10-Q - USCB - Equibles

uscb-20260331p1i0

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM

10-Q

☒

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended

March 31, 2026

☐

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:

001-41196

USCB Financial Holdings, Inc.

(Exact name of registrant as specified in its charter)

Florida

87-4070846

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

2301 N.W. 87th Avenue

Doral

33172

(Address of principal executive offices) (zip code)

Registrant’s telephone number, including area code:

(

305

)

715-5200

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Class A common stock, $1.00 par value per share

USCB

The Nasdaq Stock Market LLC

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.

Yes

☒

☐

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).

Yes

☒

☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting

company

emerging

growth

company.

See

the

definitions

“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

☐

Accelerated filer

☒

Non-accelerated filer

☐

Smaller reporting company

☒

Emerging growth company

☒

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 April 30, 2026, the registrant had

18,263,900

shares of Class

common stock outstanding.

uscb-20260331p1i0

FORM 10-Q

March 31, 2026

TABLE OF CONTENTS

PART I

Item 1.

Financial Statements

Consolidated Balance Sheets as of March 31, 2026 (Unaudited) and December 31, 2025

Consolidated Statements of Operations for the three months ended March 31, 2026 and 2025 (Unaudited)

Consolidated Statements of Comprehensive Income for the three months ended March 31, 2026 and 2025

(Unaudited)

Consolidated Statements of Changes in Stockholders’ Equity for the three months ended March 31, 2026 and

2025 (Unaudited)

Consolidated Statements of Cash Flows for the three months ended March 31, 2026 and 2025 (Unaudited)

Notes to the Consolidated Financial Statements (Unaudited)

Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Item 4.

Controls and Procedures

PART II

Item 1.

Legal Proceedings

Item 1A.

Risk Factors

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

Item 3.

Defaults Upon Senior Securities

Item 4.

Mine Safety Disclosures

Item 5.

Other Information

Item 6.

Exhibit Index

Signatures

Table of Contents

USCB Financial Holdings, Inc.

Q1 2026 Form 10-Q

PART

Item 1.

Financial Statements

USCB FINANCIAL HOLDINGS, INC

Consolidated Balance Sheets – Unaudited

(Dollars in thousands, except share data)

March 31, 2026

December 31, 2025

ASSETS:

Cash and due from banks

6,598

6,027

Interest-bearing deposits in banks

72,365

32,450

Total cash and cash equivalents

78,963

38,477

Investment securities held to maturity, net of allowance of $

and $

, respectively (fair value of

137,714

and $

142,508

, respectively)

149,931

153,941

Investment securities available for sale, at fair value

277,160

307,490

Federal Home Loan Bank stock, at cost

4,470

9,323

Loans held for investment, net of allowance of

26,102

and $

25,500

, respectively

2,214,949

2,163,757

Accrued interest receivable

11,773

11,661

Premises and equipment, net

4,401

4,247

Bank owned life insurance

59,920

59,424

Deferred tax assets, net

19,649

18,046

Lease right-of-use asset

4,756

5,519

Other assets

19,763

19,655

Total assets

2,845,735

2,791,540

LIABILITIES:

Deposits:

Non-interest bearing demand deposits

620,714

583,860

Savings and money market deposits

1,263,248

1,186,422

Interest-bearing demand deposits

57,444

46,989

Time deposits

552,174

527,809

Total deposits

2,493,580

2,345,080

Federal Home Loan Bank advances

53,000

158,250

Subordinated notes, net

39,338

39,300

Lease liability

4,756

5,519

Accrued interest and other liabilities

31,815

26,208

Total liabilities

2,622,489

2,574,357

Commitments and contingencies (See Notes 5

and 10)

(nil)

STOCKHOLDERS' EQUITY:

Preferred stock - Class C; $

1.00

par value; $

1,000

per share liquidation preference;

52,748

authorized;

and

issued and outstanding as of March 31, 2026

and December 31, 2025

Preferred stock - Class D; $

1.00

par value; $

5.00

per share liquidation preference;

12,309,480

authorized;

and

issued and outstanding as of March 31, 2026

and December 31, 2025

Preferred stock - Class E; $

1.00

par value; $

1,000

per share liquidation preference;

3,185,024

authorized;

and

issued and outstanding as of March 31, 2026

and December 31, 2025

Common stock - Class A Voting; $

1.00

par value;

45,000,000

shares authorized;

18,257,400

issued and

outstanding as of March 31, 2026,

18,137,885

issued and outstanding as of December

31, 2025

18,257

18,138

Common stock - Class B Non-voting; $

1.00

par value;

8,000,000

shares authorized;

and

issued and

outstanding as of March 31, 2026 and December

31, 2025

Additional paid-in capital on common stock

278,812

278,852

Accumulated deficit

(42,473)

(49,542)

Accumulated other comprehensive loss

(31,350)

(30,265)

Total stockholders' equity

223,246

217,183

Total liabilities and stockholders' equity

2,845,735

2,791,540

The accompanying notes are an integral part of

these unaudited consolidated financial statements.

Table of Contents

USCB Financial Holdings, Inc.

Q1 2026 Form 10-Q

USCB FINANCIAL HOLDINGS, INC.

Consolidated Statements of Operations - Unaudited

(Dollars in thousands,

except per share data)

Three Months Ended March 31,

2026

2025

Interest income:

Loans, including fees

32,789

30,245

Investment securities

3,411

3,024

Interest-bearing deposits in financial institutions

832

709

Total interest income

37,032

33,978

Interest expense:

Interest-bearing demand deposits

310

338

Savings and money market deposits

8,133

9,335

Time deposits

4,700

3,918

Federal Home Loan Bank advances

1,040

1,272

Subordinated notes

801

Total interest expense

14,984

14,863

Net interest income before provision for

credit losses

22,048

19,115

Provision for credit losses

801

681

Net interest income after provision for

credit losses

21,247

18,434

Non-interest income:

Service fees

3,100

2,331

Gain on sale of securities available for sale, net

Gain on sale of loans held for sale, net

106

525

Other non-interest income

930

860

Total non-interest income

4,150

3,716

Non-interest expense:

Salaries and employee benefits

8,570

7,636

Occupancy

1,316

1,284

Regulatory assessments and fees

484

421

Consulting and legal fees

561

193

Network and information technology services

560

505

Other operating expense

2,220

2,013

Total non-interest expense

13,711

12,052

Income before income tax expense

11,686

10,098

Income tax expense

2,335

2,440

Net income

9,351

7,658

Per share information:

Earnings per share, basic

0.51

0.38

Earnings per share, diluted

0.51

0.38

Cash dividends declared

0.125

0.10

The accompanying notes are an integral part of

these unaudited consolidated financial statements.

Table of Contents

USCB Financial Holdings, Inc.

Q1 2026 Form 10-Q

USCB FINANCIAL HOLDINGS, INC.

Consolidated Statements of Comprehensive Income

Unaudited

(Dollars in thousands)

Three Months Ended

March 31,

2026

2025

Net income

9,351

7,658

Other comprehensive (loss) income:

Unrealized (loss) gain on investment securities

(2,207)

4,673

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

(158)

Tax effect

971

(1,161)

Total other comprehensive (loss) income, net of tax

(1,085)

3,421

Total comprehensive income

8,266

11,079

The accompanying notes are an integral part of

these unaudited consolidated financial statements.

Table of Contents

USCB Financial Holdings, Inc.

Q1 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

Par Value

Total

Stockholders'

Equity

Balance at December 31, 2025

18,137,885

18,138

278,852

(49,542)

(30,265)

217,183

Net income

9,351

Other comprehensive loss

(1,085)

Repurchase of Class A common stock

(53,475)

(53)

(948)

(1,001)

Restricted stock issued

147,490

147

(147)

Exercise of stock options

25,500

166

191

Dividend payment

(2,282)

Stock-based compensation

889

Balance at March 31, 2026

18,257,400

18,257

278,812

(42,473)

(31,350)

223,246

Balance at December 31, 2024

19,924,632

19,925

307,810

(67,813)

(44,534)

215,388

Net income

7,658

Other comprehensive income

3,421

Repurchase of Class A common stock

(9,671)

(10)

(164)

(174)

Restricted stock issued

124,424

124

(124)

Exercise of stock options

9,000

Dividend payment

(2,005)

Stock-based compensation

708

Balance at March 31, 2025

20,048,385

20,048

308,313

(62,160)

(41,113)

225,088

The accompanying notes are an integral

part of these consolidated financial statements.

Table of Contents

USCB Financial Holdings, Inc.

Q1 2026 Form 10-Q

USCB FINANCIAL HOLDINGS, INC.

Consolidated Statements of Cash Flows - Unaudited

(Dollars in thousands)

Three Months Ended March 31,

2026

2025

Cash flows from operating activities:

Net income

9,351

7,658

Adjustments to reconcile net income

to net cash provided by operating activities:

Provision for credit losses

801

681

Depreciation and amortization

166

148

Accretion of premiums on securities, net

(374)

(212)

Amortization of deferred loan fees, net

269

126

Stock-based compensation

889

708

Gain on sale of available for sale securities,

net

(14)

Gain on sale of loans held for sale, net

(106)

(525)

Proceeds from the sale of loans held for sale

1,329

7,719

Origination of loans held for sale

(1,223)

(7,194)

Increase in cash surrender value of bank owned

life insurance

(496)

(471)

Amortization of subordinated debt issuance

costs

Deferred income tax expense (benefit)

(581)

2,440

Net change in operating assets and liabilities:

Accrued interest receivable

(112)

(79)

Other assets

(62)

(3,005)

Accrued interest and other liabilities

5,401

6,634

Net cash provided by operating activities

15,276

14,628

Cash flows from investing activities:

Proceeds from maturities and pay-downs of investment

securities held to maturity

4,063

2,955

Purchase of investment securities available

for sale

(13,631)

(14,123)

Proceeds from maturities and pay-downs of investment

securities available for sale

4,964

4,106

Proceeds from sales of investment securities

available for sale

37,181

Net increase in loans held for investment

(7,968)

(43,503)

Purchase of loans held for investment

(44,090)

(19,989)

Additions to premises and equipment

(320)

(46)

Purchase of bank owned life insurance

(4,000)

Proceeds from the redemption of Federal

Home Loan Bank stock

6,994

2,612

Purchase of Federal Home Loan Bank stock

(2,141)

(169)

Net cash used in investment activities

(14,948)

(72,157)

Cash flows from financing activities:

Proceeds from issuance of Class A common

stock, net

191

Cash dividends paid

(2,282)

(2,005)

Repurchase of Class A common stock

(1,001)

(174)

Net increase in deposits

148,500

135,565

Proceeds from FHLB advances

42,000

Repayments on Federal Home Loan Bank advances

(147,250)

(55,000)

Net cash provided by financing activities

40,158

78,478

Net increase in cash and cash equivalents

40,486

20,949

Cash and cash equivalents at beginning

of period

38,477

77,035

Cash and cash equivalents at end of period

78,963

97,984

Supplemental disclosure of cash flow

information:

Interest paid

14,673

14,454

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

USCB Financial Holdings, Inc.

Q1 2026 Form 10-Q

SUMMARY OF SIGNIFICANT ACCOUNTING

POLICIES

Overview

USCB Financial Holdings,

Inc., a Florida

corporation incorporated

in 2021, is

a bank holding

company with

one

direct

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

normally

recurring

accruals

that,

the

opinion

management,

are

necessary

for

fair

presentation

the

financial

position

and

results

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

which

has

controlling

financial

interest.

Intercompany

transactions

and

balances are eliminated in consolidation.

Use of Estimates

prepare

consolidated

financial

statements

conformity

with

U.S.

GAAP,

management

makes

estimates

and

assumptions

based

available

information.

These

estimates

and

assumptions

affect

the

amounts

reported

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

prior

period

consolidated

financial

statements

have

been

reclassified

conform

the

current

presentation. Reclassifications had no impact on prior period

net income or stockholders’ equity.

Recently Issued Accounting Standards

There were no

recently issued accounting

standards adopted or

issued during the

period that are

expected to have

material impact on the Company’s consolidated financial

statements.

Table of Contents

USCB FINANCIAL HOLDINGS, INC.

Notes to the Consolidated Financial Statements - Unaudited

USCB Financial Holdings, Inc.

Q1 2026 Form 10-Q

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):

March 31, 2026

Available-for-sale:

Amortized

Cost

Unrealized

Gains

Unrealized

Losses

Fair Value

U.S. Government Agency

12,568

(970)

11,598

Collateralized mortgage obligations

86,307

(17,727)

68,580

Mortgage-backed securities - residential

35,364

(6,190)

29,272

Mortgage-backed securities - commercial

156,895

145

(8,005)

149,035

Municipal securities

5,194

(995)

4,199

Bank subordinated debt securities

14,570

163

(257)

14,476

310,898

406

(34,144)

277,160

March 31, 2026

Held-to-maturity:

Amortized

Cost

Unrecognized

Gains

Unrecognized

Losses

Fair Value

U.S. Government Agency

40,748

(3,319)

37,507

Collateralized mortgage obligations

50,175

664

(5,768)

45,071

Mortgage-backed securities - residential

35,963

659

(3,359)

33,263

Mortgage-backed securities - commercial

15,041

(1,163)

13,878

Corporate bonds

8,004

(9)

7,995

149,931

1,401

(13,618)

137,714

Allowance for credit losses - securities held-to-maturity

Securities held-to maturity, net of allowance for credit losses

149,931

December 31, 2025

Available-for-sale:

Amortized

Cost

Unrealized

Gains

Unrealized

Losses

Fair Value

U.S. Government Agency

15,169

(1,043)

14,144

Collateralized mortgage obligations

92,871

(17,043)

75,828

Mortgage-backed securities - residential

35,865

135

(6,083)

29,917

Mortgage-backed securities - commercial

174,622

347

(6,861)

168,108

Municipal securities

5,196

(933)

4,263

Bank subordinated debt securities

15,284

189

(243)

15,230

339,007

689

(32,206)

307,490

December 31, 2025

Held-to-maturity:

Amortized

Cost

Unrecognized

Gains

Unrecognized

Losses

Fair Value

U.S. Government Agency

41,158

(3,279)

37,970

Collateralized mortgage obligations

51,431

854

(5,499)

46,786

Mortgage-backed securities - residential

37,221

760

(3,263)

34,718

Mortgage-backed securities - commercial

15,088

(1,037)

14,051

Corporate bonds

9,045

(62)

8,983

153,943

1,705

(13,140)

142,508

Allowance for credit losses - securities held-to-maturity

(2)

Securities held-to maturity, net of allowance for credit losses

153,941

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

Table of Contents

USCB FINANCIAL HOLDINGS, INC.

Notes to the Consolidated Financial Statements - Unaudited

USCB Financial Holdings, Inc.

Q1 2026 Form 10-Q

other comprehensive

loss (“AOCL”) and

in the carrying

value of the

HTM securities

and there is

no impact to

net income.

Such amounts

are amortized

over the

remaining life

of the security.

The Company

made

two

transfers from

AFS to

HTM

portfolios in 2022.

During the quarter ended March 31, 2026, there were

investment securities that were transferred from AFS to HTM.

For three months ended March 31, 2026, total amortization

out of AOCL for net unrealized losses on securities

transferred

in 2022 from AFS to HTM

was $

thousand and $

thousand for the three months

ended March 31, 2025. At

March 31,

2026, the fair value

of the transferred securities

was $

96.1

million and the balance

of the remaining unamortized

loss was

8.9

million.

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

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 March 31, 2026

and December 31, 2025, all HTM securities held by

the

Company were rated investment grade.

At March 31,

2026, HTM

securities

included $

141.9

million of

U.S. Government

and U.S.

Agency issued

bonds and

mortgage-backed

securities.

Because

the

explicit

and/or

implicit

guarantee

these

bonds,

the

Company

holds

reserves

on these

holdings.

The remaining

portion of

the HTM

portfolio

is made

up of

8.0

million

in investment

grade

corporate bonds that mature in May of

The required reserve for these holdings

is determined each quarter using the

model

described

above.

For

the

portion

the

HTM

exposed

non-government

credit

risk,

the

Company

utilized

the

PD/LGD methodology

to estimate

a $

ACL as

of March

31, 2026.

The book

value for

debt securities

classified as

HTM

represents amortized cost less the ACL related to these securities.

The Company’s investment portfolio

includes AFS debt securities, which

are carried at fair value with unrealized

gains

and losses

recognized

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

macro-economic

conditions.

When

the

fair

value

AFS

security

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

March 31, 2026.

Table of Contents

USCB FINANCIAL HOLDINGS, INC.

Notes to the Consolidated Financial Statements - Unaudited

USCB Financial Holdings, Inc.

Q1 2026 Form 10-Q

Information pertaining

to investment

securities with

gross unrealized

losses, aggregated

by investment

category

and

length of

time that

those

individual securities

have been

in a

continuous

loss position,

are presented

as of

the following

dates (in thousands):

March 31, 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

5,909

(88)

5,689

(882)

11,598

(970)

Collateralized mortgage obligations

3,898

(116)

64,682

(17,611)

68,580

(17,727)

Mortgage-backed securities - residential

22,164

(6,190)

22,164

(6,190)

Mortgage-backed securities - commercial

73,867

(977)

55,483

(7,028)

129,350

(8,005)

Municipal securities

4,199

(995)

4,199

(995)

Bank subordinated debt securities

2,722

(12)

6,245

(246)

8,967

(257)

86,396

(1,193)

158,462

(32,952)

244,858

(34,144)

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

5,937

(59)

5,649

(984)

11,586

(1,043)

Collateralized mortgage obligations

8,929

(93)

66,899

(16,950)

75,828

(17,043)

Mortgage-backed securities - residential

22,695

(6,083)

22,695

(6,083)

Mortgage-backed securities - commercial

59,655

(477)

56,852

(6,384)

116,507

(6,861)

Municipal securities

4,263

(933)

4,263

(933)

Bank subordinated debt securities

2,020

(4)

7,234

(239)

9,254

(243)

76,541

(633)

163,592

(31,573)

240,133

(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

deterioration

the

creditworthiness.

Similarly,

the

decrease

fair

value

bank

subordinated

debt

securities

primarily

driven

changes

market

interest

rates

rather

than

credit

concerns.

Based

management’s

evaluation

of these

factors,

management

believes

that

the unrealized

losses

on these

debt

securities

are attributable

fluctuations in market spreads and interest rate movements, rather than adverse changes in the underlying credit quality of

the issuers.

Table of Contents

USCB FINANCIAL HOLDINGS, INC.

Notes to the Consolidated Financial Statements - Unaudited

USCB Financial Holdings, Inc.

Q1 2026 Form 10-Q

Gains

and

losses

the

sale

securities

are

recorded

the

trade

date

and

are

determined

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 months ended

March 31, 2026 and 2025 (in thousands):

Three Months Ended March 31,

Available-for-sale:

2026

2025

Proceeds from sale and call of securities

38,181

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

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

March 31, 2026:

Amortized

Cost

Fair Value

Amortized

Cost

Fair Value

Due within one year

8,004

7,995

Due after one year through five years

2,000

1,984

Due after five years through ten years

17,764

16,691

Due after ten years

U.S. Government Agency

12,568

11,598

40,748

37,507

Collateralized mortgage obligations

86,307

68,580

50,175

45,071

Mortgage-backed securities - residential

35,364

29,272

35,963

33,263

Mortgage-backed securities - commercial

156,895

149,035

15,041

13,878

310,898

277,160

149,931

137,714

At March 31, 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

March 31, 2026 and

December 31, 2025 were

issued

by U.S. Government entities.

The Bank is a Qualified Public Depository (“QPD”) with the State of Florida. As a QPD, the Bank

has the legal authority

maintain

public

deposits

from

cities,

municipalities,

and

the

State

Florida.

These

public

deposits

are

secured

securities pledged to the

State of Florida at

a ratio of

% of the

quarter daily average balance

for quarters ended March 31,

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 March 31,

2026, the

Bank had a

total of $

220.8

million in deposits

under the public

funds program and

pledged

to the State of Florida for these public funds were

twenty

bonds with an aggregate fair value of $

55.1

million.

As of

December 31, 2025, the

Bank had

a total

of $

167.7

million in

deposits under the

public funds program

and pledged

to the State of Florida for these public funds were

fifteen

bonds with an aggregate fair value of $

43.5

million.

Table of Contents

USCB FINANCIAL HOLDINGS, INC.

Notes to the Consolidated Financial Statements - Unaudited

USCB Financial Holdings, Inc.

Q1 2026 Form 10-Q

LOANS

The following table is a summary of the distribution of loans

held for investment by type (dollars in thousands):

March 31, 2026

December 31, 2025

Total

Percent of

Total

Percent of

Total

Residential real estate

346,917

15.5

307,692

14.1

Commercial real estate

1,259,642

56.4

1,244,835

57.0

Commercial and industrial

291,333

13.0

295,548

13.5

Correspondent banks

128,722

5.8

127,968

5.9

Consumer and other

207,794

9.3

207,215

9.5

Total

gross loans

2,234,408

100.0

2,183,258

100.0

Plus: Deferred fees/costs

6,643

5,999

Total

loans net of deferred fees/costs

2,241,051

2,189,257

Less: Allowance for credit losses

26,102

25,500

Total

net loans

2,214,949

2,163,757

March 31,

2026

and

December 31,

2025,

the

Company

had

599.7

million

and

561.4

million,

respectively,

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

general,

the

Company

utilizes

the

Discounted

Cash

Flow

(“DCF”)

method

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

used to

inform

regression

analyses

quantify

the

impact

of reasonable

and

supportable

forecasts

projective

models.

Economic

forecasts

applied

regression

models

estimate

probability

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:

•

Changes in lending policies, procedures, and strategies

•

Changes in international, national, regional, and local economic

conditions

•

Changes in nature and volume of the portfolio

•

Changes in the volume and severity of past due loans

and other similar conditions

•

Concentration risk

•

Changes in the value of underlying collateral

•

The effect of other external factors: e.g., competition,

legal, and regulatory requirements

•

Changes in lending management, among others

•

Changes in the loan review system

Table of Contents

USCB FINANCIAL HOLDINGS, INC.

Notes to the Consolidated Financial Statements - Unaudited

USCB Financial Holdings, Inc.

Q1 2026 Form 10-Q

Changes in the ACL for the three months ended March

31, 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 March 31, 2026

Beginning balance

5,908

9,476

4,814

1,015

4,287

25,500

Provision for credit losses

(1)

(644)

456

512

271

598

Recoveries

Charge-offs

(6)

Ending Balance

5,270

9,932

5,330

1,018

4,552

26,102

(1) Provision for credit losses excludes a $

205

thousand provision due to unfunded commitments included in accrued interest and

other liabilities and a $

thousand release related to investment securities held to maturity.

Residential

Real Estate

Commercial

Real Estate

Commercial

and

Industrial

Correspondent

Banks

Consumer

and Other

Total

Three Months Ended March 31, 2025

Beginning balance

5,121

8,788

4,633

654

4,874

24,070

Provision for credit losses

(1)

(12)

409

(204)

163

316

672

Recoveries

Charge-offs

(13)

Ending Balance

5,115

9,197

4,434

817

5,177

24,740

(1) Provision for credit losses excludes a $

thousand provision due to unfunded commitments included in accrued interest and other

liabilities and a $

thousand release related to investment securities held to maturity.

At March 31,

2026, the

ACL for

loans was

26.1

million compared

to $

25.5

million at

December 31, 2025.

The $

602

thousand increase in the ACL was

primarily attributable to loan portfolio growth, partially offset by

lower expected loss rates

resulting from improvements in the economic forecast.

Charge offs

related to

loans for the

three months

ended March 31,

2026 were

thousand and

were all

originated in

2026.

Charge-offs for the three months ended March

31, 2025 totaled $

thousand and were all originated in 2025.

Table of Contents

USCB FINANCIAL HOLDINGS, INC.

Notes to the Consolidated Financial Statements - Unaudited

USCB Financial Holdings, Inc.

Q1 2026 Form 10-Q

The ACL and the outstanding

balances in the specified

loan categories as of March

31, 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

March 31, 2026:

Allowance for credit losses:

Individually evaluated

Collectively evaluated

5,246

9,932

5,314

1,018

4,552

26,062

Balances, end of period

5,270

9,932

5,330

1,018

4,552

26,102

Loans:

Individually evaluated

6,023

1,288

7,311

Collectively evaluated

340,894

1,259,642

290,045

128,722

207,794

2,227,097

Balances, end of period

346,917

1,259,642

291,333

128,722

207,794

2,234,408

December 31, 2025:

Allowance for credit losses:

Individually evaluated

111

Collectively evaluated

5,881

9,476

4,730

1,015

4,287

25,389

Balances, end of period

5,908

9,476

4,814

1,015

4,287

25,500

Loans:

Individually evaluated

5,583

1,265

6,848

Collectively evaluated

302,109

1,244,835

294,283

127,968

207,215

2,176,410

Balances, end of period

307,692

1,244,835

295,548

127,968

207,215

2,183,258

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

– Loans classified as special mention have a potential weakness

that deserves management’s

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

– Loans classified as doubtful have all the weaknesses inherent

in those classified at substandard, with

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.

Table of Contents

USCB FINANCIAL HOLDINGS, INC.

Notes to the Consolidated Financial Statements - Unaudited

USCB Financial Holdings, Inc.

Q1 2026 Form 10-Q

Loan credit exposures by internally assigned grades are

presented below for the periods indicated (in thousands):

As of March 31, 2026

Term Loans by Origination Year

Revolving

Loans

Total

2026

2025

2024

2023

2022

Prior

Residential real estate

Pass

52,271

63,410

81,292

31,652

23,244

71,610

19,989

343,468

Special Mention

488

Substandard

370

1,015

1,468

108

2,961

Total

52,271

64,268

82,307

33,120

23,244

71,718

19,989

346,917

Commercial real estate

Pass

74,914

243,124

175,333

99,617

269,282

372,973

5,861

1,241,104

Special Mention

2,933

10,083

3,137

16,153

Substandard

2,385

Total

74,914

243,124

178,266

109,700

269,282

378,495

5,861

1,259,642

Commercial and

industrial

Pass

4,473

72,274

62,037

56,211

31,367

39,343

23,336

289,041

Special Mention

805

Substandard

378

1,037

1,487

Total

4,473

72,274

62,109

56,589

31,367

41,185

23,336

291,333

Correspondent banks

Pass

55,661

73,061

128,722

Total

55,661

73,061

128,722

Consumer and other

Pass

2,623

58,516

34,010

36,516

50,584

21,819

3,726

207,794

Total

2,623

58,516

34,010

36,516

50,584

21,819

3,726

207,794

Total

Loans

Pass

189,942

510,385

352,672

223,996

374,477

505,745

52,912

2,210,129

Special Mention

488

2,933

10,083

3,942

17,446

Substandard

370

1,087

1,846

3,530

6,833

Total

189,942

511,243

356,692

235,925

374,477

513,217

52,912

2,234,408

Table of Contents

USCB FINANCIAL HOLDINGS, INC.

Notes to the Consolidated Financial Statements - Unaudited

USCB Financial Holdings, Inc.

Q1 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

65,582

83,426

32,139

23,685

21,056

58,220

20,168

304,276

Special Mention

128

587

201

916

Substandard

917

1,468

115

2,500

Total

65,710

84,343

33,607

24,272

21,056

58,536

20,168

307,692

Commercial real estate

Pass

241,028

184,323

109,465

281,985

134,663

273,483

5,876

1,230,823

Special Mention

8,451

3,162

11,613

Substandard

1,724

675

2,399

Total

241,028

184,323

117,916

281,985

136,387

277,320

5,876

1,244,835

Commercial and

industrial

Pass

75,867

63,178

58,060

32,118

28,090

12,314

23,542

293,169

Special Mention

835

907

Substandard

389

445

638

1,472

Total

75,867

63,250

58,449

32,118

29,370

12,952

23,542

295,548

Correspondent banks

Pass

127,968

Total

127,968

Consumer and other

Pass

59,276

34,309

36,808

51,091

23,214

747

1,770

207,215

Total

59,276

34,309

36,808

51,091

23,214

747

1,770

207,215

Total

Loans

Pass

569,721

365,236

236,472

388,879

207,023

344,764

51,356

2,163,451

Special Mention

128

8,451

587

835

3,363

13,436

Substandard

917

1,857

2,169

1,428

6,371

Total

569,849

366,225

246,780

389,466

210,027

349,555

51,356

2,183,258

Table of Contents

USCB FINANCIAL HOLDINGS, INC.

Notes to the Consolidated Financial Statements - Unaudited

USCB Financial Holdings, Inc.

Q1 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 March 31,

2026 and

December 31, 2025 (in thousands):

Accruing

As of March 31, 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

1,848

1-4 family residential

259,121

1,257

260,378

2,732

263,110

Condo residential

79,585

2,145

81,730

229

81,959

340,554

3,402

343,956

2,961

346,917

Commercial real estate:

Land and construction

65,423

Multi-family residential

265,267

4,583

269,850

Condo commercial

63,777

Commercial property

858,500

2,092

860,592

1,252,967

6,675

1,259,642

Commercial and industrial:

Secured

269,120

269,143

679

269,822

Unsecured

21,511

290,631

290,654

679

291,333

Correspondent banks

128,722

Consumer and other

207,794

Total

2,220,668

10,100

2,230,768

3,640

2,234,408

Table of Contents

USCB FINANCIAL HOLDINGS, INC.

Notes to the Consolidated Financial Statements - Unaudited

USCB Financial Holdings, Inc.

Q1 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

1,538

1-4 family residential

238,852

1,150

240,002

2,385

242,387

Condo residential

62,364

1,288

63,652

115

63,767

302,754

2,438

305,192

2,500

307,692

Commercial real estate:

Land and construction

83,305

Multi-family residential

254,562

Condo commercial

61,525

Commercial property

845,003

440

845,443

1,244,395

440

1,244,835

Commercial and industrial:

Secured

272,900

272,971

638

273,609

Unsecured

21,939

294,839

294,910

638

295,548

Correspondent banks

127,968

Consumer and other

207,215

Total

2,177,171

2,949

2,180,120

3,138

2,183,258

Non-accrual Status

The following

table includes

the amortized

cost basis

of loans

on non-accrual

status as

of March 31,

2026 and

as of

December 31, 2025 (in thousands):

March 31, 2026

Non-accrual

Loans With No

Related Allowance

Non-accrual

Loans With

Related Allowance

Total Non-

accruals

Residential real estate

2,961

Commercial and industrial

679

Total

3,640

December 31, 2025

Non-accrual

Loans With No

Related Allowance

Non-accrual

Loans With

Related Allowance

Total Non-

accruals

Residential real estate

2,500

Commercial and industrial

563

638

Total

3,063

3,138

Accrued interest

receivable is

excluded from

the estimate

of credit

losses. There

was

interest income

recognized

attributable to non-accrual loans outstanding during the three

months ended March 31, 2026 and 2025. Interest income on

these loans for the three months ended March

31, 2026 and 2025, would have been

approximately $

thousand and $

thousand, 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

USCB Financial Holdings, Inc.

Q1 2026 Form 10-Q

Collateral-Dependent Loans

loan

collateral

dependent

when

the

borrower

experiencing

financial

difficulty

and

repayment

the

loan

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 March

31, 2026 and December 31, 2025 (in thousands):

March 31, 2026

Collateral Type

Residential Real Estate

Specific Reserve

Residential real estate

3,063

Commercial and industrial

Total

3,135

December 31, 2025

Collateral Type

Residential Real Estate

Specific Reserve

Residential real estate

2,583

Total

2,583

Management evaluates

on an individual

basis collateral

dependent loans

using the fair

value of the

collateral method

to determine

if a

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

one

new

modification

borrowers

experiencing

financial

difficulties

for

the

three

months

ended

March 31, 2026.

The Company had

new modifications to

borrowers experiencing financial

difficulties for the

three months

ended March 31, 2025.

The following table

presents newly restructured

loans, by

type of modification,

which occurred during

the three months ended March 31, 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

418

350

Total

418

350

The

loan

modification

for

the

borrower

experiencing

financial

difficulty

March

31,

2026

included

a combination

principal and maturity modifications. There was

a principal reduction of $

thousand and a two-year extension of

the loan

maturity.

There were

existing loan modifications that subsequently

defaulted during the three months

ended March 31, 2026

and 2025.

Table of Contents

USCB FINANCIAL HOLDINGS, INC.

Notes to the Consolidated Financial Statements - Unaudited

USCB Financial Holdings, Inc.

Q1 2026 Form 10-Q

INCOME TAXES

The Company’s income tax expense is presented

in the following table for the periods indicated (in thousands):

Three Months Ended March 31,

2026

2025

Pre-tax income:

Domestic

11,686

10,098

Total pre-tax income

11,686

10,098

Current tax expense:

Federal

2,833

State

Total

current

2,916

Deferred tax expense:

Federal

(799)

1,914

State

218

526

Deferred income tax expense (benefit)

(581)

2,440

Total

income tax expense

2,335

2,440

The actual

income

tax

expense

for the

three

months

ended March

31,

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):

Three Months Ended March 31,

2026

2025

Amount

% Pre-tax

Income

Amount

% Pre-tax

Income

Computed tax at the statutory federal income tax rate

2,454

21.00%

2,120

21.00%

Increase (decrease) resulting from:

State income taxes, net of federal tax benefit

(1)

631

5.40%

439

4.34%

Bank owned life insurance income

(131)

(1.12%)

(119)

(1.18%)

Benefit from stock-based compensation

(166)

(1.42%)

Section 162(m) limitation

0.71%

Other adjustments, net

(536)

(4.59%)

Total

tax expense

2,335

19.98%

2,440

24.16%

(1) Taxes

in Florida made up the majority (greater than 50%) of the tax effect in this category.

Table of Contents

USCB FINANCIAL HOLDINGS, INC.

Notes to the Consolidated Financial Statements - Unaudited

USCB Financial Holdings, Inc.

Q1 2026 Form 10-Q

The Company’s deferred tax assets and deferred

tax liabilities as of the dates indicated were (in

thousands):

March 31, 2026

December 31, 2025

Deferred tax assets:

Net operating loss

618

1,039

Allowance for credit losses

6,891

6,463

Lease liability

1,256

1,399

Unrealized losses on available for sale securities

11,266

10,270

Equity compensation

878

973

Accruals

174

721

Cash flow hedge

(5)

Other, net

1,771

268

Deferred tax assets:

22,875

21,128

Deferred tax liabilities:

Deferred loan cost

(1,754)

(1,520)

Lease right of use asset

(1,256)

(1,399)

Deferred expenses

(194)

(154)

Depreciable property

(22)

(9)

Other, net

Deferred tax liabilities

(3,226)

(3,082)

Net deferred tax assets

19,649

18,046

The Company

has approximately

17.4

million of

state net

operating loss

carryforwards expiring

in various

amounts

between 2032 and 2036 and which are limited to offset,

to the extent permitted, future taxable earnings of the

Company.

In assessing the realizability of deferred tax assets, management 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 three months

ended March 31, 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,

interest or

penalties

were

recorded as a result of tax uncertainties.

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

credit,

commitments

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

USCB Financial Holdings, Inc.

Q1 2026 Form 10-Q

summary

the

amounts

the

Company's

financial

instruments

with

off-balance

sheet

risk

are

shown

below

March 31, 2026 and December 31, 2025 (in thousands):

March 31, 2026

December 31, 2025

Commitments to grant loans and unfunded lines of credit

179,642

161,606

Standby and commercial letters of credit

3,073

2,700

Total

182,715

164,306

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

credit

are

conditional

commitments

issued

the

Company

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.

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 March

31, 2026,

the Company

had

two

costless collar

hedges with

a notional

amount of

100

million that

were

designated as cash flow hedges of two three-month brokered CDs. The derivatives

are based on the USD SOFR overnight

index and

have a

weighted average

cap rate

4.50

% and

weighted average

floor rate

1.763

%, effectively

creating a

defined range of interest rate outcomes without requiring an upfront premium. The

costless collar hedges have an average

maturity of

1.29

years.

As of

December 31,

2025, the

Company

had

two

costless

collar hedges

with

a notional

amount of

100

million

that

were

designated

cash

flow

hedge

two

three-month

brokered

CDs.

The

derivatives

are

based

the

USD

SOFR

overnight

index and

have

a weighted

average cap

rate of

4.50

% and

weighted

average floor

rate

1.763

%, effectively

creating a defined range of interest rate outcomes without requiring an upfront

premium. The costless collar hedges had an

average maturity of

1.54

years.

As of

March 31, 2026,

the Company

had

one

interest rate

swap agreement

with a

notional aggregate

amount of

million that

was designated

as a

cash flow

hedge of

a certificate

of deposit.

Under the

agreement, the

Company pays

fixed rate

3.47

% and

receives a

variable rate

based on

the weighted

‑

average three

‑

months compounded

USD SOFR.

The swap has a remaining maturity of

0.12

years.

As of

December 31,

2025, the

Company had

one

interest rate

swap agreement

with a

notional aggregate

amount of

million that was designated

as cash flow hedge

of a certificate of deposit.

Under the agreement, the

Company pays a

fixed rate

3.47

% and

receives a

variable rate

based on

the weighted

‑

average three

‑

months compounded

USD SOFR.

The swap had a maturity of

0.42

years. The Company unwound

one

interest rate swap designated as a cash flow hedge of

certificate

deposit

with

notional

amount

million

during

the

quarter

ended

December

31,

2025.

The

decision

unwind

this

swap

was

driven by

changes

interest

rate

forecasts

and

asset-liability

management

strategies.

The

early

termination income to

unwind the fair value

swaps totaled $

thousand. The original

maturity of the cash

flow interest rate

swap 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

corresponding

recognition

other

comprehensive

income

(loss)

and

subsequently

reclassified

earnings

when

gains or losses are realized.

Table of Contents

USCB FINANCIAL HOLDINGS, INC.

Notes to the Consolidated Financial Statements - Unaudited

USCB Financial Holdings, Inc.

Q1 2026 Form 10-Q

Interest Rate Swaps

The Company enters into

interest rate swaps

with its loan

customers. The Company had

113

and

interest rate swaps

with

loan

customers

with

aggregate

notional

amount

370.1

million

and

310.8

million

March 31,

2026

and

December 31,

2025,

respectively.

March 31,

2026,

these

interest

rate

swaps

mature

between

2026

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

March 31, 2026:

Derivatives designated as cash flow hedges:

Interest rate swaps

125,000

Other assets/Accrued interest and

other liabilities

Derivatives not designated as hedging instruments:

Interest rate swaps related to customer loans

370,106

6,972

Other assets/Accrued interest and

other liabilities

8,837

December 31, 2025:

Derivatives designated as cash flow hedges:

Interest rate swaps

125,000

Other assets/Accrued interest and

other liabilities

Derivatives not designated as hedging instruments:

Interest rate swaps related to customer loans

310,761

5,769

Other assets/Accrued interest and

other liabilities

9,753

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

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.

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,

change in

valuation technique or

the use

of multiple

valuation techniques may

be appropriate.

In such

instances, determining

the

price

which

willing

market

participants

would

transact

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

Valuation

is based

on quoted

prices in

active markets

for identical

assets or

liabilities that

the reporting

entity has

the ability

to access

at the measurement

date. Level

1 assets

and liabilities

generally include

debt and

Table of Contents

USCB FINANCIAL HOLDINGS, INC.

Notes to the Consolidated Financial Statements - Unaudited

USCB Financial Holdings, Inc.

Q1 2026 Form 10-Q

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

Valuation

is based on inputs other

than quoted prices included

within Level 1 that are

observable for the

asset

liability,

either

directly

indirectly.

The

valuation

may

based

quoted

prices

for

similar

assets

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

Valuation

is based on

unobservable inputs that

are supported

by little or

no market activity

and that are

significant

the

fair

value

the

assets

liabilities.

Level

assets

and

liabilities

include

financial

instruments

whose value

is determined

using pricing

models, discounted

cash

flow

methodologies,

or similar

techniques,

well as instruments for which determination of fair value

requires significant management judgment or estimation.

financial

instrument's

categorization

within

the

valuation

hierarchy

based

upon

the

lowest

level

input

that

significant to the fair value measurement.

Items Measured at Fair Value

on a Recurring Basis

AFS investment securities:

When instruments are traded in

secondary markets and quoted market

prices do not exist

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:

The

fair

values

derivatives

are

measured

with

pricing

provided

third-party

participants

and

are

classified within Level 2 of the hierarchy.

The

following

table

represents

the

Company's

assets

and

liabilities

measured

fair

value

recurring

basis

March 31, 2026 and December 31, 2025 for each of the

fair value hierarchy levels (in thousands):

March 31, 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

11,598

14,144

Collateralized mortgage obligations

68,580

75,828

Mortgage-backed securities - residential

29,272

29,917

Mortgage-backed securities - commercial

149,035

168,108

Municipal securities

4,199

4,263

Bank subordinated debt securities

14,476

15,230

Total

277,160

307,490

Derivative assets

8,915

9,767

Total assets at fair value

286,075

317,257

Derivative liabilities

8,837

9,786

Total liabilities at fair value

8,837

9,786

Table of Contents

USCB FINANCIAL HOLDINGS, INC.

Notes to the Consolidated Financial Statements - Unaudited

USCB Financial Holdings, Inc.

Q1 2026 Form 10-Q

Fair Value Measurements

on a Nonrecurring Basis

At March 31, 2026 and

December 31, 2025, the

Company did

t have any 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 March 31, 2026 and December 31, 2025 (in

thousands):

Fair Value Hierarchy

Carrying

Amount

Level 1

Level 2

Level 3

Fair Value

Amount

March 31, 2026:

Financial Assets:

Cash and due from banks

6,598

Interest-bearing deposits in banks

72,365

Investment securities held to maturity, net

149,931

137,714

Loans held for investment, net

2,214,949

2,266,736

Accrued interest receivable

11,773

1,331

10,442

11,773

Financial Liabilities:

Non-interest bearing demand deposits

620,714

Savings and money market deposits

1,263,248

Interest-bearing demand deposits

57,444

Time deposits

552,174

551,253

FHLB advances

53,000

52,989

Subordinated notes, net

39,338

39,454

Accrued interest payable

2,436

December 31, 2025:

Financial Assets:

Cash and due from banks

6,027

Interest-bearing deposits in banks

32,450

Investment securities held to maturity, net

153,941

142,508

Loans held for investment, net

2,163,757

2,210,781

Accrued interest receivable

11,661

1,443

10,218

11,661

Financial Liabilities:

Non-interest bearing demand deposits

583,860

Savings and money market deposits

1,186,422

Interest-bearing demand deposits

46,989

Time deposits

527,809

527,575

FHLB advances

158,250

158,342

Subordinated notes, net

39,300

40,131

Accrued interest payable

3,984

Collateral Dependent Loans Measured for

Expected Credit Losses:

Fair values of collateral-dependent yacht

loans

and real estate loans

are based on recent

boat and real estate

appraisals less estimated costs of

sale, repossession, and/or

holding costs.

Appraisals

are made

by a

third

party,

and

its evaluation

may use

either a

comparative

sales, cost

and/or

income approach or a combination of methodologies.

The fair value of collateral dependent loans considered Level

3 in the fair value hierarchy was $

with

reserve as of

March 31, 2026 and $

2.6

million with

specific reserve as of December 31, 2025.

Table of Contents

USCB FINANCIAL HOLDINGS, INC.

Notes to the Consolidated Financial Statements - Unaudited

USCB Financial Holdings, Inc.

Q1 2026 Form 10-Q

STOCKHOLDERS’ EQUITY

Common Stock

During the three

months ended

March 31, 2026,

the Company repurchased

53,475

shares of

Class A common

stock

at a weighted

average cost

per share

of $

18.74

. The

aggregate purchase

price for

these transactions

was approximately

1.0

million,

including transaction

costs. These

repurchases

were made

pursuant

to the

Company’s

publicly

announced

repurchase programs.

As of

March 31,

2026,

474,834

shares remained

authorized

for repurchase

under the

Company’s

the 2024 share repurchase program. The Company’s

2022 share repurchase program has been fully utilized.

During the three months ended March 31,

2025, the Company repurchased

9,671

shares of Class A common stock

a weighted average cost

per share of $

17.91

. The aggregate purchase price

for these transactions was approximately $

174

thousand,

including

transaction

costs.

These

repurchases

were

made

pursuant

the

Company’s

publicly

announced

repurchase programs.

As of

March 31, 2025,

528,309

shares remained

authorized

for repurchase

under the

Company’s

two stock repurchase programs.

During

the

three

months

ended

March 31,

2026,

the

Company

issued

147,490

Class

common

stock

employees as restricted stock awards pursuant to the Company’s

2015 equity incentive plan.

During

the

three

months

ended

March 31,

2025,

the

Company

issued

124,424

Class

A common

stock

employees as restricted stock awards pursuant to the Company’s

2015 equity incentive plan.

The number

of shares

of the

Company’s

Class

A common

stock

issued

and

outstanding

as of

March 31,

2026 and

December 31, 2025 were

18,257,400

and

18,137,885

, 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

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

prohibit banks and bank holding companies

from paying dividends if they deem such

payment to be an unsafe or unsound

practice.

As of March 31, 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:

Three Months Ended March 31, 2026

Declaration Date

Record Date

Payment Date

Dividend Per Share

Dividend Amount

January 20, 2026

February 17, 2026

March 5, 2026

0.125

2.3

million

Three Months Ended March 31, 2025

Declaration Date

Record Date

Payment Date

Dividend Per Share

Dividend Amount

January 21, 2025

February 14, 2025

March 5, 2025

0.10

2.0

million

The

Company

and

the

Bank

exceeded

all

regulatory

capital

requirements

and

remained

above

“well-capitalized”

guidelines as of March 31, 2026 and December 31, 2025.

At March 31, 2026, the total risk-based capital ratio

for the Bank

was

13.96

The

Company

not

subject

regulatory

capital

ratios

imposed

Basel

III

bank

holding

companies

because the Company is deemed to be a small bank holding

company.

Table of Contents

USCB FINANCIAL HOLDINGS, INC.

Notes to the Consolidated Financial Statements - Unaudited

USCB Financial Holdings, Inc.

Q1 2026 Form 10-Q

See Note 11, Subsequent

Events, for information regarding dividends declared in April 2026.

EARNINGS PER SHARE

Earnings

per

(“EPS”)

for

common

stock

calculated

using

the

two-class

method

required

for

participating

securities.

Basic

EPS

calculated

dividing

net

income

available

common

shareholders

the

weighted-average

number of common shares outstanding for

the period, without consideration for common

stock equivalents. Diluted EPS is

computed by dividing

net income

available to common

shareholders by the

weighted-average number

of common shares

outstanding for

the period

and the

weighted-average number of

dilutive common stock

equivalents outstanding

for the

period

determined using the treasury-stock

method. For purposes of this

calculation, common stock equivalents

include common

stock options which are only included in the calculation

of diluted EPS when their effect is dilutive.

The following table reflects the calculation of net income

available to common shareholders for the three months ended

March 31, 2026 and 2025 (in thousands):

Three Months Ended March 31,

2026

2025

Net Income

9,351

7,658

Net income available to common shareholders

9,351

7,658

The following table reflects

the calculation of basic and

diluted earnings per common

share class for the

three months

ended March 31, 2026 and 2025 (in thousands, except

share amounts):

Three Months Ended March 31,

2026

2025

Class A

Basic EPS

Numerator:

Net income available to common shares

9,351

7,658

Denominator:

Weighted average shares outstanding

18,214,041

20,020,933

Earnings per share, basic

0.51

0.38

Diluted EPS

Numerator:

Net income available to common shares

9,351

7,658

Denominator:

Weighted average shares outstanding for basic EPS

18,214,041

20,020,933

Add: Dilutive effects of assumed exercises of stock

options

239,965

298,602

Weighted avg. shares including dilutive potential common

18,454,006

20,319,535

Earnings per share, diluted

0.51

0.38

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.

Table of Contents

USCB FINANCIAL HOLDINGS, INC.

Notes to the Consolidated Financial Statements - Unaudited

USCB Financial Holdings, Inc.

Q1 2026 Form 10-Q

10.

LOSS CONTINGENCIES

Loss contingencies,

including claims

and legal actions

may arise in

the ordinary

course of

business. In

the opinion

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

11.

SUBSEQUENT EVENTS

Dividends

On April

20, 2026, the

Company announced that

its Board

of Directors

declared its quarterly

cash dividend.

The dividend

is in the amount of $

0.125

per share of Class A common

stock and will be paid

on June 5, 2026, to stockholders

of record

as of the close of business on May 15, 2026.

Table of Contents

USCB Financial Holdings, Inc.

Q1 2026 Form 10-Q

Item 2.

Management's Discussion and Analysis of Financial Condition

and Results of Operations

The

following

discussion

and

analysis

designed

provide

better

understanding

the

consolidated

financial

condition and results

of operations of

the Company and

the Bank, its

wholly owned subsidiary,

as of

and for the

three months

ended March 31,

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

notes

included

the

Annual

Report

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

“we,”

“us,”

“our,”

and

“the

Company”

generally

refer

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

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:

•

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 allowance

for credit losses and deferred tax asset valuation allowance;

•

the efficiency and effectiveness of our

internal control procedures and processes;

•

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 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, including the enactment

of the One Big Beautiful Bill, and changes in accounting

principles, policies,

practices or

guidelines, including

the on-going

effects of

the Current

Expected Credit

Losses

(“CECL”) standard;

•

the lack of a

significantly diversified loan

portfolio and our concentration

in the South Florida

market, including the

risks

of geographic,

depositor,

and

industry concentrations,

including our

concentration

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;

•

the effects of potential new or increased tariffs

retaliatory tariffs, and trade restrictions;

•

the impacts of international hostilities and geopolitical events;

•

increased competition and its

effect on the pricing

of our products and services

as well as our 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 security breaches; and

Table of Contents

USCB Financial Holdings, Inc.

Q1 2026 Form 10-Q

•

other risks described in this Form 10-Q, the 2025 Form

10-K and other filings we make with the SEC.

All

forward-looking

statements

are

necessarily

only

estimates

future

results,

and

there

can

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 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

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

$9.4 million

or $0.51

per diluted

share of

common stock

for the

three

months

ended March 31,

2026 compared

to $7.7

million or

$0.38 per

diluted share

of common

stock for

the three

months ended

March 31, 2025.

In evaluating our financial

performance, the Company

considers the level of

and trends in net

interest income, the

net

interest

margin,

the

cost

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

March 31, 2026

compared

to at

or for

the

quarter ended

March 31,

2025 and

as of

December 31,

2025

and annualized

where appropriate:

•

Net interest

income before

provision for

credit losses

for the three

months ended

March 31, 2026

increased $2.9

million or 15.3% to $22.0 million from $19.1 million for the

quarter ended March 31, 2025.

•

Net interest margin (“NIM”) expanded to 3.27% for the three months ended March 31, 2026 compared to 3.10% for

the three months ended March 31, 2025.

•

Total assets

were $2.85

billion at

March 31, 2026,

representing an

increase of

$168.4 million

or 6.3%

from March 31,

2025 and an increase of $54.2 million or 7.9% annualized from

December 31, 2025.

•

Total loans

held for

investment (net

of deferred

cost/fees)

were $2.24

billion at

March 31, 2026,

representing

increase of $204.8 million or 10.1% from March 31, 2025 and an increase of $51.8 million or 9.6% annualized from

December 31, 2025.

•

Total

deposits

were

$2.49

billion

March 31,

2026,

representing

increase

$184.0

million

8.0%

from

March 31, 2025 and an increase of $148.5 million or

25.7% annualized from December 31, 2025.

•

Annualized return on average assets for the quarter

ended March 31, 2026 was 1.34% compared to

1.19% for the

quarter ended March 31, 2025.

•

Annualized return on average stockholders’ equity for the quarter ended March 31, 2026 was 17.07% compared to

14.15% for quarter ended March 31, 2025.

•

The ACL to total loans was 1.16% at March 31, 2026 and at December 31, 2025.

•

Non-performing loans to total loans was 0.16% at March

31, 2026 and 0.14% at December 31, 2025.

•

At March 31,

2026,

the

total risk

-based capital

ratios

for the

Company

and

the

Bank were

14.09%

and 13.

96%,

respectively.

•

Tangible book

value per

common share

(a non-GAAP

measure) was

$12.23 at

March 31, 2026,

representing an

increase of $1.00 or

8.9% annualized from

$11.23 at March

31, 2025. At March 31, 2026,

tangible book value

per

common share was

negatively affected by

($1.72) due to

an accumulated comprehensive

loss of $31.4

million. At

March 31, 2025, tangible book value per common share was negatively affected by ($2.05) due to an accumulated

comprehensive loss

of $41.1

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

USCB Financial Holdings, Inc.

Q1 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

Practices (“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.

prepare

consolidated

financial

statements

conformity

with

GAAP,

management

makes

estimates,

assumptions,

and

judgments based

on available

information. These

estimates, assumptions,

and judgments

affect the

amounts reported

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

the

consolidated

financial

statements.

particular,

management has

identified accounting

policies that,

due to

the estimates,

assumptions and

judgments inherent

in those

policies,

are

critical

understanding

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

methods

other

than

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

refer

them

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

evaluated

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):

March 31, 2026

December 31, 2025

Consolidated Balance Sheets:

Total

assets

2,845,735

2,791,540

Total

loans

(1)

2,241,051

2,189,257

Total

deposits

2,493,580

2,345,080

Total

stockholders' equity

223,246

217,183

(1)

Loan amounts include deferred fees/costs.

Table of Contents

USCB Financial Holdings, Inc.

Q1 2026 Form 10-Q

Three Months Ended March 31,

2026

2025

Consolidated Statements of Operations:

Net interest income before provision for credit losses

22,048

19,115

Total

non-interest income

4,150

3,716

Total

non-interest expense

13,711

12,052

Net income

9,351

7,658

Profitability:

Efficiency ratio

52.34%

52.79%

Net interest margin

3.27%

3.10%

The Company’s

results

operations

depend

substantially

the

levels

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 March 31, 2026 compared to the three

months ended March 31, 2025

Net income increased

$1.7 million to

$9.4 million for the

three months ended

March 31, 2026

from $7.7 million

for the

same period

in 2025. The

$1.7 million

or 22.1%

increase in

the net

income was

primarily driven

by higher

income from

larger loan portfolio combined with a reduction

on rates paid of interest-bearing liabilities

between periods. The increase in

net interest income was partially offset by an increase in

non-interest 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

interest-earning

assets,

including

loans,

investment

securities

and

other

short-term

investments.

Interest

expense

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

market

interest

rates

and

interest

rates

earn

interest-earning

assets

pay

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

USCB Financial Holdings, Inc.

Q1 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 March 31,

2026

2025

Average

(1)

Balance

Interest

Yield/Rate

(2)

Average

(1)

Balance

Interest

Yield/Rate

(2)

Assets

Interest-earning assets:

Loans

(3)

2,177,734

32,789

6.11%

1,986,856

30,245

6.17%

Investment securities

(4)

454,262

3,411

3.05%

436,935

3,024

2.81%

Other interest-earnings assets

105,457

832

3.20%

75,182

709

3.82%

Total interest-earning assets

2,737,453

37,032

5.49%

2,498,973

33,978

5.51%

Non-interest-earning assets

97,264

107,620

Total assets

2,834,717

2,606,593

Liabilities and stockholders' equity

Interest-bearing liabilities:

Interest-bearing demand deposits

52,099

310

2.41%

53,611

338

2.56%

Saving and money market deposits

1,256,418

8,133

2.63%

1,199,027

9,335

3.16%

Time deposits

533,766

4,700

3.57%

399,509

3,918

3.98%

Total interest-bearing deposits

1,842,283

13,143

2.89%

1,652,147

13,591

3.34%

FHLB advances

110,045

1,040

3.83%

138,944

1,272

3.71%

Subordinated notes

39,313

801

8.26%

Total interest-bearing liabilities

1,991,641

14,984

3.05%

1,791,091

14,863

3.37%

Non-interest-bearing demand deposits

584,784

563,040

Other non-interest-bearing liabilities

36,066

32,957

Total liabilities

2,612,491

2,387,088

Stockholders' equity

222,226

219,505

Total liabilities and stockholders' equity

2,834,717

2,606,593

Net interest income

22,048

19,115

Net interest spread

(5)

2.44%

2.14%

Net interest margin

(6)

3.27%

3.10%

(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 March 31, 2026 compared to the three months

ended March 31, 2025

Net interest income before the provision for

credit losses was $22.0 million for the

three months ended March 31, 2026,

an increase

of $2.9

million or

15.3%, from

$19.1 million

for the

same period

in 2025. This

growth was

primarily driven

higher income from a

larger loan portfolio

and a reduction in

the weighted average

rates paid on interest-bearing

liabilities

between periods.

The NIM

was

3.27%

for the

three months

ended

March 31,

2026 and

3.10%

for

the same

period

in 2025.

The NIM

expansion of 17 basis

points reflects primarily

the increase in the

loan portfolio average balance

along with a decrease

the weighted average interest rate paid on interest-bearing

liabilities, 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 debt securities portfolio, recent historical

and

projected

future

economic

conditions,

our

internal

assessment

the

credit

quality

the

loan

and

debt

securities

portfolios and net charge-offs.

Table of Contents

USCB Financial Holdings, Inc.

Q1 2026 Form 10-Q

Three months ended March 31, 2026 compared to the three months

ended March 31, 2025

The

provision

for

credit

losses

was

$801

thousand

for

the

three

months

ended

March 31,

2026

compared

$681

thousand for the same period in 2025. The increase in the provision

for credit losses was due to loan portfolio growth.

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 March 31,

2026

2025

Service fees

3,100

2,331

Gain on sale of securities available for sale, net

Gain on sale of loans held for sale, net

106

525

Other non-interest income

930

860

Total

non-interest income

4,150

3,716

Three months ended March 31, 2026 compared to the three months

ended March 31, 2025

Non-interest income for the

three months ended March

31, 2026 increased $434

thousand or 11.7%, compared to

the

same period in 2025. This increase

was primarily driven by $1.5 million increase in income

generated by the Company loan

swap program reported under service fees in the Consolidated

Statements of Operations.

Non-Interest Expense

The following table presents the components of non-interest

expense for the dates indicated (in thousands):

Three Months Ended March 31,

2026

2025

Salaries and employee benefits

8,570

7,636

Occupancy

1,316

1,284

Regulatory assessment and fees

484

421

Consulting and legal fees

561

193

Network and information technology services

560

505

Other operating

2,220

2,013

Total

non-interest expense

13,711

12,052

Three months ended March 31, 2026 compared to the three months ended

March 31, 2025

Non-interest expense

for the

three months

ended March

31, 2026

increased $1.7

million or

13.8%, compared

to the

same period in 2025.

The increase was primarily driven by

an increase of $934

thousand in salaries and employee

benefits,

consisting

$412

thousand

merit

increases

and

new

full-time

employee

salaries,

$342

thousand

increase

payroll taxes,

and $181

thousand

increase in

additional

stock-based

compensation

expense. In

addition, consulting

and

legal fees

increased $368

thousand,

primarily due

to model

validation-related consulting

expenses and

human resources

consulting

costs. Other

non-interest

expenses

increased

by $207

thousand,

driven by

a $60

thousand

increase

in FDIC

insurance expense and $183 thousand increase in promotional

expenses between periods.

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.

Table of Contents

USCB Financial Holdings, Inc.

Q1 2026 Form 10-Q

Three months ended March 31, 2026 compared to the three months ended

March 31, 2025

Income tax expense

for the three

months ended

March 31, 2026

was $2.3 million

as compared to

$2.4 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,

The effective

tax rate for the

three

months ended March 31, 2026 was 19.98% compared to 24.16%

for the same period in 2025.

For

further

discussion

income

taxes,

see

Note

“Income

Taxes”

the

unaudited

Consolidated

Financial

Statements in Item 1 of Part I of this Form 10-Q.

Analysis of Financial Condition

Total

assets at

March 31, 2026

were $2.85 billion,

an increase of

$54.2 million,

or 7.9% annualized,

over total assets

of $2.79 billion at December 31, 2025. Total

loans, net of deferred fees/costs, increased $51.8 million, or 9.6% annualized,

to $2.24

billion at

March 31, 2026

compared

to $2.19

billion

at December

31, 2025.

Total

deposits

increased

by $148.5

million, or 25.7% annualized, to $2.49 billion at March

31, 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

the

portfolio

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

reviewed

least

annually

frequently

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

the

Asset-Liability

Committee

(“ALCO”).

The

portfolio

investments

also

can

used

modify

the

duration

the

balance

sheet.

The

allocation

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

the

optionality

embedded

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

macro-economic

conditions.

result

this

evaluation,

the

Company

concluded

that

allowance

was

required on AFS securities as of March 31, 2026.

quarter

end,

HTM

securities

included

$141.9

million

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.

The remaining portion

of the HTM

portfolio is made

up of $8.0

million in investment

grade corporate

bonds that

mature in

May of

Using

the PD/LGD

methodology and

considering the

short remaining

maturity of

the HTM

securities exposed to

non

‑

government credit risk,

the Company

estimated an

allowance for credit

losses

(“ACL”) of

$0 as

of March 31,

book value

for debt

securities classified

as HTM

represents amortized

cost less

ACL.

Aggregate

AFS

and

HTM

investment

securities

decreased

$34.3 million

$427.1 million

March 31,

2026

from

$461.4 million at December 31, 2025. The decrease was primarily attributable to $38.2 million

of AFS securities sold during

the quarter ended March 31, 2026.

Table of Contents

USCB Financial Holdings, Inc.

Q1 2026 Form 10-Q

As of

March 31, 2026, investment

securities with a

market value of

$55.1 million were pledged

to secure public

deposits.

The investment portfolio does not contain any tax-exempt

securities.

The following table

presents the amortized

cost and fair

value of investment

securities for

the dates indicated

(dollars

in thousands):

March 31, 2026

December 31, 2025

Available-for-sale:

Amortized

Cost

Fair Value

Amortized

Cost

Fair Value

U.S. Government Agency

12,568

11,598

15,169

14,144

Collateralized mortgage obligations

86,307

68,580

92,871

75,828

Mortgage-backed securities - residential

35,364

29,272

35,865

29,917

Mortgage-backed securities - commercial

156,895

149,035

174,622

168,108

Municipal securities

5,194

4,199

5,196

4,263

Bank subordinated debt securities

14,570

14,476

15,284

15,230

310,898

277,160

339,007

307,490

Held-to-maturity:

U.S. Government Agency

40,748

37,507

41,158

37,970

Collateralized mortgage obligations

50,175

45,071

51,431

46,786

Mortgage-backed securities - residential

35,963

33,263

37,221

34,718

Mortgage-backed securities - commercial

15,041

13,878

15,088

14,051

Corporate bonds

8,004

7,995

9,045

8,983

149,931

137,714

153,943

142,508

Allowance for credit losses - securities held-to-maturity

(2)

Securities held-to maturity, net of allowance for credit losses

149,931

153,941

The following

table shows

the weighted

average yields,

categorized by

contractual maturity,

for investment

securities

as of March 31, 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

12,568

2.73%

12,568

2.73%

Collateralized mortgage obligations

86,307

1.58%

86,307

1.58%

MBS - residential

35,365

2.43%

35,364

2.43%

MBS - commercial

156,895

4.08%

156,895

4.08%

Municipal securities

5,194

1.87%

5,194

1.87%

Bank subordinated debt securities

2,000

7.86%

12,570

5.74%

14,570

6.03%

2,000

7.86%

17,764

4.61%

291,135

3.08%

310,898

3.20%

Held-to-maturity:

U.S. Government Agency

7,982

1.02%

18,034

1.27%

1,478

2.39%

13,254

2.10%

40,748

1.53%

Collateralized mortgage obligations

50,175

1.66%

50,175

1.66%

MBS - residential

2.96%

8,918

1.64%

27,015

2.32%

35,963

2.15%

MBS - commercial

3,038

1.63%

12,003

2.56%

15,041

2.37%

Corporate bonds

8,004

2.97%

8,004

2.97%

16,016

2.00%

29,990

1.42%

1,478

2.39%

102,447

2.00%

149,931

1.88%

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

USCB Financial Holdings, Inc.

Q1 2026 Form 10-Q

The following table shows the loan portfolio composition

as of the dates indicated (in thousands):

March 31, 2026

December 31, 2025

Total

Percent of

Total

Percent of

Total

Residential real estate

346,917

15.5

307,692

14.1

Commercial real estate

1,259,642

56.4

1,244,835

57.0

Commercial and industrial

291,333

13.0

295,548

13.5

Correspondent banks

128,722

5.8

127,968

5.9

Consumer and other

207,794

9.3

207,215

9.5

Total

gross loans

2,234,408

100.0

2,183,258

100.0

Plus: Deferred fees/costs

6,643

5,999

Total

loans net of deferred fees/costs

2,241,051

2,189,257

Less: Allowance for credit losses

26,102

25,500

Total

net loans

2,214,949

2,163,757

Total

loans,

net of

deferred

fees/costs,

increased

by $51.8

million,

or 9.6%

annualized

to $2.24

billion, at

March 31,

2026 compared to December 31, 2025. The residential 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 56.4%

of the

total gross

loan portfolio

as of

March 31, 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

our

senior

management

team

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 March 31,

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

7,403

69,792

61,936

207,786

346,917

Commercial real estate

62,790

573,987

617,411

5,454

1,259,642

Commercial and industrial

11,107

117,619

119,110

43,497

291,333

Correspondent banks

128,722

Consumer and other

4,096

1,267

22,625

179,806

207,794

Total

gross loans

214,118

762,665

821,082

436,543

2,234,408

Interest rate sensitivity:

Fixed interest rates

175,825

197,208

145,518

306,009

824,560

Floating or adjustable rates

38,293

565,457

675,564

130,534

1,409,848

Total

gross loans

214,118

762,665

821,082

436,543

2,234,408

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

March 31, 2026,

approximately 63.1%

of the

loan portfolio

has adjustable/variable

rates and

36.9% of

the loan

portfolio

has

fixed

rates.

The

adjustable/variable

rate

loans

re-price

different

benchmarks

and

tenors

and

different

periods of time. By contractual characteristics, there are no

material concentrations on anniversary repricing.

Table of Contents

USCB Financial Holdings, Inc.

Q1 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

– Loans classified as special mention have a potential weakness

that deserves management’s

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

– Loans classified as doubtful have all the weaknesses inherent

in those classified at substandard, with

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):

March 31, 2026

Pass

Special Mention

Substandard

Doubtful

Total

Residential real estate

343,468

488

2,961

346,917

Commercial real estate

1,241,104

16,153

2,385

1,259,642

Commercial and industrial

289,041

805

1,487

291,333

Correspondent banks

128,722

Consumer and other

207,794

2,210,129

17,446

6,833

2,234,408

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

Consumer and other

207,215

2,163,451

13,436

6,371

2,183,258

Table of Contents

USCB Financial Holdings, Inc.

Q1 2026 Form 10-Q

Non-Performing Assets

The following table presents non-performing assets as

of the dates shown (in thousands,

except ratios):

March 31, 2026

December 31, 2025

Non-accrual loans

3,640

3,138

Loans past due over 90 days and still accruing

Total

non-performing loans

3,640

3,138

Other real estate owned

Total

non-performing assets

3,640

3,138

Asset quality ratios:

Allowance for credit losses to total loans

1.16%

Allowance for credit losses to non-performing loans

717%

813%

Non-performing loans to total loans

0.16%

0.14%

Non-performing

assets

include

all

loans

categorized

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

the

full

contractual

balance

unlikely,

the

loan

placed

non-accrual

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

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

accrual

status.

Restoring

loan

accrual

status

possible

when

the

borrower

resumes

payment

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

loan

concession

borrower

experiencing

financial

difficulties.

This

determination

performed

during

the

annual

review

process

whenever

problems

surface

regarding

the

borrower’s

ability

repay

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

loans

represents

amount

that,

management's

evaluation,

adequate

provide

coverage

for

all

expected future credit losses on outstanding loans. Additionally,

qualitative adjustments are made to the ACL when, based

management’s

judgment,

there

are

factors

impacting

the

allowance

estimate

not

considered

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

USCB Financial Holdings, Inc.

Q1 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 March 31, 2026

Beginning balance

5,908

9,476

4,814

1,015

4,287

25,500

Provision for credit losses

(1)

(644)

456

512

271

598

Recoveries

Charge-offs

(6)

Ending Balance

5,270

9,932

5,330

1,018

4,552

26,102

Average loans

304,162

1,267,713

235,352

128,849

241,658

2,177,734

Net charge-offs (recoveries) to average

loans

(2)

(0.01)%

0.01%

(0.00)%

(1) Provision for credit losses excludes a $205 thousand provision due to unfunded commitments included in accrued interest and

other liabilities and a $2 thousand release related to investment securities held to maturity.

(2) Annualized.

Residential

Real Estate

Commercial

Real Estate

Commercial

and

Industrial

Correspondent

Banks

Consumer

and Other

Total

Three Months Ended March 31, 2025

Beginning balance

5,121

8,788

4,633

654

4,874

24,070

Provision for credit losses

(1)

(12)

409

(204)

163

316

672

Recoveries

Charge-offs

(13)

Ending Balance

5,115

9,197

4,434

817

5,177

24,740

Average loans

301,230

1,142,985

257,241

87,214

198,186

1,986,856

Net charge-offs (recoveries) to average

loans

(2)

(0.01)%

0.03%

0.00%

(1) Provision for credit losses excludes a $10 thousand provision due to unfunded commitments included in accrued interest and other

liabilities and a $1 thousand release related to investment securities held to maturity.

(2) Annualized.

Table of Contents

USCB Financial Holdings, Inc.

Q1 2026 Form 10-Q

The

Federal

Open

Market

Committee

(“FOMC”)

economic

forecasts

March 31,

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 March 31,

2026, for every 100 basis points increase in the HPI, the

forecast

reduces

reserves

approximately

$239

thousand

and

about

basis

points

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 March 31, 2026, the Company stress tested

two qualitative factors within the non

‑

owner

‑

occupied subsegment of

the

commercial

real

estate

loan portfolio,

represents

the

largest

segment

the

Company’s

portfolio.

The

analysis

evaluated

the

impact

changing

the

qualitative

factors

from

risk

maximum

loss

assess

the

sensitivity

the

allowance for credit losses (“ACL”). This

stress resulted in a hypothetical increase

of $6.7 million, or 25.7%,

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.

Bank-Owned Life Insurance

As of March 31, 2026, the combined cash surrender value of all bank-owned life insurance (“BOLI”) policies was

$59.9

million.

Changes

cash

surrender

value

are

recorded

other

non-interest

income

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 March 31,

2026

2025

Average Balance

Average Rate

Paid

Average Balance

Average Rate

Paid

Non-interest bearing demand deposits

584,784

0.00%

563,040

0.00%

Interest-bearing demand deposits

52,099

2.41%

53,611

2.56%

Saving and money market deposits

1,256,418

2.63%

1,199,027

3.16%

Time deposits

533,766

3.57%

399,509

3.98%

Total

2,427,067

2.20%

2,215,187

2.49%

Table of Contents

USCB Financial Holdings, Inc.

Q1 2026 Form 10-Q

The Company has a

granular deposit portfolio

with outstanding balances

comprised of 55.7% in

commercial deposits,

26.9% in

personal

deposits,

8.9% in

public funds

(which are

partially collateralized)

and 8.6%

in brokered

deposits. The

brokered deposits balance at March 31, 2026 was $215.0

million and $256.8 million at December 31, 2025.

As of March 31, 2026, the Company has approximately

21 thousand deposit accounts with the majority

which were

personal accounts, approximately

12 thousand or 59.6%.

The estimated average account

size in our deposit

portfolio was

approximately $120 thousand as of March 31, 2026.

The

amount

uninsured

deposits

are

estimated

based

the

FDIC

deposit

insurance

limit

$250

thousand

per

account holder for all deposit accounts at the Company.

The total estimated percentage of uninsured deposits

was 54% at

March 31,

2026

and

51%

December 31,

2025.

The

Company

offers

Insured

Cash

Sweep

(“ICS”)

and

Certificate

Deposit Account

Registry

Service

(“CDARS”)

deposit

products

fully

insure

our

clients.

The

deposit

balance

ICS/CDARS was $186.5 million at March 31, 2026 and was

$183.2 million at December 31, 2025.

The following table shows scheduled maturities of uninsured

time deposits as of March 31, 2026 (in thousands):

March 31, 2026

Three months or less

24,318

Over three through six months

55,400

Over six through twelve months

16,536

Over twelve months

101,211

197,465

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 March 31, 2026, escrow balances totaled $15.4

million compared to $8.1 million at December 31, 2025.

The

increase reflects the normal growth in escrow accounts

pending tax and insurance payments.

Borrowings

FHLB Advances

member

the

FHLB

Atlanta,

are

eligible

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 March 31, 2026, we had

$11.0 million of fixed-rate advances and $42.0 million of daily-rate advances outstanding

with

the

FHLB,

with

weighted

average

interest

rates

3.76%

and

3.88%,

maturing

January

2028

and

May

2026,

respectively, as detailed

in the table below.

The following table presents the FHLB advances as of

March 31, 2026 (in thousands):

March 31, 2026

Interest Rate

Type of Rate

Maturity Date

Amount

3.76%

Fixed

January 24, 2028

11,000

3.88%

Fixed

May 22, 2026

42,000

53,000

The

Company

has

also

established

Federal

Funds

lines

credit

with

our

upstream

correspondent

banks

and

the

Federal

Reserve

Bank

Atlanta

Discount

Window

manage

temporary

fluctuations

our

daily

cash

balances.

March 31, 2026, there were no outstanding balances with

any of these additional liquidity sources.

Table of Contents

USCB Financial Holdings, Inc.

Q1 2026 Form 10-Q

Subordinated Notes

August

14,

2025,

the

Company

entered

into

Subordinated

Note

Purchase

Agreement

with

certain

qualified

institutional

buyers

pursuant

which

the

Company

sold

and

issued

$40.0

million

aggregate

principal

amount

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 $39.3

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

the

Company

private

placement

transaction

reliance

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 March 31,

2026 was

$957

thousand and

at December 31,

2025 was

$752 thousand.

The increase

was primarily driven by an increase in unfunded commitments.

Since commitments associated with letters of

credit and commitments to extend

credit may expire unused, the

amounts

shown

not

necessarily

reflect

actual

future

cash

funding

requirements.

The

following

table

presents

lending

commitments outstanding as of the dates indicated (in thousands

March 31, 2026

December 31, 2025

Commitments to grant loans and unfunded lines of credit

179,642

161,606

Standby and commercial letters of credit

3,073

2,700

Total

182,715

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

the

contract,

for

specific

purpose.

Commitments

generally

have

variable

interest

rates,

fixed

expiration

dates or

other

termination

clauses

and

may require

payment

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.

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

senior

management

and

our

Board

make

the

asset

and

liability

management

committee,

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

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.

Table of Contents

USCB Financial Holdings, Inc.

Q1 2026 Form 10-Q

When assessing the

scope of IRR

exposure and impact

on the

consolidated balance sheet,

cash flows and

consolidated

statement

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

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

current

exposures

and

assume

constant

balance

sheet

with

new

growth.

Dynamic simulation

is also

utilized to

have a

more comprehensive

assessment

on IRR.

This simulation

relies on,

and in

assumptions regarding

changes in

existing lines

of business,

new business,

management strategies

and client

expected

behavior.

have

complete

picture

IRR,

the

Company

also

evaluates

the

economic

value

equity

(“EVE”).

This

assessment

allows

measure

the

degree

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.

Market and Interest Rate Risk Management

According to

our ALCO

model, As

of March

31, 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

both models transition toward

an asset

‑

sensitive posture, reflecting projected

balance

‑

sheet growth, continued variable

‑

rate

loan

production,

and

changes

balance

‑

sheet

mix

over

time.

This

progression

consistent

with

management’s

forward

‑

looking assumptions embedded in the dynamic model.

Management’s

interest

rate

positioning

reflects

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.

Modeled NII and Economic Value of Equity (EVE) outcomes remain well within ALCO policy limits across all rate shock

scenarios. 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

not

incorporate

potential

management

actions

response

changes

market

conditions

customer

behavior.

EVE sensitivity remains compliant with policy guidelines, with greater volatility observed in rising

‑

rate scenarios, driven

asset

and

liability

convexity.

higher

‑

rate

environments,

the

value

longer

‑

term

assets

declines

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.

The improvement in the Bank’s

IRR profile was driven primarily by a

reduction in asset duration, while liability

duration

remained

relatively

stable.

Increased

variable

‑

rate

loan

production,

higher

prepayment

activity,

and

targeted

portfolio

repositioning contributed to a shorter effective

asset duration and reduced optionality risk.

Overall,

the

Bank

remains

well

positioned

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,

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.

Table of Contents

USCB Financial Holdings, Inc.

Q1 2026 Form 10-Q

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

meet

them,

depend

significantly

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

unexpected

impact

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

consumer

and

commercial

relationships,

which

management

believes

enhances

funding

stability

and

mitigates

reliance

rate

sensitive

wholesale

funding

sources.

Due

its

critical

importance

the

viability

the

Company,

liquidity

risk

management

integrated into our risk management processes, Contingency

Funding Plan and ALM policy.

Critical elements of our liquidity

risk management include: effective corporate governance consisting of

oversight by the

Board and

ALCO, and

active involvement

of senior

management; appropriate

strategies, policies,

procedures,

and limits

used

identify

and

mitigate

liquidity

risk;

comprehensive

liquidity

risk

measurement

and

monitoring

systems

(including

assessments

the

current

and

prospective

cash

flows

sources

and

uses

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

determine

the

adequacy

the

institution’s

liquidity risk management process.

expect

funds

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.

March

31,

2026,

the

Company

had

$336

million

available

liquidity

balance

sheet,

including

$261

million

unpledged securities

(excluding

Unencumbered

HTM securities)

available to

use as

collateral

and

$79 million

in excess

cash. The Company had an

additional $457 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

USCB Financial Holdings, Inc.

Q1 2026 Form 10-Q

Capital Adequacy

As of

March 31, 2026,

the Bank

was well

capitalized

under the

FDIC’s

prompt corrective

action framework.

We also

follow the capital conservation buffer framework, and as of March 31, 2026, we exceeded the capital conversation buffer

all capital

ratios,

according

our actual

ratios.

The

following

table

presents

the

capital

ratios

for

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

March 31, 2026

Total

risk-based capital

309,408

13.96

177,286

8.00

221,607

10.00

Tier 1 risk-based capital

282,348

12.74

132,964

6.00

177,286

8.00

Common equity tier 1 capital

282,348

12.74

99,723

4.50

144,045

6.50

Leverage ratio

282,348

9.88

114,333

4.00

142,917

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

The Company is

not subject to

regulatory capital ratios

imposed by Basel

III on bank

holding companies because

the

Company is deemed to be a small bank holding company.

Impact of Inflation

Our

Consolidated

Financial

Statements

and

notes

have

been

prepared

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

USCB Financial Holdings, Inc.

Q1 2026 Form 10-Q

Reconciliation and Management Explanation of Non

-GAAP Financial Measures

Management

has

included

these

non-GAAP

measures

because

believes

these

measures

may

provide

useful

supplemental information

for evaluating

the Company’s

underlying performance

trends. Further,

management uses

these

measures

managing

and

evaluating

the

Company’s

business

and

intends

refer

them

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

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

3/31/2026

12/31/2025

9/30/2025

6/30/2025

3/31/2025

Pre-tax pre-provision ("PTPP") income:

(1)

Net income

9,351

1,363

8,939

8,140

7,658

Plus: Income tax expense

2,335

1,911

2,866

2,599

2,440

Plus: Provision for credit losses

801

480

105

1,031

681

PTPP income

12,487

3,754

11,910

11,770

10,779

PTPP return on average assets:

(1)

PTPP income

12,487

3,754

11,910

11,770

10,779

Average assets

2,834,717

2,799,863

2,798,115

2,677,198

2,606,593

PTPP return on average assets

(2)

1.79%

0.53%

1.69%

1.76%

1.68%

Operating net income:

(1)

Net income

9,351

1,363

8,939

8,140

7,658

Less: Net gains (losses) on sale of securities

(7,498)

(28)

Less: Tax effect on sale of securities

(4)

1,900

Plus: Tax (benefit) liability expense from prior periods

(619)

(3)

1,096

(4)

Operating net income

8,722

8,057

8,960

8,140

7,658

Operating return on average assets:

(1)

Operating net income

8,722

8,057

8,960

8,140

7,658

Average assets

2,834,717

2,799,863

2,798,115

2,677,198

2,606,593

Operating return on average assets

(2)

1.25%

1.14%

1.27%

1.22%

1.19%

Operating return on average equity:

(1)

Operating net income

8,722

8,057

8,960

8,140

7,658

Average equity

222,226

212,393

225,316

228,492

219,505

Operating return on average equity

(2)

15.92%

15.05%

15.78%

14.29%

14.15%

Operating Revenue:

(1)

Net interest income

22,048

22,207

21,274

21,034

19,115

Plus: Non-interest income

4,150

(4,178)

3,684

3,370

3,716

Less: Net gains (losses) on sale of

securities

(7,498)

(28)

Operating revenue

26,184

25,527

24,986

24,404

22,831

Operating Efficiency Ratio:

(1)

Total non-interest expense

13,711

14,275

13,048

12,634

12,052

Operating revenue

26,184

25,527

24,986

24,404

22,831

Operating efficiency ratio

52.36%

55.92%

52.22%

51.77%

52.79%

(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

USCB Financial Holdings, Inc.

Q1 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

3/31/2026

12/31/2025

9/30/2025

6/30/2025

3/31/2025

Tangible book value per common share (at period-end):

(1)

Total stockholders' equity

223,246

217,183

209,095

231,583

225,088

Less: Intangible assets

Tangible stockholders' equity

(2)

223,246

217,183

209,095

231,583

225,088

Total shares issued and outstanding (at period-end):

Total common shares issued and outstanding

18,257,400

18,137,885

18,107,385

20,078,385

20,048,385

Tangible book value per common share

(3)

12.23

11.97

11.55

11.53

11.23

Operating diluted net income per common share:

(1)

Operating net income

8,722

8,057

8,960

8,140

7,658

Total weighted average diluted shares of common stock

18,454,006

18,348,725

19,755,820

20,295,794

20,319,535

Operating diluted net income per common share:

0.47

0.44

0.45

0.40

0.38

Tangible Common Equity/Tangible Assets

(1)

Tangible stockholders' equity

223,246

217,183

209,095

231,583

225,088

Tangible total assets

(2)

2,845,735

2,791,540

2,767,945

2,719,474

2,677,382

Tangible Common Equity/Tangible

Assets

7.84%

7.78%

7.55%

8.52%

8.41%

(1)

The Company believes these non-GAAP measurements are

key indicators of the ongoing earnings power

of the Company.

(2)

Since the Company has no intangible assets,

tangible stockholders’ equity and tangible total

assets are the same amounts as stockholders’ equity

and total assets, respectively, as calculated under GAAP.

(3)

Excludes the dilutive effect, if any, of shares of common stock issuable upon exercise

of outstanding stock options.

Table of Contents

USCB Financial Holdings, Inc.

Q1 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

Rules

13a-15(e)

and

15d-15(e)

under

the

Securities

Exchange

Act

1934

(“Exchange Act”)) as

of March 31, 2026.

Based on that

evaluation, management believes

that, as of the

end of the period

covered

this

Form

10-Q,

the

Company's

disclosure

controls

and

procedures

were

effective

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

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

USCB Financial Holdings, Inc.

Q1 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

the

ordinary

course

business.

These

claims

and

litigation

may

include,

among

other

things,

allegations

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.

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

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 t this 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.

for the three months ended March 31, 2026 were as

follows:

Total

Number of

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

January 1 - 31, 2026

30,889

19.17

30,889

497,420

February 1 - 28, 2026

497,420

March 1 - 31, 2026

22,586

18.12

22,586

474,834

Total

53,475

18.73

53,475

(1) As of March 31, 2026 there were 474,834

number of 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 March 31, 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)

Not applicable

(b)

Not applicable

Item 4.

Mine Safety Disclosures

Not applicable.

Item 5. Other Information

(a)

Not applicable

(b)

Not applicable

Table of Contents

USCB Financial Holdings, Inc.

Q1 2026 Form 10-Q

(c)

During the three months ended

March 31, 2026, none of the

Company’s directors or

Section 16 reporting persons

adopted

terminated

any

Rule

10b5-1

trading

arrangement

non-Rule

10b5-1

trading

arrangement

(as

such

terms are defined in Item 408 of the SEC’s Regulation

S-K).

Table of Contents

USCB Financial Holdings, Inc.

Q1 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 September 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, 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, 2024, 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).

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

March 31,

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

USCB Financial Holdings, Inc.

Q1 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

May 8, 2026

Luis de la Aguilera

(Principal Executive Officer)

/s/ Robert Anderson

Executive Vice President and Chief Financial

Officer

May 8, 2026

Robert Anderson

(Principal Financial Officer and Principal

Accounting Officer)

exhibit311

Exhibit 31.1

Certification of Chief Executive Officer

Pursuant to Section 302 of the Sarbanes-Oxley Act

of 2002

I, Luis de la Aguilera, certify that:

I have reviewed this Quarterly Report on Form

10-Q of USCB Financial Holdings, Inc.;

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact

necessary

make

the

statements

made,

light

the

circumstances

under

which

such

statements

were

made,

not

misleading with respect to the period covered by this report;

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all

material respects

the financial

condition, results

of operations

and cash

flows of

the registrant

as of,

and for,

the periods

presented in this report;

The

registrant’s

other

certifying

officer

and

are

responsible

for

establishing

and

maintaining

disclosure

controls

and

procedures (as

defined in

Exchange Act

Rules 13a-15(e)

and 15d-15(e))

and internal

control over

financial reporting

(as

defined in Exchange

Act Rules 13a-15(f) and 15d-15(f)) for the registrant and

have:

designed

such

disclosure

controls

and

procedures,

caused

such

disclosure

controls

and

procedures

designed

under

our

supervision,

ensure

that

material

information

relating

the

registrant,

including

its

consolidated subsidiaries, is

made known

to us by

others within those

entities, particularly during

the period in

which

this report is being prepared;

designed such internal control over financial reporting, or caused such

internal control over financial reporting to be

designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and

the

preparation

financial

statements

for

external

purposes

accordance

with

generally

accepted

accounting

principles;

evaluated the effectiveness

of the registrant’s

disclosure controls and

procedures and presented

in this report our

conclusions about the effectiveness of the

disclosure controls and procedures, as of the

end of the period covered

by this report based on such evaluation; and

disclosed in this

report any

change in the

registrant’s internal

control over

financial reporting

that occurred

during

the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an Annual Report) that

has

materially

affected,

reasonably

likely

materially

affect,

the

registrant’s

internal

control

over

financial

reporting; and

The registrant’s

other certifying

officer

and I

have disclosed,

based on

our most

recent evaluation

of internal

control over

financial

reporting,

the

registrant’s

auditors

and

the

audit

committee

the

registrant’s

board

directors

(or

persons

performing the equivalent functions):

All

significant

deficiencies

and

material

weaknesses

the

design

operation

internal

control

over

financial

reporting which are

reasonably likely

to adversely affect

the registrant’s ability

to record, process,

summarize and

report financial information; and

Any fraud, whether or not material,

that involves management or other employees who

have a significant role in

the

registrant’s internal control over financial reporting.

/s/ Luis de la Aguilera

Luis de la Aguilera

Chairman, President and Chief Executive Officer

Date: May 8, 2026

exhibit312

Exhibit 31.2

Certification of Chief Financial Officer

Pursuant to Section 302 of the Sarbanes-Oxley Act

of 2002

I, Robert Anderson, certify that:

I have reviewed this Quarterly Report on Form 10-Q of

USCB Financial Holdings, Inc.;

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact

necessary

make

the

statements

made,

light

the

circumstances

under

which

such

statements

were

made,

not

misleading with respect to the period covered by this report;

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all

material respects

the financial

condition, results

of operations

and cash

flows of

the registrant

as of,

and for,

the periods

presented in this report;

The

registrant’s

other

certifying

officer

and

are

responsible

for

establishing

and

maintaining

disclosure

controls

and

procedures (as

defined in

Exchange Act

Rules 13a-15(e)

and 15d-15(e))

and internal

control over

financial reporting

(as

defined in Exchange Act Rules 13a-15(f) and 15d-15(f))

for the registrant and have:

designed

such

disclosure

controls

and

procedures,

caused

such

disclosure

controls

and

procedures

designed

under

our

supervision,

ensure

that

material

information

relating

the

registrant,

including

its

consolidated subsidiaries, is

made known

to us by

others within those

entities, particularly during

the period in

which

this report is being prepared;

designed such internal control over financial reporting, or caused such

internal control over financial reporting to be

designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and

the

preparation

financial

statements

for

external

purposes

accordance

with

generally

accepted

accounting

principles;

evaluated the effectiveness

of the registrant’s

disclosure controls and

procedures and presented

in this report our

conclusions about the effectiveness of the

disclosure controls and procedures, as of the

end of the period covered

by this report based on such evaluation; and

disclosed in this

report any

change in the

registrant’s internal

control over

financial reporting

that occurred

during

the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an Annual Report) that

has

materially

affected,

reasonably

likely

materially

affect,

the

registrant’s

internal

control

over

financial

reporting; and

The registrant’s

other certifying

officer

and I

have disclosed,

based on

our most

recent evaluation

of internal

control over

financial

reporting,

the

registrant’s

auditors

and

the

audit

committee

the

registrant’s

board

directors

(or

persons

performing the equivalent functions):

All

significant

deficiencies

and

material

weaknesses

the

design

operation

internal

control

over

financial

reporting which are

reasonably likely

to adversely affect

the registrant’s ability

to record, process,

summarize and

report financial information; and

Any fraud, whether or not material, that involves

management or other employees who have a significant role

in the

registrant’s internal control over financial reporting.

/s/ Robert Anderson

Robert Anderson

Chief Financial Officer

Date: May 8, 2026

exhibit321

Exhibit 32.1

Certification of Chief Executive Officer Pursuant to

18 U.S.C. Section 1350

as Adopted Pursuant to Section 906 of the Sarbanes

-Oxley Act of 2002

In connection with the Quarterly

Report of USCB Financial Holdings, Inc. (the

“Company”) on Form 10-Q for the

quarter

ended March 31, 2026, as filed with

the Securities and Exchange Commission

on the date hereof (the “Report”),

I, Luis de

la Aguilera, as President and

Chief Executive Officer of

the Company,

certify,

to the best of my knowledge,

pursuant to 18

U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes

-Oxley Act of 2002, that:

The

Report

fully

complies

with

the

requirements

Section 13(a) or

15(d),

applicable,

the

Securities

Exchange Act of 1934; and

The

information

contained

the

Report

fairly

presents,

all

material

respects,

the

financial

condition

and

results of operations of the Company.

/s/ Luis de la Aguilera

Luis de la Aguilera

Chairman, President and Chief Executive Officer

Date: May 8, 2026

exhibit322

Exhibit 32.2

Certification of Chief Financial Officer Pursuant to

18 U.S.C. Section 1350

as Adopted Pursuant to Section 906 of the Sarbanes

-Oxley Act of 2002

In connection with the Quarterly

Report of USCB Financial Holdings, Inc. (the

“Company”) on Form 10-Q for the

quarter

ended March 31, 2026,

as filed with the

Securities and Exchange

Commission on the

date hereof (the “Report”),

I, Robert

Anderson,

as Chief Financial Officer of the Company, certify, to the best of my knowledge, pursuant to 18 U.S.C. §1350, as

adopted pursuant to Section 906 of the Sarbanes-Oxley

Act of 2002, that:

The

Report

fully

complies

with

the

requirements

Section 13(a) or

15(d),

applicable,

the

Securities

Exchange Act of 1934; and

The

information

contained

the

Report

fairly

presents,

all

material

respects,

the

financial

condition

and

results of operations of the Company.

/s/ Robert Anderson

Robert Anderson

Chief Financial Officer

Date: May 8, 2026