First US Bancshares, Inc. Reports First Quarter Results
April 25 2017 - 6:23PM
First US Bancshares, Inc. (Nasdaq:FUSB) (the “Company”) today
reported net income of $0.4 million, or $0.06 per diluted share,
for the quarter ended March 31, 2017. The results represent
an increase of $0.01 per diluted share compared to the first
quarter of 2016.
Financial Highlights – First Quarter
2017 Compared to First Quarter 2016
- Revenue Growth – Increased first quarter earnings were driven
by growth in revenue, including both interest and non-interest
income, which increased on a combined basis by $0.5 million, or
6.0%, compared to the first quarter of 2016. The increase in
interest income resulted from loan growth that occurred in 2016
primarily at the Company’s banking subsidiary, First US Bank (the
“Bank”). Net loans totaled $317.7 million as of March 31,
2017, compared to $264.0 million as of March 31, 2016. The
increase in non-interest income resulted from increases in credit
insurance income at the Company’s finance company subsidiary,
Acceptance Loan Company (ALC), as well as increases in service and
other charges on deposit accounts at the Bank.
- Provision for Loan Loss – The revenue growth experienced by the
Company during the first quarter of 2017 was partially offset by an
increase in the Company’s provision for loan losses of $0.3
million, comparing the first quarter of 2017 to the first quarter
of 2016. The increase resulted primarily from a negative
provision of $0.3 million at the Bank during the first quarter of
2016 that was not repeated during the first quarter of 2017. Total
provision expense, including both the Bank and ALC, was $0.5
million in the first quarter of 2017, compared to $0.2 million
during the first quarter of 2016.
- Asset Quality Improvement – Non-performing assets, including
loans in non-accrual status and other real estate owned, decreased
to $6.8 million, or 1.10% of total assets, as of March 31, 2017,
compared to $8.6 million, or 1.50% of total assets, as of March 31,
2016.
- Deposit Growth – Deposits, which represent the Company’s
largest funding source, remained strong during the first quarter of
2017. Deposits totaled $509.1 million as of March 31, 2017,
compared to $485.5 million as of March 31, 2016, an increase of
4.8% over the 12-month period.
“We are pleased to report year-over-year
earnings improvement driven by growth in revenues, as well as
continued improvement in asset quality,” stated James F. House,
President and Chief Executive Officer of the Company. “During
2016, we reported growth in net loans of 26.4%. That growth
has enabled us to start 2017 in a stronger earnings position than
we started 2016. Although we do not expect to achieve the
same level of loan growth each quarter, and indeed we saw a small
decrease in our loan balances from the prior quarter, we remain
optimistic about our prospects for growth over the remainder of
2017. Our management team is committed to improving revenue
through loan growth at the Bank and sustained performance at ALC,”
continued Mr. House.
Results of Operations
- Pre-provision net interest income totaled $6.9 million in the
first quarter of 2017, compared to $7.1 million in the prior
quarter and $6.7 million in the first quarter of 2016. Net
yield on interest-earning assets was 5.05% for the first quarter,
compared to 5.17% for the prior quarter, and 5.10% during the first
quarter of 2016. The reduction in net yield in the first quarter of
2017 resulted primarily from a mix-shift in loan composition at ALC
away from traditional consumer loans to point-of-sale retail
lending, which provides higher credit quality, but at reduced
yield. This change in mix is generally more pronounced during
the first quarter when ALC’s traditional consumer lending is
typically lower than other quarters of the year. Yield on
ALC’s loans was 19.11% during the first quarter of 2017, compared
to 19.94% and 19.60% for the fourth and first quarters of 2016,
respectively. At the Bank, yield on loans totaled 4.06%
during the first quarter of 2017, compared to 4.02% and 4.47%
during the fourth and first quarters of 2016, respectively.
The decrease in the Bank’s yield compared to the first quarter of
2016 resulted primarily from continued efforts by management to
adhere to lending practices designed to improve the credit quality
of the Bank’s portfolio. The Company’s average cost of funds
on deposits and borrowings was 0.54% during the first quarter of
2017, compared to 0.54% and 0.52% during the fourth and first
quarters of 2016, respectively.
- The provision for loan losses was $0.5 million for the first
quarter of 2017, compared to $1.8 million and $0.2 million for the
fourth and first quarters of 2016, respectively. The
allowance for loan losses as a percentage of loans was 1.51% as of
March 31, 2017, compared to 1.48% as of December 31, 2016, and
1.26% as of March 31, 2016. Loan growth at the Bank was the
primary driver in increasing the allowance for loan losses during
2016.
- Non-interest income totaled $1.2 million in both the first
quarter of 2017 and the fourth quarter of 2016, compared to $1.0
million during the first quarter of 2016. The increase in the
more recent quarters was the result of increases in credit
insurance income on loans at ALC, as well as increased service
charge income on deposit accounts at the Bank.
- Non-interest expense totaled $7.0 million in the first quarter
of 2017, compared to $6.8 million and $7.1 million in the fourth
and first quarters of 2016, respectively.
Balance Sheet Management
- Net loans totaled $317.7 million as of March 31, 2017, compared
to $322.8 million as of December 31, 2016. The decrease
included reductions of $4.3 million and $0.8 million at the Bank
and ALC, respectively. The majority of the Bank’s reduction
occurred in the non-farm, non-residential real estate portfolio and
was due primarily to scheduled maturity of loans. The reduction in
this category was partially offset by growth in the Bank’s real
estate construction loan category. ALC’s reduction occurred in its
consumer and real estate portfolios. A decrease in consumer loans
at ALC is generally expected during the first quarter due to the
seasonal nature of traditional consumer finance lending. Real
estate lending was previously discontinued at ALC as part of
management’s efforts to improve credit quality. Accordingly, ALC’s
real estate portfolio is expected to decrease each quarter. The
reductions in these portfolio categories were partially offset by
increases in ALC’s indirect sales portfolio during the
quarter.
- As a result of the decrease in loan volume, excess funds were
redeployed into the investment securities portfolio. Investment
securities totaled $213.5 million as of March 31, 2017, compared to
$207.8 million as of December 31, 2016. Investment securities serve
to both enhance interest income and provide an additional source of
liquidity available to fund loan growth and capital expenditures.
Management has structured the investment portfolio to provide cash
flows through interest earned and the maturity or payoff of
securities in the portfolio on a monthly basis. In the current
environment, it is expected that cash flows from the investment
portfolio will continue to serve as a significant source of
liquidity available for the funding of future loan growth.
- Liabilities increased to $542.5 million as of March 31, 2017,
compared to $530.7 million as of December 31, 2016. The increase
resulted from an increase in deposits of $11.5 million and an
increase in short-term borrowings of $0.6 million. These
increases were partially offset by a decrease in other liabilities
of approximately $0.3 million. Deposits generated through the
Bank’s branch system are considered the Company’s primary funding
source to meet short- and long-term liquidity needs. Deposit
levels fluctuate throughout the year based on seasonality, as well
as specific circumstances impacting deposit customers. In addition
to deposits, significant external sources of liquidity are
available to the Bank, including access to funding through federal
funds lines, Federal Home Loan Bank advances and brokered
deposits.
- Shareholders’ equity increased to $77.3 million, or $12.77 per
outstanding common share, as of March 31, 2017, compared to $76.2
million, or $12.62 per outstanding common share, as of December 31,
2016. The increase in shareholders’ equity resulted primarily
from continued growth in retained earnings and increases in other
comprehensive income resulting from changes in the fair value of
investment securities available-for-sale.
- The Company declared a cash dividend of $0.02 per share on its
common stock in the first quarter of 2017. This amount is
consistent with the Company’s quarterly dividend declarations for
each quarter of 2016.
- During the first quarter, the Bank continued to maintain
capital ratios at higher levels than the ratios required to be
considered a “well-capitalized” institution under applicable
banking regulations. As of March 31, 2017, the Bank’s common
equity Tier 1 capital and Tier 1 risk-based capital ratios were
each 18.98%. Its total capital ratio was 20.23%, and its Tier 1
leverage ratio was 12.15%.
About First US Bancshares, Inc.
First US Bancshares, Inc. is a bank holding
company that operates banking offices in Alabama through First US
Bank. In addition, the Company’s operations include
Acceptance Loan Company, Inc., a consumer loan company, and FUSB
Reinsurance, Inc., an underwriter of credit life and credit
accident and health insurance policies sold to the Bank’s and ALC’s
consumer loan customers. 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 are identified in
the public filings made by the Company with the Securities and
Exchange Commission, 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. Specifically, with respect to statements relating to
loan demand, growth and earnings potential, geographic expansion
and the adequacy of the allowance for loan losses for the Company,
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, the availability of quality loans in the
Bank’s and ALC’s service areas, the relative strength and weakness
in the consumer and commercial credit sectors and in the real
estate markets and collateral values. There can be no
assurance that such factors or other factors will not affect the
accuracy of such forward-looking statements.
FIRST US BANCSHARES, INC. AND
SUBSIDIARIES |
SELECTED FINANCIAL DATA – LINKED
QUARTERS |
(Dollars in Thousands, Except Per Share
Data) |
|
|
Quarter
Ended(Unaudited) |
|
|
2017 |
|
|
|
2016 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March31, |
|
|
|
December31, |
|
|
|
September30, |
|
|
|
June30, |
|
|
|
March31, |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Results of
Operations: |
|
|
|
|
|
|
|
|
|
|
|
|
Interest income |
$ |
7,510 |
|
|
$ |
7,721 |
|
|
$ |
7,760 |
|
|
$ |
7,478 |
|
|
$ |
7,196 |
|
Interest expense |
|
591 |
|
|
|
588 |
|
|
|
587 |
|
|
|
561 |
|
|
|
535 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
interest income |
|
6,919 |
|
|
|
7,133 |
|
|
|
7,173 |
|
|
|
6,917 |
|
|
|
6,661 |
|
Provision for loan
losses |
|
515 |
|
|
|
1,814 |
|
|
|
680 |
|
|
|
536 |
|
|
|
167 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income
after provision for loan losses |
|
6,404 |
|
|
|
5,319 |
|
|
|
6,493 |
|
|
|
6,381 |
|
|
|
6,494 |
|
Non-interest
income |
|
1,167 |
|
|
|
1,165 |
|
|
|
1,567 |
|
|
|
1,480 |
|
|
|
989 |
|
Non-interest
expense |
|
7,037 |
|
|
|
6,826 |
|
|
|
7,348 |
|
|
|
7,255 |
|
|
|
7,066 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) before
income taxes |
|
534 |
|
|
|
(342) |
|
|
|
712 |
|
|
|
606 |
|
|
|
417 |
|
Provision for (benefit
from) income taxes |
|
130 |
|
|
|
(237) |
|
|
|
162 |
|
|
|
144 |
|
|
|
100 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income (loss) |
$ |
404 |
|
|
$ |
(105) |
|
|
$ |
550 |
|
|
$ |
462 |
|
|
$ |
317 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Per Share Data: |
|
|
|
|
|
|
|
|
Basic net income (loss)
per share |
$ |
0.07 |
|
|
$ |
(0.02) |
|
|
$ |
0.09 |
|
|
$ |
0.08 |
|
|
$ |
0.05 |
|
Diluted net income
(loss) per share |
$ |
0.06 |
|
|
$ |
(0.02) |
|
|
$ |
0.09 |
|
|
$ |
0.07 |
|
|
$ |
0.05 |
|
Dividends declared |
$ |
0.02 |
|
|
$ |
0.02 |
|
|
$ |
0.02 |
|
|
$ |
0.02 |
|
|
$ |
0.02 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Period-End Balance
Sheet: |
|
|
|
|
|
|
|
|
Total assets |
$ |
619,827 |
|
|
$ |
606,892 |
|
|
$ |
600,307 |
|
|
$ |
601,754 |
|
|
$ |
575,582 |
|
Loans, net of allowance
for loan losses |
|
317,677 |
|
|
|
322,772 |
|
|
|
317,121 |
|
|
|
298,901 |
|
|
|
263,975 |
|
Allowance for loan
losses |
|
4,879 |
|
|
|
4,856 |
|
|
|
3,668 |
|
|
|
3,591 |
|
|
|
3,375 |
|
Investment securities,
net |
|
213,497 |
|
|
|
207,814 |
|
|
|
209,566 |
|
|
|
213,165 |
|
|
|
231,466 |
|
Total deposits |
|
509,078 |
|
|
|
497,556 |
|
|
|
493,828 |
|
|
|
495,618 |
|
|
|
485,537 |
|
Long-term debt |
|
15,000 |
|
|
|
15,000 |
|
|
|
15,000 |
|
|
|
15,000 |
|
|
|
5,000 |
|
Total shareholders’
equity |
|
77,297 |
|
|
|
76,241 |
|
|
|
78,848 |
|
|
|
78,525 |
|
|
|
77,727 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Key Ratios: |
|
|
|
|
|
|
|
|
Return on average
assets (annualized) |
|
0.27 |
% |
|
|
(0.07 |
)% |
|
|
0.36 |
% |
|
|
0.31 |
% |
|
|
0.22 |
% |
Return on average
equity (annualized) |
|
2.12 |
% |
|
|
(0.53 |
)% |
|
|
2.78 |
% |
|
|
2.30 |
% |
|
|
1.65 |
% |
Loans to deposits |
|
62.4 |
% |
|
|
64.9 |
% |
|
|
64.2 |
% |
|
|
60.3 |
% |
|
|
54.4 |
% |
Allowance for loan
losses as % of loans |
|
1.51 |
% |
|
|
1.48 |
% |
|
|
1.14 |
% |
|
|
1.19 |
% |
|
|
1.26 |
% |
Nonperforming assets as
% of total assets |
|
1.10 |
% |
|
|
1.20 |
% |
|
|
1.28 |
% |
|
|
1.33 |
% |
|
|
1.50 |
% |
|
|
|
|
|
|
|
|
|
FIRST US BANCSHARES, INC. AND
SUBSIDIARIES |
INTERIM CONDENSED CONSOLIDATED BALANCE
SHEETS |
(Dollars in Thousands, Except Share and Per
Share Data) |
|
|
March31, |
|
December31, |
|
|
2017 |
|
|
|
2016 |
|
|
(Unaudited) |
|
|
ASSETS |
Cash and due from
banks |
$ |
5,701 |
|
|
$ |
7,018 |
|
Interest-bearing
deposits in banks |
|
27,204 |
|
|
|
16,512 |
|
Total
cash and cash equivalents |
|
32,905 |
|
|
|
23,530 |
|
Investment securities
available-for-sale, at fair value |
|
183,858 |
|
|
|
181,910 |
|
Investment securities
held-to-maturity, at amortized cost |
|
29,639 |
|
|
|
25,904 |
|
Federal Home Loan Bank
stock, at cost |
|
1,609 |
|
|
|
1,581 |
|
Loans, net of allowance
for loan losses of $4,879 and $4,856, respectively |
|
317,677 |
|
|
|
322,772 |
|
Premises and equipment,
net |
|
22,192 |
|
|
|
18,340 |
|
Cash surrender value of
bank-owned life insurance |
|
14,683 |
|
|
|
14,603 |
|
Accrued interest
receivable |
|
1,924 |
|
|
|
1,987 |
|
Other real estate
owned |
|
4,587 |
|
|
|
4,858 |
|
Other assets |
|
10,753 |
|
|
|
11,407 |
|
Total
assets |
$ |
619,827 |
|
|
$ |
606,892 |
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS’
EQUITY |
Deposits |
$ |
509,078 |
|
|
$ |
497,556 |
|
Accrued interest
expense |
|
229 |
|
|
|
241 |
|
Other liabilities |
|
7,473 |
|
|
|
7,735 |
|
Short-term
borrowings |
|
10,750 |
|
|
|
10,119 |
|
Long-term debt |
|
15,000 |
|
|
|
15,000 |
|
Total
liabilities |
|
542,530 |
|
|
|
530,651 |
|
|
|
|
|
Shareholders’
equity: |
|
|
|
Common stock, par value
$0.01 per share, 10,000,000 shares authorized; |
|
|
|
7,341,061
and 7,329,060 shares issued, respectively; 6,055,103 and 6,043,102
shares outstanding, respectively |
|
73 |
|
|
|
73 |
|
Surplus |
|
10,826 |
|
|
|
10,786 |
|
Accumulated other
comprehensive income, net of tax |
|
(543 |
) |
|
|
(1,277 |
) |
Retained earnings |
|
87,717 |
|
|
|
87,434 |
|
Less treasury stock:
1,285,958 shares at cost |
|
(20,764 |
) |
|
|
(20,764 |
) |
Noncontrolling
interest |
|
(12 |
) |
|
|
(11 |
) |
|
|
|
|
Total
shareholders’ equity |
|
77,297 |
|
|
|
76,241 |
|
|
|
|
|
Total
liabilities and shareholders’ equity |
$ |
619,827 |
|
|
$ |
606,892 |
|
|
|
|
|
FIRST US BANCSHARES, INC. AND
SUBSIDIARIES |
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS |
(Dollars in Thousands, Except Per Share
Data) |
|
|
Three Months Ended |
|
March 31, |
|
|
2017 |
|
2016 |
|
|
|
|
|
|
|
(Unaudited) |
Interest income: |
|
|
|
Interest
and fees on loans |
$ |
6,496 |
|
$ |
6,053 |
Interest
on investment securities |
|
1,014 |
|
|
1,143 |
Total
interest income |
|
7,510 |
|
|
7,196 |
|
|
|
|
Interest expense: |
|
|
|
Interest
on deposits |
|
528 |
|
|
523 |
Interest
on borrowings |
|
63 |
|
|
12 |
Total
interest expense |
|
591 |
|
|
535 |
|
|
|
|
Net interest
income |
|
6,919 |
|
|
6,661 |
|
|
|
|
Provision for loan
losses |
|
515 |
|
|
167 |
|
|
|
|
Net interest income
after provision for loan losses |
|
6,404 |
|
|
6,494 |
|
|
|
|
Non-interest
income: |
|
|
|
Service
and other charges on deposit accounts |
|
464 |
|
|
417 |
Credit
insurance income |
|
256 |
|
|
152 |
Net gain
on sales and prepayments of investment securities |
|
49 |
|
|
2 |
Other
income, net |
|
398 |
|
|
418 |
Total
non-interest income |
|
1,167 |
|
|
989 |
|
|
|
|
Non-interest
expense: |
|
|
|
Salaries
and employee benefits |
|
4,398 |
|
|
4,164 |
Net
occupancy and equipment |
|
777 |
|
|
769 |
Other
real estate/foreclosure expense, net |
|
84 |
|
|
117 |
Other
expense |
|
1,778 |
|
|
2,016 |
Total
non-interest expense |
|
7,037 |
|
|
7,066 |
|
|
|
|
Income before income
taxes |
|
534 |
|
|
417 |
Provision for income
taxes |
|
130 |
|
|
100 |
Net income |
$ |
404 |
|
$ |
317 |
Basic net income per
share |
$ |
0.07 |
|
$ |
0.05 |
Diluted net income per
share |
$ |
0.06 |
|
$ |
0.05 |
Dividends per
share |
$ |
0.02 |
|
$ |
0.02 |
|
|
|
|
Contact:
Thomas S. Elley
334-636-5424
First US Bancshares (NASDAQ:FUSB)
Historical Stock Chart
From Mar 2024 to Apr 2024
First US Bancshares (NASDAQ:FUSB)
Historical Stock Chart
From Apr 2023 to Apr 2024