First US Bancshares Earnings 2020-06-30

Balance Sheet	Income Statement	Cash Flow

10-Q 1 fusb-10q_20200630.htm 10-Q fusb-10q_20200630.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2020

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 0-14549

First US Bancshares, Inc.

(Exact Name of Registrant as Specified in Its Charter)

Delaware

63-0843362

(State or Other Jurisdiction of

Incorporation or Organization)

(IRS Employer

Identification No.)

3291 U.S. Highway 280

Birmingham, AL

35243

(Address of Principal Executive Offices)

(Zip Code)

(205) 582-1200

(Registrant’s Telephone Number, Including Area Code)

N/A

(Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.01 par value	FUSB	The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☒
Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐ No ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.


Class	Outstanding at August 10, 2020
Common Stock, $0.01 par value	6,176,756 shares

FIRST US BANCSHARES, INC. AND SUBSIDIARIES

		PAGE

PART I. FINANCIAL INFORMATION		4

ITEM 1. FINANCIAL STATEMENTS		4

Interim Condensed Consolidated Balance Sheets at June 30, 2020 (Unaudited) and December 31, 2019		4

Interim Condensed Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2020 and 2019 (Unaudited)		5

Interim Condensed Consolidated Statements of Comprehensive Income for the Three and Six Months Ended June 30, 2020 and 2019 (Unaudited)		6

Interim Condensed Consolidated Statements of Changes in Shareholders’ Equity for the Three and Six Months Ended June 30, 2020 and 2019 (Unaudited)		7

Interim Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2020 and 2019 (Unaudited)		9

Notes to Interim Condensed Consolidated Financial Statements (Unaudited)		10

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS		42

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK		55

ITEM 4. CONTROLS AND PROCEDURES		56

PART II. OTHER INFORMATION		57

ITEM 1. LEGAL PROCEEDINGS		57

ITEM 1A. RISK FACTORS		57

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS		59

ITEM 6. EXHIBITS		60

Signature Page		61

FORWARD-LOOKING STATEMENTS

Statements contained in this Quarterly Report on Form 10-Q that are not historical facts are forward-looking statements (as defined in the Private Securities Litigation Reform Act of 1995). In addition, First US Bancshares, Inc. (“Bancshares” and, together with its subsidiaries, the “Company”), through its senior management, from time to time makes forward-looking statements concerning its expected future operations, performance and other developments. The words “estimate,” “project,” “intend,” “anticipate,” “expect,” “believe,” “continues” and similar expressions are indicative of forward-looking statements. Such forward-looking statements are necessarily estimates reflecting the Company’s best judgment based on current information and involve a number of risks and uncertainties, and various factors could cause results to differ materially from those contemplated by such forward-looking statements. Such factors could include those identified from time to time in the Company’s Securities and Exchange Commission (“SEC”) filings and other public announcements, including the risk factors described in Part I, Item 1A of the Company's Annual Report on Form 10-K as of and for the year ended December 31, 2019 and in Part II, Item 1A of this Quarterly Report on Form 10-Q. Specifically, with respect to statements relating to the sufficiency of the allowance for loan and lease losses, loan demand, cash flows, interest costs, growth and earnings potential, expansion and the Company’s positioning to handle the challenges presented by COVID-19, these factors include, but are not limited to, the rate of growth (or lack thereof) in the economy generally and in the Bank’s and ALC’s service areas; market conditions and investment returns; changes in interest rates; the impact of the current COVID-19 pandemic on the Company’s business, the Company’s customers, the communities that the Company serves and the United States economy, including the impact of actions taken by governmental authorities to try to contain the virus or address the impact of the virus on the United States economy (including, without limitation, the Coronavirus Aid, Relief and Economic Security Act and subsequent federal legislation) and the resulting effect on the Company’s operations, liquidity and capital position and on the financial condition of the Company’s borrowers and other customers; the pending discontinuation of LIBOR as an interest rate benchmark; the availability of quality loans in the Company’s service areas; the relative strength and weakness in the consumer and commercial credit sectors and in the real estate markets; collateral values; and cybersecurity threats. There can be no assurance that such factors or other factors will not affect the accuracy of such forward-looking statements.

PART I. FINANCIAL INFORMATION

ITEM 1.

FINANCIAL STATEMENTS

FIRST US BANCSHARES, INC. AND SUBSIDIARIES

INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS

(Dollars in Thousands)

	June 30,			December 31,
	2020			2019
	(Unaudited)
ASSETS
Cash and due from banks	$	12,751		$	11,939
Interest-bearing deposits in banks		95,517			45,091
Total cash and cash equivalents		108,268			57,030
Federal funds sold		80			10,080
Investment securities available-for-sale, at fair value		94,658			94,016
Investment securities held-to-maturity, at amortized cost		9,306			14,340
Federal Home Loan Bank stock, at cost		1,135			1,137
Loans, net of allowance for loan and lease losses of $6,423 and $5,762, respectively		566,062			545,243
Premises and equipment, net of accumulated depreciation of $23,195 and $22,570, respectively		28,724			29,216
Cash surrender value of bank-owned life insurance		15,696			15,546
Accrued interest receivable		3,140			2,488
Goodwill and core deposit intangible, net		8,605			8,825
Other real estate owned		1,003			1,078
Other assets		9,070			9,739
Total assets	$	845,747		$	788,738
LIABILITIES AND SHAREHOLDERS’ EQUITY
Deposits:
Non-interest-bearing	$	153,664		$	112,729
Interest-bearing		584,626			570,933
Total deposits		738,290			683,662
Accrued interest expense		438			537
Other liabilities		11,404			9,766
Short-term borrowings		10,334			10,025
Total liabilities		760,466			703,990
Shareholders’ equity:
Common stock, par value $0.01 per share, 10,000,000 shares authorized; 7,596,551 and 7,568,053 shares issued, respectively; 6,176,433 and 6,157,692 shares outstanding, respectively		75			75
Additional paid-in capital		13,573			13,814
Accumulated other comprehensive loss, net of tax		(145	)		(46	)
Retained earnings		93,636			92,755
Less treasury stock: 1,420,118 and 1,410,361 shares at cost, respectively		(21,858	)		(21,850	)
Total shareholders’ equity		85,281			84,748
Total liabilities and shareholders’ equity	$	845,747		$	788,738

The accompanying notes are an integral part of these Interim Condensed Consolidated Statements.

FIRST US BANCSHARES, INC. AND SUBSIDIARIES

INTERIM CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Dollars in Thousands, Except Per Share Data)

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2020		2019		2020		2019
	(Unaudited)				(Unaudited)
Interest income:
Interest and fees on loans	$	9,237	$	9,833	$	18,876	$	19,506
Interest on investment securities		543		1,090		1,301		2,230
Total interest income		9,780		10,923		20,177		21,736
Interest expense:
Interest on deposits		1,131		1,690		2,606		3,330
Interest on borrowings		26		—		62		—
Total interest expense		1,157		1,690		2,668		3,330
Net interest income		8,623		9,233		17,509		18,406
Provision for loan and lease losses		850		715		1,430		1,115
Net interest income after provision for loan and lease losses		7,773		8,518		16,079		17,291
Non-interest income:
Service and other charges on deposit accounts		263		443		697		903
Credit insurance income		45		108		198		251
Net gain on sales and prepayments of investment securities		326		9		326		22
Mortgage fees from secondary market		176		186		303		289
Lease income		212		212		424		421
Other income, net		308		333		679		670
Total non-interest income		1,330		1,291		2,627		2,556
Non-interest expense:
Salaries and employee benefits		5,193		5,195		10,329		10,183
Net occupancy and equipment		995		1,046		1,996		2,135
Computer services		424		333		841		684
Fees for professional services		401		321		679		563
Other expense		1,568		1,609		3,230		3,392
Total non-interest expense		8,581		8,504		17,075		16,957

Income before income taxes		522		1,305		1,631		2,890
Provision for income taxes		118		300		380		651
Net income	$	404	$	1,005	$	1,251	$	2,239
Basic net income per share	$	0.07	$	0.16	$	0.20	$	0.35
Diluted net income per share	$	0.06	$	0.15	$	0.19	$	0.33
Dividends per share	$	0.03	$	0.02	$	0.06	$	0.04

The accompanying notes are an integral part of these Interim Condensed Consolidated Statements.

FIRST US BANCSHARES, INC. AND SUBSIDIARIES

INTERIM CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Dollars in Thousands)

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2020			2019			2020			2019
	(Unaudited)						(Unaudited)
Net income	$	404		$	1,005		$	1,251		$	2,239
Other comprehensive income (loss):
Unrealized holding gains on securities available-for-sale arising during period, net of tax expense of $343, $402, $550 and $686, respectively		1,031			1,205			1,653			2,056
Reclassification adjustment for net gains on securities available-for -sale realized in net income, net of tax of $81, $2, $81 and $5, respectively		(245	)		(7	)		(245	)		(17	)
Unrealized holding losses arising during the period on effective cash flow hedge derivatives, net of tax benefit of $56, $0, $503 and $0, respectively		(168	)		—			(1,507	)		—
Other comprehensive income (loss)		618			1,198			(99	)		2,039
Total comprehensive income	$	1,022		$	2,203		$	1,152		$	4,278

The accompanying notes are an integral part of these Interim Condensed Consolidated Statements.

FIRST US BANCSHARES, INC. AND SUBSIDIARIES

INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

(Dollars in Thousands, Except Share and Per Share Data)

For the three months ended June 30, 2020 and 2019 (Unaudited)

	Common Stock Shares Outstanding		Common Stock		Additional Paid-in Capital			Accumulated Other Comprehensive Income (Loss)			Retained Earnings			Treasury Stock, at Cost			Total Shareholders’ Equity
Balance, March 31, 2019		6,303,582	$	75	$	13,589		$	(1,536	)	$	89,859		$	(20,414	)	$	81,573
Net income		—		—		—			—			1,005			—			1,005
Net change in fair value of securities available-for-sale, net of tax		—		—		—			1,198			—			—			1,198
Dividends declared: $.02 per share		—		—		—			—			(127	)		—			(127	)
Impact of stock-based compensation plans, net		—		—		99			—			—			—			99
Reissuance of treasury stock as compensation		2,579		—		(42	)		—			—			42			—
Balance, June 30, 2019		6,306,161	$	75	$	13,646		$	(338	)	$	90,737		$	(20,372	)	$	83,748

Balance, March 31, 2020		6,143,286	$	75	$	13,904		$	(763	)	$	93,418		$	(22,302	)	$	84,332
Net income		—		—		—			—			404			—			404
Net change in fair value of securities available-for-sale, net of tax		—		—		—			786			—			—			786
Net change in fair value of derivative instruments, net of tax		—		—		—			(168	)		—			—			(168	)
Dividends declared: $.03 per share		—		—		—			—			(186	)		—			(186	)
Impact of stock-based compensation plans, net		4,300		—		113			—			—			—			113
Reissuance of treasury stock as compensation		28,847		—		(444	)		—			—			444			—
Balance, June 30, 2020		6,176,433	$	75	$	13,573		$	(145	)	$	93,636		$	(21,858	)	$	85,281

FIRST US BANCSHARES, INC. AND SUBSIDIARIES

INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

(Dollars in Thousands, Except Share and Per Share Data)

For the six months ended June 30, 2020 and 2019 (Unaudited)

	Common Stock Shares Outstanding			Common Stock		Additional Paid-in Capital			Accumulated Other Comprehensive Income (Loss)			Retained Earnings			Treasury Stock, at Cost			Non- controlling Interest			Total Shareholders’ Equity
Balance, January 1, 2019		6,298,062		$	75	$	13,496		$	(2,377	)	$	88,668		$	(20,414	)	$	(11	)	$	79,437
Net income		—			—		—			—			2,239			—			—			2,239
Net change in fair value of securities available-for-sale, net of tax		—			—		—			2,039			—			—			—			2,039
Dividends declared: $.04 per share		—			—		—			—			(253	)		—			—			(253	)
Impact of stock-based compensation plans, net		5,520			—		192			—			—			—			—			192
Reissuance of treasury stock as compensation		2,579			—		(42	)		—			—			42			—			—
Discontinuation of partnership consolidation		—			—		—			—			83			—			11			94
Balance, June 30, 2019		6,306,161		$	75	$	13,646		$	(338	)	$	90,737		$	(20,372	)	$	—		$	83,748

Balance, January 1, 2020		6,157,692		$	75	$	13,814		$	(46	)	$	92,755		$	(21,850	)	$	—		$	84,748
Net income		—			—		—			—			1,251			—			—			1,251
Net change in fair value of securities available-for-sale, net of tax		—			—		—			1,408			—			—			—			1,408
Net change in fair value of derivative instruments, net of tax		—			—		—			(1,507	)		—			—			—			(1,507	)
Dividends declared: $.06 per share		—			—		—			—			(370	)		—			—			(370	)
Impact of stock-based compensation plans, net		28,498			—		203			—			—			—			—			203
Reissuance of treasury stock as compensation		28,847			—		(444	)		—			—			444			—			—
Treasury stock repurchases		(38,604	)		—		—			—			—			(452	)		—			(452	)
Balance, June 30, 2020		6,176,433		$	75

Price	10.00	EPS	1
Shares	7	P/E	14
MCap	68	P/FCF	8
Net Debt	-35	EBIT	13
TEV	33	TEV/EBIT	3
TTM 2019-09-30, in MM, except price, ratios

10-Q	2020-06-30	Filed 2020-08-12
10-Q	2020-03-31	Filed 2020-05-14
10-K	2019-12-31	Filed 2020-03-18
10-Q	2019-09-30	Filed 2019-11-06
10-Q	2019-06-30	Filed 2019-08-07
10-Q	2019-03-31	Filed 2019-05-10
10-K	2018-12-31	Filed 2019-03-15
10-Q	2018-09-30	Filed 2018-11-13
10-Q	2018-05-07	Filed 2018-08-08
10-Q	2018-03-31	Filed 2018-05-04
10-K	2017-12-31	Filed 2018-03-15
10-Q	2017-09-30	Filed 2017-11-08
10-Q	2017-06-30	Filed 2017-08-09
10-Q	2017-03-31	Filed 2017-05-05
10-K	2016-12-31	Filed 2017-03-15
10-Q	2016-09-30	Filed 2016-11-09
10-Q	2016-06-30	Filed 2016-08-10
10-Q	2016-03-31	Filed 2016-05-12
10-K	2015-12-31	Filed 2016-03-11
10-Q	2015-09-30	Filed 2015-11-13
10-Q	2015-06-30	Filed 2015-08-13
10-Q	2015-03-31	Filed 2015-05-14
10-K	2014-12-31	Filed 2015-03-12
10-Q	2014-09-30	Filed 2014-11-13
10-Q	2014-06-30	Filed 2014-08-13
10-Q	2014-03-31	Filed 2014-05-14
10-K	2013-12-31	Filed 2014-03-21
10-Q	2013-09-30	Filed 2013-11-13
10-Q	2013-06-30	Filed 2013-08-14
10-Q	2013-03-31	Filed 2013-05-10
10-K	2012-12-31	Filed 2013-03-28
10-Q	2012-09-30	Filed 2012-11-13
10-Q	2012-06-30	Filed 2012-08-10
10-Q	2012-03-31	Filed 2012-05-11
10-K	2011-12-31	Filed 2012-03-30
10-Q	2011-09-30	Filed 2011-11-14
10-Q	2011-06-30	Filed 2011-08-12
10-Q	2011-03-31	Filed 2011-05-23
10-K	2010-12-31	Filed 2011-03-15
10-Q	2010-09-30	Filed 2010-11-08
10-Q	2010-06-30	Filed 2010-08-09
10-Q	2010-03-31	Filed 2010-05-10
10-K	2009-12-31	Filed 2010-03-15

8-K	2020-08-07	Regulation FD, Exhibits
8-K	2020-07-29	Earnings, Exhibits
8-K	2020-05-29
8-K	2020-05-04
8-K	2020-04-30
8-K	2020-02-26
8-K	2020-01-28
8-K	2020-01-27
8-K	2019-10-28
8-K	2019-09-03
8-K	2019-07-29
8-K	2019-07-09
8-K	2019-05-02
8-K	2019-05-02
8-K	2019-04-29
8-K	2019-01-29
8-K	2019-01-28
8-K	2018-11-06
8-K	2018-08-31
8-K	2018-08-16
8-K	2018-08-13
8-K	2018-07-30
8-K	2018-04-27
8-K	2018-04-25
8-K	2018-04-16
8-K	2018-01-30

EX-10.1	fusb-ex101_73.htm
EX-31.1	fusb-ex311_7.htm
EX-31.2	fusb-ex312_8.htm
EX-32	fusb-ex32_6.htm

FUSB 10Q Quarterly Report

First US Bancshares Earnings 2020-06-30