# USCB FINANCIAL HOLDINGS, INC. (USCB) FY 2021 MD&A

Verbatim Item 7 Management's Discussion and Analysis from USCB FINANCIAL HOLDINGS, INC.'s 10-K for fiscal year 2021.

SEC filing source: https://www.sec.gov/Archives/edgar/data/1901637/000156276222000137/uscb-10K-20211231.htm
Accession: 0001562762-22-000137
Filing date: 2022-03-24
Report date: 2021-12-31
Extracted from Item 7 to the first post-MD&A boundary after HTML sanitization.
Confidence: high

Company profile: /company/USCB/
All MD&A years: /company/USCB/mda/
Next year: /company/USCB/mda/fy2022/ (FY 2022)

Item 7.
 
Management's Discussion and Analysis of Financial Condition
 
and Results of Operations

Management’s
 
discussion
 
and
 
analysis
 
of
 
financial
 
condition
 
and
 
results
 
of
 
operations
 
analyzes
 
the
 
consolidated

financial condition and results of operations of the Company and the
 
Bank, its wholly owned subsidiary, for the years ended

December 31, 2021
 
and
 
2020. This
 
discussion and
 
analysis are
 
best read
 
in conjunction
 
with the
 
Consolidated Financial

Statements and related footnotes
 
of our Company presented
 
in Item 8 “Financial
 
Statements and Supplementary
 
Data” of

this Annual
 
Report.
 
In
 
addition
 
to
 
historical
 
information,
 
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" of this Annual Report.

Throughout this document, references to “we,” “us,” “our,” and “the
 
Company” refer to USCB Financial Holdings, Inc.

Forward-Looking Statements

This
 
Annual
 
Report
 
on
 
Form
 
10-K
 
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,”
 
“should,”
 
“would,”
 
“believe,”
 
“contemplate,”

“expect,” “aim,” “plan,” “estimate,” “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.

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:

•
 
the strength of the United States economy
 
in general and the strength of the local
 
economies in which we conduct

operations;

•
 
the COVID-19 pandemic and its impact on
 
us, our employees, customers and third-party service providers, and the

ultimate extent of the impacts of the pandemic and related government
 
stimulus programs;

•
 
our ability to successfully manage interest rate risk, credit
 
risk, liquidity risk, and other risks inherent to our industry;

•
 
the accuracy of our financial statement estimates and assumptions, including the estimates used for our credit loss

reserve and deferred tax asset valuation allowance;

•
 
the efficiency and effectiveness of our
 
internal control environment;

•
 
our ability
 
to comply
 
with the
 
extensive laws
 
and regulations
 
to which
 
we are
 
subject, including
 
the laws
 
for each

jurisdiction where we operate;

•
 
legislative or regulatory
 
changes and changes
 
in accounting
 
principles, policies,
 
practices or guidelines,
 
including

the effects of the forthcoming implementation
 
of the Current Expected Credit Losses (“CECL”) standard;

•
 
the effects
 
of our
 
lack of
 
a diversified
 
loan portfolio
 
and concentration
 
in the
 
South Florida
 
market, including
 
the

risks
 
of geographic,
 
depositor,
 
and
 
industry concentrations,
 
including our
 
concentration
 
in
 
loans secured
 
by real

estate;

•
 
the concentration of ownership of our Class A common
 
stock;

•
 
fluctuations in the price of our Class A common stock;

•
 
our ability to fund or access the capital markets at attractive
 
rates and terms and manage our growth, both organic

growth as well as growth through other means, such as
 
future acquisitions;

•
 
inflation, interest rate, unemployment rate, market, and monetary
 
fluctuations;

•
 
increased competition and its effect on pricing
 
of our products and services as well as our margins;

•
 
the effectiveness of our risk management strategies, including operational risks, including, but not limited to, client,

employee, or third-party fraud and security breaches; and

•
 
other
 
risks
 
described
 
this
 
Form
 
10-K
 
and
 
other
 
filings
 
we
 
make
 
with
 
the
 
Securities
 
and
 
Exchange
 
Commission

(“SEC”).

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,
 
forward-looking statements included in this presentation
 
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

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 reports the Company
 
filed or will

file with the
 
SEC and,
 
for periods
 
prior to
 
the completion
 
of the bank
 
holding company
 
reorganization, the
 
Bank filed
 
with

the FDIC.

Table of Contents

44
 
USCB Financial Holdings, Inc.
 
2021 10-K

Non-GAAP Financial Measures

This Annual Report on Form 10-K includes
 
financial information determined by methods
 
other than in accordance with

generally
 
accepted
 
accounting
 
principles
 
(“GAAP”).
 
This
 
financial
 
information
 
includes
 
certain
 
operating
 
performance

measures. Management has included these non-GAAP
 
measures because it believes these measures may
 
provide useful