USCB FINANCIAL HOLDINGS, INC.

Cash flows from operating activities:

$

26,100

$

24,674

Adjustments to reconcile net income to net

cash provided by operating activities:

2,297

3,157

Depreciation and amortization

Accretion of premiums on securities, net

(1,540)

(521)

Amortization of deferred loan fees, net

1,020

3,005

2,130

Loss (gain) on sale of available for sale securities

7,526

(14)

Gain on sale of loans held for sale

(1,001)

(747)

Proceeds from the sale of loans held for

sale

13,810

9,137

Origination of loans held for sale

(12,809)

(8,390)

Increase in cash surrender value of bank owned

life insurance

(1,952)

(1,691)

Decrease in deferred tax asset

6,756

7,725

Net change in operating assets and liabilities:

(716)

(257)

(5,930)

(6,223)

5,620

4,610

Net cash provided by operating activities

42,805

34,837

Cash flows from investing activities:

Proceeds from maturities and pay-downs of investment

securities held to maturity

10,935

10,461

Purchase of investment securities available for

sale

(139,841)

(85,673)

Proceeds from maturities and pay-downs of investment

securities available for sale

23,364

20,045

Proceeds from sales of investment securities available

for sale

82,497

34,753

Net increase in loans held for investment

(136,726)

(126,049)

Purchase of loans held for investment

(81,392)

(66,605)

Additions to premises and equipment

(303)

(314)

Proceeds from the redemption of Federal Home

Loan Bank stock

16,221

11,733

Purchase of Federal Home Loan Bank stock

(16,165)

(10,959)

Purchase of bank owned life insurance, net

(4,000)

Net cash used in investment activities

(245,410)

(212,608)

(Continued)

Cash flows from financing activities:

Proceeds from exercise of Class A common stock

options, net

1,319

Cash dividends paid

(7,829)

(3,939)

(501)

Net increase in deposits

171,076

236,865

Proceeds from subordinated notes, net

39,300

Proceeds from Federal Home Loan Bank advances

and other borrowings

336,750

227,000

Repayments on Federal Home Loan Bank advances

and other borrowings

(341,500)

(247,000)

Net cash provided by financing activities

164,047

213,744

Net increase (decrease) in cash and cash equivalents

(38,558)

35,973

Cash and cash equivalents at beginning of period

77,035

41,062

Cash and cash equivalents at end of period

$

38,477

$

77,035

Supplemental disclosure of cash flow information:

Interest paid

$

59,998

$

60,544

SUMMARY OF SIGNIFICANT ACCOUNTING

POLICIES