Company Quick10K Filing
First US Bancshares
Price10.00 EPS1
Shares7 P/E14
MCap68 P/FCF8
Net Debt-35 EBIT13
TEV33 TEV/EBIT3
TTM 2019-09-30, in MM, except price, ratios
10-Q 2021-03-31 Filed 2021-05-11
10-K 2020-12-31 Filed 2021-03-15
10-Q 2020-09-30 Filed 2020-11-10
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 2021-01-29
8-K 2021-01-28
8-K 2020-11-18
8-K 2020-10-30
8-K 2020-08-07
8-K 2020-07-29
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

FUSB 10Q Quarterly Report

Part I. Financial Information
Item 1. Financial Statements
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Item 4. Controls and Procedures
Part II. Other Information
Item 1. Legal Proceedings
Item 1A. Risk Factors
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Item 6. Exhibits
EX-10.1 fusb-ex101_43.htm
EX-31.1 fusb-ex311_7.htm
EX-31.2 fusb-ex312_8.htm
EX-32 fusb-ex32_6.htm

First US Bancshares Earnings 2021-03-31

Balance SheetIncome StatementCash Flow

10-Q 1 fusb-10q_20210331.htm 10-Q fusb-10q_20210331.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 March 31, 2021

OR

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 May 7, 2021

Common Stock, $0.01 par value

6,213,641 shares

 

 


 

FIRST US BANCSHARES, INC. AND SUBSIDIARIES

 

 

 

PAGE

 

 

 

PART I.  FINANCIAL INFORMATION

 

4

 

 

 

ITEM  1. FINANCIAL STATEMENTS

 

4

 

 

 

Interim Condensed Consolidated Balance Sheets at March 31, 2021 (Unaudited) and December 31, 2020

 

4

 

 

 

Interim Condensed Consolidated Statements of Operations for the Three Months Ended March 31, 2021 and 2020 (Unaudited)

 

5

 

 

 

Interim Condensed Consolidated Statements of Comprehensive Income for the Three Months Ended March 31, 2021 and 2020 (Unaudited)

 

6

 

 

 

Interim Condensed Consolidated Statements of Changes in Shareholders’ Equity for the Three Months Ended March 31, 2021 and 2020 (Unaudited)

 

7

 

 

 

Interim Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2021 and 2020 (Unaudited)

 

8

 

 

 

Notes to Interim Condensed Consolidated Financial Statements (Unaudited)

 

9

 

 

 

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

 

38

 

 

 

ITEM  3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

 

50

 

 

 

ITEM  4. CONTROLS AND PROCEDURES

 

51

 

 

 

PART II. OTHER INFORMATION

 

52

 

 

 

ITEM  1. LEGAL PROCEEDINGS

 

52

 

 

 

ITEM  1A. RISK FACTORS

 

52

 

 

 

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

 

52

 

 

 

ITEM  6. EXHIBITS

 

53

 

 

 

Signature Page

 

54

 

2


 

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, 2020. 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 Company’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 and protect against it, through vaccinations and otherwise, or address the impact of the virus on the United States economy (including, without limitation, the Coronavirus Aid, Relief and Economic Security (CARES) 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; cybersecurity threats; and risks related to the Paycheck Protection Program. There can be no assurance that such factors or other factors will not affect the accuracy of such forward-looking statements.

3


PART I. FINANCIAL INFORMATION

ITEM 1.

FINANCIAL STATEMENTS

FIRST US BANCSHARES, INC. AND SUBSIDIARIES

INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS

(Dollars in Thousands)

 

 

 

March 31,

 

 

December 31,

 

 

 

2021

 

 

2020

 

 

 

(Unaudited)

 

 

 

 

 

ASSETS

 

Cash and due from banks

 

$

13,322

 

 

$

12,235

 

Interest-bearing deposits in banks

 

 

112,545

 

 

 

82,180

 

Total cash and cash equivalents

 

 

125,867

 

 

 

94,415

 

Federal funds sold

 

 

84

 

 

 

85

 

Investment securities available-for-sale, at fair value

 

 

70,104

 

 

 

84,993

 

Investment securities held-to-maturity, at amortized cost

 

 

5,679

 

 

 

6,429

 

Federal Home Loan Bank stock, at cost

 

 

870

 

 

 

1,135

 

Loans, net of allowance for loan and lease losses of $7,475 and $7,470, respectively

 

 

659,230

 

 

 

638,374

 

Premises and equipment, net of accumulated depreciation of $24,041 and $23,774,

   respectively

 

 

27,953

 

 

 

28,206

 

Cash surrender value of bank-owned life insurance

 

 

15,919

 

 

 

15,846

 

Accrued interest receivable

 

 

2,593

 

 

 

2,807

 

Goodwill and core deposit intangible, net

 

 

8,319

 

 

 

8,410

 

Other real estate owned

 

 

942

 

 

 

949

 

Other assets

 

 

8,975

 

 

 

8,862

 

Total assets

 

$

926,535

 

 

$

890,511

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

Deposits:

 

 

 

 

 

 

 

 

Non-interest-bearing

 

$

164,659

 

 

$

151,935

 

Interest-bearing

 

 

653,384

 

 

 

630,277

 

Total deposits

 

 

818,043

 

 

 

782,212

 

Accrued interest expense

 

 

242

 

 

 

292

 

Other liabilities

 

 

10,316

 

 

 

11,312

 

Short-term borrowings

 

 

10,017

 

 

 

10,017

 

Total liabilities

 

 

838,618

 

 

 

803,833

 

Shareholders’ equity:

 

 

 

 

 

 

 

 

Common stock, par value $0.01 per share, 10,000,000 shares authorized; 7,634,281 and

   7,596,351 shares issued, respectively; 6,213,641 and 6,176,556 shares outstanding,

   respectively

 

 

75

 

 

 

75

 

Additional paid-in capital

 

 

13,889

 

 

 

13,786

 

Accumulated other comprehensive income (loss), net of tax

 

 

327

 

 

 

(52

)

Retained earnings

 

 

95,486

 

 

 

94,722

 

Less treasury stock: 1,420,640 and 1,419,795 shares at cost, respectively

 

 

(21,860

)

 

 

(21,853

)

Total shareholders’ equity

 

 

87,917

 

 

 

86,678

 

Total liabilities and shareholders’ equity

 

$

926,535

 

 

$

890,511

 

 

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

 

4


 

FIRST US BANCSHARES, INC. AND SUBSIDIARIES

INTERIM CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Dollars in Thousands, Except Per Share Data)

 

 

 

Three Months Ended

 

 

 

March 31,

 

 

 

2021

 

 

2020

 

 

 

(Unaudited)

 

Interest income:

 

 

 

 

 

 

 

 

Interest and fees on loans

 

$

9,490

 

 

$

9,639

 

Interest on investment securities

 

 

355

 

 

 

758

 

Total interest income

 

 

9,845

 

 

 

10,397

 

Interest expense:

 

 

 

 

 

 

 

 

Interest on deposits

 

 

743

 

 

 

1,475

 

Interest on borrowings

 

 

38

 

 

 

36

 

Total interest expense

 

 

781

 

 

 

1,511

 

Net interest income

 

 

9,064

 

 

 

8,886

 

Provision for loan and lease losses

 

 

401

 

 

 

580

 

Net interest income after provision for loan and lease losses

 

 

8,663

 

 

 

8,306

 

Non-interest income:

 

 

 

 

 

 

 

 

Service and other charges on deposit accounts

 

 

266

 

 

 

434

 

Credit insurance income

 

 

105

 

 

 

153

 

Mortgage fees from secondary market

 

 

23

 

 

 

127

 

Lease income

 

 

209

 

 

 

212

 

Other income, net

 

 

348

 

 

 

371

 

Total non-interest income

 

 

951

 

 

 

1,297

 

Non-interest expense:

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

 

4,914

 

 

 

5,136

 

Net occupancy and equipment

 

 

1,039

 

 

 

1,001

 

Computer services

 

 

465

 

 

 

417

 

Fees for professional services

 

 

357

 

 

 

278

 

Other expense

 

 

1,621

 

 

 

1,662

 

Total non-interest expense

 

 

8,396

 

 

 

8,494

 

 

 

 

 

 

 

 

 

 

Income before income taxes

 

 

1,218

 

 

 

1,109

 

Provision for income taxes

 

 

268

 

 

 

262

 

Net income

 

$

950

 

 

$

847

 

Basic net income per share

 

$

0.15

 

 

$

0.13

 

Diluted net income per share

 

$

0.14

 

 

$

0.13

 

Dividends per share

 

$

0.03

 

 

$

0.03

 

 

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

 


5


 

FIRST US BANCSHARES, INC. AND SUBSIDIARIES

INTERIM CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Dollars in Thousands)

 

 

 

Three Months Ended

 

 

 

March 31,

 

 

 

2021

 

 

2020

 

 

 

(Unaudited)

 

Net income

 

$

950

 

 

$

847

 

Other comprehensive income (loss):

 

 

 

 

 

 

 

 

Unrealized holding (losses) gains on securities available-for-sale

   arising during period, net of tax (benefit) expense of ($36) and $207, respectively

 

 

(106

)

 

 

622

 

Unrealized holding gains (losses) arising during the period on

   effective cash flow hedge derivatives, net of tax expense (benefit)

   of $161 and ($447), respectively

 

 

485

 

 

 

(1,339

)

Other comprehensive income (loss)

 

 

379

 

 

 

(717

)

Total comprehensive income

 

$

1,329

 

 

$

130

 

 

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

 

6


 

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 March 31, 2021 and 2020 (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, January 1, 2020

 

 

6,157,692

 

 

$

75

 

 

$

13,814

 

 

$

(46

)

 

$

92,755

 

 

$

(21,850

)

 

$

84,748

 

Net income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

847

 

 

 

 

 

 

847

 

Net change in fair value of

   securities available-for-sale,

   net of tax

 

 

 

 

 

 

 

 

 

 

 

622

 

 

 

 

 

 

 

 

 

622

 

Net change in fair value of

   derivative instruments, net

   of tax

 

 

 

 

 

 

 

 

 

 

 

(1,339

)

 

 

 

 

 

 

 

 

(1,339

)

Dividends declared: $.03 per

   share

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(184

)

 

 

 

 

 

(184

)

Impact of stock-based

   compensation plans, net

 

 

24,198

 

 

 

 

 

 

90

 

 

 

 

 

 

 

 

 

 

 

 

90

 

Treasury stock repurchases

 

 

(38,604

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(452

)

 

 

(452

)

Balance, March 31, 2020

 

 

6,143,286

 

 

$

75

 

 

$

13,904

 

 

$

(763

)

 

$

93,418

 

 

$

(22,302

)

 

$

84,332

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, January 1, 2021

 

 

6,176,556

 

 

$

75

 

 

$

13,786

 

 

$

(52

)

 

$

94,722

 

 

$

(21,853

)

 

$

86,678

 

Net income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

950

 

 

 

 

 

 

950

 

Net change in fair value of

   securities available-for-sale,

   net of tax

 

 

 

 

 

 

 

 

 

 

 

(106

)

 

 

 

 

 

 

 

 

(106

)

Net change in fair value of

   derivative instruments, net

   of tax

 

 

 

 

 

 

 

 

 

 

 

485

 

 

 

 

 

 

 

 

 

485

 

Dividends declared: $.03 per

   share

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(186

)

 

 

 

 

 

(186

)

Impact of stock-based

   compensation plans, net

 

 

37,085

 

 

 

 

 

 

103

 

 

 

 

 

 

 

 

 

(7

)

 

 

96

 

Balance, March 31, 2021

 

 

6,213,641

 

 

$

75

 

 

$

13,889

 

 

$

327

 

 

$

95,486

 

 

$

(21,860

)

 

$

87,917

 

 

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

 

7


 

FIRST US BANCSHARES, INC. AND SUBSIDIARIES

INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Dollars in Thousands)

 

 

 

Three Months Ended

 

 

 

March 31,

 

 

 

2021

 

 

2020

 

 

 

(Unaudited)

 

Cash flows from operating activities:

 

 

 

 

 

 

 

 

Net income

 

$

950

 

 

$

847

 

Adjustments to reconcile net income to cash provided by operating activities:

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

445

 

 

 

399

 

Provision for loan and lease losses

 

 

401

 

 

 

580

 

Deferred income tax provision

 

 

29

 

 

 

266

 

Stock-based compensation expense

 

 

103

 

 

 

90

 

Net amortization of securities

 

 

72

 

 

 

96

 

Amortization of intangible assets

 

 

91

 

 

 

110

 

Net loss on premises and equipment and other real estate

 

 

39

 

 

 

171

 

Changes in assets and liabilities:

 

 

 

 

 

 

 

 

Decrease in accrued interest receivable

 

 

214

 

 

 

97

 

Increase in other assets

 

 

(321

)

 

 

(299

)

Decrease in accrued interest expense

 

 

(50

)

 

 

(50

)

Decrease in other liabilities

 

 

(86

)

 

 

(1,308

)

Net cash provided by operating activities

 

 

1,887

 

 

 

999

 

Cash flows from investing activities:

 

 

 

 

 

 

 

 

Net decrease (increase) in federal funds sold

 

 

1

 

 

 

(5,000

)

Purchases of investment securities, available-for-sale

 

 

(3,512

)

 

 

(9,142

)

Proceeds from maturities and prepayments of investment securities, available-for-sale

 

 

18,199

 

 

 

7,365

 

Proceeds from maturities and prepayments of investment securities, held-to-maturity

 

 

738

 

 

 

787

 

Net decrease in Federal Home Loan Bank stock

 

 

265

 

 

 

2

 

Proceeds from the sale of premises and equipment and other real estate

 

 

279

 

 

 

190

 

Net (increase) decrease in loans

 

 

(21,921

)

 

 

5,699

 

Purchases of premises and equipment

 

 

(122

)

 

 

(233

)

Net cash used in investing activities

 

 

(6,073

)

 

 

(332

)

Cash flows from financing activities:

 

 

 

 

 

 

 

 

Net increase (decrease) in deposits

 

 

35,831

 

 

 

(1,067

)

Net increase in short-term borrowings

 

 

 

 

 

127

 

Net share-based compensation transactions

 

 

(7

)

 

 

 

Treasury stock repurchases

 

 

 

 

 

(452

)

Dividends paid

 

 

(186

)

 

 

(184

)

Net cash provided by (used in) financing activities

 

 

35,638

 

 

 

(1,576

)

Net increase (decrease) in cash and cash equivalents

 

 

31,452

 

 

 

(909

)

Cash and cash equivalents, beginning of period

 

 

94,415

 

 

 

57,030

 

Cash and cash equivalents, end of period

 

$

125,867

 

 

$

56,121

 

Supplemental disclosures:

 

 

 

 

 

 

 

 

Cash paid for:

 

 

 

 

 

 

 

 

Interest

 

$

830

 

 

$

1,561

 

Income taxes

 

 

 

 

 

147

 

Non-cash transactions:

 

 

 

 

 

 

 

 

Assets acquired in settlement of loans

 

 

400

 

 

 

335

 

 

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

8


FIRST US BANCSHARES, INC. AND SUBSIDIARIES

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1.

GENERAL

The accompanying unaudited interim condensed consolidated financial statements include the accounts of First US Bancshares, Inc. (“Bancshares”) and its subsidiaries (collectively, the “Company”). Bancshares is the parent holding company of First US Bank (the “Bank”). The Bank operates a finance company subsidiary, Acceptance Loan Company, Inc. (“ALC”). Management has determined that the Bank and ALC comprise Bancshares’ two reportable operating segments. All significant intercompany transactions and accounts have been eliminated.

The unaudited interim condensed consolidated financial statements, in the opinion of management, reflect all adjustments necessary for a fair presentation of the Company’s consolidated financial position, results of operations and cash flows for the periods presented. Such adjustments are of a normal, recurring nature. The results of operations for any interim period are not necessarily indicative of results expected for the fiscal year ending December 31, 2021. While certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”), management believes that the disclosures herein are adequate to make the information presented not misleading. These unaudited interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto contained in the Company’s Annual Report on Form 10-K as of and for the year ended December 31, 2020.

Risks and Uncertainties

 

The COVID-19 pandemic and its associated impacts on trade (including supply chains and export levels), travel, employee productivity and other economic activities have had, are currently having, and may for some time continue to have a destabilizing effect on financial markets and economic activity. The extent of the impact of COVID-19 on the Company’s operational and financial performance is currently uncertain, cannot be predicted and will depend on certain developments, including, among others, the spread of COVID-19 and its variants, vaccination efforts, the duration of the pandemic, its impact on our customers, employees and vendors, and the continued governmental, regulatory and private sector responses, which may be precautionary, to COVID-19.  

 

The Company’s business, financial condition and results of operations generally rely upon the ability of the Company’s borrowers to repay their loans, the value of collateral underlying those loans, and demand for loans and other products and services that the Company offers, which are highly dependent on the business environment in the Company’s primary markets and the United States economy as a whole.

In light of the changing economic outlook as a result of COVID-19, in March 2020, the Federal Reserve reduced the target federal funds rate by 150 basis points. The reduction in interest rates and other economic uncertainties that have arisen as a result primarily of the COVID-19 pandemic have negatively impacted net interest income, provisions for loan losses and noninterest income. Additional negative financial impacts could occur; however, the ultimate potential impact is not known at this time.

 

2.

BASIS OF PRESENTATION

Summary of Significant Accounting Policies

Certain significant accounting policies followed by the Company are set forth in Note 2, “Summary of Significant Accounting Policies,” of the Notes to Consolidated Financial Statements in the Company’s Annual Report on Form 10-K as of and for the year ended December 31, 2020.

Reclassification

Certain disclosures in the notes to the prior period consolidated financial statements have been reclassified to conform to the 2021 presentation. These reclassifications had no effect on the Company’s results of operations, financial position or net cash flow.

9


Net Income Per Share

Basic net income per share is computed by dividing net income by the weighted average number of shares of common stock outstanding (basic shares). Included in basic shares are certain shares that have been accrued as of the balance sheet date as deferred compensation for members of Bancshares’ Board of Directors, as well as shares of restricted stock that have been granted pursuant to Bancshares’ 2013 Incentive Plan (as amended, the “2013 Incentive Plan”) previously approved by Bancshares’ shareholders. Diluted net income per share is computed by dividing net income by the weighted average number of shares of common stock outstanding, adjusted for the effect of potentially dilutive stock awards outstanding during the period (dilutive shares). The dilutive shares consist of nonqualified stock option grants issued to employees and members of Bancshares’ Board of Directors pursuant to the 2013 Incentive Plan. The following table reflects weighted average shares used to calculate basic and diluted net income per share for the periods presented.

 

 

 

Three Months Ended

 

 

 

March 31,

 

 

 

2021

 

 

2020

 

Basic shares

 

 

6,307,227

 

 

 

6,280,593

 

Dilutive shares

 

 

421,000

 

 

 

422,000

 

Diluted shares

 

 

6,728,227

 

 

 

6,702,593

 

 

 

 

Three Months Ended

 

 

 

March 31,

 

 

 

2021

 

 

2020

 

 

 

(Dollars in Thousands,

Except Per Share Data)

 

Net income

 

$

950

 

 

$

847

 

Basic net income per share

 

$

0.15

 

 

$

0.13

 

Diluted net income per share

 

$

0.14

 

 

$

0.13

 

 

Comprehensive Income

Comprehensive income consists of net income, as well as unrealized holding gains and losses that arise during the period associated with the Company’s available-for-sale securities portfolio and the effective portion of cash flow hedge derivatives. In the calculation of comprehensive income, reclassification adjustments are made for gains or losses realized in the statement of operations associated with the sale of available-for-sale securities, settlement of derivative contracts or changes in the fair value of cash flow derivatives.

Accounting Policies Recently Adopted

ASU 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes.” Issued in December 2019, ASU 2019-12 seeks to simplify the accounting for income taxes by removing certain exceptions to the general principles in Topic 740. The amendments also simplify GAAP for other areas of Topic 740 by clarifying and amending existing guidance. ASU 2019-12 became effective for the Company on January 1, 2021. The adoption of ASU 2019-12 did not have a material impact on the Company’s consolidated financial statements.

Pending Accounting Pronouncements

ASU 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting.”  Issued in March 2020, ASU 2020-04 seeks to provide guidance, for a limited time, to ease the potential burden in accounting for or recognizing the effects of reference rate reform on financial reporting. ASU 2020-04 was issued in response to concerns about the structural risks of interbank offered rates, and specifically, the risk that the London Interbank Offer Rate (LIBOR) will no longer be used. Regulators have begun reference rate reform initiatives to identify alternative reference rates that are more observable or transaction-based and less susceptible to manipulation. ASU 2020-04 provides temporary optional expedients to GAAP guidance on contract modifications, hedge accounting, and other transactions that reference LIBOR or another reference rate expected to be discontinued. As the guidance in ASU 2020-04 is intended to assist entities during the global market-wide reference rate transition period, it is in effect for a limited time, from March 12, 2020 through December 31, 2022. Management is currently evaluating the impact of the potential discontinuance of LIBOR, and a determination cannot be made at this time as to the impact that the amendments of ASU 2020-04 or the reference rate reform will have on the Company’s consolidated financial statements.

 

10


 

ASU 2017-04, “Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment.”  Issued in January 2017, ASU 2017-04 simplifies the manner in which an entity is required to test goodwill for impairment by eliminating Step 2 from the goodwill impairment test. Step 2 measures a goodwill impairment loss by comparing the implied fair value of a reporting unit’s goodwill with the carrying amount of that goodwill. In computing the implied fair value of goodwill under Step 2, an entity, prior to the amendments in ASU 2017-04, had to perform procedures to determine the fair value at the impairment testing date of its assets and liabilities, including unrecognized assets and liabilities, in accordance with the procedure that would be required in determining the fair value of assets acquired and liabilities assumed in a business combination. However, under the amendments in ASU 2017-04, an entity should (1) perform its annual or interim goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount, and (2) recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value, with the understanding that the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. Additionally, ASU 2017-04 removes the requirements for any reporting unit with a zero or negative carrying amount to perform a qualitative assessment and, if it fails such qualitative test, to perform Step 2 of the goodwill impairment test. As originally issued, ASU 2017-04 was effective prospectively for annual, or any interim, goodwill impairment tests in fiscal years beginning after December 15, 2019. On October 16, 2019, the FASB approved a delay in the implementation of ASU 2017-04 by three years for smaller reporting companies, including the Company. Management is currently evaluating the impact that this ASU will have on the Company’s consolidated financial statements.

ASU 2016-13, "Financial Instruments – Credit Losses: Measurement of Credit Losses on Financial Instruments.” Issued in June 2016, ASU 2016-13 removes the thresholds that companies apply to measure credit losses on financial instruments measured at amortized cost, such as loans, receivables and held-to-maturity debt securities. Under current U.S. GAAP, companies generally recognize credit losses when it is probable that the loss has been incurred. The revised guidance removes all current recognition thresholds and requires companies to recognize an allowance for lifetime expected credit losses. Credit losses will be immediately recognized through net income; the amount recognized will be based on the current estimate of contractual cash flows not expected to be collected over the financial asset’s contractual term. ASU 2016-13 also amends the credit loss measurement guidance for available-for-sale debt securities. The standard will add new disclosures related to factors that influenced management’s estimate, including current expected credit losses, the changes in those factors and reasons for the changes, as well as the method applied to revert to historical credit loss experience. As originally issued, ASU 2016-13 was effective for financial statements issued for fiscal years and for interim periods within those fiscal years beginning after December 15, 2019, with institutions required to apply the changes through a cumulative-effect adjustment to their retained earnings balance as of the beginning of the first reporting period in which the guidance is effective. On October 16, 2019, the FASB approved a delay in the implementation of ASU 2016-13 by three years for smaller reporting companies, including the Company. Management has been in the process of developing a revised model to calculate the allowance for loan and lease losses upon implementation of ASU 2016-13 in order to determine the impact on the Company’s consolidated financial statements and, at this time, expects to recognize a one-time cumulative effect adjustment to the allowance for loan and lease losses as of the beginning of the first reporting period in which the new standard is effective. The magnitude of any such one-time adjustment is not yet known.

 

3.

INVESTMENT SECURITIES

Details of investment securities available-for-sale and held-to-maturity as of March 31, 2021 and December 31, 2020 were as follows:

 

 

 

Available-for-Sale

 

 

 

March 31, 2021

 

 

 

 

 

 

 

Gross

 

 

Gross

 

 

Estimated

 

 

 

Amortized

 

 

Unrealized

 

 

Unrealized

 

 

Fair

 

 

 

Cost

 

 

Gains

 

 

Losses

 

 

Value

 

 

 

(Dollars in Thousands)

 

Mortgage-backed securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Residential

 

$

25,801

 

 

$

745

 

 

$

(5

)

 

$

26,541

 

Commercial

 

 

36,217

 

 

 

723

 

 

 

(85

)

 

 

36,855

 

Obligations of states and political subdivisions

 

 

3,729

 

 

 

126

 

 

 

 

 

 

3,855

 

Corporate notes

 

 

2,713

 

 

 

59

 

 

 

 

 

 

2,772

 

U.S. Treasury securities

 

 

82

 

 

 

 

 

 

(1

)

 

 

81

 

Total

 

$

68,542

 

 

$

1,653

 

 

$

(91

)

 

$

70,104

 

11


 

 

 

 

Held-to-Maturity

 

 

 

March 31, 2021

 

 

 

 

 

 

 

Gross

 

 

Gross

 

 

Estimated

 

 

 

Amortized

 

 

Unrealized

 

 

Unrealized

 

 

Fair

 

 

 

Cost

 

 

Gains

 

 

Losses

 

 

Value

 

 

 

(Dollars in Thousands)

 

Mortgage-backed securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial

 

$

3,644

 

 

$

79

 

 

$

 

 

$

3,723

 

Obligations of U.S. government-sponsored agencies

 

 

1,054

 

 

 

21

 

 

 

 

 

 

1,075

 

Obligations of states and political subdivisions

 

 

981

 

 

 

16

 

 

 

 

 

 

997

 

Total

 

$

5,679

 

 

$

116

 

 

$

 

 

$

5,795

 

 

 

 

Available-for-Sale

 

 

 

December 31, 2020

 

 

 

 

 

 

 

Gross

 

 

Gross

 

 

Estimated

 

 

 

Amortized

 

 

Unrealized

 

 

Unrealized

 

 

Fair

 

 

 

Cost

 

 

Gains

 

 

Losses

 

 

Value

 

 

 

(Dollars in Thousands)

 

Mortgage-backed securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Residential

 

$

24,680

 

 

$

865

 

 

$

(8

)

 

$

25,537

 

Commercial

 

 

40,849

 

 

 

780

 

 

 

(142

)

 

 

41,487

 

Obligations of states and political subdivisions