First US Bancshares, Inc. Reports Third Quarter 2025 Results

BIRMINGHAM, Ala., Oct. 29, 2025 /PRNewswire/ -- Third Quarter Highlights:

First US Bancshares, Inc. (NASDAQ:FUSB) (the "Company"), the parent company of First US Bank (the "Bank"), today reported net income of $1.9 million, or $0.32 per diluted share, for the quarter ended September 30, 2025 ("3Q2025"), compared to $0.2 million, or $0.03 per diluted share, for the quarter ended June 30, 2025 ("2Q2025") and $2.2 million, or $0.36 per diluted share, for the quarter ended September 30, 2024 ("3Q2024"). For the nine months ended September 30, 2025, net income totaled $3.9 million, or $0.64 per diluted share, compared to $6.5 million, or $1.04 per diluted share, for the nine months ended September 30, 2024.  

The table below summarizes selected financial data for each of the periods presented.

CEO Commentary

"We returned to solid earnings during the third quarter as the provision for credit losses on loans decreased substantially from the second quarter," stated James F. House, President and CEO of the Company. "The credit issues with two commercial loans that manifested earlier in the year have now been largely resolved, and net charge-offs associated with consumer indirect loans decreased to more normalized levels during the third quarter. In addition, we saw continued improvement in net interest income and margin, and pre-tax pre-provision net revenue, which increased by 7.1%, comparing the third quarter to the second quarter," continued Mr. House. "All of these are positive developments that reflect the strong momentum our team has built as we move toward the end of the year."

Financial Results

Loans and Leases – The table below summarizes loan balances by portfolio category as of the end of each of the most recent five quarters.

Total loans decreased by $3.9 million in 3Q2025 as growth in the consumer indirect and C&I categories was offset by decreases in construction, multi-family residential and commercial real estate. While total loans decreased during the quarter, average loans increased due to substantial growth, primarily in the consumer indirect category, earlier in the year. Average loans increased to $871.9 million in 3Q2025, compared to $857.7 million during 2Q2025, and $821.4 million during 3Q2024. The indirect lending platform focuses on consumer lending at the higher end of the credit spectrum. Collateral financed in the indirect portfolio primarily includes boats, recreational vehicles, campers, horse trailers and cargo trailers. The weighted average credit score of new indirect loans financed during the nine months ended September 30, 2025 was 798, while the weighted average credit score for the entire portfolio was 782.  For the nine months ended September 30, 2025, the Company's average total loan balance increased by $30.6 million, or 3.7%, compared to the nine months ended September 30, 2024. While loan yields increased modestly during 3Q2025 compared to 2Q2025, during the nine months ended September 30, 2025, aggregate loan yields generally decreased compared to the corresponding period of 2024, consistent with the general interest rate environment. Average yield on loans totaled 6.10% during 3Q2025, compared to 6.07% during 2Q2025 and 6.40% during 3Q2024. For the nine months ended September 30, 2025, average loan yields totaled 6.07%, compared to 6.34% for the nine months ended September 30, 2024.

Net Interest Income and Margin – Net interest income in 3Q2025 increased by $0.2 million, or 2.0%, compared to 2Q2025 and increased by $0.5 million, or 5.2%, compared to 3Q2024. Net interest margin increased to 3.60% for 3Q2025 (matching the 3Q2024 level), compared to 3.59% for 2Q2025. For the nine-month period ended September 30, 2025, net interest margin was 3.57% compared to 3.65% for the nine-month period ended September 30, 2024.

Provision for Credit Losses – During 3Q2025, the Company recorded a provision for credit losses of $0.6 million, compared to $2.7 million in 2Q2025 and $0.2 million in 3Q2024. The significantly larger provision for credit losses in 2Q2025 resulted primarily from substantial growth in the consumer indirect category, combined with an increase in net charge-offs in the category, as well as from additional credit allowances on two individually evaluated commercial loans. During 3Q2025, charge-offs associated with the indirect portfolio decreased relative to 2Q2025 and credit issues associated with the two individually evaluated commercial loans were substantially resolved.  For the nine months ended September 30, 2025, the provision for credit losses totaled $3.8 million, compared to $0.2 million for the nine months ended September 30, 2024. As of September 30, 2025, the Company's allowance for credit losses ("ACL") on loans and leases as a percentage of total loans was 1.23%, compared to 1.24% as of December 31, 2024.     

Pre-tax Pre-provision Net Revenue ("PPNR") – PPNR totaled $3.1 million in 3Q2025, compared to $2.9 million in 2Q2025 and $3.1 million in 3Q2024. For the nine months ended September 30, 2025, PPNR totaled $8.8 million compared to $8.6 million for the nine months ended September 30, 2024. As a percentage of average assets, PPNR totaled 1.08% in 3Q2025 compared to 1.03% in 2Q2025 and 1.14% in 3Q2024. For the nine months ended September 30, 2025, PPNR as a percentage of average assets was 1.06% compared to 1.07% for the nine months ended September 30, 2024. Refer to the non-GAAP reconciliation of PPNR to net income beginning on page 11.

Deposits – Total deposits increased by $15.6 million, or 1.6%, during 3Q2025, due primarily to increases in both interest-bearing and noninterest-bearing demand deposit accounts, partially offset by a decrease in certificates of deposit. Core deposits, which exclude time deposits of $250 thousand or more and all wholesale brokered deposits, totaled $838.4 million, or 83.6% of total deposits, as of September 30, 2025, compared to $837.7 million, or 86.1% of total deposits, as of December 31, 2024. The average rate on deposits totaled 2.14% during 3Q2025, compared to 2.08% during 2Q2025 and 2.36% during 3Q2024. Fluctuations in deposit costs have been relatively consistent with changes in market interest rates; however, significant competitive pressure remains to acquire and maintain deposit balances in the current environment. For the nine months ended September 30, 2025, the Company's average rate on deposits totaled 2.10%, compared to 2.24% for the nine months ended September 30, 2024.       

Short-term Borrowings – As of September 30, 2025, the Company had $20.0 million in short-term borrowings outstanding compared to $10.0 million outstanding as of December 31, 2024. The short-term borrowings were held as part of the Company's efforts to maintain on-balance sheet liquidity levels while repricing deposits at lower rates. As of both September 30, 2025 and December 31, 2024, all outstanding short-term borrowings had remaining maturities of less than 30 days. The amount outstanding as of September 30, 2025 included $10.0 million borrowed from the Federal Home Loan Bank of Atlanta ("FHLB") and $10.0 million borrowed from the Federal Reserve Bank's ("FRB") discount window. As of December 31, 2024, all short-term borrowings outstanding were borrowed exclusively from the FHLB.

Deployment of Funds – As of September 30, 2025, the Company held cash, federal funds sold and securities purchased under reverse repurchase agreements totaling $59.5 million, or 5.2% of total assets, compared to $52.9 million, or 4.8% of total assets, as of December 31, 2024. Investment securities, including both the available-for-sale and held-to-maturity portfolios, totaled $164.5 million as of September 30, 2025 compared to $168.6 million as of December 31, 2024. As of September 30, 2025, the expected average life of securities in the investment portfolio was 4.2 years compared to 3.6 years as of December 31, 2024. During the nine months ended September 30, 2025 and 2024, the Company purchased $34.0 million and $27.5 million, respectively, of investment securities at market rates in existence at the time of purchase. These purchases, combined with the maturity and paydown of investment securities at lower rates have led to continued improvement in yield on the portfolio. The yield on the investment securities, including both available-for-sale and held to maturity securities, totaled 3.65% during 3Q2025, compared to 3.46% during 2Q2025 and 3.08% during 3Q2024.  For the nine months ended September 30, 2025, the yield on investment securities totaled 3.52%, compared to 2.93% for the nine months ended September 30, 2024.                                                     

Asset Quality – Nonperforming assets, including loans in non-accrual status and other real estate owned, totaled $2.2 million as of September 30, 2025, a decrease from $5.5 million as of December 31, 2024. As a percentage of total assets, nonperforming assets decreased to 0.19% as of September 30, 2025 compared to 0.50% as of December 31, 2024. Net charge-offs as a percentage of average loans totaled 0.61% during 3Q2025 compared to 0.79% during 2Q2025 and 0.12% during 3Q2024. Net charge-offs in 3Q2025 totaled $1.3 million, of which $1.0 million was associated with the final charge-off of an individually evaluated commercial loan and $0.4 million was associated with the consumer indirect portfolio, partially offset by $0.1 million in net recoveries in other loan categories. For the nine months ended September 30, 2025, annualized net charge-offs as a percentage of average loans totaled 0.52% compared to 0.10% for the nine months ended September 30, 2024. Net charge-offs over the nine months ended September 30, 2025 totaled $3.3 million, of which $2.2 million was associated with individually evaluated commercial loans and $1.3 million was associated with the consumer indirect portfolio, partially offset by $0.2 million in net recoveries in other portfolios.    

Non-interest Income – Non-interest income remained relatively consistent, totaling $0.9 million in 3Q2025 compared to $0.8 million in 2Q2025 and $0.9 million in 3Q2024. For both nine-month periods ended September 30, 2025 and 2024, non-interest income totaled $2.6 million.

Non-interest Expense – Non-interest expense totaled $7.4 million in both 3Q2025 and 2Q2025, compared to $7.0 million in 3Q2024. The expense increase comparing 3Q2025 to 3Q2024 resulted primarily from increases in fees for professional services, write-downs on other real estate owned and inflationary increases in other miscellaneous expense categories. For the nine months ended September 30, 2025, non-interest expense totaled $21.8 million, compared to $21.4 million for the nine months ended September 30, 2024, an increase of $0.4 million, or 1.8%.    

Shareholders' Equity – As of September 30, 2025, shareholders' equity totaled $104.2 million, or 9.09% of total assets, compared to $98.6 million, or 8.96% of total assets, as of December 31, 2024. The increase in shareholders' equity during the nine months ended September 30, 2025 resulted primarily from earnings, net of dividends paid and repurchases of shares of the Company's common stock. In addition, shareholders' equity was positively impacted during the period by reductions in the Company's accumulated other comprehensive loss resulting from changes in market interest rates, as well as the maturity of lower yielding investment securities. The Company's ratio of tangible common equity to tangible assets was 8.49% as of September 30, 2025 compared to 8.33% as of December 31, 2024.  

Cash Dividend – In 3Q2025, the Company declared a cash dividend of $0.07 per share on its common stock, consistent with the dividend paid in the two previous quarters of 2025. The Company's cash dividend was increased in 4Q2024 compared to a dividend declared of $0.05 per share in each of the first three quarters of 2024.

Share Repurchases – The Company did not repurchase shares of its common stock during 3Q2025. During the nine-month period ended September 30, 2025, the Company completed the repurchase of 40,000 shares of its common stock at a weighted average price of $13.38 per share. The repurchases were completed under the Company's previously announced share repurchase program. As of September 30, 2025, 872,813 shares remained available for repurchase under the program.

Regulatory Capital – During 3Q2025, the Bank continued to maintain capital ratios at higher levels than required to be considered a "well-capitalized" institution under applicable banking regulations. As of September 30, 2025, the Bank's common equity Tier 1 capital and Tier 1 risk-based capital ratios were each 10.77%, its total capital ratio was 11.92%, and its Tier 1 leverage ratio was 9.19%.

Liquidity – As of September 30, 2025, the Company continued to maintain funding capacity sufficient to provide adequate liquidity for loan growth, capital expenditures and ongoing operations. The Company benefits from a strong core deposit base, a liquid investment securities portfolio and access to funding from a variety of sources, including federal funds lines with other banking institutions, FHLB advances, the FRB's discount window, and brokered deposits. Refer to the Non-GAAP Financial Measures section for additional discussion of measures of the Company's liquidity.

Banking Center Growth – During 3Q2025, the Company continued its renovation of a banking center office in Daphne, Alabama that was purchased from another financial institution. This location is expected to serve as the Bank's initial deposit gathering facility in the Daphne/Mobile area. It is currently anticipated that the location will open to the public during the first half of 2026. In addition, in October 2025, the Company opened a new automated banking facility in Mountain Brook, Alabama.  

About First US Bancshares, Inc.

First US Bancshares, Inc. (the "Company") is a bank holding company that operates banking offices in Alabama, Tennessee, and Virginia through First US Bank (the "Bank"). The Company files periodic reports with the U.S. Securities and Exchange Commission (the "SEC"). Copies of its filings may be obtained through the SEC's website at www.sec.gov or at www.firstusbank.com. More information about the Company and the Bank may be obtained at www.firstusbank.com. The Company's stock is traded on the Nasdaq Capital Market under the symbol "FUSB."

Forward-Looking Statements

This press release contains forward-looking statements, as defined by federal securities laws. Statements contained in this press release that are not historical facts are forward-looking statements. These statements may address issues that involve significant risks, uncertainties, estimates and assumptions made by management. The Company undertakes no obligation to update these statements following the date of this press release, except as required by law. In addition, the Company, through its senior management, may make from time to time forward-looking public statements concerning the matters described herein. Such forward-looking statements are necessarily estimates reflecting the best judgment of the Company's senior management based upon current information and involve a number of risks and uncertainties.

Certain factors that could affect the accuracy of such forward-looking statements and cause actual results to differ materially from those projected in such forward-looking statements are identified in the public filings made by the Company with the SEC, and forward-looking statements contained in this press release or in other public statements of the Company or its senior management should be considered in light of those factors. Such factors may include risk related to the Company's credit, including that if loan losses are greater than anticipated; the increased lending risks associated with commercial real estate lending; potential weakness in the residential real estate market; liquidity risks; the impact of national and local market conditions on the Company's business and operations; the rate of growth (or lack thereof) in the economy generally and in the Company's service areas; the effects of significant changes to the structure and operations of the federal government; strong competition in the banking industry; the impact of changes in interest rates and monetary policy on the Company's performance and financial condition; the effects of fiscal challenges facing the U.S. government or any potential government shutdown; the impact of technological changes in the banking and financial service industries and potential information system failures; cybersecurity and data privacy threats; the risks and challenges presented by the development and use of artificial intelligence ("AI"); the costs of complying with extensive governmental regulation; the impact of changing accounting standards and tax laws on the Company's allowance for credit losses and financial results; the possibility that acquisitions may not produce anticipated results and result in unforeseen integration difficulties; and other risk factors described from time to time in the Company's public filings, including, but not limited to, the Company's most recent Annual Report on Form 10-K. Relative to the Company's dividend policy, the payment of cash dividends is subject to the discretion of the Board of Directors and will be determined in light of then-current conditions, including the Company's earnings,  leverage, operations, financial conditions, capital requirements and other factors deemed relevant by the Board of Directors. In the future, the Board of Directors may change the Company's dividend policy, including the frequency or amount of any dividend, in light of then-existing conditions.

 

 

 

 

Non-GAAP Financial Measures

In addition to the financial results presented in this press release that have been prepared in accordance with U.S. generally accepted accounting principles ("GAAP"), the Company's management believes that certain non-GAAP financial measures and ratios are beneficial to the reader. These non-GAAP measures have been provided to enhance overall understanding of the Company's current financial performance and position. Management believes that these presentations provide meaningful comparisons of financial performance and position in various periods and can be used as a supplement to the GAAP-based measures presented in this press release. The non-GAAP financial results presented should not be considered in isolation or as a substitute for the most directly comparable or other financial measures calculated in accordance with GAAP. Management believes that both GAAP measures of the Company's financial performance and the respective non-GAAP measures should be considered together.

The non-GAAP measures and ratios that have been provided in this press release include measures of liquidity, pre-tax pre-provision net revenue, tangible assets and equity, and certain ratios that include tangible assets and equity. Discussion of these measures and ratios is included below, along with reconciliations of such non-GAAP measures to GAAP amounts included in the consolidated financial statements previously presented in this press release.

Liquidity Measures

The table below provides information combining the Company's on-balance sheet liquidity with readily available off-balance sheet sources of liquidity as of both September 30, 2025 and December 31, 2024.

The table above calculates readily available liquidity by combining cash and cash equivalents, federal funds sold, securities purchased under reverse repurchase agreements and unencumbered investment security values on the Company's consolidated balance sheet with off-balance sheet liquidity that is readily available through unused collateral pledged to the FHLB and FRB, as well as unsecured lines of credit with other banks. Liquidity from pledgable investment securities and total readily available liquidity are non-GAAP measures used by management and regulators to analyze a portion of the Company's liquidity. Management uses these measures to evaluate the Company's liquidity position.

Pledgable investment securities are considered by management as a readily available source of liquidity since the Company has the ability to pledge the securities with the FHLB or FRB to obtain immediate funding. Both available-for-sale and held-to-maturity securities may be pledged at fair value with the FHLB and through the FRB discount window. The amounts shown as liquidity from pledgable investment securities represent total investment securities as recorded on the consolidated balance sheet, less reductions for securities already pledged and discounts expected to be taken by the lender to determine collateral value.

The unused lendable collateral value at the FHLB presented in the table represents only the amount immediately available to the Company from loans already pledged by the Company to the FHLB as of each consolidated balance sheet date presented. As of September 30, 2025 and December 31, 2024, the Company's total remaining credit availability with the FHLB was $313.0 million and $319.9 million, respectively, subject to the pledging of additional collateral which may include eligible investment securities and loans. In addition, the Company has access to additional sources of liquidity that generally could be obtained over a period of time, including access to unsecured brokered deposits through the wholesale funding markets. Management believes the Company's on-balance sheet and other readily available liquidity provide strong indicators of the Company's ability to fund obligations in a stressed liquidity environment.

Excluding wholesale brokered deposits, as of September 30, 2025, the Company had approximately 28 thousand deposit accounts with an average balance of approximately $32.2 thousand per account. Estimated uninsured deposits (calculated as deposit amounts per deposit holder in excess of $250 thousand, the maximum amount of federal deposit insurance, and excluding deposits secured by pledged assets) totaled $220.2 million, or 22.0% of total deposits, as of September 30, 2025. As of December 31, 2024, estimated uninsured deposits totaled $216.8 million, or 22.2% of total deposits.

Pre-tax Pre-provision Net Revenue

The Company utilizes pre-tax pre-provision net revenue ("PPNR") as a supplemental measure of profitability in addition to earnings measures defined by GAAP, including income before income taxes and net income. PPNR measures the Company's profitability before accounting for the provisions for credit losses and income taxes. Management believes PPNR provides a means to effectively measure the Company's core operating profitability on a trended basis. In management's experience, PPNR and PPNR as a percentage of average assets are commonly used by stock analysts and investors in conjunction with their evaluation of financial institutions. The table below reconciles the Company's calculation of PPNR to amounts recorded in accordance with GAAP.

Tangible Balances and Measures

In addition to capital ratios defined by GAAP and banking regulators, the Company utilizes various tangible common equity measures when evaluating capital utilization and adequacy. These measures, which are presented in the financial tables in this press release, may also include calculations of tangible assets. As defined by the Company, tangible common equity represents shareholders' equity less goodwill and identifiable intangible assets, while tangible assets represent total assets less goodwill and identifiable intangible assets.

Management believes that the measures of tangible equity are important because they reflect the level of capital available to withstand unexpected market conditions. In addition, presentation of these measures allows readers to compare certain aspects of the Company's capitalization to other organizations. In management's experience, many stock analysts use tangible common equity measures in conjunction with more traditional bank capital ratios to compare capital adequacy of banking organizations with significant amounts of goodwill or other intangible assets that typically result from the use of the purchase accounting method in accounting for mergers and acquisitions.

These calculations are intended to complement the capital ratios defined by GAAP and banking regulators. Because GAAP does not include these measures, management believes that there are no comparable GAAP financial measures to the tangible common equity ratios that the Company utilizes. Despite the importance of these measures to the Company, there are no standardized definitions for the measures, and, therefore, the Company's calculations may not be comparable with those of other organizations. In addition, there may be limits to the usefulness of these measures to investors. Accordingly, management encourages readers to consider the Company's consolidated financial statements in their entirety and not to rely on any single financial measure. The table below reconciles the Company's calculations of these measures to amounts reported in accordance with GAAP.

 

 

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SOURCE First US Bancshares, Inc.