Stockholders' Equity

6 Months Ended

Jun. 30, 2022

Stockholders' Equity [Abstract]

Stockholders' Equity

8. STOCKHOLDERS’ EQUITY

Common Stock

The rights of the holders of Class A common stock and Class B common stock are the same, except for voting and

conversion rights. Holders of Class A common stock are entitled to voting rights, while holders of Class B common stock

have no voting rights. Shares of Class B common stock are convertible into shares of Class A common stock if sold or

transferred.

In June 2021, the Bank effected a 1 for 5 reverse stock split of all the Class A common stock $

1.00

 par value. Each five

shares of the Bank’s Class A common stock was combined into

one

 fully paid share of Class A common stock. Any fractional

shares resulting from this reverse stock split were rounded up to one whole share. The Bank has adjusted the Class A

common stock, earnings per share and stock options for this 1 for 5 reverse stock split for all periods in 2021. The Class B

common stock was not adjusted but if sold or exchanged would be converted at the 1 for 5 reverse stock split of

1

 share of

Class A common stock for 5 shares of Class B common stock. Any dividends declared by the Board of Directors (the

“Board”) to include Class B common stock will also be paid as if converted. The 1 for 5 reverse stock split resulted in

adjustments to Consolidated Balance Sheets, Consolidated Statements of Operations, and Consolidated Statements of

Changes in Stockholders’ Equity. 

In July 2021, the Bank completed the IPO of its Class A common stock, in which it issued and sold

4,600,000

 shares

of Class A common stock at a price of $

10.00

 per share. The Bank received total net proceeds of $

40.0

 million after

deducting underwriting discounts and expenses.

In December 2021, the Bank entered into agreements with the Class B shareholders to exchange all outstanding Class

B common stock for Class A common stock at a ratio of 5 to 1. As a result, a total of

6,121,052

 shares of Class B common

stock were exchanged for

1,224,212

 shares of Class A common stock. 

In December 2021, USCB Financial Holdings, Inc. (the “Company”) acquired all the issued and outstanding shares of

the Class A voting common stock of U.S. Century Bank (the “Bank”), which are the only issued and outstanding shares of

the Bank’s capital stock, in a share exchange (the “Reorga nization”) effected under the Florida Business Corporation Act.

Each of the outstanding shares of the Bank’s common stock, par value $

1.00

 per share, formerly held by its shareholders

was converted into and exchanged for one newly issued share of the Company’s common stock, par value $

1.00

 per share,

and the Bank became the Company’s wholly owned subsidiary. 

In the Reorganization, each shareholder of the Bank received securities of the same class, having substantially the

same designations, rights, powers, preferences, qualifications, limitations and restrictions, as those that the shareholder

held in the Bank, and the Company’s current shareholders own the same percentages of its common stock as they

previously owned of the Bank’s common stock.

Preferred Stock

In April 2021, the Board authorized and approved the offer to repurchase all outstanding shares of Class E preferred

stock at the liquidation value of $

7.5

 million along with declared dividends of $

103

 thousand. All Class E preferred stock

shareholders approved the repurchase which the Bank completed in April 2021. 

The Bank offered the Class C and Class D preferred stockholders the ability to exchange their shares for Class A

common stock. The offer to exchange was voluntary and the preferred stockholders were given the option to convert

90

%

of their preferred shares for Class A common stock with the remaining

10

% to be redeemed in the form of cash. The

exchange ratio for the shares of Class A common stock issued in the preferred stock exchange transaction was based upon

the IPO price for shares of Class A common stock. 

During the year ended December 31, 2021,

47,473

 shares of Class C preferred stock and

11,061,552

 shares of Class

D preferred stock converted into an aggregate of

10,278,072

 shares of Class A common stock. The exchange of the Class

C and Class D preferred shares had a total liquidation value of $

102.8

 million. The remaining unconverted shares of Class

C preferred stock and Class D preferred stock totaling

1,234,354

 shares were subsequently redeemed at their liquidation

value for $

11.4

 million. 

The fair value of consideration on the preferred stock exchange and redemption of the Class C and Class D preferred

shares exceeded the book value causing a one-time reduction in net income available to common stockholders of

$

89.6

 million. As of June 30, 2022 and December 31, 2021, there were

no

 preferred shares and

no

 outstanding dividends

to be paid these on.

Dividends

The following dividend amounts were paid on the preferred shares for the three and six months ended June 30, 2022

and 2021 (in thousands):

Declaration of dividends by the Board is required before dividend payments are made.

No

 dividends were approved by

the Board for the common stock classes for the three months ended June 30, 2022 and 2021. Additionally, there were

no

dividends declared and unpaid as of June 30, 2022 and 2021.

The Company and the Bank exceeded all regulatory capital requirements and remained significantly above “well-

capitalized” guidelines. At June 30, 2022, total risk-based capital ratio for the Company and the Bank were

13.74

% and

13.67

%, respectively.

Three Months Ended June 30,

Six Months Ended June 30,

2022

2021

2022

2021

Preferred stock - Class C: Non-voting, Non-cumulative, Perpetual:

$

1.00

 par value; $

1,000

 per share liquidation preference; annual

dividend rate of

4

% of liquidation preference paid quarterly. Quarterly

dividend of $

10.00

 per share.

$

-

$

528

$

-

$

1,055

Preferred stock - Class D: Non-voting, Non-cumulative, Perpetual:

$

1.00

 par value; $

5.00

 per share liquidation preference; annual

dividend rate of

4

% of par value paid quarterly. Quarterly dividend of

$

0.01

 per share.

-

123

-

246

Preferred stock - Class E: Non-voting, Partially Cumulative,

Perpetual: $

1.00

 par value; $

1,000

 per share liquidation preference;

annual dividend rate of

7

% of liquidation preference paid quarterly.

Quarterly dividend of $

17.50

 per share.

-

103

-

234

Total dividends paid

$

-

$

754

$

-

$

1,535