USCB Financial (NASDAQ: USCB) boosts Q2 profit as loans and assets grow
Rhea-AI Filing Summary
USCB Financial Holdings reported stronger Q2 2026 results, with net income of $9.1 million (dollars in thousands) and diluted EPS of $0.49, up from $8.1 million and $0.40 a year earlier. Net interest income rose to $24.4 million, and net interest margin expanded to 3.49% from 3.28%, helped by loan growth and lower deposit costs.
Total assets surpassed $3.0 billion, up 11.0% from June 30, 2025. Loans held for investment reached $2.32 billion, while deposits were $2.45 billion, both higher year over year. Asset quality remained solid: the allowance for credit losses was $26.7 million (1.15% of total loans) and non‑performing loans were 0.09% of total loans, with lower charge‑offs than in 2025.
Capital levels stayed comfortably above “well‑capitalized” thresholds, with total risk‑based capital ratios of 13.88% for the company and 13.68% for the bank. Tangible book value per share was $12.64, while share repurchases and $0.25 per share in year‑to‑date dividends, plus another $0.125 dividend declared for Q3 2026, returned capital to shareholders.
Positive
- Profitability improved: Q2 2026 net income rose to $9.1 million (from $8.1 million) and net interest margin expanded to 3.49%, driving annualized returns of 1.26% on assets and 15.90% on stockholders’ equity.
Negative
- None.
Filing Explained
The share count rose through disclosed issuances net of repurchases, while bank-level dividend distributions require prior FDIC approval.
This Form 10-Q is an unaudited interim report for the quarter ended
During the first six months, the company issued 147,490 restricted shares and 227,570 shares through option exercises, repurchased 53,475 shares, and had 18,459,470 shares outstanding at June 30 versus 18,137,885 at December 31. Additional shares increase the total share count and can reduce an existing holder’s percentage ownership absent offsetting changes; the repurchases partly offset the disclosed issuances.
Although no formal supervisory restriction was reported, the company says the bank’s negative retained earnings require prior FDIC approval before the bank can make a cash dividend or other capital distribution to the company.
The next dated resolution points are the
Key Figures
Net income: $ 9,078 thousand
Diluted EPS: $ 0.49
Net interest margin: 3.49%
+5 more
8 metrics
Net income
$ 9,078 thousand
Three months ended June 30, 2026
Diluted EPS
$ 0.49
Three months ended June 30, 2026
Net interest margin
3.49%
Quarter ended June 30, 2026
Total assets
$ 3,019,701 thousand
Balance sheet at June 30, 2026
Total loans held for investment
$ 2,322,385 thousand
Loans net of deferred fees/costs at June 30, 2026
Total deposits
$ 2,452,271 thousand
Deposits at June 30, 2026
Allowance for credit losses
$ 26,701 thousand
1.15% of total loans at June 30, 2026
Non-performing loans ratio
0.09%
Non-performing loans to total loans at June 30, 2026
Key Terms
net interest margin, allowance for credit losses, costless collar hedges, collateral dependent loans, +2 more
6 terms
net interest margin financial
"Net interest margin (“NIM”) expanded to 3.49% for the three months ended June 30, 2026"
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 to total loans was 1.15% at June 30, 2026 compared to 1.16% at December 31, 2025"
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.
costless collar hedges financial
"two costless collar hedges with a notional amount of $ 100 million that were designated as cash flow hedges"
collateral dependent loans financial
"A loan is collateral dependent when the borrower is experiencing financial difficulty and repayment of the loan is expected"
Qualified Public Depository financial
"The Bank is a Qualified Public Depository (“QPD”) with the State of Florida"
AI-generated analysis. How Rhea-AI works. Not financial advice.
FAQ
How did USCB Financial (USCB) perform financially in Q2 2026?
USCB Financial earned $9.1 million in Q2 2026, up from $8.1 million a year earlier, with diluted EPS of $0.49. Net interest income climbed to $24.4 million and net interest margin improved to 3.49% as loans and earning assets grew.
What were USCB (USCB) loans and deposits as of June 30, 2026?
At June 30, 2026, USCB reported $2.32 billion in total loans held for investment (net of deferred fees/costs) and $2.45 billion in total deposits. Loans grew 9.9% and deposits 5.0% from June 30, 2025, supporting total assets above $3.0 billion.
How strong were USCB (USCB) asset quality and reserves in Q2 2026?
USCB’s allowance for credit losses was $26.7 million, or 1.15% of total loans, at June 30, 2026. Non‑performing loans were low at 0.09% of total loans, and loan charge‑offs for the first half of 2026 were $0.3 million versus $0.7 million a year earlier.
What capital ratios did USCB (USCB) report at June 30, 2026?
At June 30, 2026, total risk‑based capital ratios were 13.88% for USCB Financial Holdings and 13.68% for U.S. Century Bank. The bank exceeded all regulatory capital requirements and remained above “well‑capitalized” guidelines under applicable banking regulations.
How did USCB (USCB) net interest margin and efficiency ratio change in Q2 2026?
Net interest margin rose to 3.49% in Q2 2026 from 3.28% a year earlier, reflecting lower deposit costs and earning‑asset mix. The efficiency ratio improved to 49.97% from 51.77%, indicating better expense control relative to revenue growth.
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
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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 July 31, 2026, the registrant had
A
common stock outstanding.
FORM 10-Q
June 30, 2026
TABLE OF CONTENTS
PART I
3
Item 1.
Financial Statements
3
Consolidated Balance Sheets as of June 30, 2026 (Unaudited) and December 31, 2025
3
Consolidated Statements of Operations for the three and six months ended June 30, 2026 and 2025
(Unaudited)
4
Consolidated Statements of Comprehensive Income for the three and six months ended June 30, 2026 and
2025 (Unaudited)
5
Consolidated Statements of Changes in Stockholders’ Equity for the three and six months ended June 30,
2026 and 2025 (Unaudited)
6
Consolidated Statements of Cash Flows for the six months ended June 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
30
Item 3.
Quantitative and Qualitative Disclosures About Market Risk
53
Item 4.
Controls and Procedures
53
PART II
54
Item 1.
Legal Proceedings
54
Item 1A.
Risk Factors
54
Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds
54
Item 3.
Defaults Upon Senior Securities
54
Item 4.
Mine Safety Disclosures
54
Item 5.
Other Information
54
Item 6.
Exhibit Index
56
Signatures
Table of Contents
3 USCB Financial Holdings, Inc. Q2 2026 Form 10-Q
PART I
Item 1. Financial Statements
USCB FINANCIAL HOLDINGS, INC
Consolidated Balance Sheets – Unaudited
(Dollars in thousands, except share data)
June 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 June 30, 2026,
Common stock - Class B Non-voting; $
outstanding as of June 30, 2026 and December 31, 2025
Additional paid-in capital on common stock
Accumulated deficit
(35,690 )
(49,542 )
Accumulated other comprehensive loss
(31,395 )
(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. Q2 2026 Form 10-Q
USCB FINANCIAL HOLDINGS, INC.
Consolidated Statements of Operations - Unaudited
(Dollars in thousands, except per share data)
Three Months Ended June 30,
Six Months Ended June 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:
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. Q2 2026 Form 10-Q
USCB FINANCIAL HOLDINGS, INC.
Consolidated Statements of Comprehensive Income - Unaudited
(Dollars in thousands)
Three Months Ended
June 30,
Six Months Ended
June 30,
2026
2025
2026
2025
Net income
$
$
$
$
Other comprehensive (loss) income:
Unrealized gain (loss) on investment securities available for sale
(895 )
(1,922 )
Reclassification adjustment for amortization of net unrealized losses
on securities transferred from available-for-sale to held-to-maturity
Reclassification adjustment for realized gains included in net income
(14 )
Unrealized gain (loss) on cash flow hedge
(28 )
(186 )
Tax effect
(444 )
(944 )
Total other comprehensive (loss) income, net of tax
(45 )
(639 )
(1,130 )
Total comprehensive income
$
$
$
$
The accompanying notes are an integral part of these unaudited consolidated financial statements.
Table of Contents
6 USCB Financial Holdings, Inc. Q2 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 March 31, 2026
$
$
$
(42,473 )
$
(31,350 )
$
Net income
-
Other comprehensive loss
-
(45 )
(45 )
Exercise of stock options
Dividend payment
-
(2,295 )
(2,295 )
Stock-based compensation
-
Balance at June 30, 2026
$
$
$
(35,690 )
$
(31,395 )
$
Balance at March 31, 2025
$
$
$
(62,160 )
$
(41,113 )
$
Net income
-
Other comprehensive loss
-
(639 )
(639 )
Exercise of stock options
Dividend payment
-
(2,005 )
(2,005 )
Stock-based compensation
-
Balance at June 30, 2025
$
$
$
(56,025 )
$
(41,752 )
$
The accompanying notes are an integral part of these consolidated financial statements.
Table of Contents
7 USCB Financial Holdings, Inc. Q2 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
-
(1,130 )
(1,130 )
Repurchase of Class A common stock
(53,475 )
(53 )
(948 )
(1,001 )
Restricted stock issued
(147 )
Exercise of stock options
Dividend payment
-
(4,577 )
(4,577 )
Stock-based compensation
-
Balance at June 30, 2026
$
$
$
(35,690 )
$
(31,395 )
$
Balance at December 31, 2024
$
$
$
(67,813 )
$
(44,534 )
$
Net income
-
Other comprehensive income
-
Repurchase of Class A common stock
(9,671 )
(10 )
(164 )
(174 )
Restricted stock issued
(124 )
Exercise of stock options
Dividend payment
-
(4,010 )
(4,010 )
Stock-based compensation
-
Balance at June 30, 2025
$
$
$
(56,025 )
$
(41,752 )
$
The accompanying notes are an integral part of these consolidated financial statements.
Table of Contents
8 USCB Financial Holdings, Inc. Q2 2026 Form 10-Q
USCB FINANCIAL HOLDINGS, INC.
Consolidated Statements of Cash Flows - Unaudited
(Dollars in thousands)
Six Months Ended June 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
(784 )
(728 )
Amortization of deferred loan fees, net
Stock-based compensation
Gain on sale of available for sale securities, net
(14 )
Gain on sale of loans held for sale, net
(106 )
(676 )
Proceeds from the sale of loans held for sale
Origination of loans held for sale
(1,223 )
(9,069 )
Increase in cash surrender value of bank owned life insurance
(1,003 )
(955 )
Amortization of subordinated debt issuance costs
Deferred income tax expense
Net change in operating assets and liabilities:
Accrued interest receivable
(9 )
(340 )
Other assets
(6,585 )
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
(75,083 )
(31,676 )
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
(89,635 )
(71,439 )
Purchase of loans held for investment
(44,090 )
(70,015 )
Additions to premises and equipment
(762 )
(94 )
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
(20,239 )
(5,727 )
Net cash used in investment activities
(147,083 )
(157,674 )
Cash flows from financing activities:
Proceeds from issuance of Class A common stock, net
Cash dividends paid
(4,577 )
(4,010 )
Repurchase of Class A common stock
(1,001 )
(174 )
Net increase in deposits
Proceeds from FHLB advances
Repayments on Federal Home Loan Bank advances
(365,850 )
(172,000 )
Net cash provided by financing activities
Net increase (decrease) in cash and cash equivalents
(22,216 )
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. Q2 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 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
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. Q2 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):
June 30, 2026
Available-for-sale:
Amortized
Cost
Unrealized
Gains
Unrealized
Losses
Fair Value
U.S. Government Agency
$
$
$
(1,028 )
$
Collateralized mortgage obligations
(17,307 )
Mortgage-backed securities - residential
(6,026 )
Mortgage-backed securities - commercial
(8,517 )
Municipal securities
(966 )
Bank subordinated debt securities
(114 )
$
$
$
(33,958 )
$
June 30, 2026
Held-to-maturity:
Amortized
Cost
Unrecognized
Gains
Unrecognized
Losses
Fair Value
U.S. Government Agency
$
$
$
(3,266 )
$
Collateralized mortgage obligations
(5,646 )
Mortgage-backed securities - residential
(3,294 )
Mortgage-backed securities - commercial
(1,144 )
$
$
$
(13,350 )
$
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 at the date of transfer is retained in accumulated
other comprehensive loss (“AOCL”) and in the carrying value of the HTM securities and there is no impact to net income.
Table of Contents
USCB FINANCIAL HOLDINGS, INC.
Notes to the Consolidated Financial Statements - Unaudited
11 USCB Financial Holdings, Inc. Q2 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 June 30, 2026, there were
For the three months ended June 30, 2026, total amortization out of AOCL for net unrealized losses on securities transferred
in 2022 from AFS to HTM was $
2026, the fair value of the transferred securities 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 June 30, 2026 and December 31, 2025, all HTM securities held by the
Company were rated investment grade.
At June 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 June 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 $
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 AOCL, net of applicable taxes. The Company evaluates whether the declines in fair value are
attributable to credit losses or other factors like interest rate risk, using both quantitative and qualitative analyses, including
company performance analysis, review of credit ratings, bond vintage, remaining payment terms, prepayment speeds and
analysis of macro-economic conditions. When the fair value of an AFS security is less than its amortized cost and the
decline is attributable to credit-related factors, an ACL is recorded. As a result of this evaluation, the Company concluded
that no allowance was required on AFS securities as of June 30, 2026 and as of December 31, 2025.
Information pertaining to investment securities with gross unrealized losses, aggregated by investment category and
length of time that those individual securities have been in a continuous loss position, are presented as of the following
dates (in thousands):
June 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
$
$
(129 )
$
$
(899 )
$
$
(1,028 )
Collateralized mortgage obligations
(129 )
(17,178 )
(17,307 )
Mortgage-backed securities - residential
(6,026 )
(6,026 )
Mortgage-backed securities - commercial
(1,368 )
(7,149 )
(8,517 )
Municipal securities
(966 )
(966 )
Bank subordinated debt securities
(19 )
(95 )
(114 )
$
$
(1,645 )
$
$
(32,313 )
$
$
(33,958 )
Table of Contents
USCB FINANCIAL HOLDINGS, INC.
Notes to the Consolidated Financial Statements - Unaudited
12 USCB Financial Holdings, Inc. Q2 2026 Form 10-Q
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. 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.
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 six months ended June 30, 2026 and 2025 (in thousands):
Three Months Ended June 30,
Six Months Ended June 30,
Available-for-sale:
2026
2025
2026
2025
Proceeds from sale and call of securities
$
$
$
$
Gross gains
$
$
$
$
Gross losses
(68 )
Net realized gain
$
$
$
$
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
June 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 June 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 June 30, 2026 and December 31, 2025 were issued
by U.S. Government entities.
Table of Contents
USCB FINANCIAL HOLDINGS, INC.
Notes to the Consolidated Financial Statements - Unaudited
13 USCB Financial Holdings, Inc. Q2 2026 Form 10-Q
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 June 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 June 30, 2026, the Bank had a total of $
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
3. LOANS
The following table is a summary of the distribution of loans held for investment by type (dollars in thousands):
June 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 June 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 consultants with expertise in CECL model
development to assist in development of a LDA based on regression models and supportable forecast. Peer group data
obtained from FFIEC Call Report filings is used to inform regression analyses to quantify the impact of reasonable and
supportable forecasts in projective models. Economic forecasts applied to regression models to estimate probability of
default for loan receivables use at least one of the following economic indicators: civilian unemployment rate (national), real
gross domestic product growth (national GDP) or the House Price Index (“HPI”). For each of the segments in which the
WARM methodology is used, the long-term average loss rate is calculated and applied on a quarterly basis for the remaining
life of the pool. Adjustments for economic expectations are made through qualitative factors.
Qualitative factors (“Q-Factors”) used in the ACL methodology include:
•
•
•
•
•
•
Table of Contents
USCB FINANCIAL HOLDINGS, INC.
Notes to the Consolidated Financial Statements - Unaudited
14 USCB Financial Holdings, Inc. Q2 2026 Form 10-Q
•
•
•
Changes in the ACL for the three and six months ended June 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 June 30, 2026
Beginning balance
$
$
$
$
$
$
Provision for credit losses
(1)
(2 )
Recoveries
Charge-offs
(296 )
(1 )
(297 )
Ending Balance
$
$
$
$
$
$
Six Months Ended June 30, 2026
Beginning balance
$
$
$
$
$
$
Provision for credit losses
(2)
(422 )
Recoveries
Charge-offs
(296 )
(7 )
(303 )
Ending Balance
$
$
$
$
$
$
(1) Provision for credit losses excludes a $
other 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 June 30, 2025
Beginning balance
$
$
$
$
$
$
Provision for credit losses
(1)
Recoveries
Charge-offs
(710 )
(710 )
Ending Balance
$
$
$
$
$
$
Six Months Ended June 30, 2025
Beginning balance
$
$
$
$
$
$
Provision for credit losses
(2)
(131 )
Recoveries
Charge-offs
(723 )
(723 )
Ending Balance
$
$
$
$
$
$
(1) Provision for credit losses excludes a $
other liabilities and a $
(2) Provision for credit losses excludes a $
other liabilities a $
At June 30, 2026, the ACL for loans was $
million increase was primarily driven by growth in the loan portfolio, partially offset by reductions in qualitative factor
adjustments resulting from improved credit quality trends identified through loan quality reviews, particularly within the
commercial real estate ("CRE") and commercial and industrial ("C&I") portfolios.
Table of Contents
USCB FINANCIAL HOLDINGS, INC.
Notes to the Consolidated Financial Statements - Unaudited
15 USCB Financial Holdings, Inc. Q2 2026 Form 10-Q
Charge offs related to loans for the three months ended June 30, 2026 were $
related to loans originated in 2026 and $
the six months ended June 30, 2026 were $
$
Charge offs for the three months ended June 30, 2025 totaled $
originated in 2022 and $
ended June 30, 2025 totaled $
related to loans originated in 2025.
The ACL and the outstanding balances in the specified loan categories as of June 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
June 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.
Table of Contents
USCB FINANCIAL HOLDINGS, INC.
Notes to the Consolidated Financial Statements - Unaudited
16 USCB Financial Holdings, Inc. Q2 2026 Form 10-Q
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 presented below for the periods indicated (in thousands):
As of June 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
17 USCB Financial Holdings, Inc. Q2 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
18 USCB Financial Holdings, Inc. Q2 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 June 30, 2026 and
December 31, 2025 (in thousands):
Accruing
As of June 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
19 USCB Financial Holdings, Inc. Q2 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 June 30, 2026 and as of
December 31, 2025 (in thousands):
June 30, 2026
Non-accrual
Loans With No
Related Allowance
Non-accrual
Loans With
Related Allowance
Total Non-
accruals
Residential 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 six months ended June 30, 2026 and 2025. Interest
income on these loans for the three months ended June 30, 2026 and 2025, would have been approximately $
and $
loans for the six months ended June 30, 2026 and 2025, would have been approximately $
respectively, had these loans performed in accordance with their original terms.
Table of Contents
USCB FINANCIAL HOLDINGS, INC.
Notes to the Consolidated Financial Statements - Unaudited
20 USCB Financial Holdings, Inc. Q2 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 June 30, 2026 and December 31, 2025 (in thousands):
June 30, 2026
Collateral Type
Residential Real Estate
Specific Reserve
Residential 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 allowance for credit loss reserve is necessary. The ACL is measured based on the difference of the fair
value of the collateral and amortized cost basis of the loan. If the final collateral valuation is less than the 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
June 30, 2026 and
2026. The Company had
ended June 30, 2025. The following table presents newly restructured loans, by type of modification, which occurred during
the six months ended June 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
1
$
$
1
$
$
Total
1
$
$
1
$
$
The loan modification for the borrower experiencing financial difficulty at June 30, 2026 included a combination of
principal and maturity modifications. There was a principal reduction of $
two
-year extension of the loan
maturity. There was
There were
June 30, 2026 and 2025.
Table of Contents
USCB FINANCIAL HOLDINGS, INC.
Notes to the Consolidated Financial Statements - Unaudited
21 USCB Financial Holdings, Inc. Q2 2026 Form 10-Q
4. LEASES
The Company leases certain banking facilities and office space under non-cancelable operating lease agreements.
During the six months ended June 30, 2026, the Company exercised renewal options and modified certain lease
arrangements, including extensions of the Coral Gables branch and Doral branch/headquarters leases for additional
five
-
year terms. 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 $
$
%.
The Company’s incremental borrowing rate is based on the FHLB advances 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):
Six Months Ended June 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 six months ended June 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):
Six Months Ended June 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
(257 )
(1.05 %)
(242 )
(1.16 %)
Benefit from stock-based compensation
(377 )
(1.55 %)
Section 162(m) limitation
Other adjustments, net
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
22 USCB Financial Holdings, Inc. Q2 2026 Form 10-Q
The Company’s deferred tax assets and deferred tax liabilities as of the dates indicated were (in thousands):
June 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
(1,456 )
(1,520 )
Lease right of use asset
(3,230 )
(1,399 )
Deferred expenses
(256 )
(154 )
Cash flow hedge
(24 )
(5 )
Depreciable property
(35 )
(9 )
Deferred tax liabilities
(5,001 )
(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 for of the Company.
In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some
portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent
upon the generation of future taxable income during the periods in which those temporary differences become deductible.
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 six months ended June 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,
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
23 USCB Financial Holdings, Inc. Q2 2026 Form 10-Q
A summary of the amounts of the Company's financial instruments with off-balance sheet risk are shown below at
June 30, 2026 and December 31, 2025 (in thousands):
June 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 six months ended June 30, 2026 and 2025 were as follows (in thousands):
Three Months Ended June 30,
Six Months Ended June 30,
2026
2025
2026
2025
Beginning balance
$
$
$
$
Provision for credit losses - off-balance sheet arrangements
Total
$
$
$
$
7. DERIVATIVES
The Company utilizes interest rate swap agreements as part of its asset-liability management strategy to help manage
its interest rate risk exposure. The notional amount of the interest rate swaps does not represent actual amounts exchanged
by the parties. The amounts exchanged are determined by reference to the notional amount and the other terms of the
individual interest rate swap agreements.
Interest Rate Swaps Designated as a Cash Flow Hedge
As of June 30, 2026, the Company had
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 hedge 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
During the three months ended June 30, 2026,
Company had
As of December 31, 2025, the Company had
$
Table of Contents
USCB FINANCIAL HOLDINGS, INC.
Notes to the Consolidated Financial Statements - Unaudited
24 USCB Financial Holdings, Inc. Q2 2026 Form 10-Q
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.
Interest Rate Swaps
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 June 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
June 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
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.
Table of Contents
USCB FINANCIAL HOLDINGS, INC.
Notes to the Consolidated Financial Statements - Unaudited
25 USCB Financial Holdings, Inc. Q2 2026 Form 10-Q
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
26 USCB Financial Holdings, Inc. Q2 2026 Form 10-Q
The following table represents the Company's assets and liabilities measured at fair value on a recurring basis at
June 30, 2026 and December 31, 2025 for each of the fair value hierarchy levels (in thousands):
June 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 June 30, 2026 and December 31, 2025:
June 30, 2026
Range
Weighted
Financial Instrument
Fair Value
Valuation Technique(s)
Unobservable Input(s)
Minimum
Maximum
average
Collateral dependent loans -
residential loans
$
Sales comparison approach
estimated valuation
adjustments for disposition
costs, senior liens, and SBA
participation interests.
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 June 30, 2026, the Company measured one collateral-dependent residential real estate loan at fair value on a
nonrecurring basis. The fair value of the collateral-dependent loan was determined using the appraised value of the
underlying real estate collateral, adjusted for the estimated impact of senior lien positions, SBA participation interests, and
estimated costs to sell. The application of these adjustments resulted in a fair value below the amortized cost, which was
recognized through a charge-off and reflected in the carrying value of the loan. The resulting fair value attributable to the
Company's exposure was approximately of $
. The loan had an outstanding amortized cost basis of approximately $
thousand and a specific reserve of $
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
27 USCB Financial Holdings, Inc. Q2 2026 Form 10-Q
As of June 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 June 30, 2026 and December 31, 2025 (in thousands):
Fair Value Hierarchy
Carrying
Amount
Level 1
Level 2
Level 3
Fair Value
Amount
June 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
2026, the Company repurchased
.
The aggregate purchase price for these transactions was approximately $
repurchases were made pursuant to the Company’s publicly announced share repurchase programs. At June 30, 2026,
2022 share repurchase program has been fully utilized.
There were
2025, the Company repurchased
.
Table of Contents
USCB FINANCIAL HOLDINGS, INC.
Notes to the Consolidated Financial Statements - Unaudited
28 USCB Financial Holdings, Inc. Q2 2026 Form 10-Q
The aggregate purchase price for these transactions was approximately $
repurchases were made pursuant to the Company’s publicly announced repurchase programs. As of June 30, 2025,
There were
June 30, 2026, the Company issued
A
stock to employees as restricted stock awards
pursuant to the Company’s 2015 equity incentive plan.
There were
June 30, 2025, the Company issued
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 June 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 June 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:
Six Months Ended June 30, 2026
Declaration Date
Record Date
Payment Date
Dividend Per Share
Dividend Amount
$
$
$
$
Six Months Ended June 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 June 30,
2026 and December 31, 2025. At June 30, 2026, the total risk-based capital ratio for the Bank was
%.
See Note 12, Subsequent Events, for information regarding dividends declared in July 2026.
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
Table of Contents
USCB FINANCIAL HOLDINGS, INC.
Notes to the Consolidated Financial Statements - Unaudited
29 USCB Financial Holdings, Inc. Q2 2026 Form 10-Q
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 six
months ended June 30, 2026 and 2025 (in thousands, except share amounts):
Three Months Ended June 30,
Six Months Ended June 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 July 20, 2026, the Company announced that its Board of Directors declared its quarterly cash dividend. The dividend
is in the amount of $
record as of the close of business on August 17, 2026.
Table of Contents
30 USCB Financial Holdings, Inc. Q2 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
six months ended June 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, Inc.
Forward-Looking Statements
This Form 10-Q contains statements that are not historical in nature are intended to be, and are hereby identified as,
forward-looking statements for purposes of the safe harbor provided by Section 21E of the Securities Exchange Act of 1934,
as amended. The words “may,” “will,” “anticipate,” “could,” “should,” “would,” “believe,” “contemplate,” “expect,” “aim,” “plan,”
“estimate,” “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 anticipated 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 losses;
•
•
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
31 USCB Financial Holdings, Inc. Q2 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 ocurring after the date on which the statement is made or to reflect the occurrence of unanticipated events,
unless required to do so under the federal securities laws. You should also review the risk factors described in the 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 $9.1 million or $0.49 per diluted share of common stock for the three months
ended June 30, 2026 compared to $8.1 million or $0.40 per diluted share of common stock for the three months ended
June 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
June 30, 2026 compared to at or for the quarter ended June 30, 2025 and as of December 31, 2025 and annualized where
appropriate:
•
million or 15.9% to $24.4 million from $21.0 million for the quarter ended June 30, 2025.
•
the three months ended June 30, 2025.
•
June 30, 2025 and an increase of $228.2 million or 16.5% annualized from December 31, 2025.
•
increase of $209.0 million or 9.9% from June 30, 2025 and an increase of $133.1 million or 12.3% annualized from
December 31, 2025.
•
2025 and an increase of $107.2 million or 9.2% annualized from December 31, 2025.
•
quarter ended June 30, 2025.
•
14.29% for quarter ended June 30, 2025.
•
•
•
respectively.
•
increase of $1.11 or 9.6% annualized from $11.53 at June 30, 2025. At June 30, 2026, tangible book value per
common share was negatively affected by ($1.70) due to an accumulated comprehensive loss of $31.4 million. At
June 30, 2025, tangible book value per common share was negatively affected by ($2.08) due to an accumulated
comprehensive loss of $41.8 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
32 USCB Financial Holdings, Inc. Q2 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):
June 30, 2026
December 31, 2025
Consolidated Balance Sheets:
Total assets
$
3,019,701
$
2,791,540
Total loans
(1)
$
2,322,385
$
2,189,257
Total deposits
$
2,452,271
$
2,345,080
Total stockholders' equity
$
233,238
$
217,183
(1) Loan amounts include deferred fees/costs.
Table of Contents
33 USCB Financial Holdings, Inc. Q2 2026 Form 10-Q
Three Months Ended
June 30,
Six Months Ended
June 30,
2026
2025
2026
2025
Consolidated Statements of Operations:
Net interest income before provision for credit losses
$
24,387
$
21,034
$
46,435
$
40,149
Total non-interest income
$
3,560
$
3,370
$
7,710
$
7,086
Total non-interest expense
$
13,966
$
12,634
$
27,677
$
24,686
Net income
$
9,078
$
8,140
$
18,429
$
15,798
Profitability:
Efficiency ratio
49.97%
51.77%
51.12%
52.26%
Net interest margin
3.49%
3.28%
3.38%
3.18%
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 June 30, 2026 compared to the three months ended June 30, 2025
Net income increased $938 thousand to $9.1 million for the three months ended June 30, 2026 from $8.1 million for the
same period in 2025. The $938 thousand or 11.5% increase in net income was primarily driven by growth in the average
loan portfolio and expansion of net interest margin resulting from lower funding costs. These benefits were partially offset
by higher non-interest expense, income tax expense, and provision for credit losses.
Six months ended June 30, 2026 compared to the six months ended June 30, 2025
Net income increased $2.6 million to $18.4 million for the six months ended June 30, 2026
from $15.8 million for the
same period in 2025. The $2.6 million or 16.7% increase in the net income was primarily driven by higher income from a
larger loan portfolio and, to a lesser extent, an increase in service fees. The increase in income was partially offset by an
increase in non-interest expense, income tax expense, and provision for credit losses expense between periods.
Net Interest Income
Net interest income is the difference between interest earned on interest-earning assets and interest paid on interest-
bearing liabilities and is the primary driver of core earnings. Interest income is generated from interest and dividends on
interest-earning assets, including loans, investment securities and other short-term investments. Interest expense is
incurred from interest paid on interest-bearing liabilities, including interest -bearing deposits, FHLB advances, 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
34 USCB Financial Holdings, Inc. Q2 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 June 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)
$
2,258,965
$
34,899
6.20%
$
2,057,445
$
31,946
6.23%
Investment securities
(4)
461,849
3,858
3.35%
449,624
3,432
3.06%
Other interest-earnings assets
80,640
823
4.09%
63,974
776
4.87%
Total interest-earning assets
2,801,454
39,580
5.67%
2,571,043
36,154
5.64%
Non-interest-earning assets
99,271
106,155
Total assets
$
2,900,725
$
2,677,198
Liabilities and stockholders' equity
Interest-bearing liabilities:
Interest-bearing demand deposits
$
51,711
311
2.41%
$
46,694
285
2.45%
Savings and money market deposits
1,280,578
8,478
2.66%
1,211,513
9,410
3.12%
Time deposits
524,474
4,628
3.54%
452,361
4,343
3.85%
Total interest-bearing deposits
1,856,763
13,417
2.90%
1,710,568
14,038
3.29%
FHLB advances
100,685
976
3.89%
116,527
1,082
3.72%
Subordinated notes, net
39,351
800
8.15%
-
-
- %
Total interest-bearing liabilities
1,996,799
15,193
3.05%
1,827,095
15,120
3.32%
Non-interest-bearing demand deposits
632,198
580,121
Other non-interest-bearing liabilities
42,795
41,490
Total liabilities
2,671,792
2,448,706
Stockholders' equity
228,933
228,492
Total liabilities and stockholders' equity
$
2,900,725
$
2,677,198
Net interest income
$
24,387
$
21,034
Net interest spread
(5)
2.62%
2.32%
Net interest margin
(6)
3.49%
3.28%
(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
35 USCB Financial Holdings, Inc. Q2 2026 Form 10-Q
Six Months Ended June 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)
$
2,218,574
$
67,688
6.15
%
$
2,022,345
$
62,191
6.18
%
Investment securities
(4)
458,076
7,269
3.20
%
443,314
6,456
2.93
%
Other interest-earnings assets
92,980
1,655
3.59
%
69,547
1,485
4.29
%
Total interest-earning assets
2,769,630
76,612
5.58
%
2,535,206
70,132
5.56
%
Non-interest earning assets
98,273
106,885
Total assets
$
$2,867,903
$
2,642,091
$
Liabilities and stockholders' equity
Interest-bearing liabilities:
Interest-bearing demand deposits
$
51,904
$
621
2.41
%
$
50,133
$
623
2.50
%
Savings and money market deposits
1,268,565
16,611
2.64
%
1,205,305
18,745
3.13
%
Time deposits
529,094
9,328
3.56
%
426,081
8,261
3.90
%
Total interest-bearing deposits
1,849,563
26,560
2.90
%
1,681,519
27,629
3.30
%
FHLB advances
105,339
2,016
3.86
%
127,674
2,354
3.71
%
Subordinated notes, net
39,332
1,601
8.21
%
-
-
-
Total interest-bearing liabilities
1,994,234
30,177
3.05
%
1,809,193
29,983
3.33
%
Non-interest bearing demand deposits
608,622
571,627
Other non-interest-bearing liabilities
39,449
37,247
Total liabilities
2,642,305
2,418,067
Stockholders' equity
225,598
224,024
Total liabilities and stockholders' equity
$
$2,867,903
$
2,642,091
Net interest income
$
46,435
$
40,149
Net interest spread
(5)
2.53
%
2.23
%
Net interest margin
(6)
3.38
%
3.18
%
(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 June 30, 2026 compared to the three months ended June 30, 2025
Net interest income before the provision for credit losses was $24.4 million for the three months ended June 30, 2026,
an increase of $3.4 million or 15.9%, from $21.0 million for the same period in 2025. This growth was primarily driven by
higher income from a larger loan portfolio and lower rate s paid on interest -bearing deposits. This increase was partially
offset by interest expense associated with the subordinated notes issued during 2025.
The NIM was 3.49% for the three months ended June 30, 2026 and 3.28% for the same period in 2025. The 21-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.
Six months ended June 30, 2026 compared to the six months ended June 30, 2025
Net interest income before the provision for credit losses was $46.4 million for the six months ended June 30, 2026, an
increase of $6.3 million or 15.7%, from $40.1 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 deposit between
periods.
Table of Contents
36 USCB Financial Holdings, Inc. Q2 2026 Form 10-Q
The NIM was 3.38% for the six months ended June 30, 2026 and 3.18% for the same period in 2025. The NIM expansion
of 20 basis points reflects primarily the decrease in the weighted average interest rate paid on interest-bearing deposits,
particularly in 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 June 30, 2026 compared to the three months ended June 30, 2025
The provision for credit losses was $1.3 million for the three months ended June 30, 2026 compared to $1.0 million for
the same period in 2025. The increase in the provision for credit losses primarily reflects growth in the loan portfolio and off-
balance sheet arrangements, which increased the level of estimated expected credit losses under CECL.
Six months ended June 30, 2026 compared to the six months ended June 30, 2025
The provision for credit losses was $2.1 million for the six months ended June 30, 2026 compared to $1.7 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 June 30,
Six Months Ended June 30,
2026
2025
2026
2025
Service fees
$
2,601
$
2,402
$
5,701
$
4,733
Gain on sale of securities available for sale, net
-
-
14
-
Gain on sale of loans held for sale, net
-
151
106
676
Other non-interest income
959
817
1,889
1,677
Total non-interest income
$
3,560
$
3,370
$
7,710
$
7,086
Three months ended June 30, 2026 compared to the three months ended June 30, 2025
Non-interest income for the three months ended June 30, 2026 increased $190 thousand or 5.6%, compared to the
same period in 2025. This increase was primarily driven by a $322 thousand increase in loan prepayment penalty income
reported under service fees compared to the same period last year.
Six months ended June 30, 2026 compared to the six months ended June 30, 2025
Non-interest income for the six months ended June 30, 2026 increased $624 thousand or 8.8%, compared to the same
period in 2025. This increase was primarily driven by $1.6 million increase in income generated by the Company’s loan
swap program reported under service fees in the Consolidated Statements of Operations. This increase was partially offset
by a decrease in gain on sale of loans during the quarter ended June 30, 2026.
Table of Contents
37 USCB Financial Holdings, Inc. Q2 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 June 30,
Six Months Ended June 30,
2026
2025
2026
2025
Salaries and employee benefits
$
8,537
$
7,954
$
17,107
$
15,590
Occupancy
1,369
1,337
2,685
2,621
Regulatory assessment and fees
397
396
881
817
Consulting and legal fees
583
263
1,144
456
Network and information technology services
524
564
1,084
1,069
Other operating
2,556
2,120
4,776
4,133
Total non-interest expense
$
13,966
$
12,634
$
27,677
$
24,686
Three months ended June 30, 2026 compared to the three months ended June 30, 2025
Non-interest expense for the three months ended June 30, 2026 increased $1.3 million or 10.5%, compared to the same
period in 2025. This increase was primarily driven by an increase of $583 thousand in salaries and employee benefits due
to an increase of $236 thousand in salaries associated with additional full-time employees and an increase of $228 thousand
in health insurance and 401(k) expense. Additionally , consulting and legal fees increase by $320 mainly due to $290
thousand reimbursement of legal expenses recognized during the second quarter of 2025, which reduced legal expense in
the prior-year period. Other operating expenses increased by $436 thousand due mainly to $312 thousand excise tax
expense paid in the quarter ended June 30, 2026.
Six months ended June 30, 2026 compared to the six months ended June 30, 2025
Non-interest expense for the six months ended June 30, 2026 increased $3.0 million or 12.1%, compared to the same
period in 2025. The increase was primarily driven by an increase of $1.5 million in salaries and employee benefits, consisting
of $666 thousand related to merit increases and new full-time employee salaries, $580 thousand increase in health
insurance and 401(k) expense, and a $349 thousand increase in additional stock-based compensation expense. In addition,
consulting and legal fees increased $688 thousand, primarily due to an increase of $405 thousand in legal fees due to the
reimbursement of legal expenses recognized during the second quarter of 2025, which reduced legal expense in the prior-
year period. Other non-interest expenses increased by $643 thousand, mainly due to increase of $285 thousand in excise
tax expense and increase of $83 thousand in ATM expense for the six months ended June 30, 2026.
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 June 30, 2026 compared to the three months ended June 30, 2025
Income tax expense for the three months ended June 30, 2026 was $3.6 million as compared to $2.6 million for the
same period in 2025. The effective tax rate for the three months ended June 30, 2026 was 28.60% compared to 24.20% for
the same period in 2025.
Six months ended June 30, 2026 compared to the six months ended June 30, 2025
Income tax expense for the six months ended June 30, 2026 was $6.0 million as compared to $5.0 million for the same
period in 2025. The Company recognized a non-recurring $619 thousand income tax benefit in the first quarter of 2026 due
to an adjustment to the deferred tax asset calculation from December 31, 2025. The effective tax rate for the six months
ended June 30, 2026 was 24.47% compared to 24.18% 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
38 USCB Financial Holdings, Inc. Q2 2026 Form 10-Q
Analysis of Financial Condition
Total assets at June 30, 2026 were $3.02 billion, an increase of $228.2 million, or 16.5% annualized, over total assets
of $2.79 billion at December 31, 2025. Total loans, net of deferred fees/costs, increased $133.1 million, or 12.3%
annualized, to $2.32 billion at June 30, 2026 compared to $2.19 billion at December 31, 2025. Total deposits increased by
$107.2 million, or 9.2% annualized, to $2.45 billion at June 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 obligations, corporate bonds, municipal securities, other debt
securities all with varying contractual maturities and coupons. Due to the optionality embedded in these securities, the
contractual maturities do not necessarily represent the expected life of the portfolio. Some of these securities will be called
or paid down prior to maturity depending on capital market conditions and expectations. The investment portfolio is regularly
reviewed by the Chief Financial Officer, Treasurer, and the ALCO of the Company to ensure an appropriate risk and return
profile as well as for adherence to the Company’s investment policies.
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 June 30, 2026.
At quarter end, HTM securities included $136.1 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 an allowance for credit losses (“ACL”) of $0 as of June 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 $7.6 million to $469.0 million at June 30, 2026 from
$461.4 million at December 31, 2025.
As of June 30, 2026, investment securities with a market value of $56.3 million were pledged to secure public deposits.
The investment portfolio does not contain any tax-exempt securities.
Table of Contents
39 USCB Financial Holdings, Inc. Q2 2026 Form 10-Q
The following table presents the amortized cost and fair value of investment securities for the dates indicated (dollars
in thousands):
June 30, 2026
December 31, 2025
Available-for-sale:
Amortized
Cost
Fair Value
Amortized
Cost
Fair Value
U.S. Government Agency
$
11,883
$
10,855
$
15,169
$
14,144
Collateralized mortgage obligations
84,406
67,099
92,871
75,828
Mortgage-backed securities - residential
34,909
28,991
35,865
29,917
Mortgage-backed securities - commercial
215,345
206,999
174,622
168,108
Municipal securities
5,191
4,225
5,196
4,263
Bank subordinated debt securities
14,578
14,690
15,284
15,230
$
366,312
$
332,859
$
339,007
$
307,490
Held-to-maturity:
U.S. Government Agency
$
37,328
$
34,129
$
41,158
$
37,970
Collateralized mortgage obligations
48,762
43,821
51,431
46,786
Mortgage-backed securities - residential
35,188
32,522
37,221
34,718
Mortgage-backed securities - commercial
14,849
13,705
15,088
14,051
Corporate bonds
-
-
9,045
8,983
$
136,127
$
124,177
$
153,943
$
142,508
Allowance for credit losses - securities held-to-maturity
-
(2)
Securities held-to maturity, net of allowance for credit losses
$
136,127
$
153,941
The following table shows the weighted average yields, categorized by contractual maturity, for investment securities
as of June 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
$
-
-
$
-
-
$
-
-
$
11,883
3.43%
$
11,883
3.43%
Collateralized mortgage obligations
-
-
-
-
-
-
84,406
1.56%
84,406
1.56%
MBS - residential
-
-
-
-
-
-
34,909
2.43%
34,909
2.43%
MBS - commercial
-
-
4,996
4.55%
4,906
4.81%
205,443
4.38%
215,345
4.40%
Municipal securities
-
-
-
-
5,191
1.87%
-
-
5,191
1.87%
Bank subordinated debt securities
-
-
2,000
7.86%
12,578
5.81%
-
-
14,578
6.09%
$
-
-
$
6,996
5.50%
$
22,675
4.69%
$
336,641
3.44%
$
366,312
3.56%
Held-to-maturity:
U.S. Government Agency
$
4,988
1.24%
$
18,041
1.31%
$
1,483
2.85%
$
12,816
1.85%
$
37,328
1.55%
Collateralized mortgage obligations
-
-
-
-
-
-
48,762
1.65%
48,762
1.65%
MBS - residential
21
2.98%
8,874
1.65%
-
-
26,293
2.29%
35,188
2.13%
MBS - commercial
-
-
3,034
1.63%
-
-
11,815
2.57%
14,849
2.37%
$
5,009
1.25%
$
29,949
1.44%
$
1,483
2.85%
$
99,686
1.95%
$
136,127
1.83%
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
40 USCB Financial Holdings, Inc. Q2 2026 Form 10-Q
The following table shows the loan portfolio composition as of the dates indicated (in thousands):
June 30, 2026
December 31, 2025
Total
Percent of
Total
Total
Percent of
Total
Residential real estate
$
356,747
15.4
%
$
307,692
14.1
%
Commercial real estate
1,314,367
56.6
%
1,244,835
57.0
%
Commercial and industrial
300,265
13.0
%
295,548
13.5
%
Correspondent banks
137,912
6.0
%
127,968
5.9
%
Consumer and other
207,404
9.0
%
207,215
9.5
%
Total gross loans
2,316,695
100.0
%
2,183,258
100.0
%
Plus: Deferred fees/costs
5,690
5,999
Total loans net of deferred fees/costs
2,322,385
2,189,257
Less: Allowance for credit losses
26,701
25,500
Total net loans
$
2,295,684
$
2,163,757
Total loans, net of deferred fees/costs, increased by $133.1 million, or 12.3% annualized to $2.32 billion, at June 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 56.6% of the total gross loan portfolio as of June 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 June 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
$
7,064
$
83,310
$
65,616
$
200,757
$
356,747
Commercial real estate
71,847
590,427
647,640
4,453
1,314,367
Commercial and industrial
12,401
111,248
133,331
43,285
300,265
Correspondent banks
137,912
-
-
-
137,912
Consumer and other
3,579
1,238
21,910
180,677
207,404
Total gross loans
$
232,803
$
786,223
$
868,497
$
429,172
$
2,316,695
Interest rate sensitivity:
Fixed interest rates
$
187,594
$
201,973
$
159,167
$
302,650
$
851,384
Floating or adjustable rates
45,209
584,250
709,330
126,522
1,465,311
Total gross loans
$
232,803
$
786,223
$
868,497
$
429,172
$
2,316,695
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 June 30, 2026, approximately 63% of the loan portfolio has adjustable/variable rates and 37% 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
41 USCB Financial Holdings, Inc. Q2 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):
June 30, 2026
Pass
Special Mention
Substandard
Doubtful
Total
Residential real estate
$
353,869
$
1,370
$
1,508
$
-
$
356,747
Commercial real estate
1,301,144
11,520
1,703
-
1,314,367
Commercial and industrial
298,081
773
1,411
-
300,265
Correspondent banks
137,912
-
-
-
137,912
Consumer and other
207,404
-
-
-
207,404
$
2,298,410
$
13,663
$
4,622
$
-
$
2,316,695
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
42 USCB Financial Holdings, Inc. Q2 2026 Form 10-Q
Non-Performing Assets
The following table presents non-performing assets as of the dates shown (in thousands, except ratios):
June 30, 2026
December 31, 2025
Non-accrual loans
$
2,148
$
3,138
Loans past due over 90 days and still accruing
-
-
Total non-performing loans
$
2,148
$
3,138
Other real estate owned
-
-
Total non-performing assets
$
2,148
$
3,138
Asset quality ratios:
Allowance for credit losses to total loans
1.15%
1.16%
Allowance for credit losses to non-performing loans
1,243%
813%
Non-performing loans to total loans
0.09%
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
43 USCB Financial Holdings, Inc. Q2 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 June 30, 2026
Beginning balance
$
5,270
$
9,932
$
5,330
$
1,018
$
4,552
$
26,102
Provision for credit losses
(1)
222
184
407
76
(2)
887
Recoveries
8
-
1
-
-
9
Charge-offs
(296)
-
-
-
(1)
(297)
Ending Balance
$
5,204
$
10,116
$
5,738
$
1,094
$
4,549
$
26,701
Average loans
$
354,678
$
1,275,161
$
292,088
$
128,762
$
208,276
$
2,258,965
Net charge-offs (recoveries) to average
loans
(2)
0.33%
- %
(0.00)%
- %
0.00%
0.05%
Six Months Ended June 30, 2026
Beginning balance
$
5,908
$
9,476
$
4,814
$
1,015
$
4,287
$
25,500
Provision for credit losses
(3)
(422)
640
919
79
269
1,485
Recoveries
14
-
5
-
-
19
Charge-offs
(296)
-
-
-
(7)
(303)
Ending Balance
$
5,204
$
10,116
$
5,738
$
1,094
$
4,549
$
26,701
Average loans
$
329,736
$
1,271,120
$
264,440
$
128,783
$
224,495
$
2,218,574
Net charge-offs (recoveries) to average
loans
(2)
0.17%
- %
(0.00)%
- %
0.01%
0.03%
(1) Provision for credit losses excludes a $380 thousand provision due to unfunded commitments included in accrued interest and
other liabilities.
(2) Annualized.
(3) Provision for credit losses excludes a $585 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
44 USCB Financial Holdings, Inc. Q2 2026 Form 10-Q
Residential
Real Estate
Commercial
Real Estate
Commercial
and
Industrial
Correspondent
Banks
Consumer
and Other
Total
Three Months Ended June 30, 2025
Beginning balance
$
5,115
$
9,197
$
4,434
$
817
$
5,177
$
24,740
Provision for credit losses
(1)
356
294
73
57
115
895
Recoveries
6
-
1
-
1
8
Charge-offs
-
-
-
-
(710)
(710)
Ending Balance
$
5,477
$
9,491
$
4,508
$
874
$
4,583
$
24,933
Average loans
$
299,857
$
1,167,698
$
265,465
$
101,776
$
222,649
$
2,057,445
Net charge-offs (recoveries) to average
loans
(0.01)%
- %
(0.00)%
- %
1.28%
0.14%
Six Months Ended June 30, 2025
Beginning balance
$
5,121
$
8,788
$
4,633
$
654
$
4,874
$
24,070
Provision for credit losses
(3)
344
703
(131)
220
431
1,567
Recoveries
12
-
6
-
1
19
Charge-offs
-
-
-
-
(723)
(723)
Ending Balance
$
5,477
$
9,491
$
4,508
$
874
$
4,583
$
24,933
Average loans
$
300,560
$
1,155,436
$
261,377
$
94,516
$
210,456
$
2,022,345
Net charge-offs (recoveries) to average
loans
(0.01)%
- %
(0.00)%
- %
0.69%
0.07%
(1) Provision for credit losses excludes a $134 thousand provision due to unfunded commitments included in accrued interest and other
liabilities and a $2 thousand provision related to investment securities held to maturity.
(2) Annualized.
(3) Provision for credit losses excludes $144 thousand provision due to unfunded commitments included in accrued interest and a $1
thousand provision related to investment securities held to maturity.
The Federal Open Market Committee (“FOMC”) economic forecasts as of June 30, 2026, showed moderate
improvement in the forecast for real GDP and a slight improvement in the unemployment rate. 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 June 30, 2026, for every 100 basis point increase in the HPI, the
forecast reduces reserves by approximately $241 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 judgement. 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 June 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 $6.0 million, or 22.3%, 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
45 USCB Financial Holdings, Inc. Q2 2026 Form 10-Q
Bank-Owned Life Insurance
As of June 30, 2026, the combined cash surrender value of all bank-owned life insurance (“BOLI”) policies was $60.4
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 June 30,
2026
2025
Average Balance
Average Rate
Paid
Average Balance
Average Rate
Paid
Non-interest bearing demand deposits
$
632,198
0.00%
$
580,121
0.00%
Interest-bearing demand deposits
51,711
2.41%
46,694
2.45%
Saving and money market deposits
1,280,578
2.66%
1,211,513
3.12%
Time deposits
524,474
3.54%
452,361
3.85%
Total
$
2,488,961
2.16%
$
2,290,689
2.46%
The Company has a granular deposit portfolio with outstanding balances comprised of 57.1% in commercial deposits,
26.0% in personal deposits, 9.1% in public funds (which are partially collateralized) and 7.8% in brokered deposits. The
brokered deposits balance at June 30, 2026 was $190.9 million and $256.8 million at December 31, 2025.
As of June 30, 2026, the Company has approximately 21 thousand deposit accounts with the majority of which were
personal accounts, approximately 12 thousand or 58.6%. The estimated average account size in our deposit portfolio was
approximately $118 thousand as of June 30, 2026.
The amount of uninsured deposits are estimated based on the FDIC deposit insurance limit of $250 thousand per
account holder for all deposit accounts at the Company. The total estimated percentage of uninsured deposits was 55% at
June 30, 2026 and 51% at December 31, 2025. The Company offers Insured Cash Sweep (“ICS”) and Certificate
of
Deposit Account Registry Service (“CDARS”) deposit products to fully insure our clients. The deposit balance in
ICS/CDARS was $176.1 million at June 30, 2026 and was $183.2 million at December 31, 2025.
The following table shows scheduled maturities of uninsured time deposits as of June 30, 2026 (in thousands):
June 30, 2026
Three months or less
$
68,697
Over three through six months
17,702
Over six through twelve months
57,687
Over twelve months
51,597
$
195,683
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 June 30, 2026, escrow balances totaled $23.5 million compared to $8.1 million at December 31, 2025. The
increase reflects the normal growth in escrow accounts pending tax and insurance payments.
Table of Contents
46 USCB Financial Holdings, Inc. Q2 2026 Form 10-Q
Borrowings
FHLB Advances
As a member of the FHLB of Atlanta, we are eligible to obtain advances with various terms and conditions. This
accessibility to additional funding allows us to efficiently and timely meet both expected and unexpected outgoing cash flows
and collateral needs without adversely affecting either daily operations or the financial condition of the Company.
As of June 30, 2026, we had $112.0 million of fixed-rate advances and $128.9 million of daily-rate advances outstanding
with the FHLB, with weighted average interest rates of 3.82% and 3.88%, maturing in July 2026 and September 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 June 30, 2026 (in thousands):
June 30, 2026
Interest Rate
Type of Rate
Maturity Date
Amount
3.82%
Fixed
July 13, 2026
37,000
3.82%
Fixed
July 23, 2026
5,000
3.81%
Fixed
July 29, 2026
30,000
3.84%
Fixed
September 09, 2026
40,000
3.88%
Daily
May 24, 2027
128,900
$
240,900
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
June 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 June 30, 2026 was $1.3 million and at December 31, 2025 was $752 thousand. The increase
was primarily driven by an increase in unfunded commitments.
Table of Contents
47 USCB Financial Holdings, Inc. Q2 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 ):
June 30, 2026
December 31, 2025
Commitments to grant loans and unfunded lines of credit
$
205,573
$
161,606
Standby and commercial letters of credit
3,646
2,700
Total
$
209,219
$
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
48 USCB Financial Holdings, Inc. Q2 2026 Form 10-Q
Market and Interest Rate Risk Management
According to our ALCO model, as of June 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. Beginning in Year 2,
both models transition toward an asset sensitive posture, reflecting projected balance sheet growth, continued variable rate
loan production, and changes in balance sheet mix over time. This progression is consistent with management’s forward
looking assumptions embedded in the dynamic model.
The Bank’s interest rate risk profile is fairly neutral, with no significant change in overall sensitivity. While the funding
mix shifted modestly, core deposits remained essentially flat, and the Bank’s Year 1 liability-sensitive positioning was
unchanged. 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. Importantly, EVE volatility
declined quarter over quarter, reflecting balance sheet actions taken during the period and an overall reduction in structural
interest rate risk.
Overall, the Bank remains well positioned to manage current interest rate volatility, with limited exposure under rising
rate scenarios and favorable positioning in a declining rate environment. Management continues to actively review ALM
results and retains the 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 both expected and unexpected cash flow
and collateral needs without adversely affecting either daily operations or the financial condition of the Company.
Liquidity risk is the risk that we will be unable to meet our short-term and long-term obligations as they become due
because of an inability to liquidate assets or obtain relatively adequate funding. The Company’s obligations, and the funding
sources used to meet them, depend significantly on our business mix, balance sheet structure and composition, credit
quality of our assets and the cash flow profiles of our on- and off-balance sheet obligations.
In managing inflows and outflows, management regularly monitors situations that can give rise to increased liquidity
risk. These include funding mismatches, market constraints on the ability to convert assets (particularly investments) into
cash or in accessing sources of funds (i.e., market liquidity), pledging assets and contingent liquidity events.
Changes in macroeconomic conditions, as well as exposure to credit, market, operational, legal, cybersecurity risk and
reputational risks, could have an unexpected impact on the Company’s liquidity risk profile and are factored into the
assessment of liquidity and the ALM framework.
Management has established a comprehensive and holistic management process for identifying, measuring, monitoring
and mitigating liquidity risk. 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
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.
Table of Contents
49 USCB Financial Holdings, Inc. Q2 2026 Form 10-Q
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 June 30, 2026, the Company had $428 million in available liquidity on balance sheet, including $314 million in
unpledged securities (excluding Unencumbered HTM securities) available to use as collateral and $114 million in excess
cash. The Company had an additional $309 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
50 USCB Financial Holdings, Inc. Q2 2026 Form 10-Q
Capital Adequacy
As of June 30, 2026, the Company and the Bank were well capitalized under the FRB’s and FDIC’s prompt corrective
action framework. We also follow the capital conservation buffer framework, and as of June 30, 2026, we exceeded the
capital conversation 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
June 30, 2026
Total risk-based capital
$
325,362
13.88
%
$
187,482
8.00
%
$
234,352
10.00
%
Tier 1 risk-based capital
$
257,948
11.01
%
$
140,611
6.00
%
$
187,482
8.00
%
Common equity tier 1 capital
$
257,948
11.01
%
$
105,458
4.50
%
$
152,329
6.50
%
Leverage ratio
$
257,948
8.81
%
$
117,132
4.00
%
$
146,415
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
June 30, 2026
Total risk-based capital
$
320,052
13.68
%
$
187,185
8.00
%
$
233,981
10.00
%
Tier 1 risk-based capital
$
292,014
12.48
%
$
140,389
6.00
%
$
187,185
8.00
%
Common equity tier 1 capital
$
292,014
12.48
%
$
105,291
4.50
%
$
152,088
6.50
%
Leverage ratio
$
292,014
9.97
%
$
117,144
4.00
%
$
146,430
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 planning processes.
Table of Contents
51 USCB Financial Holdings, Inc. Q2 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 table reconciles the non-GAAP financial measurement
of operating net income available to common shareholders for the periods presented (in thousands, except per share data):
USCB FINANCIAL HOLDINGS, INC.
NON-GAAP FINANCIAL MEASURES (UNAUDITED)
(Dollars in thousands)
As of or For the Three Months Ended
6/30/2026
3/31/2026
12/31/2025
9/30/2025
6/30/2025
Pre-tax pre-provision ("PTPP") income:
(1)
Net income
$
9,078
$
9,351
$
1,363
$
8,939
$
8,140
Plus: Income tax expense
3,636
2,335
1,911
2,866
2,599
Plus: Provision for credit losses
1,267
801
480
105
1,031
PTPP income
$
13,981
$
12,487
$
3,754
$
11,910
$
11,770
PTPP return on average assets:
(1)
PTPP income
$
13,981
$
12,487
$
3,754
$
11,910
$
11,770
Average assets
$
2,900,725
$
2,834,717
$
2,799,863
$
2,798,115
$
2,677,198
PTPP return on average assets
(2)
1.93%
1.79%
0.53%
1.69%
1.76%
Operating net income:
(1)
Net income
$
9,078
$
9,351
$
1,363
$
8,939
$
8,140
Less: Net gains (losses) 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
$
9,078
$
8,722
$
8,057
$
8,960
$
8,140
Operating return on average assets:
(1)
Operating net income
$
9,078
$
8,722
$
8,057
$
8,960
$
8,140
Average assets
$
2,900,725
$
2,834,717
$
2,799,863
$
2,798,115
$
2,677,198
Operating return on average assets
(2)
1.26%
1.25%
1.14%
1.27%
1.22%
Operating return on average equity:
(1)
Operating net income
$
9,078
$
8,722
$
8,057
$
8,960
$
8,140
Average equity
$
228,933
$
222,226
$
212,393
$
225,316
$
228,492
Operating return on average equity
(2)
15.90%
15.92%
15.05%
15.78%
14.29%
Operating Revenue:
(1)
$
24,387
$
22,048
$
22,207
$
21,274
$
21,034
3,560
4,150
(4,178)
3,684
3,370
-
14
(7,498)
(28)
-
$
27,947
$
26,184
$
25,527
$
24,986
$
24,404
Operating Efficiency Ratio:
(1)
$
13,966
$
13,711
$
14,275
$
13,048
$
12,634
$
27,947
$
26,184
$
25,527
$
24,986
$
24,404
49.97%
52.36%
55.92%
52.22%
51.77%
(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
52 USCB Financial Holdings, Inc. Q2 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
6/30/2026
3/31/2026
12/31/2025
9/30/2025
6/30/2025
Tangible book value per common share (at period-end):
(1)(4)
Total stockholders' equity
$
233,238
$
223,246
$
217,183
$
209,095
$
231,583
Less: Intangible assets
-
-
-
-
-
Tangible stockholders' equity
(3)
$
233,238
$
223,246
$
217,183
$
209,095
$
231,583
Total shares issued and outstanding (at period-end):
Total common shares issued and outstanding
18,459,470
18,257,400
18,137,885
18,107,385
20,078,385
Tangible book value per common share
(2)
$
12.64
$
12.23
$
11.97
$
11.55
$
11.53
Operating diluted net income per common share:
(1)
Operating net income
$
9,078
$
8,722
$
8,057
$
8,960
$
8,140
Total weighted average diluted shares of common stock
18,509,572
18,454,006
18,348,725
19,755,820
20,295,794
Operating diluted net income per common share:
$
0.49
$
0.47
$
0.44
$
0.45
$
0.40
Tangible Common Equity/Tangible Assets
(1)(4)
(3)
$
233,238
$
223,246
$
217,183
$
209,095
$
231,583
(3)
$
3,019,701
$
2,845,735
$
2,791,540
$
2,767,945
$
2,719,474
Tangible Common Equity/Tangible Assets
7.72%
7.84%
7.78%
7.55%
8.52%
(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,
(4) The decrease in total stockholders’ equity in September 2025 was primarily driven by the repurchase of 2.0 million shares of Class A common
stock, as previously
disclosed.
Table of Contents
53 USCB Financial Holdings, Inc. Q2 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 June 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 collect, process, and
disclose the information required to be disclosed in the reports filed or submitted under the Exchange Act within the required
time periods.
Changes in Internal Control Over Financial Reporting
There has been no change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f)
under the Exchange Act) during the period covered by this Form 10-Q that has materially affected, or is reasonably likely to
materially affect, our internal control over financial reporting.
Limitations on Effectiveness of Controls and Procedures
In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and
procedures, no matter how well designed and operated, can provide only reasonable, not absolute, assurance of achieving
the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there
are resource constraints and that management is required to apply judgment in evaluating the benefits of possible controls
and procedures relative to their costs.
Table of Contents
54 USCB Financial Holdings, Inc. Q2 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 June 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
April 1 - 30, 2026
-
$
-
-
474,834
May 1 - 31, 2026
-
$
-
-
474,834
June 1 - 30, 2026
-
$
-
-
474,834
Total
-
$
-
-
(1) As of June 30, 2026 there were 474,834 shares available for repurchase under the outstanding share repurchase program:
- 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 ended 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.
Item 3. Defaults Upon Senior Securities
(a)
(b)
Item 4. Mine Safety Disclosures
Not applicable.
Item 5. Other Information
(a)
(b)
Table of Contents
55 USCB Financial Holdings, Inc. Q2 2026 Form 10-Q
(c)
terms are defined in Item 408 of the SEC’s Regulation S-K).
Table of Contents
56 USCB Financial Holdings, Inc. Q2 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 Securities 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 Exchange 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 Commission 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 with the Securities and Exchange Commission on August 14, 2025).
10.3
Change in Control Agreement between U.S. Century Bank and Sergio Garrido dated as of July 6, 2026.
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 June 30, 2026
formatted in Inline XBRL: (i) Consolidated Balance Sheets (unaudited), (ii) Consolidated Statements of Operations
(unaudited), (iii) Consolidated Statements of Comprehensive Income (unaudited), (iv) Consolidated Statements of Changes
in Stockholders’ Equity (unaudited), (v) Consolidated Statements of Cash Flows (unaudited), (vi) Notes to Consolidated
Financial Statements (unaudited).
104
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)
*
**
Management Contract or Compensatory plan or arrangement.
Filed herewith.
***
Furnished hereby.
Table of Contents
57 USCB Financial Holdings, Inc. Q2 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
August 7, 2026
Luis de la Aguilera
(Principal Executive Officer)
/s/ Robert Anderson
Executive Vice President and Chief Financial
Officer
August 7, 2026
Robert Anderson
(Principal Financial Officer and Principal
Accounting Officer)