCB FINANCIAL HOLDINGS, INC.
Notes to the Consolidated Financial Statements - Unaudited
13 USCB Financial Holdings, Inc. Q3 2026 Form 10-Q
Gains and losses on the sale of securities are recorded on the trade date and are determined on the specific
identification basis. The following table presents the proceeds, realized gross gains and realized gross losses on sales and
calls of AFS debt securities for the three and nine months ended September 30, 2026 and 2025 (in thousands):
Three Months Ended September 30,
Nine Months Ended September 30,
Available-for-sale:
2026
2025
2026
2025
Proceeds from sale and call of securities
$
$
$
$
Gross gains
$
$
$
$
Gross losses
(363 )
(68 )
(363 )
Net realized gain (loss)
$
$
(28 )
$
$
(28 )
The amortized cost and fair value of investment securities, by contractual maturity, are shown below as of the date
indicated (in thousands). Actual maturities may differ from contractual maturities because borrowers may have the right to
call or prepay obligations with or without call or prepayment penalties. Securities not due at a single maturity date are shown
separately.
Available-for-sale
Held-to-maturity
September 30, 2026:
Amortized
Cost
Fair Value
Amortized
Cost
Fair Value
Due within one year
$
$
$
$
Due after one year through five years
Due after five years through ten years
Due after ten years
U.S. Government Agency
Collateralized mortgage obligations
Mortgage-backed securities - residential
Mortgage-backed securities - commercial
$
$
$
$
At September 30, 2026, there were no securities held in the portfolio from any one issuer in an amount greater than
10% of total stockholders ’ equity other than the U.S. Government and U.S. Government Agency issued securities. All the
collateralized mortgage obligations and mortgage -backed securities at September 30, 2026 and December 31, 2025 were
issued by U.S. Government entities.
The Bank is a Qualified Public Depository (“QPD”) with the State of Florida. As a QPD, the Bank has the legal authority
to maintain public deposits from cities, municipalities, and the State of Florida. These public deposits are secured by
securities pledged to the State of Florida at a ratio of
% of the quarter daily average balance for quarters ended
September 30, 2026 and December 31, 2025. The Bank must also maintain a minimum amount of pledged securities to be
in the public funds program.
As of September 30, 2026, the Bank had a total of $
to
the State of Florida for these public funds were
As of December 31, 2025, the Bank had a total of $
to the State of Florida for these public funds were
Table of Contents
USCB FINANCIAL HOLDINGS, INC.
Notes to the Consolidated Financial Statements - Unaudited
14 USCB Financial Holdings, Inc. Q3 2026 Form 10-Q
3. LOANS
The following table is a summary of the distribution of loans held for investment by type (dollars in thousands):
September 30, 2026
December 31, 2025
Total
Percent of
Total
Total
Percent of
Total
Residential real estate
$
%
$
%
Commercial real estate
%
%
Commercial and industrial
%
%
Correspondent banks
%
%
Consumer and other
%
%
Total gross loans
%
%
Plus: Deferred fees/costs
Total loans net of deferred fees/costs
Less: Allowance for credit losses
Total net loans
$
$
At September 30, 2026 and December 31, 2025, the Company had $
commercial real estate and residential mortgage loans pledged as collateral for lines of credit with the Federal Home Loan
Bank (“FHLB”) of Atlanta and the Federal Reserve Bank of Atlanta.
Allowance for Credit Losses
In general, the Company utilizes the Discounted Cash Flow (“DCF”) method or the Weighted-Average Remaining
Maturity (“WARM ”) methodology to estimate the quantitative portion of the ACL for loan pools. The DCF method uses a loss
driver analysis (“LDA”) and DCF analysis. Management engaged advisors and consultant s with expertise in CECL model
development to assist in develop ment of a LDA based on regression models and supportable forecast. Peer group data
obtained from FFIEC Call Report filings is used to inform regression analyses to quantify the impact of reasonable and
supportable forecasts in projective models. Economic forecast s applied to regression models to estimate probability of
default for loan receivables use at least one of the following economic indicators: civilian unemployment rate (national), real
gross domestic product growth (national GDP) or the House Price Index (“HPI”). For each of the segments in which the
WARM methodology is used, the long-term average loss rate is calculated and applied on a quarterly basis for the remaining
life of the pool. Adjustments for economic expectations are made through qualitative factors .
Qualitative factors (“Q-Factors”) used in the ACL methodology include:
•
•
•
•
•
•
•
•
•
Table of Contents
USCB FINANCIAL HOLDINGS, INC.
Notes to the Consolidated Financial Statements - Unaudited
15 USCB Financial Holdings, Inc. Q3 2026 Form 10-Q
Changes in the ACL for the three and nine months ended September 30, 2026 and 2025 were as follows (in thousands):
Residential
Real Estate
Commercial
Real Estate
Commercial
and
Industrial
Correspondent
Banks
Consumer
and Other
Total
Three Months Ended September 30,
2026
Beginning balance
$
$
$
$
$
$
Provision for credit losses
(1)
(263 )
(78 )
(299 )
Recoveries
Charge-offs
(27 )
(1 )
(28 )
Ending Balance
$
$
$
$
$
$
Nine Months Ended September 30, 2026
Beginning balance
$
$
$
$
$
$
Provision for credit losses
(2)
(30 )
Recoveries
Charge-offs
(323 )
(8 )
(331 )
Ending Balance
$
$
$
$
$
$
(1) Provision for credit losses excludes a $
liabilities.
(2) Provision for credit losses excludes a $
other liabilities and a $
Residential
Real Estate
Commercial
Real Estate
Commercial
and
Industrial
Correspondent
Banks
Consumer
and Other
Total
Three Months Ended September 30,
2025
Beginning balance
$
$
$
$
$
$
Provision for credit losses
(1)
(102 )
(118 )
(45 )
(252 )
Recoveries
Charge-offs
(7 )
(7 )
Ending Balance
$
$
$
$
$
$
Nine Months Ended September 30, 2025
Beginning balance
$
$
$
$
$
$
Provision for credit losses
(2)
(249 )
Recoveries
Charge-offs
(730 )
(730 )
Ending Balance
$
$
$
$
$
$
(1) Provision for credit losses excludes a $
liabilities and a $
(2) Provision for credit losses excludes a $
other liabilities a $
At September 30, 2026, the ACL for loans was $
he
increase was primarily driven by growth in the loan portfolio and an increase in reserves on individually evaluated loans,
partially offset by lower expected loss rates on pooled loans primarily due to improvements in the economic forecasts,
including real GDP growth and unemployment.
Charge-offs related to loans for the three months ended September 30, 2026 were $
related to loans originated in 2026 and $
Table of Contents
USCB FINANCIAL HOLDINGS, INC.
Notes to the Consolidated Financial Statements - Unaudited
16 USCB Financial Holdings, Inc. Q3 2026 Form 10-Q
the nine months ended September 30, 2026 were $
and $
Charge-offs for the three months ended September 30, 2025 totaled $
Charge-offs related to loans for the nine months ended September 30, 2025 totaled $
related to loans originated in 2022 and $
The ACL and the outstanding balances in the specified loan categories as of September 30, 2026 and December 31,
2025 are as follows (in thousands):
Residential
Real Estate
Commercial
Real Estate
Commercial
and Industrial
Correspondent
Banks
Consumer
and Other
Total
September 30, 2026:
Allowance for credit losses:
Individually evaluated
$
$
$
$
$
$
Collectively evaluated
Balances, end of period
$
$
$
$
$
$
Loans:
Individually evaluated
$
$
$
$
$
$
Collectively evaluated
Balances, end of period
$
$
$
$
$
$
December 31, 2025:
Allowance for credit losses:
Individually evaluated
$
$
$
$
$
$
Collectively evaluated
Balances, end of period
$
$
$
$
$
$
Loans:
Individually evaluated
$
$
$
$
$
$
Collectively evaluated
Balances, end of period
$
$
$
$
$
$
Credit Quality Indicators
The Company grades loans based on the estimated capability of the borrower to repay the contractual obligation of the
loan agreement based on relevant information which may include: current financial information on the borrower, historical
payment experience, credit documentation and other current economic trends. Internal credit risk grades are evaluated
periodically .
The Company 's internally assigned credit risk grades are as follows:
Pass
– Loans indicate different levels of satisfactory financial condition and performance.
Special Mention
close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment
prospects for the loan or of the institution’s credit position at some future date.
Substandard
– Loans classified as substandard are inadequately protected by the current net worth and paying
capacity of the obligator or of the collateral pledged, if any. Loans so classified have a well-defined weakness or
weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the
institution will sustain some loss if the deficiencies are not corrected.
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USCB FINANCIAL HOLDINGS, INC.
Notes to the Consolidated Financial Statements - Unaudited
17 USCB Financial Holdings, Inc. Q3 2026 Form 10-Q
Doubtful
the added characteristic that the weaknesses make collection or liquidation in full on the basis of currently existing
facts, conditions, and values, highly questionable and improbable.
Loss
– Loans classified as loss are considered uncollectible.
Loan credit exposures by internally assigned grades are presented below for the periods indicated (in thousands):
As of September 30, 2026
Term Loans by Origination Year
Revolving
Loans
Total
2026
2025
2024
2023
2022
Prior
Residential real estate
Pass
$
$
$
$
$
$
$
$
Special Mention
Substandard
Total
Commercial real estate
Pass
Special Mention
Substandard
Total
Commercial and
industrial
Pass
Special Mention
Substandard
Total
Correspondent banks
Pass
Total
Consumer and other
Pass
Total
Total Loans
Pass
Special Mention
Substandard
Doubtful
Total
$
$
$
$
$
$
$
$
Table of Contents
USCB FINANCIAL HOLDINGS, INC.
Notes to the Consolidated Financial Statements - Unaudited
18 USCB Financial Holdings, Inc. Q3 2026 Form 10-Q
As of December 31, 2025
Term Loans by Origination Year
Revolving
Loans
Total
2025
2024
2023
2022
2021
Prior
Residential real estate
Pass
$
$
$
$
$
$
$
$
Special Mention
Substandard
Total
Commercial real estate
Pass
Special Mention
Substandard
Total
Commercial and
industrial
Pass
Special Mention
Substandard
Total
Correspondent banks
Pass
Total
Consumer and other
Pass
Total
Total Loans
Pass
Special Mention
Substandard
Doubtful
Total
$
$
$
$
$
$
$
$
Table of Contents
USCB FINANCIAL HOLDINGS, INC.
Notes to the Consolidated Financial Statements - Unaudited
19 USCB Financial Holdings, Inc. Q3 2026 Form 10-Q
Loan Aging
The Company also considers the performance of loans in grading and in evaluating the credit quality of the loan portfolio.
The Company analyzes credit quality and loan grades based on payment performance and the aging status of the loans.
The following tables include an aging analysis of accruing loans and total non-accruing loans as of September 30, 2026
and December 31, 2025 (in thousands):
Accruing
As of September 30, 2026
Current
Past Due 30-
89 Days
Past Due 90
Days or >
and Still
Accruing
Total
Accruing
Non-Accrual
Total Loans
Residential real estate:
Home equity lines of credit and other
$
$
$
$
$
$
1-4 family residential
Condo residential
Commercial real estate:
Land and construction
Multi-family residential
Condo commercial
Commercial property
Commercial and industrial:
Secured
Unsecured
Correspondent banks
Consumer and other
Total
$
$
$
$
$
$
Table of Contents
USCB FINANCIAL HOLDINGS, INC.
Notes to the Consolidated Financial Statements - Unaudited
20 USCB Financial Holdings, Inc. Q3 2026 Form 10-Q
Accruing
As of December 31, 2025:
Current
Past Due
30-89 Days
Past Due 90
Days or >
and Still
Accruing
Total
Accruing
Non-Accrual
Total Loans
Residential real estate:
Home equity lines of credit and other
$
$
$
$
$
$
1-4 family residential
Condo residential
Commercial real estate:
Land and construction
Multi-family residential
Condo commercial
Commercial property
Commercial and industrial:
Secured
Unsecured
Correspondent banks
Consumer and other
Total
$
$
$
$
$
$
Non-accrual Status
The following table includes the amortized cost basis of loans on non-accrual status as of September 30, 2026 and as
of December 31, 2025 (in thousands):
September 30, 2026
Non-accrual
Loans With No
Related Allowance
Non-accrual
Loans With
Related Allowance
Total Non-
accruals
Residential real estate
$
$
$
Commercial real estate
Commercial and industrial
Total
$
$
$
December 31, 2025
Non-accrual
Loans With No
Related Allowance
Non-accrual
Loans With
Related Allowance
Total Non-
accruals
Residential real estate
$
$
$
Commercial and industrial
Total
$
$
$
Accrued interest receivable is excluded from the estimate of credit losses. There was
attributable to non-accrual loans outstanding during the three and nine months ended September 30, 2026 and 2025.
Interest income on these loans for the three months ended September 30, 2026 and 2025 would have been approximately
$
income on these loans for the nine months ended September 30, 2026 and 2025 would have been approximately $
thousand and $
Table of Contents
USCB FINANCIAL HOLDINGS, INC.
Notes to the Consolidated Financial Statements - Unaudited
21 USCB Financial Holdings, Inc. Q3 2026 Form 10-Q
Collateral-Dependent Loans
A loan is collateral dependent when the borrower is experiencing financial difficulty and repayment of the loan is
expected to be provided substantially through the sale or operation of the collateral.
The following table includes the amortized cost basis of collateral dependent loans related to borrowers experiencing
financial difficulty by type of collateral as of September 30, 2026 and December 31, 2025 (in thousands):
September 30, 2026
Collateral Type
Residential Real
Estate
Commercial Real
Estate
Total
Specific Reserve
Residential real estate
$
$
$
$
Commercial real estate
Commercial and
industrial
Total
$
$
$
$
December 31, 2025
Collateral Type
Residential Real Estate
Specific Reserve
Residential real estate
$
$
Total
$
$
Management evaluates on an individual basis collateral dependent loans using the fair value of the collateral method
to determine if an ACL reserve is necessary. The ACL is measured based on the difference of the fair value of the collateral
and amortized cost basis of the loan . If the final collateral valuation is less than the amortized cost basis of the loan, a
reserve amount is calculated. If the collateral valuation is equal to or greater than the amortized cost basis of the loan, no
reserve is determined.
Loan Modifications to Borrowers Experiencing Financial Difficulties
The Company had
September 30, 2026 and
September 30, 2026. The Company had
and nine months ended September 30, 2025. The following table presents newly restructured loans, by type of modification,
which occurred during the nine months ended September 30, 2026 (in thousands):
Amortized Cost Basis Prior to Modification
Amortized Cost Basis After Modification
Number of
Loans
Combination
Modifications
Total
Modifications
Number of
Loans
Combination
Modifications
Total
Modifications
Commercial and industrial
$
$
$
$
Total
$
$
$
$
The loan modification for the borrower experiencing financial difficulty at September 30, 2026 included a combination
of principal and maturity modifications. There was a principal reduction of $
two
-year extension of the
loan maturity. As of September 30, 2026, the modified loan was current with its modified payment terms.
There were
September 30, 2026 and 2025.
Table of Contents
USCB FINANCIAL HOLDINGS, INC.
Notes to the Consolidated Financial Statements - Unaudited
22 USCB Financial Holdings, Inc. Q3 2026 Form 10-Q
4. LEASES
The Company leases certain banking facilities and office space under non-cancelable operating lease agreements.
During the nine months ended September 30, 2026, the Company exercised renewal options and modified certain lease
arrangements, including extensions of the Coral Gables branch, Coral Way branch, and Doral branch/headquarters leases
for additional
five
-year terms. Additionally, these lease modifications resulted in the remeasurement of operating lease
liabilities and corresponding right-of-use assets. Operating lease right-of-use assets and lease liabilities totaled $
at September 30, 2026, compared to $
and Doral branch/headquarters were measured using an incremental borrowing rate of
%, and for Coral Way branch
was measured using an incremental borrowing rate of
%. The Company’s incremental borrowing rate is based on the
FHLB advance rate matching or nearing the lease term. There were no material changes to the Company's lease accounting
policies from those disclosed in Note 4, Leases, included in the Annual Report on Form 10-K for the year ended December
31, 2025.
5. INCOME TAXES
The Company’s income tax expense is presented in the following table for the periods indicated (in thousands):
Nine Months Ended September 30,
2026
2025
Pre-tax income:
Domestic
$
$
Total pre-tax income
$
$
Current tax expense:
Federal
$
$
State
Total current
Deferred tax expense:
Federal
State
Deferred income tax expense
Total income tax expense
$
$
The actual income tax expense for the nine months ended September 30, 2026 and 2025 differs from the statutory tax
expense for the periods (computed by applying the U.S. federal corporate tax rate of
% for both 2026 and 2025 periods
to income before income tax expense) as follows (in thousands):
Nine Months Ended September 30,
2026
2025
Amount
% Pre-tax
Income
Amount
% Pre-tax
Income
Computed tax at the statutory federal income tax rate
$
$
Increase (decrease) resulting from:
State income taxes, net of federal tax benefit
(1)
Bank owned life insurance income
(389 )
(1.06 %)
(368 )
(1.13 %)
Benefit from stock-based compensation
(377 )
(1.03 %)
Section 162(m) limitation
Other adjustments, net
(445 )
(1.22 %)
Total tax expense
$
$
(1) Taxes in Florida made up the majority (greater than
%) of the tax effect in this category.
Table of Contents
USCB FINANCIAL HOLDINGS, INC.
Notes to the Consolidated Financial Statements - Unaudited
23 USCB Financial Holdings, Inc. Q3 2026 Form 10-Q
The Company’s deferred tax assets and deferred tax liabilities as of the dates indicated were (in thousands):
September 30, 2026
December 31, 2025
Deferred tax assets:
Net operating loss
$
$
Allowance for credit losses
Lease liability
Unrealized losses on available for sale securities
Equity compensation
Accruals
Other, net
Deferred tax assets:
Deferred tax liabilities:
Deferred loan cost
(1,297 )
(1,520 )
Lease right of use asset
(3,166 )
(1,399 )
Deferred expenses
(355 )
(154 )
Cash flow hedge
(44 )
(5 )
Depreciable property
(47 )
(9 )
Deferred tax liabilities
(4,909 )
(3,087 )
Net deferred tax assets
$
$
The Company has approximately $
between 2032 and 2036 and which are limited to offset, to the extent permitted, future taxable earnings of the Company.
In assessing the realizability of deferred tax assets, management consider s whether it is more likely than not that some
portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent
upon the generation of future taxable income during the periods in which those temporary differences become deductible.
Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning
strategies in making this assessment.
The major tax jurisdictions where the Company files income tax returns are the U.S. federal jurisdiction and the State
of Florida . With few exceptions, the Company is no longer subject to U.S. federal and state income tax return examinations
by tax authorities for years before 2022.
For the nine months ended September 30, 2026 and 2025, the Company did
t have any unrecognized tax benefits
as a result of tax positions taken during a prior period or during the current period. Additionally,
recorded as a result of tax uncertainties.
6. OFF-BALANCE SHEET ARRANGEMENTS
The Company is a party to financial instruments with off -balance-sheet risk in the normal course of business in order to
meet the financial needs of its customers and to reduce its own exposure to fluctuations in interest rates. These financial
instruments include unfunded commitments under lines of credit, commitments to extend credit, and standby and
commercial letters of credit. Those instruments involve, to varying degrees, elements of credit and interest rate risk in excess
of the amount recognized in the Company’s Consolidated Balance Sheets. The Company uses the same credit policies in
making commitments and conditional obligations as it does for on-balance sheet instruments.
The Company's exposure to credit loss in the event of nonperformance by the other party to the financial instruments
for unused lines of credit and standby letters of credit is represented by the contractual amount of these commitments.
Table of Contents
USCB FINANCIAL HOLDINGS, INC.
Notes to the Consolidated Financial Statements - Unaudited
24 USCB Financial Holdings, Inc. Q3 2026 Form 10-Q
A summary of the amounts of the Company's financial instruments with off -balance sheet risk are shown below at
September 30, 2026 and December 31, 2025 (in thousands):
September 30, 2026
December 31, 2025
Commitments to grant loans and unfunded lines of credit
$
$
Standby and commercial letters of credit
Total
$
$
Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition
established in the contract. Commitments generally have fixed expiration dates or other termination clauses.
Unfunded lines of credit and revolving credit lines are commitments for possible future extensions of credit to existing
customers. These lines of credit are uncollateralized and usually do not contain a specified maturity date and ultimately may
not be drawn upon to the total extent to which the Company committed.
Standby and commercial letters of credit are conditional commitments issued by the Company to guarantee the
performance of a customer to a third party. Those letters of credit are primarily issued to support public and private borrowing
arrangements. Essentially all letters of credit have fixed maturity dates and since many of them expire without being drawn
upon, they do not generally present a significant liquidity risk to the Company.
Changes in the ACL for the three and nine months ended September 30, 2026 and 2025 were as follows (in thousands):
Three Months Ended
September 30,
Nine Months Ended
September 30,
2026
2025
2026
2025
Beginning balance
$
$
$
$
Provision (recovery) for credit losses - off-balance sheet
arrangements
(287 )
Total
$
$
$
$
The decrease in the allowance for credit losses on unfunded commitments for the quarter ended September 30, 2026,
was primarily attributable to lower unfunded exposure and reduced expected loss rates.
7. DERIVATIVES
The Company utilizes derivative instruments as part of its asset-liability management strategy to help manage its interest
rate risk exposure . The notional amount of the derivatives does not represent actual amounts exchanged by the
counterparties. The amounts exchanged are determined by reference to the notional amount and the other terms of the
individual derivative instruments.
Derivatives Designated as a Cash Flow Hedge
As of September 30, 2026, the Company had
were designated as cash flow hedges of two three-month brokered CDs. The derivatives are based on the USD SOFR
overnight index and have a weighted average cap rate of
% and weighted average floor rate of
%, effectively
creating a defined range of interest rate outcomes without requiring an upfront premium. The costless collar hedges have
an average maturity of
As of December 31, 2025, the Company had
were designated as cash flow hedges of two three-month brokered CDs. The derivatives are based on the USD SOFR
overnight index and have a weighted average cap rate of
% and weighted average floor rate of
%, effectively
creating a defined range of interest rate outcomes without requiring an upfront premium. The costless collar hedges had an
average maturity of
As of September 30, 2026, the Company had
hedges of certificates of deposit. During the nine months ended September 30, 2026,
designated as cash flow hedges of a certificate of deposit matured.
Table of Contents
USCB FINANCIAL HOLDINGS, INC.
Notes to the Consolidated Financial Statements - Unaudited
25 USCB Financial Holdings, Inc. Q3 2026 Form 10-Q
As of December 31, 2025, the Company had
$
fixed rate of
% and received a variable rate based on the weighted
‑
average three
‑
months compounded USD SOFR.
The swap had a maturity of
During the quarter ended December 31, 2025, the Company unwound a separate interest rate swap designated as a
cash flow hedge of certificate of deposit with notional amount of $
by changes in interest rate forecasts and asset-liability management strategies. The early termination income to unwind the
fair value swaps totaled $
quarter was April 2026.
The changes in fair value of these interest rate swaps are recorded in other assets or accrued interest and other liabilities
with a corresponding recognition in other comprehensive income (loss) and subsequently reclassified to earnings when
gains or losses are realized.
Derivatives Not Designated as Hedging Instruments
The Company enters into interest rate swaps with its loan customers. The Company had
with loan customers with an aggregate notional amount of $
December 31, 2025, respectively. At September 30, 2026, these interest rate swaps mature between 2027 and 2051. The
Company entered into corresponding and offsetting derivatives with third parties. The fair value of the liability created by
these derivatives requires the Company to provide the counterparty with funds to be held as collateral which the Company
reports as other assets under the Consolidated Balance Sheets. While these derivatives represent economic hedges, they
do not qualify as hedges for accounting purposes.
The following table reflects the Company’s interest rate swaps at the dates indicated (in thousands):
Fair Value
Notional
Amount
Collateral
Amount
Balance Sheet Location
Asset
Liability
September 30, 2026:
Derivatives designated as cash flow hedges:
Interest rate swaps
$
$
Other assets/Accrued
interest and other liabilities
$
$
Derivatives not designated as hedging instruments:
Interest rate swaps related to customer loans
$
$
Other assets/Accrued
interest and other liabilities
$
$
December 31, 2025:
Derivatives designated as cash flow hedges:
Interest rate swaps
$
$
Other assets/Accrued
interest and other liabilities
$
$
Derivatives not designated as hedging instruments:
Interest rate swaps related to customer loans
$
$
Other assets/Accrued
interest and other liabilities
$
$
8. FAIR VALUE MEASUREMENTS
Determination of Fair Value
The Company uses fair value measurements to record fair-value adjustments to certain assets and liabilities and to
determine fair value disclosures. In accordance with the fair value measurements accounting guidance, the fair value of a
financial instrument is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction
Table of Contents
USCB FINANCIAL HOLDINGS, INC.
Notes to the Consolidated Financial Statements - Unaudited
26 USCB Financial Holdings, Inc. Q3 2026 Form 10-Q
between market participants at the measurement date. Fair value is best determined based upon quoted market prices.
However, in many instances, there are no quoted market prices for the Company 's various financial instruments. In cases
where quoted market prices are not available, fair values are based on estimates using present value or other valuation
techniques. Those techniques are significantly affected by the assumptions used, including the discount rate and estimates
of future cash flows. Accordingly, the fair value estimates may not be realized in an immediate settlement of the instrument.
The fair value guidance provides a consistent definition of fair value, which focuses on exit price in an orderly transaction
(that is, not a forced liquidation or distressed sale) between market participants at the measurement date under current
market conditions. If there has been a significant decrease in the volume and level of activity for the asset or liability, a
change in valuation technique or the use of multiple valuation techniques may be appropriate. In such instances, determining
the price at which willing market participants would transact at the measurement date under current market conditions
depends on the facts and circumstances and requires the use of significant judgment. The fair value is a reasonable point
within the range that is most representative of fair value under current market conditions.
Fair Value Hierarchy
In accordance with this guidance, the Company groups its financial assets and financial liabilities generally measured
at fair value in three levels, based on the markets in which the assets and liabilities are traded, and the reliability of the
assumptions used to determine fair value.
Level 1
entity has the ability to access at the measurement date. Level 1 assets and liabilities generally include debt and
equity securities that are traded in an active exchange market. Valuations are obtained from readily available pricing
sources for market transactions involving identical assets or liabilities.
Level 2
asset or liability, either directly or indirectly. The valuation may be based on quoted prices for similar assets or
liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated
by observable market data for substantially the full term of the asset or liability.
Level 3
significant to the fair value of the assets or liabilities. Level 3 assets and liabilities include financial instruments
whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques, as
well as instruments for which determination of fair value requires significant management judgment or estimation.
A financial instrument's categorization within the valuation hierarchy is based upon the lowest level of input that is
significant to the fair value measurement.
Items Measured at Fair Value on a Recurring Basis
AFS investment securities:
for such securities, management generally relies on prices obtained from independent vendors or third-party broker -dealers.
Management reviews pricing methodologies provided by the vendors and third-party broker -dealers in order to determine if
observable market information is being utilized. Securities measured with pricing provided by independent vendors or third-
party broker -dealers are classified within Level 2 of the hierarchy and often involve using quoted market prices for similar
securities, pricing models or discounted cash flow analyses utilizing inputs observable in the market where available.
Derivatives:
classified within Level 2 of the hierarchy.
Table of Contents
USCB FINANCIAL HOLDINGS, INC.
Notes to the Consolidated Financial Statements - Unaudited
27 USCB Financial Holdings, Inc. Q3 2026 Form 10-Q
The following table represents the Company's assets and liabilities measured at fair value on a recurring basis at
September 30, 2026 and December 31, 2025 for each of the fair value hierarchy levels (in thousands):
September 30, 2026
December 31, 2025
Level 1
Level 2
Level 3
Total
Level 1
Level 2
Level 3
Total
Investment securities available for sale:
U.S. Government Agency
$
$
$
$
$
$
$
$
Collateralized mortgage obligations
Mortgage-backed securities - residential
Mortgage-backed securities - commercial
Municipal securities
Bank subordinated debt securities
Total
Derivative assets
Total assets at fair value
$
$
$
$
$
$
$
$
Derivative liabilities
$
$
$
$
$
$
$
$
Total liabilities at fair value
$
$
$
$
$
$
$
$
Fair Value Measurements on a Nonrecurring Basis
Collateral Dependent Loans Measured for Expected Credit Losses
: Fair values of collateral-dependent real estate
loans are based on recent real estate appraisals less estimated costs of sale, repossession, and/or holding costs. Appraisals
are performed by independent third-party appraisers and may utilize a sales comparison approach, cost approach, income
approach, or a combination of these methodologies.
The following table presents quantitative information about Level 3 fair value measurements for assets measured at fair
value on a nonrecurring basis at September 30, 2026 and December 31, 2025:
September 30, 2026
Range
Weighted
Financial Instrument
Fair Value
Valuation Technique(s)
Unobservable Input(s)
Minimum
Maximum
average
Collateral dependent loans -
Commercial real estate
loans
$
Market approach
for qualitative factors and
estimated disposition costs
December 31, 2025
Range
Weighted
Financial Instrument
Fair Value
Valuation Technique(s)
Unobservable Input(s)
Minimum
Maximum
average
Collateral dependent loans -
residential loans
$
Sales comparison approach
At September 30, 2026, the Company measured one collateral -dependent nonresidential real estate loan at fair value
on a nonrecurring basis. The fair value of the collateral-dependent loan was determined using a current market offer for the
underlying real estate collateral, adjusted for qualitative factors and estimated disposition costs. The resulting fair value of
the collateral was approximately $
million and a specific reserve of approximately $
As of December 31, 2025, collateral-dependent loans classified within Level 3 of the fair value hierarchy had an
aggregate fair value of $
the outstanding loan balance.
Table of Contents
USCB FINANCIAL HOLDINGS, INC.
Notes to the Consolidated Financial Statements - Unaudited
28 USCB Financial Holdings, Inc. Q3 2026 Form 10-Q
As of September 30, 2026 and December 31, 2025, the Company did
t have any other assets or liabilities measured
at fair value on a nonrecurring basis.
Items Not Measured at Fair Value
The following table presents the carrying amounts and estimated fair values of financial instruments not carried at fair
value as of September 30, 2026 and December 31, 2025 (in thousands):
Fair Value Hierarchy
Carrying
Amount
Level 1
Level 2
Level 3
Fair Value
Amount
September 30, 2026:
Financial Assets:
Cash and due from banks
$
$
$
$
$
Interest-bearing deposits in banks
$
$
$
$
$
Investment securities held to maturity, net
$
$
$
$
$
Loans held for investment, net
$
$
$
$
$
Accrued interest receivable
$
$
$
$
$
Financial Liabilities:
Non-interest bearing demand deposits
$
$
$
$
$
Savings and money market deposits
$
$
$
$
$
Interest-bearing demand deposits
$
$
$
$
$
Time deposits
$
$
$
$
$
FHLB advances
$
$
$
$
$
Subordinated notes, net
$
$
$
$
-
$
Accrued interest payable
$
$
$
$
$
December 31, 2025:
Financial Assets:
Cash and due from banks
$
$
$
$
$
Interest-bearing deposits in banks
$
$
$
$
$
Investment securities held to maturity, net
$
$
$
$
$
Loans held for investment, net
$
$
$
$
$
Accrued interest receivable
$
$
$
$
$
Financial Liabilities:
Non-interest bearing demand deposits
$
$
$
$
$
Savings and money market deposits
$
$
$
$
$
Interest-bearing demand deposits
$
$
$
$
$
Time deposits
$
$
$
$
$
FHLB advances
$
$
$
$
$
Subordinated notes, net
$
$
$
$
$
Accrued interest payable
$
$
$
$
$
9. STOCKHOLDERS’ EQUITY
Common Stock
There were
September 30, 2026, the Company repurchased
share of $
. The aggregate purchase price for these transactions was approximately $
costs. These repurchases were made pursuant to the Company’s publicly announced share repurchase programs. At
September 30, 2026,
program. The Company’s 2022 share repurchase program has been fully utilized.
During the three months ended September 30, 2025, the Company repurchased
stock from certain institutional shareholders through privately negotiated transactions, at a weighted average price per shar
e
of $
. The aggregate purchase price for these transactions was approximately $
supplemental and not part of the Company’s two previously announced stock repurchase programs. During the nine months
ended September 30, 2025 pursuant to the Company’s publicly announced repurchase programs the Company
Table of Contents
USCB FINANCIAL HOLDINGS, INC.
Notes to the Consolidated Financial Statements - Unaudited
29 USCB Financial Holdings, Inc. Q3 2026 Form 10-Q
repurchased
. The aggregate
purchase price for these transactions was approximately $
2025,
During the three months ended September 30, 2026, the Company issued
employees as restricted stock awards pursuant to the Company’s 2015 equity incentive plan. During the nine months ended
September 30, 2026, the Company issued
A
common stock to employees as restricted stock
awards pursuant to the Company’s 2015 equity incentive plan.
There were
ended September 30, 2025, the Company issued
stock awards pursuant to the Company’s 2015 equity incentive plan.
The number of shares of the Company’s Class A common stock issued and outstanding as of September 30, 2026 and
December 31, 2025 were
, respectively.
Dividends
Declaration of dividends by the Board of Directors is required before dividend payments are made. The Company is
limited in the amount of cash dividends that it may pay. Payment of dividends is generally limited to the Company’s net
income for the current year combined with the Company’ s retained income for the preceding two years, as defined by state
banking regulations. However, for any dividend declaration, the Company must consider additional factors such as the
amount of current period net income, liquidity, asset quality, capital adequacy and economic conditions at the Bank since
the Bank is the primary source of funds to fund dividends paid by the Company. It is likely that these factors would further
limit the amount of dividends which the Company could legally declare. In addition, bank regulators have the authority to
prohibit banks and bank holding companies from paying dividends if they deem such payment to be an unsafe or unsound
practice.
As of September 30, 2026, the Company was not subject to any formal supervisory restrictions on its ability to pay
dividends but will notify the Federal Reserve Bank of Atlanta in advance of any proposed dividend to the Company's
stockholders in light of the Bank's negative retained earnings. In addition, under applicable FDIC regulations and policy,
because the Bank has negative retained earnings, it must obtain the prior approval of the FDIC before effecting a cash
dividend or other capital distribution from the Bank to the Company.
The following table details the dividends declared and paid by the Company for the periods presented:
Nine Months Ended September 30, 2026
Declaration Date
Record Date
Payment Date
Dividend Per Share
Dividend Amount
$
$
$
$
$
$
Nine Months Ended September 30, 2025
Declaration Date
Record Date
Payment Date
Dividend Per Share
Dividend Amount
$
$
$
$
$
$
The Bank exceeded all regulatory capital requirements and remained above “well-capitalized” guidelines as of
September 30, 2026 and December 31, 2025. At September 30, 2026, the total risk-based capital ratio for the Bank was
% and
% for the Company.
See Note 12, Subsequent Events, for information regarding dividends declared in October 2026.
Table of Contents
USCB FINANCIAL HOLDINGS, INC.
Notes to the Consolidated Financial Statements - Unaudited
30 USCB Financial Holdings, Inc. Q3 2026 Form 10-Q
10. EARNINGS PER SHARE
Earnings per share (“EPS”) for common stock is calculated using the two-class method required for participating
securities. Basic EPS is calculated by dividing net income available to common shareholders by the weighted-average
number of common shares outstanding for the period, without consideration for common stock equivalents. Diluted EPS is
computed by dividing net income available to common shareholders by the weighted-average number of common shares
outstanding for the period and the weighted-average number of dilutive common stock equivalents outstanding for the period
determined using the treasury-stock method. For purposes of this calculation, common stock equivalents include common
stock options which are only included in the calculation of diluted EPS when their effect is dilutive.
The following table reflects the calculation of basic and diluted earnings per common share class for the three and nine
months ended September 30, 2026 and 2025 (in thousands, except share amounts):
Three Months Ended September 30,
Nine Months Ended September 30,
2026
2025
2026
2025
Class A
Class A
Basic EPS
Numerator:
Net income available to common shares
$
$
$
$
Denominator:
Weighted average shares outstanding
Earnings per share, basic
$
$
$
$
Diluted EPS
Numerator:
Net income available to common shares
$
$
$
$
Denominator:
Weighted average shares outstanding for basic EPS
Add: Dilutive effects of assumed exercises of stock options
Weighted avg. shares including dilutive potential common shares
Earnings per share, diluted
$
$
$
$
Anti-dilutive stock options excluded from diluted EPS
Net income has not been allocated to unvested restricted stock awards that are participating securities because the amounts that would be allocated are
not material to earnings per share of common stock. Unvested restricted stock awards that are participating securities represent less than one percent of
all of the outstanding shares of common stock for each of the periods presented.
11. LOSS CONTINGENCIES
Loss contingencies, including claims and legal actions may arise in the ordinary course of business. In the opinion of
management, none of these actions, either individually or in the aggregate, is expected to have a material adverse effect
on the Company’s Consolidated Financial Statements.
12. SUBSEQUENT EVENTS
Dividends
On October 19, 2026, the Company announced that its Board of Directors declared its quarterly cash dividend. The
dividend is in the amount of $
stockholders of record as of the close of business on November 16, 2026.
Table of Contents
31 USCB Financial Holdings, Inc. Q3 2026 Form 10-Q
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis is designed to provide a better understanding of the consolidated financial
condition and results of operations of the Company and the Bank, its wholly owned subsidiary, as of and for the three and
nine months ended September 30, 2026. This discussion and analysis is best read in conjunction with the unaudited
consolidated financial statements and related notes included in this Quarterly Report on Form 10-Q (“Form 10-Q”) and the
audited consolidated financial statements and related notes included in the Annual Report on Form 10-K (“2025 Form 10-
K”) filed with the Securities and Exchange Commission (“SEC”) for the year ended December 31, 2025.
This discussion contains forward-looking statements that involve risks, uncertainties and assumptions that could cause
actual results to differ materially from management's expectations. Factors that could cause such differences are discussed
in the sections entitled "Forward-Looking Statements" and Item 1A “Risk Factors" below in Part II hereof and in the 2025
Form 10-K filed with the SEC which is available at the SEC’s website www.sec.gov.
Throughout this document, references to “we,” “us,” “our,” and “the Company” generally refer to USCB Financial
Holdings, In c.
Forward-Looking Statements
This Form 10-Q contains statements that are not historical in nature are intended to be, and are hereby identified as,
forward-looking statements for purposes of the safe harbor provided by Section 21E of the Securities Exchange Act of 1934,
as amended. The words “may,” “will,” “anticipate,” “could,” “should,” “would,” “believe,” “contemplate,” “expect,” “aim,” “plan,”
“estimate,” “seek,” “continue,” and “intend,” as well as other similar words and expressions of the future, are intended to
identify forward-looking statements. These forward-looking statements include statements related to our projected growth,
anticipated future financial performance, and management’s long-term performance goals, as well as statements relating
to the anticipated effects on results of operations and financial condition from expected developments or events, or business
and growth strategies, including anticipa ted internal growth and potential future additional balance sheet restructuring.
These forward -looking statements involve significant risks and uncertainties that could cause our actual results to differ
materially from those anticipated in such statements. Potential risks and uncertainties include, but are not limited to:
•
operations;
•
•
for credit loss es;
•
•
jurisdiction where we operate;
•
industry;
•
•
principles, policies, practices or guidelines;
•
risks of geographic, depositor, and industry concentrations, including our concentration in loans secured by real
estate, in particular, commercial real estate;
•
•
•
•
growth as well as growth through other means, such as future acquisitions;
•
•
•
•
and net interest margin;
•
•
employee, or third-party fraud and security breaches; and
•
Table of Contents
32 USCB Financial Holdings, Inc. Q3 2026 Form 10-Q
All forward-looking statements are necessarily only estimates of future results, and there can be no assurance that
actual results will not differ materially from expectations. Therefore, you are cautioned not to place undue reliance on any
forward-looking statements. Further, any forward-looking statements included in this Form 10-Q are made only as of the
date hereof, and we undertake no obligation to update or revise any forward-looking statement to reflect events or
circumstances occurring after the date on which the statement is made or to reflect the occurrence of unanticipated events,
unless required to do so under federal securities laws. You should also review the risk factors described in the 2025 Form
10-K and in the reports the Company has filed or will file with the SEC.
Overview
The Company reported net income of $9.5 million or $0.51 per diluted share of common stock for the three months
ended September 30, 2026 compared to $8.9 million or $0.45 per diluted share of common stock for the three months
ended September 30, 2025.
In evaluating our financial performance, the Company considers the level of and trends in net interest income, the net
interest margin, the cost of deposits and borrowings, the level and composition of non-interest income and non-interest
expense, performance ratios, asset quality ratios, regulatory capital ratios, and any significant event or transaction.
Unless otherwise stated, all period comparisons in the bullet points below are calculated at or for the quarter ended
September 30, 2026 compared to at or for the quarter ended September 30, 2025 and as of December 31, 2025 and
annualized where appropriate:
•
$3.0 million or 14.2% to $24.3 million from $21.3 million for the quarter ended September 30, 2025.
•
for the three months ended September 30, 2025.
•
September 30, 2025 and an increase of $219.9 million or 10.5% annualized from December 31, 2025.
•
an increase of $191.1 million or 9.0% from September 30, 2025 and an increase of $132.8 million or 8.1%
annualized from December 31, 2025.
•
September 30, 2025 and an increase of $101.2 million or 5.8% annualized from December 31, 2025.
•
•
%
compared to 15.74% for quarter ended September 30, 2025.
•
•
•
respectively.
•
an increase of $0.87 or 7.6% from $11.55 at September 30, 2025. At September 30, 2026, tangible book value per
common share was negatively affected by ($2.35) due to an accumulated other comprehensive loss of $43.3 million.
At September 30, 2025, tangible book value per common share was negatively affected by ($2.09) due to an
accumulated comprehensive loss of $37.8 million. See “Reconciliation and Management Explanation for Non-GAAP
Financial Measures” included in this Form 10-Q for a reconciliation of this non-GAAP financial measure.
Table of Contents
33 USCB Financial Holdings, Inc. Q3 2026 Form 10-Q
Critical Accounting Policies and Estimates
The consolidated financial statements are prepared based on the application of U.S. Generally Accepted Accounting
Principles (“GAAP”), the most significant of which are described in Note 1 “Summary of Significant Accounting Policies” in
the Company’s 2025 Form 10-K and “Summary of Significant Accounting Policies” in Part I in this Form 10-Q. To prepare
consolidated financial statements in conformity with US GAAP, management makes estimates, assumptions , and
judgments based on available information. These estimates, assumptions , and judgments affect the amounts reported in
the consolidated financial statements and accompanying notes. These estimates, assumptions , and judgments are based
on information available as of the date of the financial statements and, as this information changes, actual results could
differ from the estimates, assumptions and judgments reflected in the consolidated financial statements. In particular,
management has identified accounting policies that, due to the estimates, assumptions and judgments inherent in those
policies, are critical to an understanding of our consolidated financial statements. Management has presented the
application of these policies to the Audit and Risk Committee of our Board of Directors .
Non-GAAP Financial Measures
This Form 10-Q includes financial information determined by methods other than in accordance with GAAP. This
financial information includes certain operating performance measures. Management has included these non-GAAP
measures because it believes these measures may provide useful supplemental information for evaluating the Company’s
underlying performance trends. Further, management uses these measures in managing and evaluating the Company’s
business and intends to refer to them in discussions about our operations and performance. Operating performance
measures should be viewed in addition to, and not as an alternative to or substitute for, measures determined in accordance
with GAAP, and are not necessarily comparable to non-GAAP measures that may be presented by other companies. To
the extent applicable, reconciliations of these non-GAAP measures to the most directly comparable GAAP measures can
be found in the section “Reconciliation and Management Explanation of Non-GAAP Financial Measures” included in this
Form 10-Q.
Segment Reporting
Management monitors the revenue streams for all its various products and services. The identifiable segments are not
material and operations are managed and financial performance is evaluated on an overall Company-wide basis.
Accordingly, all the financial service operations are considered by management to be aggregated in one reportable operating
segment.
Results of Operations
General
The following tables present selected balance sheet, income statement, and profitability ratios for the dates and periods
indicated (in thousands, except ratios):
September 30, 2026
December 31, 2025
Consolidated Balance Sheets:
Total assets
$
3,011,481
$
2,791,540
Total loans
(1)
$
2,322,094
$
2,189,257
Total deposits
$
2,446,315
$
2,345,080
Total stockholders' equity
$
229,362
$
217,183
(1) Loan amounts include deferred fees/costs.
Table of Contents
34 USCB Financial Holdings, Inc. Q3 2026 Form 10-Q
Three Months Ended
September 30,
Nine Months Ended
September 30,
2026
2025
2026
2025
Consolidated Statements of Operations:
Net interest income before provision for credit losses
$
24,300
$
21,274
$
70,735
$
61,423
Total non -interest income
$
2,672
$
3,684
$
10,382
$
10,770
Total non -interest expense
$
14,731
$
13,048
$
42,408
$
37,734
Net income
$
9,528
$
8,939
$
27,957
$
24,737
Profitability:
Efficiency ratio
54.62%
52.28%
52.28%
52.27%
Net interest margin
3.37%
3.14%
3.38%
3.17%
The Company’s results of operations depend substantially on the levels of our net interest income and non-interest
income. Other factors contributing to the results of operations include our provision for credit losses, the level of non-interest
expense, and the provision for income taxes.
Three months ended September 30, 2026 compared to the three months ended September 30, 2025
Net income increased $589 thousand to $9.5 million for the three months ended September 30, 2026 from $8.9 million
for the same period in 2025. The $589 thousand or 6.6% increase in net income was primarily driven by higher income from
a larger loan portfolio and expansion of the net interest margin resulting primarily from lower funding costs. These benefits
were partially offset by higher non-interest expense and lower non-interest income.
Nine months ended September 30, 2026 compared to the nine months ended September 30, 2025
Net income increased $3.2 million to $28.0 million for the nine months ended September 30, 2026
from $24.7 million
for the same period in 2025. The $3.2 million or 13.0% increase in net income was primarily driven by higher income from
a larger loan portfolio and, to a lesser extent, a decrease in interest expense. The increase in net income was partially offset
by increases in non-interest expense, income tax expense, and provision for credit losses, as well as lower non-interest
income.
Net Interest Income
Net interest income is the difference between interest earned on interest-earning assets and interest paid on interest-
bearing liabilities and is the primary driver of core earnings. Interest income is generated from interest and dividends on
interest-earning assets, including loans, investment securities and other short-term investments. Interest expense is
incurred from interest paid on interest-bearing liabilities, including interest-bearing deposits, FHLB advances, subordinated
debt, and other borrowings.
To evaluate net interest income, we measure and monitor (i) yields on loans and other interest-earning assets, (ii) the
costs of deposits and other funding sources, (iii) net interest spread, and (iv) net interest margin. Net interest spread is equal
to the difference between yields earned on interest-earning assets and rates paid on interest-bearing liabilities. Net interest
margin is equal to the annualized net interest income divided by average interest-earning assets. Because non-interest-
bearing sources of funds, such as non-interest-bearing deposits and stockholders’ equity, also fund interest-earning assets,
net interest margin includes the indirect benefit of these non-interest-bearing funding sources.
Changes in market interest rates and interest rates we earn on interest-earning assets or pay on interest-bearing
liabilities, as well as the volume and types of interest-earning assets and interest-bearing and non-interest-bearing liabilities,
are usually the largest drivers of periodic changes in net interest spread, net interest margin and net interest income. Our
asset liability committee (“ALCO”) has in place asset-liability management techniques to manage major factors that affect
net interest income and net interest margin.
Table of Contents
35 USCB Financial Holdings, Inc. Q3 2026 Form 10-Q
The following table contains information related to average balances, average yields earned on assets, and average
costs of liabilities for the periods indicated (dollars in thousands):
Three Months Ended September 30,
2026
2025
Average
(1)
Balance
Interest
Yield/Rate
(2)
Average
(1)
Balance
Interest
Yield/Rate
(2)
Assets
Interest-earning assets:
Loans held for investment
(3)
$
2,309,091
$
35,547
6.11%
$
2,099,043
$
32,866
6.21%
Investment securities
(4)
476,825
4,013
3.34%
461,303
3,522
3.03%
Other interest -earnings assets
75,399
639
3.36%
130,740
1,332
4.04%
Total interest -earning assets
2,861,315
40,199
5.57%
2,691,086
37,720
5.56%
Non-interest -earning assets
104,166
107,029
Total assets
$
2,965,481
$
2,798,115
Liabilities and stockholders' equity
Interest-bearing liabilities:
Interest -bearing demand deposits
$
68,264
357
2.07%
$
47,338
286
2.40%
Savings and money market deposits
1,286,075
8,554
2.64%
1,319,862
10,343
3.11%
Time deposits
546,646
4,974
3.61%
520,345
5,036
3.84%
Total interest -bearing deposits
1,900,985
13,885
2.90%
1,887,545
15,665
3.29%
FHLB advances
121,110
1,213
3.97%
40,065
377
3.73%
Subordinated notes, net
39,389
801
8.07%
26,029
404
6.16%
Total interest -bearing liabilities
2,061,484
15,899
3.06%
1,953,639
16,446
3.34%
Non-interest -bearing demand deposits
610,271
569,522
Other non -interest -bearing liabilities
57,841
49,638
Total liabilities
2,729,596
2,572,799
Stockholders' equity
235,885
225,316
Total liabilities and stockholders' equity
$
2,965,481
$
2,798,115
Net interest income
$
24,300
$
21,274
Net interest spread
(5)
2.51%
2.22%
Net interest margin
(6)
3.37%
3.14%
(1) Average balances - Daily average balances are used to calculate yields/rates.
(2) Annualized.
(3) Average loan balances include deferred fees/costs and non-accrual loans. Interest income on loans includes accretion of deferred loan fees, net of
deferred loan costs.
(4) At fair value except for securities held to maturity. This amount includes FHLB stock.
(5) Net interest spread is the weighted average yield on total interest-earning assets minus the weighted average rate on total interest-bearing liabilities.
(6) Net interest margin is the ratio of net interest income to average total interest -earning assets.
Table of Contents
36 USCB Financial Holdings, Inc. Q3 2026 Form 10-Q
Nine Months Ended September 30,
2026
2025
Average
Balance
(1)
Interest
Yield/Rate
(2)
Average
Balance
(1)
Interest
Yield/Rate
(2)
Assets
Interest-earning assets:
Loans held for investment
(3)
$
2,249,078
$
103,235
6.14
%
$
2,048,192
$
95,057
6.21
%
Investment securities
(4)
464,395
11,282
3.25
%
449,376
9,978
2.97
%
Other interest -earnings assets
87,056
2,294
3.52
%
90,169
2,817
4.18
%
Total interest -earning assets
2,800,529
116,811
5.58
%
2,587,737
107,852
5.57
%
Non-interest earning assets
100,258
106,933
Total assets
$
2,900,787
$
2,694,670
$
Liabilities and stockholders' equity
Interest-bearing liabilities:
Interest -bearing demand deposits
$
57,417
$
978
2.28
%
$
49,191
$
909
2.47
%
Savings and money market deposits
1,274,466
25,165
2.64
%
1,243,911
29,088
3.13
%
Time deposits
535,009
14,302
3.57
%
457,847
13,297
3.88
%
Total interest -bearing deposits
1,866,892
40,445
2.90
%
1,750,949
43,294
3.31
%
FHLB advances
110,654
3,229
3.90
%
98,151
2,731
3.72
%
Subordinated notes, net
39,351
2,402
8.16
%
8,771
404
6.16
%
Total interest -bearing liabilities
2,016,897
46,076
3.05
%
1,857,871
46,429
3.34
%
Non-interest bearing demand deposits
609,178
570,918
Other non -interest -bearing liabilities
45,647
41,422
Total liabilities
2,671,722
2,470,211
Stockholders' equity
229,065
224,459
Total liabilities and stockholders' equity
$
2,900,787
$
2,694,670
Net interest income
$
70,735
$
61,423
Net interest spread
(5)
2.52
%
2.23
%
Net interest margin
(6)
3.38
%
3.17
%
(1) Average balances - Daily average balances are used to calculate yields/rates.
(2) Annualized.
(3) Average loan balances include deferred fees/costs and non-accrual loans. Interest income on loans includes accretion of deferred loan fees, net of
deferred loan costs.
(4) At fair value except for securities held to maturity. This amount includes FHLB stock.
(5) Net interest spread is the weighted average yield on total interest -earning assets minus the weighted average rate on total interest -bearing
liabilities.
(6) Net interest margin is the ratio of net interest income to average total interest -earning assets.
Three months ended September 30, 2026 compared to the three months ended September 30, 2025
Net interest income before the provision for credit losses was $24.3 million for the three months ended September 30,
2026, an increase of $3.0 million or 14.2%, from $21.3 million for the same period in 2025. This growth was primarily driven
by higher income from a larger loan portfolio and lower rates paid on interest-bearing deposits. This increase was partially
offset by increased interest expense associated with FHLB advances and the subordinated notes.
The NIM was 3.37% for the three months ended September 30, 2026 and 3.14% for the same period in 2025. The 23-
basis point increase in net interest margin was primarily attributable to a reduction in the weighted average rates paid on
interest-bearing deposits, particularly savings and money market accounts, together with a favorable earning asset mix.
Nine months ended September 30, 2026 compared to the nine months ended September 30, 2025
Net interest income before the provision for credit losses was $70.7 million for the nine months ended September 30,
2026, an increase of $9.3 million or 15.2%, from $61.4 million for the same period in 2025. This growth was primarily driven
by higher income from a larger loan portfolio and a reduction in the weighted average rates paid on interest-bearing deposits
between the periods. This increase was partially offset by increased interest expense associated with FHLB advances and
the subordinated notes.
Table of Contents
37 USCB Financial Holdings, Inc. Q3 2026 Form 10-Q
The NIM was 3.38% for the nine months ended September 30, 2026 and 3.17% for the same period in 2025. The NIM
expansion of 21 basis points primarily reflects the decrease in the weighted average interest rate paid on interest-bearing
deposits, particularly on savings and money market deposits.
Provision for Credit Losses
The provision for credit losses represents a charge to earnings necessary to maintain an allowance for credit losses at
a level that, in management's evaluation, is adequate to provide coverage for all expected credit losses. The provision for
credit losses is impacted by variations in the size and composition of our loan and investment securities portfolio, recent
historical and projected future economic conditions, our internal assessment of the credit quality of the loan and investment
securities portfolios and net charge-offs.
Three months ended September 30, 2026 compared to the three months ended September 30, 2025
The provision for credit losses was $53 thousand for the three months ended September 30, 2026 compared to $105
thousand for the same period in 2025. The decrease primarily reflected a $287 thousand release related to unfunded
commitments resulting from lower loss rates under CECL, partially offset by a higher provision for credit losses on loans.
Nine months ended September 30, 2026 compared to the nine months ended September 30, 2025
The provision for credit loss es was $2.1 million for the nine months ended September 30, 2026 compared to $1.8 million
for the same period in 2025. The increase in the provision for credit losses primarily reflects growth in the loan portfolio,
which increased the level of estimated expected credit losses under CECL.
Non-Interest Income
Our services and products generate service charges and fees, mainly from our depository accounts. We also generate
income from gain on sale of loans though the SBA 7a loan program and the monetization of fees earned through our loan
swap program. In addition, we own and are beneficiaries of the life insurance policies covering certain of our key employees,
which policies generate income from the increase in the cash surrender values.
The following table presents the components of non-interest income for the periods indicated (in thousands):
Three Months Ended September 30,
Nine Months Ended September 30,
2026
2025
2026
2025
Service fees
$
1,542
$
2,661
$
7,243
$
7,394
Gain (loss) on sale of securities available for sale, net
-
(28)
14
(28)
Gain on sale of loans held for sale, net
165
128
271
804
Other non-interest income
965
923
2,854
2,600
Total non -interest income
$
2,672
$
3,684
$
10,382
$
10,770
Three months ended September 30, 2026 compared to the three months ended September 30, 2025
Non-interest income for the three months ended September 30, 2026 decreased $1.0 million , or 27.5%, compared to
the same period in 2025. This decrease was primarily driven by a $551 thousand decrease in income generated by the
Company’s loan swap program and a $438 thousand decrease in loan prepayment penalty income, both of which were
reported under service fees, compared to the same period last year.
Nine months ended September 30, 2026 compared to the nine months ended September 30, 2025
Non-interest income for the nine months ended September 30, 2026 decreased $388 thousand or 3.6%, compared to
the same period in 2025. The decrease was primarily attributable to a $586 thousand decrease in prepayment penalty
income, a $524 thousand decrease in title insurance fees, and a $533 thousand decrease in gains on the sale of SBA loans.
These decreases were partially offset by a $838 thousand increase in income generated by the Company’s loan swap
program, which is reported under service fees in the Consolidated Statements of Operations.
Table of Contents
38 USCB Financial Holdings, Inc. Q3 2026 Form 10-Q
Non-Interest Expense
The following table presents the components of non-interest expense for the dates indicated (in thousands):
Three Months Ended September 30,
Nine Months Ended September 30,
2026
2025
2026
2025
Salaries and employee benefits
$
9,295
$
7,909
$
26,402
$
23,499
Occupancy
1,352
1,382
4,037
4,003
Regulatory assessment and fees
392
377
1,273
1,194
Consulting and legal fees
663
585
1,807
1,041
Network and information technology services
802
656
1,886
1,725
Other operating
2,227
2,139
7,003
6,272
Total non -interest expense
$
14,731
$
13,048
$
42,408
$
37,734
Three months ended September 30, 2026 compared to the three months ended September 30, 2025
Non-interest expense for the three months ended September 30, 2026 increased $1.7 million or 12.9%, compared to
the same period in 2025. This increase was primarily driven by an increase of $1.4 million in salaries and employee benefits,
consisting of a $547 thousand increase in salaries associated with additional full-time employees, a $559 thousand increase
in sales incentives, a $145 thousand increase in benefits (health insurance expense), an $88 thousand increase in 401(k)
expense, and a $143 thousand increase in stock-based compensation expense. Additionally, network and information
technology services increased $146 thousand, primarily due to enhancements to the data server infrastructure.
Nine months ended September 30, 2026 compared to the nine months ended September 30, 2025
Non-interest expense for the nine months ended September 30, 2026 increased $4.7 million or 12.4%, compared to the
same period in 2025. The increase was primarily driven by an increase of $2.9 million in salaries and employee benefits,
consisting of $1.2 million related to merit increases and new full-time employee salaries, a $540 thousand increase in sales
incentives, a $496 thousand increase in benefits (health insurance and 401(k) expenses), a $359 thousand increase in
stock-based compensation expense, and a $192 thousand increase in payroll taxes. In addition, consulting and legal fees
increased $766 thousand, primarily due to a $448 thousand increase in professional fees related to marketing consulting
and executive talent search services and a $381 thousand increase in legal fees related to the reimbursement of legal
expenses recognized during the first and second quarters of 2025, which reduced legal expense in the prior-year period.
Other non-interest expenses increased by $731 thousand, mainly due to a $173 thousand increase in promotional expense,
a $285 thousand increase in excise tax expense, and an $86 thousand increase in ATM expense.
Provision for Income Tax
Fluctuations in the effective tax rate reflect the effect of the differences in the inclusion or deductibility of certain income
and expenses for income tax purposes. Therefore, future decisions on the investments we choose will affect our effective
tax rate. The cash surrender value of bank-owned life insurance policies covering key employees, purchasing municipal
bonds, and overall levels of taxable income will be important elements in determining our effective tax rate.
Three months ended September 30, 2026 compared to the three months ended September 30, 2025
Income tax expense for the three months ended September 30, 2026 was $2.7 million as compared to $2.9 million for
the same period in 2025. The effective tax rate for the three months ended September 30, 2026 was 21.82% compared to
24.28% for the same period in 2025.
Nine months ended September 30, 2026 compared to the nine months ended September 30, 2025
Income tax expense for the nine months ended September 30, 2026 was $8.6 million as compared to $7.9 million for
the same period in 2025. The Company recognized a non-recurring $619 thousand income tax benefit in the first quarter of
2026 resulting from an adjustment to the deferred tax asset calculation as of December 31, 2025. The effective tax rate for
the nine months ended September 30, 2026 was 23.59% compared to 24.22% for the same period in 2025.
For a further discussion of income taxes, see Note 5 “Income Taxes” to the unaudited Consolidated Financial
Statements in Item 1 of Part I of this Form 10-Q.
Table of Contents
39 USCB Financial Holdings, Inc. Q3 2026 Form 10-Q
Analysis of Financial Condition
Total assets at September 30, 2026 were $3.0 1 billion, an increase of $219.9 million, or 10.5% annualized, over total
assets of $2.79 billion at December 31, 2025. Total loans, net of deferred fees/costs, increased $132.8 million, or 8.1%
annualized, to $2.32 billion at September 30, 2026 compared to $2.19 billion at December 31, 2025. Total deposits
increased by $101.2 million, or 5.8% annualized, to $2.45 billion at September 30, 2026 compared to $2.35 billion at
December 31, 2025.
Investment Securities
The investment portfolio is used and managed to provide liquidity through cash flows, marketability and, if necessary,
collateral for borrowings. The investment portfolio is also used as a tool to manage interest rate risk and the Company’s
capital market risk exposure. The philosophy of the portfolio is to maximize the Company’s profitability taking into
consideration the Company’s risk appetite and tolerance, manage its asset composition and diversification, and maintain
adequate risk -based capital ratios.
The investment portfolio is managed in accordance with the Board approved Asset and Liability Management (“ALM”)
policy, which includes investment guidelines. Such policy is reviewed at least annually or more frequently if deemed
necessary, depending on market conditions and/or unexpected events. The investment portfolio composition is subject to
change depending on the funding and liquidity needs of the Company, and the interest risk management objective directed
by the Asset-Liability Committee (“ALCO”). The portfolio of investments also can be used to modify the duration of the
balance sheet. The allocation of cash into securities takes into consideration anticipated future cash flows (uses and
sources) and all available sources of credit.
Our investment portfolio consists primarily of securities issued by the U.S. Government and U.S. Government Agencies
and mortgage -backed securities, collateralized mortgage obligation s, corporate bonds , municipal securities, other debt
securities all with varying contractual maturities and coupons. Due to the optionality embedded in these securities, the
contractual maturities do not necessarily represent the expected life of the portfolio. Some of these securities will be called
or paid down prior to maturity depending on capital market conditions and expectations. The investment portfolio is regularly
reviewed by the Chief Financial Officer, Treasurer, and the ALCO of the Company to ensure an appropriate risk and return
profile as well as for adherence to the Company’s investment polic ies.
When evaluating AFS debt securities under ASC Topic 326, the Company evaluates whether the decline in fair value
is attributable to credit losses or other factors like interest rate risk, using both quantitative and qualitative analyses, including
company performance analysis, review of credit ratings, vintage bonds, remaining payment terms, prepayment speeds and
analysis of macro-economic conditions . As a result of this evaluation, the Company concluded that no allowance was
required on AFS securities as of September 30, 2026 and as of December 31, 2025.
At quarter end, HTM securities included $133.1 million of U.S. Government and U.S. Government Agencies issued
bonds and mortgage -backed securities. Because of the explicit and/or implicit guarantee on these bonds, the Company
holds no reserves on these holdings. Using the PD/LGD methodology and considering that there are no HTM securities
exposed to non
‑
government credit risk, the Company estimated ACL of $0 as of September 30, 2026. For periods where
there was an ACL for HTM securities recorded the book value for debt securities classified as HTM represents amortized
cost less ACL.
Aggregate AFS and HTM investment securities increased $14.3 million to $475.7 million at September 30, 2026 from
$461.4 million at December 31, 2025.
As of September 30, 2026, investment securities with a market value of $54.7 million were pledged to secure public
deposits . The investment portfolio does not contain any tax-exempt securities.
Table of Contents
40 USCB Financial Holdings, Inc. Q3 2026 Form 10-Q
The following table presents the amortized cost and fair value of investment securities for the dates indicated (dollars
in thousands ):
September 30, 2026
December 31, 2025
Available-for-sale:
Amortized
Cost
Fair Value
Amortized
Cost
Fair Value
U.S. Government Agency
$
11,882
$
10,467
$
15,169
$
14,144
Collateralized mortgage obligations
82,427
62,334
92,871
75,828
Mortgage-backed securities - residential
34,446
26,792
35,865
29,917
Mortgage-backed securities - commercial
212,444
193,989
174,622
168,108
Municipal securities
5,189
3,963
5,196
4,263
Bank subordinated debt securities
45,931
45,079
15,284
15,230
$
392,319
$
342,624
$
339,007
$
307,490
Held-to-maturity:
U.S. Government Agency
$
36,664
$
32,566
$
41,158
$
37,970
Collateralized mortgage obligations
47,284
40,841
51,431
46,786
Mortgage-backed securities - residential
34,363
30,274
37,221
34,718
Mortgage-backed securities - commercial
14,790
13,016
15,088
14,051
Corporate bonds
-
-
9,045
8,983
$
133,101
$
116,697
$
153,943
$
142,508
Allowance for credit losses - securities held-to-maturity
-
(2)
Securities held-to maturity, net of allowance for credit losses
$
133,101
$
153,941
The following table shows the weighted average yields, categorized by contractual maturity, for investment securities
as of September 30, 2026 (in thousands, except yields ):
Within 1 year
After 1 year
through 5 years
After 5 years
through 10 years
After 10 years
Total
Amortized
Cost
Yield
Amortized
Cost
Yield
Amortized
Cost
Yield
Amortized
Cost
Yield
Amortized
Cost
Yield
Available-for-sale:
U.S. Government Agency
$
-
-
$
-
-
$
-
-
$
11,882
2.77%
$
11,882
2.77%
Collateralized mortgage obligations
-
-
-
-
-
-
82,427
1.57%
82,427
1.57%
MBS - residential
-
-
-
-
-
-
34,446
2.44%
34,446
2.44%
MBS - commercial
-
-
4,998
4.55%
4,706
4.80%
202,740
4.27%
212,444
4.28%
Municipal securities
-
-
-
-
5,189
1.87%
-
-
5,189
1.87%
Bank subordinated debt securities
-
-
4,954
6.24%
40,977
5.52%
-
-
45,931
5.60%
$
-
-
$
9,952
5.39%
$
50,872
5.08%
$
331,495
3.35%
$
392,319
3.63%
Held-to-maturity:
U.S. Government Agency
$
4,993
1.24%
$
17,652
1.21%
$
1,426
2.65%
$
12,593
1.98%
$
36,664
1.54%
Collateralized mortgage obligations
-
-
-
-
-
-
47,284
1.65%
47,284
1.65%
MBS - residential
11
2.99%
8,829
1.65%
-
-
25,523
2.27%
34,363
2.11%
MBS - commercial
-
-
3,031
1.63%
-
-
11,759
2.56%
14,790
2.37%
$
5,004
1.24%
$
29,512
1.39%
$
1,426
2.65%
$
97,159
1.97%
$
133,101
1.82%
Loans
Loans are the largest category of interest-earning assets on the unaudited Consolidated Balance Sheets, and usually
provide higher yields than the remainder of the interest-earning assets. Higher yields typically carry greater inherent credit
and liquidity risks in comparison to lower yield assets. The Company manages and mitigates such risks in accordance with
the credit and ALM policies, risk tolerance and balance sheet composition.
Table of Contents
41 USCB Financial Holdings, Inc. Q3 2026 Form 10-Q
The following table shows the loan portfolio composition as of the dates indicated (in thousands):
September 30, 2026
December 31, 2025
Total
Percent of
Total
Total
Percent of
Total
Residential real estate
$
347,565
15.0
%
$
307,692
14.1
%
Commercial real estate
1,349,240
58.2
%
1,244,835
57.0
%
Commercial and industrial
298,362
12.9
%
295,548
13.5
%
Correspondent banks
128,168
5.5
%
127,968
5.9
%
Consumer and other
193,688
8.4
%
207,215
9.5
%
Total gross loans
2,317,023
100.0
%
2,183,258
100.0
%
Plus: Deferred fees/costs
5,071
5,999
Total loans net of deferred fees/costs
2,322,094
2,189,257
Less: Allowance for credit losses
27,018
25,500
Total net loans
$
2,295,076
$
2,163,757
Total loans, net of deferred fees/costs, increased by $132.8 million, or 8.1% annualized to $2.32 billion, at
September 30, 2026 compared to December 31, 2025. The commercial real estate loan segment had the most significant
balance increase compared to December 31, 2025.
Our loan portfolio continues to grow, with commercial real estate lending being the primary focus which represented
approximately 58.2% of the total gross loan portfolio as of September 30, 2026. Our loan growth strategy since inception
has been reflective of the market in which we operate and of our strategic plan as approved by the Board.
The growth experienced in recent years is primarily due to implementation of our relationship-based banking model and
the success of our relationship managers in competing for new business in a highly competitive metropolitan area. Many of
our larger loan clients have long-term relationships with members of our senior management team or our relationship
managers that date back to former institutions.
From a liquidity perspective, our loan portfolio provides us with additional liquidity due to repayments or unexpected
prepayments. The following table shows maturities and sensitivity to interest rate changes of the loan portfolio at
September 30, 2026 (in thousands ):
Due in 1 year or
less
Due in 1 to 5
years
Due after 5 to 15
years
Due after 15
years
Total
Residential real estate
$
13,601
$
81,505
$
62,261
$
190,198
$
347,565
Commercial real estate
80,719
586,819
677,937
3,765
1,349,240
Commercial and industrial
12,275
108,951
134,064
43,072
298,362
Correspondent banks
128,168
-
-
-
128,168
Consumer and other
3,863
839
20,981
168,005
193,688
Total gross loans
$
238,626
$
778,114
$
895,243
$
405,040
$
2,317,023
Interest rate sensitivity:
Fixed interest rates
$
178,365
$
187,204
$
167,688
$
289,667
$
822,924
Floating or adjustable rates
60,261
590,910
727,555
115,373
1,494,099
Total gross loans
$
238,626
$
778,114
$
895,243
$
405,040
$
2,317,023
The information presented in the table above is based upon the contractual maturities of the individual loans, which
may be subject to renewal at their contractual maturity. Renewals will depend on approval by our credit department and
balance sheet composition at the time of the analysis, as well as any modification of terms at the loan’s maturity. Additionally,
maturity concentrations, loan duration, prepayment speeds and other interest rate sensitivity measures are discussed,
reviewed, and analyzed by the ALCO. Decisions on term/rate modifications are discussed as well.
As of September 30, 2026, approximately 64.5% of the loan portfolio has adjustable/variable rates and 35.5% of the
loan portfolio has fixed rates. The adjustable/variable rate loans re-price to different benchmarks and tenors and in different
periods of time. By contractual characteristics, there are no material concentrations on anniversary repricing .
Table of Contents
42 USCB Financial Holdings, Inc. Q3 2026 Form 10-Q
Asset Quality
Our asset quality grading analysis estimates the capability of the borrower to repay the contractual obligation of the loan
agreement as scheduled or at all. The Company’s internal credit risk grading system is based on experiences with similarly
graded loans. Internal credit risk grades are reviewed at least once a year, and more frequently as needed. Internal credit
risk ratings may change based on management’s assessment of the results from the annual review, portfolio monitoring,
and other developments observed with borrowers.
The internal credit risk grades used by the Company to assess the credit worthiness of a loan are shown below:
Pass
– Loans indicate different levels of satisfactory financial condition and performance.
Special Mention
close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment
prospects for the loan or of the institution’s credit position at some future date.
Substandard
– Loans classified as substandard are inadequately protected by the current net worth and paying
capacity of the obligator or of the collateral pledged, if any. Loans so classified have a well-defined weakness or
weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the
institution will sustain some loss if the deficiencies are not corrected.
Doubtful
the added characteristic that the weaknesses make collection or liquidation in full on the basis of currently existing
facts, conditions, and values, highly questionable and improbable.
Loss
– Loans classified as loss are considered uncollectible.
Loan credit exposures by internally assigned grades are as follows for the dates indicated (in thousands ):
September 30, 2026
Pass
Special Mention
Substandard
Doubtful
Total
Residential real estate
$
344,805
$
1,120
$
1,640
$
-
$
347,565
Commercial real estate
1,330,723
11,377
7,140
-
1,349,240
Commercial and industrial
296,279
741
1,342
-
298,362
Correspondent banks
128,168
-
-
-
128,168
Consumer and other
193,688
-
-
-
193,688
$
2,293,663
$
13,238
$
10,122
$
-
$
2,317,023
December 31, 2025
Pass
Special Mention
Substandard
Doubtful
Total
Residential real estate
$
304,276
$
916
$
2,500
$
-
$
307,692
Commercial real estate
1,230,823
11,613
2,399
-
1,244,835
Commercial and industrial
293,169
907
1,472
-
295,548
Correspondent banks
127,968
-
-
-
127,968
Consumer and other
207,215
-
-
-
207,215
$
2,163,451
$
13,436
$
6,371
$
-
$
2,183,258
Table of Contents
43 USCB Financial Holdings, Inc. Q3 2026 Form 10-Q
Non-Performing Assets
The following table presents non-performing assets as of the dates shown (in thousands , except ratios):
September 30, 2026
December 31, 2025
Non-accrual loans
$
7,689
$
3,138
Loans past due over 90 days and still accruing
-
-
Total non -performing loans
$
7,689
$
3,138
Other real estate owned
-
-
Total non -performing assets
$
7,689
$
3,138
Asset quality ratios:
Allowance for credit losses to total loans
1.16%
1.16%
Allowance for credit losses to non-performing loans
351%
813%
Non-performing loans to total loans
0.33%
0.14%
Non-performing assets include all loans categorized as non-accrual, other real estate owned (“OREO”) and other
repossessed assets. Problem loans for which the collection or liquidation in full is reasonably uncertain are placed on a non-
accrual status. This determination is based on current existing facts concerning collateral values and the paying capacity of
the borrower. When the collection of the full contractual balance is unlikely, the loan is placed on non-accrual to avoid
overstating the Company’s income for a loan with increased credit risk.
If the principal or interest on a commercial loan becomes due and unpaid for 90 days or more, the loan is placed on
non-accrual status as of the date it becomes 90 days past due and remains in non-accrual status until it meets the criteria
for restoration to accrual status. Residential loans, on the other hand, are placed on non-accrual status when the principal
or interest becomes due and unpaid for 120 days or more and remains in non-accrual status until it meets the criteria for
restoration to accrual status. Restoring a loan to accrual status is possible when the borrower resumes payment of all
principal and interest payments for a period of six consecutive months and the Company has a documented expectation of
repayment of the remaining contractual principal and interest or the loan becomes secured and in the process of collection.
The Company may grant a loan concession to a borrower experiencing financial difficulties. This determination is
performed during the annual review process or whenever problems surface regarding the borrower’s ability to repay in
accordance with the original terms of the loan or line of credit. The concessions are given to the debtor in various forms,
including interest rate reductions, principal forgiveness, extension of maturity date, waiver or deferral of payments and other
concessions intended to minimize potential losses.
For further discussion of non-performing loans and borrowers experiencing financial difficulties , see Note 3 “Loans” to
the unaudited Consolidated Financial Statements in Item 1 of Part 1 of this Form 10-Q.
Allowance for Credit Losses
The ACL on loans represents an amount that, in management's evaluation, is adequate to provide coverage for all
expected future credit losses on outstanding loans. Additionally, qualitative adjustments are made to the ACL when, based
on management’s judgment, there are factors impacting the allowance estimate not considered by the quantitative
calculations. See Note 3 “Loans” in Item 1 of Part 1 of this Form 10-Q for more information on the ACL.
Table of Contents
44 USCB Financial Holdings, Inc. Q3 2026 Form 10-Q
The following table presents ACL on loans and net charge -offs to average loans by type for the periods indicated (in
thousands ):
Residential
Real
Estate
Commercial
Real Estate
Commercial
and
Industrial
Correspondent
Banks
Consumer
and Other
Total
Three Months Ended September 30,
2026
Beginning balance
$
5,204
$
10,116
$
5,738
$
1,094
$
4,549
$
26,701
Provision for credit losses
(1)
565
415
(263)
(78)
(299)
340
Recoveries
2
-
3
-
-
5
Charge-offs
(27)
-
-
-
(1)
(28)
Ending Balance
$
5,744
$
10,531
$
5,478
$
1,016
$
4,249
$
27,018
Average loans
$
353,313
$
1,330,530
$
300,007
$
126,019
$
199,222
$
2,309,091
Net charge-offs (recoveries) to average
loans
(2)
0.03%
- %
(0.00)%
- %
0.00%
0.00%
Nine Months Ended September 30,
2026
Beginning balance
$
5,908
$
9,476
$
4,814
$
1,015
$
4,287
$
25,500
Provision for credit losses
(3)
143
1,055
656
1
(30)
1,825
Recoveries
16
-
8
-
-
24
Charge-offs
(323)
-
-
-
(8)
(331)
Ending Balance
$
5,744
$
10,531
$
5,478
$
1,016
$
4,249
$
27,018
Average loans
$
337,680
$
1,291,141
$
276,424
$
127,852
$
215,981
$
2,249,078
Net charge-offs (recoveries) to average
loans
(2)
0.12%
- %
(0.01)%
0.00%
0.00%
0.02%
(1) Provision for credit losses excludes a $287 thousand release due to unfunded commitments included in accrued interest and other
liabilities.
(2) Annualized.
(3) Provision for credit losses excludes a $298 thousand provision due to unfunded commitments included in accrued interest and
other liabilities and a $2 thousand release related to investment securities held to maturity.
Table of Contents
45 USCB Financial Holdings, Inc. Q3 2026 Form 10-Q
Residential
Real Estate
Commercial
Real Estate
Commercial
and
Industrial
Correspondent
Banks
Consumer
and Other
Total
Three Months Ended September 30,
2025
Beginning balance
$
5,477
$
9,491
$
4,508
$
874
$
4,583
$
24,933
Provision for credit losses
(1)
544
(102)
(118)
(45)
(252)
27
Recoveries
5
-
6
-
-
11
Charge-offs
-
-
-
-
(7)
(7)
Ending Balance
$
6,026
$
9,389
$
4,396
$
829
$
4,324
$
24,964
Average loans
$
316,701
$
1,184,145
$
269,204
$
103,210
$
225,783
$
2,099,043
Net charge-offs (recoveries) to average
loans
(0.01)%
- %
(0.01)%
- %
0.01%
(0.00)%
Nine Months Ended September 30,
2025
Beginning balance
$
5,121
$
8,788
$
4,633
$
654
$
4,874
$
24,070
Provision for credit losses
(3)
888
601
(249)
175
179
1,594
Recoveries
17
-
12
-
1
30
Charge-offs
-
-
-
-
(730)
(730)
Ending Balance
$
6,026
$
9,389
$
4,396
$
829
$
4,324
$
24,964
Average loans
$
304,401
$
1,170,204
$
264,718
$
95,724
$
213,145
$
2,048,192
Net charge-offs (recoveries) to average
loans
(0.01)%
- %
(0.01)%
- %
0.69%
0.07%
(1) Provision for credit losses excludes a $80 thousand provision due to unfunded commitments included in accrued interest and other
liabilities and a $2 thousand release related to investment securities held to maturity.
(2) Annualized.
(3) Provision for credit losses excludes $224 thousand provision due to unfunded commitments included in accrued interest and a $1
thousand release related to investment securities held to maturity.
The Federal Open Market Committee (“FOMC”) economic forecasts as of September 30, 2026, reflected moderate
improvement relative to December 31, 2025 and September 30, 2025. The for ecast for real GDP, the unemployment rate
,
and Fannie Mae House Price Index (“HPI”) forecast reflected an improvement in national housing prices. The Company
continued to adjust the HPI index effect on the 1-4 Family loan portfolio with a qualitative factor because Florida housing
prices are performing better than national levels. The Q-factor scorecard was updated based on the latest portfolio stress
test and the resulting maximum loss calculation.
Our ACL included residential loans. To assess the potential impact of changes in qualitative factors related to these
loans, management performed a sensitivity analysis. The Company evaluated the impact of the HPI used in calculating
expected losses on the residential loan segment. As of September 30, 2026, for every 100 basis point increase in the HPI,
the forecast reduces reserves by approximately $226 thousand and about 1 basis points to the reserve coverage ratio,
everything else being constant. This sensitivity analysis provides a hypothetical result to assess the sensitivity of the ACL
and does not represent a change in management’s judgment. For comparative purposes, in prior periods the Company
stress tested the commercial real estate loan subcategory based on collateral code (1st lien, commercial property) rather
than the non
‑
owner
‑
occupied subsegment.
As of September 30, 2026, the Company stress tested two qualitative factors within the non
‑
owner
‑
occupied
subsegment of the commercial real estate loan portfolio, as it represents the largest segment of the Company’s portfolio.
The analysis evaluated the impact of changing the qualitative factors from no risk to maximum loss to assess the sensitivity
of the allowance for credit losses (“ACL”). This stress resulted in a hypothetical increase of $6.2 million, or 22.9%, in the
ACL. The sensitivity analysis is intended solely to illustrate the responsiveness of the ACL to changes in qualitative
assumptions and does not represent a change in management’s judgment. For comparative purposes, in prior periods the
Company stress tested the commercial real estate loan subcategory based on collateral code (1st lien, commercial property)
rather than the non
‑
owner
‑
occupied subsegment.
Table of Contents
46 USCB Financial Holdings, Inc. Q3 2026 Form 10-Q
Bank-Owned Life Insurance
As of September 30, 2026, the combined cash surrender value of all bank-owned life insurance (“BOLI”) policies was
$60.9 million. Changes in cash surrender value are recorded
to
other non-interest income in the unaudited Consolidated
Statements of Operations. The Company has BOLI policies with five insurance carriers. The Company is the beneficiary of
these policies.
Deposits
Customer deposits are the primary funding source for the Bank’s growth. Through our network of banking centers, we
offer a competitive array of deposit accounts and treasury management services designed to meet our customers’ business
needs. Our primary deposit customers are small -to-medium sized businesses (“SMBs”), and the personal business of the
owners and operators of these SMBs, as well as the retail/consumer relationships of the employees of these businesses.
The following table presents the daily average balance and average rate paid on deposits by category for the periods
presented (in thousands, except ratios):
Three Months Ended September 30,
2026
2025
Average Balance
Average Rate
Paid
Average Balance
Average Rate
Paid
Non-interest bearing demand deposits
$
610,271
0.00%
$
569,522
0.00%
Interest-bearing demand deposits
68,264
2.07%
47,338
2.40%
Saving and money market deposits
1,286,075
2.64%
1,319,862
3.11%
Time deposits
546,646
3.61%
520,345
3.84%
Total
$
2,511,256
2.19%
$
2,457,067
2.53%
The Company has a granular deposit portfolio with outstanding balances comprised of 57.9% in commercial deposits,
27.3% in personal deposits, 6.9% in public funds (which are partially collateralized) and 7.9% in brokered deposits. The
brokered deposits balance at September 30, 2026 was $192.8 million and $256.8 million at December 31, 2025.
As of September 30, 2026, the Company has approximately 21 thousand deposit accounts with the majority of which
were personal accounts, approximately 12 thousand or 58.2%. The estimated average account size in our deposit portfolio
was approximately $118 thousand as of September 30, 2026.
The amount of uninsured deposits are estimated based on the FDIC deposit insurance limit of $250 thousand per
depositor for each account ownership category for all deposit accounts at the Company. The total estimated percentage of
uninsured deposits was 53% at September 30, 2026 and 51% at December 31, 2025.
The Company participates in the IntraFi Network through which it offers Certificate of
Deposit Account Registry Service
(“CDARS”) and Insured Cash Sweep (“ICS”) reciprocal deposit products. Customer funds are placed with other participating
financial institutions in deposit accounts in amounts designed to remain within applicable FDIC insurance limits, allowing
customers to obtain FDIC insurance coverage on larger balances while maintaining their banking relationship with the
Company. The Company receives reciprocal deposits from other participating institutions in connection with these
transactions. Reciprocal deposits through the IntraFi Network totaled $197.7 million and $183.2 million as of September 30,
2026 and December 31, 2025, respectively.
The following table shows scheduled maturities of uninsured time deposits as of September 30, 2026 (in thousands):
September 30, 2026
Three months or less
$
57,956
Over three through six months
65,740
Over six through twelve months
31,008
Over twelve months
53,053
$
207,757
Table of Contents
47 USCB Financial Holdings, Inc. Q3 2026 Form 10-Q
Other Liabilities
The Company collects from commercial and residential loan customers funds which are held in escrow for future
payment of real estate taxes and insurance. These escrow funds are disbursed by the Company directly to the insurance
companies and taxing authority of the borrower. Escrow funds are recorded as accrued interest and other liabilities in the
consolidated balance sheet.
As of September 30, 2026, escrow balances totaled $32.2 million compared to $8.1 million at December 31, 2025.
The increase reflects the normal growth in escrow accounts pending tax and insurance payments.
Borrowings
FHLB Advances
As a member of the FHLB of Atlanta, we are eligible to obtain advances with various terms and conditions. This
accessibility to additional funding allows us to efficiently and timely meet both expected and unexpected outgoing cash flows
and collateral needs without adversely affecting either daily operations or the financial condition of the Company .
As of September 30, 2026, we had $106.5 million of fixed -rate advances and $125.5 million of daily-rate advances
outstanding with the FHLB, with weighted average interest rates of 4.04% and 4.13%, maturing in October 2026, November
2026 and December 2026 for the fixed -rate advances and May 2027 for the daily-rate advance, as detailed in the table
below.
The following table presents the FHLB advances as of September 30, 2026 (in thousands ):
September 30, 2026
Interest Rate
Type of Rate
Maturity Date
Amount
4.19%
Fixed
December 15, 2026
$
35,000
4.02%
Fixed
December 9, 2026
20,000
3.94%
Fixed
November 25, 2026
31,500
3.93%
Fixed
October 13, 2026
20,000
4.13%
Daily
May 24, 2027
125,500
$
232,000
The Company has also established Federal Funds lines of credit with our upstream correspondent banks and the
Federal Reserve Bank of Atlanta Discount Window to manage temporary fluctuations in our daily cash balances. As of
September 30, 2026, there were no outstanding balances with any of these additional liquidity sources.
Subordinated Notes
On August 14, 2025, the Company entered into a Subordinated Note Purchase Agreement with certain qualified
institutional buyers pursuant to which the Company sold and issued $40.0 million in aggregate principal amount of its
7.625% Fixed -to-Floating Rate Subordinated Notes due 2035. The Notes were issued by the Company to the purchasers
at a price equal to 100% of their face amount. The subordinated debt was originally issued at a cost of $760 thousand. The
subordinated debt, net of amortized expenses, was $39.4 million, reflecting the scheduled expense recognition over the
term of the instruments. The subordinated notes are presented net of these costs on the Consolidated Balance Sheet. The
Notes were offered and sold by the Company in a private placement transaction in reliance on exemptions from the
registration requirements of the Securities Act of 1933, as amended (the “Securities Act”), pursuant to Section 4(a)(2) of the
Securities Act and Rule 506(b) of Regulation D thereunder. For additional information, see the Company Form 8-K filed on
August 14, 2025.
Off-Balance Sheet Arrangements
We engage in various financial transactions in our operations that, under GAAP, may not be included on the Balance
Sheet. To meet the financing needs of our customers, we may include commitments to extend credit and standby letters of
credit. To a varying degree, such commitments involve elements of credit, market, and interest rate risk in excess of the
amount recognized in the consolidated balance sheets. We maintain an allowance for off -balance sheet credit risk which is
recorded under accrued interest and other liabilities on the unaudited Consolidated Balance Sheets. The ACL related to
unfunded commitments at September 30, 2026 was $1.1 million and at December 31, 2025 was $752 thousand. The
increase was primarily driven by an increase in unfunded commitments.
Table of Contents
48 USCB Financial Holdings, Inc. Q3 2026 Form 10-Q
Since commitments associated with letters of credit and commitments to extend credit may expire unused, the amounts
shown do not necessarily reflect actual future cash funding requirements. The following table presents lending related
commitments outstanding as of the dates indicated (in thousands ):
September 30, 2026
December 31, 2025
Commitments to grant loans and unfunded lines of credit
$
194,822
$
161,606
Standby and commercial letters of credit
3,397
2,700
Total
$
198,219
$
164,306
Commitments to extend credit are agreements to lend funds to a client, as long as there is no violation of any condition
established in the contract, for a specific purpose. Commitments generally have variable interest rates, fixed expiration
dates or other termination clauses and may require payment of a fee. Since many of the commitments are expected to
expire without being fully drawn, the total commitment amounts disclosed above do not necessarily represent future cash
requirements.
Unfunded lines of credit represent unused portions of credit facilities to our current borrowers that represent no change
in credit risk in our portfolio. Lines of credit generally have variable interest rates. The maximum potential amount of future
payments we could be required to make is represented by the contractual amount of the commitment, less the amount of
any advances made.
Letters of credit are conditional commitments issued by us to guarantee the performance of a client to a third party. In
the event of nonperformance by the client in accordance with the terms of the agreement with the third party, we would be
required to fund the commitment. If the commitment is funded, we would be entitled to seek recovery from the client from
the underlying collateral, which can include commercial real estate, physical plant and property, inventory, receivables, cash
or marketable securities.
Asset and Liability Management Committee
Members of senior management and our Board make up the asset and liability management committee, or ALCO.
Senior management is responsible for ensuring that Board approved strategies and policies for managing and mitigating
risks are appropriately executed within the designated lines of authority and responsibility in a timely manner.
ALCO oversees the establishment, approval, implementation, and review of interest rate risk, management, and
mitigation strategies, ALM related policies, ALCO procedures and risk tolerances and appetite.
While some degree of interest rate risk (“IRR”) is inherent to the banking business, we believe our ALCO implements
sound risk management practices to identify, quantify, monitor, and limit IRR exposures.
When assessing the scope of IRR exposure and impact on the consolidated balance sheet, cash flows and consolidated
statement of operations, management considers both earnings and economic impacts. Asset price variations, deposit
volatility and reduced earnings or outright losses could adversely affect the Company’s liquidity, performance, and capital
adequacy.
Income simulations are used to assess the impact of changing rates on earnings under different interest rates scenarios,
yield curve shapes and time horizons. These simulations utilize both instantaneous and parallel changes in the level of
interest rates, as well as non-parallel changes such as changing slopes (flat and steepening) and twists of the yield curve.
Static simulation models are based on current exposures and assume a constant balance sheet with no new growth.
Dynamic simulation is also utilized to have a more comprehensive assessment on IRR. This simulation relies on
assumptions regarding changes in existing lines of business, new business, management strategies and client expected
behavior.
To have a more complete picture of IRR, the Company also evaluates the economic value of equity (“EVE”). This
assessment allows us to measure the degree to which the economic values will change under different interest rate
scenarios (parallel and non -parallel). The economic value approach focuses on a longer-term time horizon and captures all
future cash flows expected from existing assets and liabilities. The economic value model utilizes a static approach in that
the analysis does not incorporate new business; rather, the analysis shows a snapshot in time of the risk inherent in the
balance sheet.
Table of Contents
49 USCB Financial Holdings, Inc. Q3 2026 Form 10-Q
Market and Interest Rate Risk Management
According to our ALCO model, as of September 30, 2026, both the static and dynamic ALM simulations indicate that
the Bank’s balance sheet remains liability sensitive in Year 1, positioning the Bank to benefit in a declining rate environment
as liabilities reprice more quickly than assets, resulting in favorable Net Interest Income (“NII”) outcomes. In Year 2, the
models diverge: the dynamic simulation is broadly neutral to rising rates as the balance sheet reprices, while the static
simulation reflects lower NII under both rising and falling rate scenarios. This indicates that the more balanced Year 2 profile
depends on new business and reinvestment at current market rates, consistent with management’s forward-looking
assumptions embedded in the dynamic model.
Year 1 liability sensitivity increased modestly from the prior quarter, consistent with greater reliance on rate-sensitive
wholesale funding while core deposits remained essentially flat. During the quarter, the Bank also incorporated updated
deposit beta assumptions derived from an independent study of its historical deposit pricing, which assumes faster repricing
of certain interest-bearing deposits in rising rate scenarios. All modeled NII and EVE results continued to remain within
ALCO policy limits across all rate shock scenarios.
Management’s interest rate positioning reflects a deliberate balance between earnings stability and balance sheet
flexibility, particularly given the Bank’s relationship driven deposit base and variable rate lending profile within the South
Florida market.
The ALM model incorporates a wide range of assumptions, including asset prepayment speeds, non-maturity deposit
beta and decay assumptions, pricing correlations, deposit truncations, and key interest rate drivers. Given the inherent
estimation involved in these assumptions, actual results may differ from modeled outcomes, particularly as static measures
do not incorporate potential management actions in response to changes in market conditions or customer behavior.
EVE sensitivity remains compliant with policy guidelines, with greater volatility observed in rising rate scenarios, driven
by asset and liability convexity. In higher rate environments, the value of longer-term assets declines more rapidly,
particularly as loan prepayments slow, while certain funding sources reprice less immediately. Conversely, in declining rate
scenarios, faster prepayments and quicker asset repricing help mitigate downside EVE exposure. EVE sensitivity increased
modestly quarter over qu arter, reflecting the redeployment of cash into longer-term assets and greater reliance on shorter-
tenor funding, which widened the duration gap between assets and liabilities.
Overall, the Bank remains well positioned to manage current interest rate volatility, with modest, within-policy exposure
under rising rate scenarios and favorable positioning in a declining rate environment. Management continues to actively
review ALM results and retains flexibility, consistent with ALCO policy, to adjust asset and liability duration through balance
sheet strategies as market conditions evolve. Results and related strategies are reviewed quarterly with ALCO and adjusted
as appropriate.
Liquidity
Liquidity is defined as a Company’s capacity to meet its cash and collateral obligations at a reasonable cost. Maintaining
an adequate level of liquidity depends on the Company’s ability to efficiently meet expected and unexpected cash flow and
collateral needs without adversely affecting either daily operations or the financial condition of the Company.
Liquidity risk is the risk that we will be unable to meet our short-term and long-term obligations as they become due
because of an inability to liquidate assets or obtain relatively adequate funding. The Company’s obligations, and the funding
sources used to meet them, depend significantly on our business mix, balance sheet structure and composition, credit
quality of our assets and the cash flow profiles of our on - and off -balance sheet obligations.
In managing inflows and outflows, management regularly monitors situations that can give rise to increased liquidity
risk. These include funding mismatches, market constraints on the ability to convert assets (particularly investments) into
cash or in accessing sources of funds (i.e., market liquidity), pledging assets and contingent liquidity events.
Changes in macroeconomic conditions, as well as exposure to credit, market, operational, legal, cybersecurity risk and
reputational risks, could have an unexpected impact on the Company’s liquidity risk profile and are factored into the
assessment of liquidity and the ALM framework.
Management has established a comprehensive and holistic management process for identifying, measuring, monitoring
and mitigating liquidity risk. Liquidity management also reflects the Bank’s granular mix of consumer and commercial
relationships, which management believes enhances funding stability and mitigates reliance on more rate sensitive
Table of Contents
50 USCB Financial Holdings, Inc. Q3 2026 Form 10-Q
wholesale funding sources. Due to its critical importance to the viability of the Company, liquidity risk management is
integrated into our risk management processes, Contingency Funding Plan and ALM policy.
Critical elements of our liquidity risk management include: effective corporate governance consisting of oversight by the
Board and ALCO, and active involvement of senior management; appropriate strategies, policies, procedures, and limits
used to identify and mitigate liquidity risk; comprehensive liquidity risk measurement and monitoring systems (including
assessments of the current and prospective cash flows or sources and uses of funds) that are commensurate with the
complexity and business activities of the Company; active management of intraday liquidity and collateral; an appropriately
diverse mix of existing and potential future funding sources; adequate levels of highly liquid marketable securities free of
legal, regulatory, or operational impediments, that can be used to meet liquidity needs in stressful situations; comprehensive
contingency funding plans that sufficiently address potential adverse liquidity events and emergency cash flow
requirements; and internal controls and internal audit processes sufficient to determine the adequacy of the institution’s
liquidity risk management process.
We expect funds to be available from several basic banking activity sources, including the core deposit base, the
repayment and maturity of loans and investment security cash flows. Other potential funding sources include federal funds
purchased, brokered certificates of deposit, listing certificates of deposit, Fed Funds lines and borrowings from the FHLB
Atlanta. Accordingly, our liquidity resources were at sufficient levels to fund loans and meet other cash needs as necessary.
As of September 30, 2026, the Company had $412 million in available liquidity on its balance sheet, consisting of $323
million in unpledged AFS securities, at fair value, available for use as collateral and $89 million in excess cash. Of the
Company's $459.3 million investment portfolio, at fair value, $54.7 million was pledged as collateral, comprising $19.2 million
of AFS securities and $35.5 million of HTM securities. The Company also held $81.2 million in unpledged HTM securities,
which are excluded from available liquidity above but could be pledged to the FHLB or the Federal Reserve for additional
borrowing capacity. The Company had an additional $274 million in off -balance sheet liquidity, excluding access to brokered
deposits and other off -balance sheet sources of funding.
Management believes current liquidity levels remain appropriate relative to the Bank’s risk appetite, balance sheet size,
and anticipated funding needs under both base case and stressed scenarios.
Table of Contents
51 USCB Financial Holdings, Inc. Q3 2026 Form 10-Q
Capital Adequacy
As of September 30, 2026, the Company and the Bank were both well capitalized under the FRB’s and FDIC’s prompt
corrective action framework. We also follow the capital conservation buffer framework, and as of September 30, 2026, we
exceeded the capital conservation buffer in all capital ratios , according to our actual ratios. The following table presents the
capital ratios for the Company and the Bank at the dates indicated (in thousands , except ratios).
Actual
Minimum Capital
Requirements
To be Well Capitalized
Under Prompt Corrective
Action Provisions
Amount
Ratio
Amount
Ratio
Amount
Ratio
September 30, 2026
Total risk -based capital
$
333,421
14.07
%
$
189,525
8.00
%
$
236,906
10.00
%
Tier 1 risk-based capital
$
265,952
11.23
%
$
142,144
6.00
%
$
189,525
8.00
%
Common equity tier 1 capital
$
265,952
11.23
%
$
106,608
4.50
%
$
153,989
6.50
%
Leverage ratio
$
265,952
8.88
%
$
119,832
4.00
%
$
149,789
5.00
%
December 31, 2025
Total risk -based capital
$
305,225
13.91
%
$
175,565
8.00
%
$
219,457
10.00
%
Tier 1 risk-based capital
$
239,671
10.92
%
$
131,674
6.00
%
$
175,565
8.00
%
Common equity tier 1 capital
$
239,671
10.92
%
$
98,756
4.50
%
$
142,647
6.50
%
Leverage ratio
$
239,671
8.46
%
$
113,285
4.00
%
$
141,606
5.00
%
Actual
Minimum Capital
Requirements
To be Well Capitalized
Under Prompt Corrective
Action Provisions
Amount
Ratio
Amount
Ratio
Amount
Ratio
September 30, 2026
Total risk -based capital
$
329,518
13.93
%
$
189,188
8.00
%
$
236,485
10.00
%
Tier 1 risk-based capital
$
301,450
12.75
%
$
141,891
6.00
%
$
189,188
8.00
%
Common equity tier 1 capital
$
301,450
12.75
%
$
106,418
4.50
%
$
153,715
6.50
%
Leverage ratio
$
301,450
10.06
%
$
119,844
4.00
%
$
149,805
5.00
%
December 31, 2025
Total risk -based capital
$
299,596
13.67
%
$
175,387
8.00
%
$
219,234
10.00
%
Tier 1 risk-based capital
$
273,342
12.47
%
$
131,541
6.00
%
$
175,387
8.00
%
Common equity tier 1 capital
$
273,342
12.47
%
$
98,655
4.50
%
$
142,502
6.50
%
Leverage ratio
$
273,342
9.65
%
$
113,296
4.00
%
$
141,620
5.00
%
Impact of Inflation
Our Consolidated Financial Statements and related notes have been prepared in accordance with U.S. GAAP,
which require the measurement of financial position and operating results in terms of historical dollars, without considering
the changes in the relative purchasing power of money over time due to inflation. The impact of inflation is mostly reflected
in the increased cost of operations; inflation can negatively impact overhead expenses and other variable expenses. Unlike
most industrial companies, nearly all our assets and liabilities are monetary in nature. As a result, interest rates have a
greater impact on our performance than the effects of inflation. Periods of high inflation are often accompanied by relatively
higher interest rates, and periods of low inflation are accompanied by relatively lower interest rates. Inflationary conditions
may also influence customer deposit behavior, loan demand, and pricing dynamics, which management considers as part
of its ongoing balance sheet and earnings plannin g processes.
Table of Contents
52 USCB Financial Holdings, Inc. Q3 2026 Form 10-Q
Reconciliation and Management Explanation of Non-GAAP Financial Measures
Management has included these non-GAAP measures because it believes these measures may provide useful
supplemental information for evaluating the Company’s underlying performance trends. Further, management uses these
measures in managing and evaluating the Company’s business and intends to refer to them in discussions about our
operations and performance. Operating performance measures should be viewed in addition to, and not as an alternative
to or substitute for, measures determined in accordance with GAAP, and are not necessarily comparable to non-GAAP
measures that may be presented by other companies. The following tables reconciles the non-GAAP financial measurement
of operating net income available to common shareholders for the periods presented (dollars in thousands, except per share
data):
USCB FINANCIAL HOLDINGS, INC.
NON-GAAP FINANCIAL MEASURES (UNAUDITED)
(Dollars in thousands)
As of or For the Three Months Ended
9/30/2026
6/30/2026
3/31/2026
12/31/2025
9/30/2025
Pre-tax pre-provision ("PTPP") income:
(1)
Net income
$
9,528
$
9,078
$
9,351
$
1,363
$
8,939
Plus: Income tax expense
2,660
3,636
2,335
1,911
2,866
Plus: Provision for credit losses
53
1,267
801
480
105
PTPP income
$
12,241
$
13,981
$
12,487
$
3,754
$
11,910
PTPP return on average assets:
(1)
PTPP income
$
12,241
$
13,981
$
12,487
$
3,754
$
11,910
Average assets
$
2,965,481
$
2,900,725
$
2,834,717
$
2,799,863
$
2,798,115
PTPP return on average assets
(2)
1.64%
1.93%
1.79%
0.53%
1.69%
Operating net income:
(1)
Net income
$
9,528
$
9,078
$
9,351
$
1,363
$
8,939
Less: Net gain (loss) on sale of securities
-
-
14
(7,498)
(28)
Less: Tax effect on sale of securities
-
-
(4)
1,900
7
Plus: Tax (benefit) liability expense from prior periods
-
(619)
(3)
1,096
(4)
-
Operating net income
$
9,528
$
9,078
$
8,722
$
8,057
$
8,960
Operating return on average assets:
(1)
Operating net income
$
9,528
$
9,078
$
8,722
$
8,057
$
8,960
Average assets
$
2,965,481
$
2,900,725
$
2,834,717
$
2,799,863
$
2,798,115
Operating return on average assets
(2)
1.27%
1.26%
1.25%
1.14%
1.27%
Operating return on average equity:
(1)
Operating net income
$
9,528
$
9,078
$
8,722
$
8,057
$
8,960
Average equity
$
235,885
$
228,933
$
222,226
$
212,393
$
225,316
Operating return on average equity
(2)
16.03%
15.90%
15.92%
15.05%
15.78%
Operating Revenue:
(1)
$
24,300
$
24,387
$
22,048
$
22,207
$
21,274
2,672
3,560
4,150
(4,178)
3,684
-
-
14
(7,498)
(28)
$
26,972
$
27,947
$
26,184
$
25,527
$
24,986
Operating Efficiency Ratio:
(1)
$
14,731
$
13,966
$
13,711
$
14,275
$
13,048
$
26,972
$
27,947
$
26,184
$
25,527
$
24,986
54.62%
49.97%
52.36%
55.92%
52.22%
(1) The Company believes these non -GAAP measurements are key indicators of the ongoing earnings power of the Company.
(2) Annualized.
(3) The Company recognized a $619 thousand income tax benefit in first quarter of 2026 due to an adjustment to the deferred tax asset calculation from
2025.
(4) State tax liability expenses for 2024 and for the first three quarters of 2025 were recognized during the fourth quarter of 2025. The state tax expense is
related to taxes due on interest income on loans whose collateral are located outside of the State of Florida.
Table of Contents
53 USCB Financial Holdings, Inc. Q3 2026 Form 10-Q
USCB FINANCIAL HOLDINGS, INC.
NON-GAAP FINANCIAL MEASURES (UNAUDITED)
(Dollars in thousands, except per share data)
As of or For the Three Months Ended
9/30/2026
6/30/2026
3/31/2026
12/31/2025
9/30/2025
Tangible book value per common share (at period-end):
(1)
Total stockholders' equity
$
229,362
$
233,238
$
223,246
$
217,183
$
209,095
Less: Intangible assets
-
-
-
-
-
Tangible stockholders' equity
(3)
$
229,362
$
233,238
$
223,246
$
217,183
$
209,095
Total shares issued and outstanding (at period-end):
Total common shares issued and outstanding
18,465,077
18,459,470
18,257,400
18,137,885
18,107,385
Tangible book value per common share
(2)
$
12.42
$
12.64
$
12.23
$
11.97
$
11.55
Operating diluted net income per common share:
(1)
Operating net income
$
9,528
$
9,078
$
8,722
$
8,057
$
8,960
Total weighted average diluted shares of common stock
18,662,385
18,509,572
18,454,006
18,348,725
19,755,820
Operating diluted net income per common share:
$
0.51
$
0.49
$
0.47
$
0.44
$
0.45
Tangible Common Equity/Tangible Assets
(1)
(3)
$
229,362
$
233,238
$
223,246
$
217,183
$
209,095
(3)
$
3,011,481
$
3,019,701
$
2,845,735
$
2,791,540
$
2,767,945
Tangible Common Equity/Tangible Assets
7.62%
7.72%
7.84%
7.78%
7.55%
(1) The Company believes these non -GAAP measurements are key indicators of the ongoing earnings power of the Company.
(2) Excludes the dilutive effect, if any, of shares of common stock issuable upon exercise of outstanding stock options.
(3) Since the Company has no intangible assets, tangible stockholders’ equity and tangible total assets are the same amounts as stockholders’ equity
and total assets.
Table of Contents
54 USCB Financial Holdings, Inc. Q3 2026 Form 10-Q
Item 3. Quantitative and Qualitative Disclosures About Market Risk
As a smaller reporting company, we are not required to provide the information required by this item.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Under the supervision and with the participation of our management, including our President and Chief Executive Officer
and our Chief Financial Officer, we evaluated the effectiveness of the design and operation of the Company’s disclosure
controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934
(“Exchange Act”)) as of September 30, 2026. Based on that evaluation, management believes that, as of the end of the
period covered by this Form 10-Q, the Company's disclosure controls and procedures were effective to record, process,
summarize and report the information required to be disclosed in the reports filed or submitted under the Exchange Act
within the required time periods.
Changes in Internal Control Over Financial Reporting
There has been no change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f)
under the Exchange Act) during the period covered by this Form 10-Q that has materially affected, or is reasonably likely to
materially affect, our internal control over financial reporting.
Limitations on Effectiveness of Controls and Procedures
In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and
procedures, no matter how well designed and operated, can provide only reasonable, not absolute, assurance of achieving
the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there
are resource constrain ts and that management is required to apply judgment in evaluating the benefits of possible controls
and procedures relative to their costs.
Table of Contents
55 USCB Financial Holdings, Inc. Q3 2026 Form 10-Q
PART II
Item 1. Legal Proceedings
We are not currently subject to any material legal proceedings. We are from time to time subject to claims and litigation
arising in the ordinary course of business. These claims and litigation may include, among other things, allegations of
violation of banking and other applicable regulations, competition law, labor laws and consumer protection laws, as well as
claims or litigation relating to intellectual property, securities, breach of contract and tort. We intend to defend ourselves
vigorously against any pending or future claims and litigation.
There can be no assurance that any future legal proceedings to which we are a party will not be decided adversely to
our interests and have a material adverse effect on our financial condition and operations.
Item 1A. Risk Factors
For detailed information about certain risk factors that could materially affect our business, financial condition, or future
results, see “Part I, Item 1A – Risk Factors” of the 2025 Form 10-K. There have been no material changes to the risk factors
disclosed in the 2025 Form 10-K.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
(a) None.
(b) Not applicable.
(c) The Company’s repurchases of equity securities for the three months ended September 30, 2026 were as follows:
Total
Number of
Shares
Purchased
Average
Price Paid
Per Share
Total Number of Shares Purchased
as Part of Publicly Announced
Plans or Programs (1)
Maximum Number
of Shares that
May
Yet Be Purchased
Under Plans or
Programs (1)
Period
July 1 - 31, 2026
-
$
-
-
474,834
August 1 - 31, 2026
-
$
-
-
474,834
September 1 - 30, 2026
-
$
-
-
474,834
Total
-
$
-
-
(1) As of September 30, 2026 there were 474,834 shares available for repurchase under the outstanding share repurchase progra m:
- On January 24, 2022, the Company announced its initial stock repurchase program to repurchase up to 750,000 shares of Class A common stock.
The Company completed the repurchase of all remaining shares authorized under this program during the quarter ende d June 30, 2026.
- On April 22, 2024, the Company announced the adoption of a second repurchase program to repurchase up to 500,000 shares of Class A common
stock to commence upon completion of its first repurchase program. Accordingly, the second repurchase program commenced in the quarter ended
June 30, 2026 upon completion of the Company's initial share repurchase program.
Item 3. Defaults Upon Senior Securities
(a)
(b)
Item 4. Mine Safety Disclosures
Not applicable.
Item 5. Other Information
(a)
Table of Contents
56 USCB Financial Holdings, Inc. Q3 2026 Form 10-Q
(b)
(c)
persons
such terms are defined in Item 408 of the SEC’s Regulation S-K).
Table of Contents
57 USCB Financial Holdings, Inc. Q3 2026 Form 10-Q
Item 6. Exhibits
Exhibit No.
Description of Exhibit
2.1
Agreement and Plan of Share Exchange, dated December 27, 2021, by and between U.S. Century Bank and USCB
Financial Holdings, Inc. (incorporated by reference to Exhibit 2.1 to the Registrant’s Current Report on Form 8-K (File No.
001-41196) filed with the S
ecurities and Exchange Commission on December 30, 2021).
3.1
Articles of Incorporation, as amended, of USCB Financial Holdings, Inc. (incorporated by reference to Exhibit 3.1 to the
Registrant's Quarterly Report on Form 10-Q for the quarter ended June 30, 2023 (File No. 001-41196) filed with the
Securities and Excha
nge Commission on August 11, 2023).
3.2
Amended and Restated Bylaws of USCB Financial Holdings, Inc. (incorporated by reference to Exhibit 3.1 to the Registrant’s
Current Report on Form 8-K (File No. 001-
41196) filed with the Securities and Exchange Commission on July 26, 2023).
4.1
Side Letter Agreement, dated December 30, 2021, between USCB Financial Holdings, Inc., U.S. Century Bank, Priam
Capital Fund II, LP, Patriot Financial Partners II, L.P. and Patriot Financial Partners Parallel II, L.P. (incorporated by
reference to Exhibit 4.1 to the Registrant’s Current Report on Form 8-K (File No. 001-41196) filed with the Securities and
Exchange Commission on December 30, 2021).
4.2
Registration Rights Agreement, dated March 17, 2015, between U.S. Century Bank, Priam Capital Fund II, LP, Patriot
Financial Partners II, L.P., Patriot Financial Partners Parallel II, L.P., and certain other shareholders of U.S. Century Bank
(incorporated by reference to Exhibit 4.2 to the Registrant’s Current Report on Form 8-K (File No. 001-41196) filed with the
Securities and Exchange Commission on December 30, 2021).
4.3
Assignment and Assumption of Agreement, dated December 30, 2021, between U.S. Century Bank and USCB Financial
Holdings, Inc. (incorporated by reference to Exhibit 4.3 to the Registrant’s Current Report on Form 8-K (File No. 001-41196)
filed with the Securities and Exchange Commission on December 30, 2021).
4.4
Description of USCB Financial Holdings, Inc.’s securities (incorporated by reference to Exhibit 4.4 to the Registrant's Annual
Report on Form 10-K (File No. 001-
41196) filed with the Securities and Exchange Commission on March 22, 2024).
4.5
Indenture, dated August 14, 2025 by and between USCB Financial Holdings, Inc. and Wilmington Trust, National
Association, as trustee (incorporated by reference to Exhibit 4.1 to the Registrant’s Current Report on Form 8-K (File No.
001-41196) filed with the Securities and Exchange Commis
sion on August 14, 2025).
4.6
Form of 7.625% Fixed-to-Floating Rate Subordinated Note due 2035 (included as Exhibit A-1 and Exhibit A-2 to the
Indenture referenced in Exhibit 4.5 hereto (incorporated by reference to Exhibit 4.1 to the Registrant’s Current Report on
Form 8-K (File No. 001-
41196) filed with the Securities and Exchange Commission on August 14, 2025).
4.7
Mutual Termination Agreement, dated as of April 29, 2026, between USCB Financial Holdings, Inc., U.S. Century Bank,
Patriot Financial Partners II, L.P. and Patriot Financial Partners Parallel II, L.P. (incorporated by reference to Exhibit 4.2 to
the Registrant’s Current Report on Form 8-K (File No. 001-41196) filed with the Securities and Exchange Commission on
May 1, 2026).
10.1
Form of Subordinated Note Purchase Agreement, dated August 14, 2025, by and among USCB Financial Holdings, Inc.
and certain qualified institutional buyers (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on
Form 8-K (File No. 001-
41196) filed with the Securities and Exchange Commission on August 14, 2025).
10.2
Form of Registration Rights Agreement, dated August 14, 2025, by and among USCB Financial Holdings, Inc. and certain
institutional buyers (incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K (File No. 001-
41196) filed w
ith the Securities and Exchange Commission on August 14, 2025).
31.1
Certification of Chief Executive Officer pursuant to Rule 13a-
14(a) of the Securities Exchange Act of 1934.
*
31.2
Certification of Chief Financial Officer pursuant to Rule 13a-
14(a) of the Securities Exchange Act of 1934.
*
32.1
Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350
.
**
32.2
Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350
.
**
101
The following financial statements from the Company’s Quarterly Report on Form 10-Q for the quarter ended September
30,
2026 formatted in Inline XBRL: (i) Consolidated Balance Sheets (unaudited), (ii) Consolidated Statements of Operations
(unaudited), (iii) Consolidated Statement s of Comprehensive Income (unaudited), (iv) Consolidated Statements of Changes
in Stockholders’ Equity (unaudited), (v) Consolidated Statements of Cash Flows (unaudited), (vi) Notes to Consolidated
Financial Statements (unaudited).
104
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)
*
**
Filed herewith.
Furnished hereby.
Table of Contents
58 USCB Financial Holdings, Inc. Q3 2026 Form 10-Q
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be
signed on its behalf by the undersigned thereunto duly authorized.
USCB FINANCIAL HOLDINGS, INC.
(Registrant)
Signature
Title
Date
/s/ Luis de la Aguilera
Chairman, President and Chief Executive
Officer
November 6, 2026
Luis de la Aguilera
(Principal Executive Officer)
/s/ Robert Anderson
Executive Vice President and Chief Financial
Officer
November 6, 2026
Robert Anderson
(Principal Financial Officer and Principal
Accounting Officer)