How to format a USB drive and increase its available size?
If you can you might trying erasing the disk and then reformat it. You will, of course, lose everything written to disk. If you want to keep what's on the disk you could copy it you main drive. Disk utility allows you to erase the disk and then reformat it.
After opening Disk Utility go to the Edit menu and at the top of the panal you'll see option to erase, partition, and other commands.