USCB FINANCIAL HOLDINGS, INC.USCB
USCB FINANCIAL HOLDINGS, INC. Stock Compensation Disclosure
9. EQUITY BASED AND OTHER COMPENSATION PLANS
Employee 401(k) Plan
The Company has an 401(k) plan (the “Plan”) covering substantially all eligible employees. The Plan includes a provision
that the employer may contribute to the accounts of eligible employees for whom a salary deferral is made. The Company
contributed $
354
306
respectively; the contributions are included under salaries and employee benefits in the Consolidated Statements of
Operations.
Stock-Based Compensation
In 2015, the Company's stockholders approved the 2015 Equity Incentive Plan (the “2015 Option Plan”), which
authorized grants of options to purchase up to
2,000,000
2015
Option Plan provided that
vesting schedules will be determined upon issuance of options by the Board of Directors or compensation committee.
Options granted under the 2015 Option Plan have a
10
-year life and, in no event shall an option be exercisable after the
expiration of
10
10
-year life and initially would have terminated in
2025. In July 2020, the stockholders of the Company approved the amendment of the 2015 Option plan to authorize the
issuance of an additional
3,000,000
5
in 2030. The authorized shares, after being adjusted to reflect the 1 for 5 reverse stock split, totaled
1,000,000
December 2021, the shareholders of the Company approved the amendment of the 2015 Option Plan to authorize the
issuance of an additional
1,400,000
600,000
2,400,000
At December 31, 2024, there were
996,436
2023, there were
1,160,564
shares available for grant under the 2015 Option Plan.
Stock Options
The Company recognizes compensation expense based on the estimated grant date fair value method using the Black-
Scholes option pricing model and accounts for this expense using a prorated straight-line amortization method over the
vesting period of the option. Stock-based compensation expense is based on awards that the Company expects will
ultimately vest, reduced by estimated forfeitures. Estimated forfeitures consider the voluntary termination trends as well as
actual option forfeitures.
The compensation expense is reported under salaries and employee benefits in the accompanying Consolidated
Statements of Operations. Compensation expense totaling $
278
December 31, 2024 and $
459
no
years ended December 31, 2024 and 2023.
Unrecognized compensation cost remaining on stock-based compensation totaled $
10
342
for the years ended December 31, 2024 and 2023, respectively.
Cash flows resulting from excess tax benefits are required to be classified as a part of cash flows from operating
activities. Excess tax benefits are realized tax benefits from tax deductions for exercised options in excess of the deferred
tax asset attributable to the compensation cost for such options.
There were
no
For the fair value of options granted in 2023, the following were the assumptions:
The following table presents a summary of stock options for the years ended December 31, 2024 and 2023:
The aggregate intrinsic value in the table above represents the total pre-tax intrinsic value of exercisable options at the
dates presented (the difference between the valuation of the Company’s stock and the exercise price, multiplied by the
number of options considered in-the-money) that would have been received by the option holders had all option holders
exercised their options.
The weighted average per share fair value of options granted for the year ended December 31, 2023, was $
3.91
; there
were no grants in 2024.
Restricted Stock
In 2024 , the Company issued
277,922
awards pursuant to the Company's 2015 Option Plan. Awards under the 2015 Option Plan may not be sold or otherwise
transferred until certain restrictions have lapsed. The Company primarily issues restricted stock awards with a
3
-year vesting
period. However, out of the
277,922
150,000
150,000
33
% of the award in a
period of two months in 2024, and
67
% remaining will vest in the next 2 years.
In 2023 , the Company issued
242,713
awards pursuant to the Company's 2015 Option Plan. Awards under the 2015 Option Plan may not be sold or otherwise
transferred until certain restrictions have lapsed.
The total share-based compensation expense for these awards is determined based on the market price of the
Company's common stock as of the date of grant applied to the total number of shares granted and is amortized straight
line over the vesting period which is generally three years unless the Board of Directors approves a different vesting
schedule for the grants. As of December 31, 2024, unearned share-based compensation expense associated with these
awards totaled $
4.3
Compensation expense totaling $
1.9
salaries and benefits in the accompanying Consolidated Statement of Operations. Compensation expense totaling $
553
thousand was recognized for the year ended December 31, 2023.
The following table presents a summary of restricted stock awards for the years ended December 31, 2024 and 2023:
Assumption
2023
Risk-free interest rate
3.53
%
Expected term
10
years
Expected stock price volatility
10
%
Dividend yield
0
%
Stock Options
Weighted Average
Exercise Price
Weighted Average
Remaining
Contractual Years
Aggregate Intrinsic
Value (in
thousands)
Balance at January 1, 2024
947,167
$
10.97
6.5
Granted
—
$
-
Exercised
(122,000)
$
10.81
Forfeitures
(100,000)
$
11.99
Balance at December 31, 2024
725,167
$
10.86
5.3
Exercisable at December 31, 2024
720,499
$
10.85
5.3
$
4,972
Balance at January 1, 2023
965,667
$
10.91
7.4
Granted
7,500
$
12.41
Exercised
(10,000)
$
7.50
Forfeitures
(16,000)
$
10.34
Balance at December 31, 2023
947,167
$
10.97
6.5
Exercisable at December 31, 2023
758,000
$
10.71
6.1
$
1,195
Restricted Stock
Weighted Average Grant Date
Fair Value
Balance at January 1, 2024
218,422
$
12.19
Granted
277,922
$
14.33
Forfeited
(8,625)
$
12.63
Vested
(85,643)
$
13.84
Balance at December 31, 2024
402,076
$
13.31
Restricted Stock
Weighted Average Grant Date
Fair Value
Balance at January 1, 2023
-
$
-
Granted
242,713
$
12.24
Forfeited
(8,111)
$
12.67
Vested
(16,180)
$
12.67
Balance at December 31, 2023
218,422
$
12.19
About Stock Compensation Disclosures
Stock-based compensation disclosures detail the equity awards granted to employees and executives — including stock options, restricted stock units (RSUs), and performance shares — along with the valuation methods and assumptions used to expense them. This section reveals the true cost of talent retention and the alignment between management incentives and shareholder interests.
Key signals: total unrecognized compensation expense and its expected recognition period signal future earnings headwinds from already-granted awards. For stock options, examine Black-Scholes assumptions — expected volatility, risk-free rate, and expected term — as understating any of these reduces reported compensation expense. Compare stock compensation expense as a percentage of revenue against peers to assess dilution cost. Watch vesting schedules for acceleration clauses tied to change-of-control events. Performance-based awards with undemanding targets may indicate weak governance. Add back stock compensation to operating cash flow to calculate a more conservative free cash flow figure.