First US Bancshares, Inc. Reports First Quarter 2024 Earnings

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Insights

First US Bancshares, Inc.'s reported decrease in net income from $2.3 million in the previous quarter to $2.1 million may raise concerns for investors. However, the consistency in net income year-over-year suggests a level of stability amid a volatile economic landscape. The Return on Average Assets and Return on Average Common Equity figures, at 0.80% and 9.25% respectively, provide a snapshot of efficiency and profitability, which seem to reflect cautious growth and prudent balance sheet management. The slight uptick in loan-to-deposit ratio to 87.2% could be seen as an attempt to leverage deposits more effectively, although care must be taken to maintain adequate liquidity.

The shift in deposit composition towards interest-bearing time deposits indicates an adaptation by the bank's clientele to the rising interest rate environment. For investors, this could signal a pressure on interest margins if rates continue to increase. The maintenance of capital ratios above 'well-capitalized' thresholds assures a buffer against potential market downturns. The company's strategic approach towards controlling non-interest expenses, notably by recovering check fraud losses and optimizing staff levels, can be perceived as a positive measure for operational efficiency.

The static provision for credit losses suggests a balanced risk-taking approach, aligning with modest loan growth. Notably, the bank's efforts to purchase interest rate floors are a defensive move to hedge against a potential decline in interest rates, which may appeal to investors seeking a risk-averse profile. The bank's asset quality, indicated by a stable rate of nonperforming assets at 0.28% of total assets, does not raise immediate red flags. Continuity of such trends will be essential for sustaining investor confidence.

04/24/2024 - 04:15 PM

BIRMINGHAM, Ala., April 24, 2024 /PRNewswire/ -- First Quarter Highlights:

Net Income	Diluted Earnings per share	Return on average assets (annualized)	Return on average common equity (annualized)	Return on average tangible common equity (annualized) ⁽¹⁾	Loans to deposits
$2.1 million	$0.34	0.80 %	9.25 %	10.08 %	87.2 %

First US Bancshares, Inc. (Nasdaq: FUSB) (the "Company"), the parent company of First US Bank (the "Bank"), today reported net income of $2.1 million, or $0.34 per diluted share, for the quarter ended March 31, 2024 ("1Q2024"), compared to $2.3 million, or $0.36 per diluted share, for the quarter ended December 31, 2023 ("4Q2023") and $2.1 million, or $0.33 per diluted share, for the quarter ended March 31, 2023 ("1Q2023").

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

	Quarter Ended
	2024			2023
	March 31,			December 31,			September 30,			June 30,			March 31,
Results of Operations:	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)
Interest income	$	14,277		$	13,945		$	13,902		$	12,999		$	11,960
Interest expense		5,237			4,835			4,419			3,676			2,526
Net interest income		9,040			9,110			9,483			9,323			9,434
Provision for (recovery of) credit losses		-			(434)			184			300			269
Net interest income after provision for (recovery of) credit losses		9,040			9,544			9,299			9,023			9,165
Non-interest income		865			916			837			799			829
Non-interest expense		7,147			7,401			7,319			7,151			7,270
Income before income taxes		2,758			3,059			2,817			2,671			2,724
Provision for income taxes		651			782			704			648			652
Net income	$	2,107		$	2,277		$	2,113		$	2,023		$	2,072
Per Share Data:
Basic net income per share	$	0.36		$	0.38		$	0.35		$	0.34		$	0.35
Diluted net income per share	$	0.34		$	0.36		$	0.33		$	0.31		$	0.33
Dividends declared	$	0.05		$	0.05		$	0.05		$	0.05		$	0.05
Key Measures (Period End):
Total assets	$	1,070,541		$	1,072,940		$	1,065,239		$	1,068,126		$	1,026,658
Tangible assets ⁽¹⁾		1,062,972			1,065,334			1,057,597			1,060,435			1,018,912
Total loans		822,941			821,791			815,300			814,494			775,889
Allowance for credit losses on loans and leases		10,436			10,507			11,380			11,536			11,599
Investment securities, net		126,363			136,669			127,823			124,404			128,689
Total deposits		943,268			950,191			927,038			932,628			897,885
Short-term borrowings		15,000			10,000			30,000			30,000			25,000
Long-term borrowings		10,817			10,799			10,781			10,763			10,744
Total shareholders' equity		92,326			90,593			87,408			85,725			84,757
Tangible common equity ⁽¹⁾		84,757			82,987			79,766			78,034			77,011
Book value per common share		15.95			15.80			14.88			14.59			14.45
Tangible book value per common share ⁽¹⁾		14.65			14.47			13.58			13.28			13.13
Key Ratios:
Return on average assets (annualized)		0.80	%		0.86	%		0.80	%		0.79	%		0.85	%
Return on average common equity (annualized)		9.25	%		10.31	%		9.65	%		9.48	%		10.02	%
Return on average tangible common equity (annualized) ⁽¹⁾		10.08	%		11.29	%		10.58	%		10.41	%		11.05	%
Net interest margin		3.65	%		3.67	%		3.79	%		3.88	%		4.13	%
Efficiency ratio ⁽²⁾		72.2	%		73.8	%		70.9	%		70.6	%		70.8	%
Total loans to deposits		87.2	%		86.5	%		87.9	%		87.3	%		86.4	%
Total loans to assets		76.9	%		76.6	%		76.5	%		76.3	%		75.6	%
Common equity to total assets		8.62	%		8.44	%		8.21	%		8.03	%		8.26	%
Tangible common equity to tangible assets ⁽¹⁾		7.97	%		7.79	%		7.54	%		7.36	%		7.56	%
Tier 1 leverage ratio ⁽³⁾		9.37	%		9.36	%		9.09	%		9.19	%		9.36	%
Allowance for credit losses on loans and leases as % of total loans		1.27	%		1.28	%		1.40	%		1.42	%		1.49	%
Nonperforming assets as % of total assets		0.28	%		0.28	%		0.29	%		0.15	%		0.18	%
Net charge-offs as a percentage of average loans		0.09	%		0.19	%		0.10	%		0.14	%		0.11	%

⁽¹⁾ Refer to Non-GAAP reconciliation of tangible balances and measures beginning on page 8.

⁽²⁾ Efficiency ratio = non-interest expense / (net interest income + non-interest income)

⁽³⁾ First US Bank Tier 1 leverage ratio

CEO Commentary

"We are off to a solid start for 2024," stated James F. House, President and CEO of the Company. "While the economic and interest rate environments have certainly been volatile, our balance sheet remains well-positioned to weather the uncertainty. During the early months of 2024, we are taking advantage of market opportunities to improve asset yields, while simultaneously working to control expenses, and strengthen our balance sheet positioning. These efforts impacted the Company's first quarter results positively and we expect continued benefit as we move through 2024," continued Mr. House.

Financial Results

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

	Quarter Ended
	2024	2023
	March 31,	December 31,	September 30,	June 30,	March 31,
	(Dollars in Thousands)
	(Unaudited)		(Unaudited)	(Unaudited)	(Unaudited)
Real estate loans:
Construction, land development and other land loans	$102,282	$88,140	$90,051	$91,231	$69,398
Secured by 1-4 family residential properties	74,361	76,200	83,876	85,101	86,622
Secured by multi-family residential properties	62,145	62,397	56,506	54,719	63,368
Secured by non-farm, non-residential properties	212,465	213,586	199,116	204,270	198,266
Commercial and industrial loans	57,112	60,515	59,369	60,568	65,708
Consumer loans:
Direct	5,590	5,938	6,544	7,593	8,435
Branch retail	7,794	8,670	9,648	10,830	12,222
Indirect	301,192	306,345	310,190	300,182	271,870
Total loans and leases held for investment	$822,941	$821,791	$815,300	$814,494	$775,889
Allowance for credit losses on loans and leases	10,436	10,507	11,380	11,536	11,599
Net loans and leases held for investment	$812,505	$811,284	$803,920	$802,958	$764,290

Total loan volume increased by $1.2 million, or 0.1%, in 1Q2024, driven primarily by growth in multi-family construction lending, which was partially offset by reductions in other loan categories. Average total loan balances increased by $18.6 million, or 2.3%, during 1Q2024, compared to 4Q2023, and by $51.1 million, or 6.6%, comparing 1Q2024 to 1Q2023.

Net Interest Income and Margin – Net interest income decreased to $9.0 million in 1Q2024, compared to $9.1 million in 4Q2023, and $9.4 million in 1Q2023. The decrease compared to 4Q2023 resulted from one less earning day during the quarter, combined with a decrease in net interest margin of 2 basis points. Compared to 1Q2023, the reduction resulted from net interest margin compression that totaled 48 basis points as interest-bearing liabilities repriced at a faster pace than interest-bearing assets. While margin compression has persisted since 1Q2023, it slowed substantially in 1Q2024 due to continued repricing of earning assets at more favorable rates, combined with growth in average earning assets and efforts to hold deposit expense at reasonable levels. Net interest margin was 3.65% in 1Q2024, compared to 3.67% in 4Q2023, and 4.13% in 1Q2023.

Deposit Growth – Total deposits decreased by $6.9 million, or 0.7%, during 1Q2024, due primarily to reductions in non-interest bearing and interest-bearing direct deposit accounts, partially offset by increases in interest-bearing time deposits. The shift to interest-bearing time deposits is consistent with deposit holders seeking to maximize interest earnings, a condition that has persisted in the current interest rate environment. The increase in interest-bearing time deposits was partially offset by a reduction in wholesale brokered time deposits of $5.5 million during 1Q2024. Core deposits, which exclude time deposits of $250 thousand or more and all wholesale brokered deposits, totaled $807.3 million, or 85.6% of total deposits as of March 31, 2024, compared to $819.5 million, or 86.2% of total deposits, as of December 31, 2023.

Deployment of Funds – As of March 31, 2024, the Company held cash and federal funds sold balances totaling $65.8 million, or 6.1% of total assets, compared to $59.8 million, or 5.6% of total assets, as of December 31, 2023. Investment securities, including both the available-for-sale and held-to-maturity portfolios, totaled $126.4 million as of March 31, 2024, compared to $136.7 million as of December 31, 2023. The decrease in investment securities during 1Q2024 resulted from the maturity of U.S. treasury bonds that occurred late in the quarter. Subsequent to March 31, 2024, these funds were reinvested in higher yielding securities. As of March 31, 2024, the expected average life of securities in the investment portfolio was 4.2 years, compared to 3.9 years as of December 31, 2023. In the current higher interest rate environment, management continues to seek opportunities to reconfigure the investment portfolio with higher yielding assets as cash flows become available.

Provision for Credit Losses – On a net basis, no provision for credit losses was recorded by the Company during 1Q2024, compared to a negative provision of $0.4 million in 4Q2023 and a provision of $0.3 million in 1Q2023. The Company's determination that no net credit loss provisioning was required in 1Q2024 was due to modest overall loan growth during the quarter, combined with a decrease in both unfunded lending commitments and indirect loan fundings. The indirect portfolio generally requires higher allowances for credit losses than most other loan categories in the Company's portfolio. As of March 31, 2024, the Company's allowance for credit losses on loans and leases as a percentage of total loans was 1.27%, compared to 1.28% as of December 31, 2023.

Asset Quality – Nonperforming assets, including loans in non-accrual status and OREO, totaled $3.0 million as of both March 31, 2024 and December 31, 2023. As a percentage of total assets, nonperforming assets totaled 0.28% as of both March 31, 2024 and December 31, 2023. Annualized net charge-offs as a percentage of average loans during 1Q2024 totaled 0.09%, compared to 0.19% during 4Q2023 and 0.11% during 1Q2023.

Non-interest Income – Non-interest income remained relatively consistent, totaling $0.9 million in both 1Q2024 and 4Q2023, compared to $0.8 million in 1Q2023.

Non-interest Expense – Non-interest expense totaled $7.1 million in 1Q2024, compared to $7.4 million in 4Q2023, and $7.3 million in 1Q2023. The decrease compared to 4Q2023 resulted primarily from check fraud losses recorded by the Company in 4Q2023, the majority of which were recovered in 1Q2024. The impact of recovered check fraud losses in 1Q2024 was partially offset by increases in salaries and benefits due primarily to payroll tax expenses that tend to be higher during the early part of the year. The decrease comparing 1Q2024 to 1Q2023 resulted from the recovery of check fraud losses, combined with an overall reduction in salaries and benefits resulting from reductions in staff levels attained through strategic initiatives implemented by the Company in prior years.

Shareholders' Equity – As of March 31, 2024, shareholders' equity totaled $92.3 million, or 8.62% of total assets, compared to $90.6 million, or 8.44% of total assets, as of December 31, 2023. The increase in shareholders' equity during the quarter resulted primarily from earnings, net of dividends paid. In addition, the rising interest rate environment, particularly during the latter part of 1Q2024, led to a decrease in valuations of investment securities and drove an overall increase in accumulated other comprehensive loss of $0.2 million during the quarter. Securities valuation decreases were, in part, mitigated by the maturity of lower interest rate securities that totaled $13.0 million during the quarter. The Company's ratio of tangible common equity to tangible assets was 7.97% as of March 31, 2024, compared to 7.79% as of December 31, 2023.

Cash Dividend – The Company declared a cash dividend of $0.05 per share on its common stock in 1Q2024, consistent with all four quarters of 2023.

Regulatory Capital – During 1Q2024, 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 March 31, 2024, the Bank's common equity Tier 1 capital and Tier 1 risk-based capital ratios were each 11.11%, its total capital ratio was 12.32%, and its Tier 1 leverage ratio was 9.37%.

Liquidity – As of March 31, 2024, the Company continued to maintain excess 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, Federal Home Loan Bank (FHLB) advances, the discount window of the Federal Reserve Bank (FRB), and brokered deposits.

Interest Rate Risk Management – During 1Q2024, the Company purchased $50 million notional in interest rate floors to assist in mitigating a portion of the Company's risk in down rate scenarios.

Anticipated Banking Center Growth – As part of the Company's overall growth strategy, progress was made during 1Q2024 toward the anticipated opening of a new banking center in the Bearden area of Knoxville, Tennessee that will replace the Bank's existing Knoxville-Bearden location. It is anticipated that the new location, which is expected to open during 2Q2024, will provide more favorable exposure to potential customers, while at the same time improving access to most of the Bank's existing customers in the area. In addition, during 1Q2024, the Company purchased a banking center office in Daphne, Alabama 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 anticipated that the location will open to the public in the fourth quarter of 2024. As of March 31, 2024, both the anticipated Knoxville and Daphne banking centers had received all necessary regulatory approvals.

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; 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; 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 impact of technological changes in the banking and financial service industries and potential information system failures; cybersecurity and data privacy threats; 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.

FIRST US BANCSHARES, INC. AND SUBSIDIARIES NET INTEREST MARGIN THREE MONTHS ENDED March 31, 2024 AND 2023 (Dollars in Thousands) (Unaudited)

	Three Months Ended							Three Months Ended
	March 31, 2024							March 31, 2023
	Average Balance		Interest		Annualized Yield/ Rate %			Average Balance		Interest		Annualized Yield/ Rate %
ASSETS
Interest-earning assets:
Total loans	$	821,984	$	12,853		6.29	%	$	770,871	$	10,982		5.78	%
Taxable investment securities		133,689		862		2.59	%		129,840		680		2.12	%
Tax-exempt investment securities		1,030		3		1.17	%		1,059		3		1.15	%
Federal Home Loan Bank stock		914		18		7.92	%		1,634		28		6.95	%
Federal funds sold		6,607		89		5.42	%		2,591		29		4.54	%
Interest-bearing deposits in banks		33,004		452		5.51	%		20,526		238		4.70	%
Total interest-earning assets		997,228		14,277		5.76	%		926,521		11,960		5.24	%

Noninterest-earning assets		67,790							62,818
Total	$	1,065,018						$	989,339

LIABILITIES AND SHAREHOLDERS' EQUITY
Interest-bearing deposits:
Demand deposits	$	201,261		252		0.50	%	$	227,382		195		0.35	%
Savings deposits		260,420		1,884		2.91	%		193,878		553		1.16	%
Time deposits		336,822		2,963		3.54	%		270,780		1,389		2.08	%
Total interest-bearing deposits		798,503		5,099		2.57	%		692,040		2,137		1.25	%
Noninterest-bearing demand deposits		149,613		—		—			166,548		—		—
Total deposits		948,116		5,099		2.16	%		858,588		2,137		1.01	%
Borrowings		14,545		138		3.82	%		37,221		389		4.24	%
Total funding costs		962,661		5,237		2.19	%		895,809		2,526		1.14	%

Other noninterest-bearing liabilities		10,712							9,693
Shareholders' equity		91,645							83,837
Total	$	1,065,018						$	989,339

Net interest income			$	9,040						$	9,434
Net interest margin						3.65	%						4.13	%

FIRST US BANCSHARES, INC. AND SUBSIDIARIES INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS (Dollars in Thousands, Except Per Share Data)

	March 31,		December 31,
	2024		2023
	(Unaudited)
ASSETS
Cash and due from banks	$	18,557	$	12,987
Interest-bearing deposits in banks		41,685		37,292
Total cash and cash equivalents		60,242		50,279
Federal funds sold		5,532		9,475
Investment securities available-for-sale, at fair value		125,380		135,565
Investment securities held-to-maturity, at amortized cost		983		1,104
Federal Home Loan Bank stock, at cost		1,494		1,201
Loans and leases held for investment		822,941		821,791
Less allowance for credit losses on loans and leases		10,436		10,507
Net loans and leases held for investment		812,505		811,284
Premises and equipment, net of accumulated depreciation		25,041		24,398
Cash surrender value of bank-owned life insurance		16,788		16,702
Accrued interest receivable		4,148		3,976
Goodwill and core deposit intangible, net		7,569		7,606
Other real estate owned		572		602
Other assets		10,287		10,748
Total assets	$	1,070,541	$	1,072,940
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits:
Non-interest-bearing	$	142,944	$	153,591
Interest-bearing		800,324		796,600
Total deposits		943,268		950,191
Accrued interest expense		1,714		2,030
Other liabilities		7,416		9,327
Short-term borrowings		15,000		10,000
Long-term borrowings		10,817		10,799
Total liabilities		978,215		982,347
Shareholders' equity:
Common stock, par value $0.01 per share, 10,000,000 shares authorized; 7,794,911 and 7,738,201 shares issued, respectively; 5,787,441 and 5,735,075 shares outstanding, respectively		75		75
Additional paid-in capital		15,122		14,972
Accumulated other comprehensive loss, net of tax		(6,621)		(6,431)
Retained earnings		111,777		109,959
Less treasury stock: 2,007,470 and 2,003,126 shares at cost, respectively		(28,027)		(27,982)
Total shareholders' equity		92,326		90,593
Total liabilities and shareholders' equity	$	1,070,541	$	1,072,940

FIRST US BANCSHARES, INC. AND SUBSIDIARIES INTERIM CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Dollars in Thousands, Except Per Share Data)

	Three Months Ended
	March 31,
	2024		2023
	(Unaudited)		(Unaudited)
Interest income:
Interest and fees on loans	$	12,853	$	10,982
Interest on investment securities		865		683
Interest on deposits in banks		452		238
Other		107		57
Total interest income		14,277		11,960

Interest expense:
Interest on deposits		5,099		2,137
Interest on borrowings		138		389
Total interest expense		5,237		2,526

Net interest income		9,040		9,434

Provision for credit losses		-		269

Net interest income after provision for credit losses		9,040		9,165

Non-interest income:
Service and other charges on deposit accounts		299		285
Lease income		257		231
Other income, net		309		313
Total non-interest income		865		829

Non-interest expense:
Salaries and employee benefits		4,088		4,222
Net occupancy and equipment		894		835
Computer services		443		421
Insurance expense and assessments		391		327
Fees for professional services		341		245
Other expense		990		1,220
Total non-interest expense		7,147		7,270

Income before income taxes		2,758		2,724
Provision for income taxes		651		652
Net income	$	2,107	$	2,072
Basic net income per share	$	0.36	$	0.35
Diluted net income per share	$	0.34	$	0.33
Dividends per share	$	0.05	$	0.05

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, 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 March 31, 2024 and December 31, 2023.

	March 31, 2024		December 31, 2023
	(Dollars in Thousands)
	(Unaudited)		(Unaudited)
Liquidity from cash and federal funds sold:
Cash and cash equivalents	$	60,242	$	50,279
Federal funds sold		5,532		9,475
Liquidity from cash and federal funds sold		65,774		59,754
Liquidity from pledgable investment securities:
Investment securities available-for sale, at fair value		125,380		135,565
Investment securities held-to-maturity, at amortized cost		983		1,104
Less: securities pledged		(47,233)		(41,375)
Less: estimated collateral value discounts		(11,080)		(11,129)
Liquidity from pledgable investment securities		68,050		84,165
Liquidity from unused lendable collateral (loans) at FHLB		15,878		21,696
Liquidity from unused lendable collateral (loans and securities) at FRB		158,782		161,729
Unsecured lines of credit with banks		48,000		48,000
Total readily available liquidity	$	356,484	$	375,344

The table above calculates readily available liquidity by combining cash and cash equivalents, federal funds sold 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-for-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 March 31, 2024 and December 31, 2023, the Company's total remaining credit availability with the FHLB was $276.8 million and $279.4 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. For example, the Company has 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 March 31, 2024, the Company had approximately 29 thousand deposit accounts with an average balance of approximately $29.6 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 $192.5 million, or 20.4% of total deposits, as of March 31, 2024. As of December 31, 2023, estimated uninsured deposits totaled $200.3 million, or 21.1% of total deposits.

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.

		Quarter Ended
		2024	2023
		March 31,	December 31,	September 30,	June 30,	March 31,
		(Dollars in Thousands, Except Per Share Data)
		(Unaudited Reconciliation)
TANGIBLE BALANCES
Total assets		$1,070,541	$1,072,940	$1,065,239	$1,068,126	$1,026,658
Less: Goodwill		7,435	7,435	7,435	7,435	7,435
Less: Core deposit intangible		134	171	207	256	311
Tangible assets	(a)	$1,062,972	$1,065,334	$1,057,597	$1,060,435	$1,018,912

Total shareholders' equity		$92,326	$90,593	$87,408	$85,725	$84,757
Less: Goodwill		7,435	7,435	7,435	7,435	7,435
Less: Core deposit intangible		134	171	207	256	311
Tangible common equity	(b)	$84,757	$82,987	$79,766	$78,034	$77,011

Average shareholders' equity		$91,645	$87,615	$86,897	$85,660	$83,837
Less: Average goodwill		7,435	7,435	7,435	7,435	7,435
Less: Average core deposit intangible		151	188	229	282	337
Average tangible shareholders' equity	(c)	$84,059	$79,992	$79,233	$77,943	$76,065

Net income	(d)	$2,107	$2,277	$2,113	$2,023	$2,072
Common shares outstanding (in thousands)	(e)	5,787	5,735	5,875	5,875	5,867

TANGIBLE MEASURES
Tangible book value per common share	(b)/(e)	$14.65	$14.47	$13.58	$13.28	$13.13

Tangible common equity to tangible assets	(b)/(a)	7.97 %	7.79 %	7.54 %	7.36 %	7.56 %

Return on average tangible common equity (annualized)	(1)	10.08 %	11.29 %	10.58 %	10.41 %	11.05 %

(1) Calculation of Return on average tangible common equity (annualized) = ((net income (d) / number of days in period) * number of days in year) / average tangible shareholders' equity (c)

Contact:	Thomas S. Elley
	205-582-1200

View original content:https://www.prnewswire.com/news-releases/first-us-bancshares-inc-reports-first-quarter-2024-earnings-302126307.html

SOURCE First US Bancshares, Inc.

FAQ

What was First US Bancshares, Inc.'s net income for the first quarter of 2024?

First US Bancshares, Inc. reported a net income of $2.1 million for the first quarter of 2024.

What was the diluted earnings per share for First US Bancshares, Inc. in the first quarter of 2024?

First US Bancshares, Inc. had a diluted earnings per share of $0.34 for the first quarter of 2024.

What were the total assets of First US Bancshares, Inc. as of March 31, 2024?

First US Bancshares, Inc. had total assets of $1,070,541 as of March 31, 2024.

What were the key ratios for First US Bancshares, Inc. in the first quarter of 2024?

First US Bancshares, Inc. had a return on average assets of 0.80%, return on average common equity of 9.25%, and return on average tangible common equity of 10.08% in the first quarter of 2024.

What was the efficiency ratio for First US Bancshares, Inc. in the first quarter of 2024?

First US Bancshares, Inc. had an efficiency ratio of 72.2% in the first quarter of 2024.

Did First US Bancshares, Inc. record a provision for credit losses in the first quarter of 2024?

No, First US Bancshares, Inc. did not record a provision for credit losses in the first quarter of 2024.

First US Bancshares, Inc. Reports First Quarter 2024 Earnings

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What was First US Bancshares, Inc.'s net income for the first quarter of 2024?

What was the diluted earnings per share for First US Bancshares, Inc. in the first quarter of 2024?

What were the total assets of First US Bancshares, Inc. as of March 31, 2024?

What were the key ratios for First US Bancshares, Inc. in the first quarter of 2024?

What was the efficiency ratio for First US Bancshares, Inc. in the first quarter of 2024?

Did First US Bancshares, Inc. record a provision for credit losses in the first quarter of 2024?

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What was First US Bancshares, Inc.'s net income for the first quarter of 2024?

What was the diluted earnings per share for First US Bancshares, Inc. in the first quarter of 2024?

What were the total assets of First US Bancshares, Inc. as of March 31, 2024?

What were the key ratios for First US Bancshares, Inc. in the first quarter of 2024?

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Did First US Bancshares, Inc. record a provision for credit losses in the first quarter of 2024?

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