# USCB FINANCIAL HOLDINGS, INC. (USCB) FY 2023 MD&A

Verbatim Item 7 Management's Discussion and Analysis from USCB FINANCIAL HOLDINGS, INC.'s 10-K for fiscal year 2023.

SEC filing source: https://www.sec.gov/Archives/edgar/data/1901637/000156276224000061/uscb-20231231.htm
Accession: 0001562762-24-000061
Filing date: 2024-03-22
Report date: 2023-12-31
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/
Previous year: /company/USCB/mda/fy2022/ (FY 2022)
Next year: /company/USCB/mda/fy2024/ (FY 2024)

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, 2023
 
and
 
2022. This
 
discussion
 
and
 
analysis
 
is best
 
read
 
in
 
conjunction
 
with
 
the
 
Consolidated
 
Financial

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

this Annual Report on Form
 
10-K. 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.

In this Annual Report on Form 10-K, unless the context indicated otherwise, references to “we,” “us,”, and “our” refer to

the Company and the Bank, as
 
the contest dictates. However, if
 
the discussion relates to a period
 
before the Effective Date,

the terms refer only to the Bank.

Table of Contents

51
 
USCB Financial Holdings, Inc.
 
2023 10-K

CAUTIONARY NOTE REGARDING 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,” “could,”
 
“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;

•

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;

•

adverse
 
changes
 
or
 
conditions
 
in
 
the
 
capital
 
and
 
financial
 
markets,
 
including
 
actual
 
or
 
potential
 
stresses
 
in
 
the

banking industry;

•

deposit attrition and the level of our uninsured deposits;

•

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

the on-going effects of the implementation of CECL;

•

the lack of a significantly 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,

in particular, commercial real estate;

•

the effects of climate change;

•

the concentration of ownership of our common stock;

•

fluctuations in the price of our 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;

•

impacts of international hostilities and geopolitical events;

•

increased
 
competition
 
and
 
its
 
effect
 
on
 
the
 
pricing
 
of
 
our
 
products
 
and
 
services
 
as
 
well
 
as
 
our
 
net
 
interest
 
rate

spread and net interest margin;

•

the loss of key employees;

•

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

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

•

other risks described in this Annual Report on Form 10-K
 
and other filings we make with the 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
 
Annual Report
 
on Form
 
10-K 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 this Annual

Report on Form 10-K
 
and 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.

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