First US Bancshares, Inc. Reports Third Quarter Results
October 30 2017 - 4:15PM
First US Bancshares, Inc. (Nasdaq:FUSB) (the “Company”) today
reported net income of $635,000, or $0.10 per diluted share, for
the quarter ended September 30, 2017, compared to $550,000, or
$0.09 per diluted share, for the corresponding period of
2016. For the nine months ended September 30, 2017, the
Company reported net income of $1.5 million, or $0.22 per diluted
share, compared to $1.3 million, or $0.21 per diluted share, for
the corresponding period of 2016. The improved results were
achieved despite reductions in certain non-routine income sources
for the nine months ended September 30, 2017 compared to the same
period in 2016. These reductions, which totaled $679,000, included
a decrease of $429,000 in gains on sale and prepayments of
investment securities and the collection of a judgment on a
nonaccrual asset, which resulted in $100,000 and $150,000 of
interest income and non-interest income, respectively, that was
recognized during the third quarter of 2016.
Financial Highlights
- Interest Income – Interest and fees on loans increased by
$736,000 during the nine months ended September 30, 2017, compared
to the corresponding period of 2016. The increase resulted
from increased average loan volume and was partially offset by a
decrease of $157,000 in interest on investment securities as
proceeds from the scheduled maturity of investments were redeployed
into the loan portfolio.
- Loan Growth – Net loans increased $15.3 million, or 6.3% on an
annualized basis, during the nine months ended September 30,
2017. Growth in the Company’s banking subsidiary, First US
Bank (the “Bank”), totaled $11.5 million during the nine months
ended September 30, 2017, while the Company’s finance company
subsidiary, Acceptance Loan Company, Inc. (“ALC”), grew its loan
portfolio by $3.8 million. The third quarter represented the
most significant growth quarter of the first nine months of 2017,
with total growth in net loans of $7.5 million, or 9.1% on an
annualized basis. Growth in net loans at the Bank totaled
$6.2 million, while ALC’s growth totaled $1.3 million during the
quarter.
- Asset Quality Improvement – Non-performing assets, including
loans in non-accrual status and other real estate owned (OREO),
decreased to $5.8 million, or 0.94% of total assets, as of
September 30, 2017, compared to $7.3 million, or 1.20% of total
assets, as of December 31, 2016.
“We are pleased to report continued improvement
in earnings during the third quarter of 2017,” stated James F.
House, President and Chief Executive Officer of the Company. “The
third quarter represents our strongest quarter to date this year
from an earnings standpoint. We continue to realize earnings
growth built through expansion of our loan portfolio and focus on
expense control,” continued Mr. House.
Results of Operations
- Pre-provision net interest income totaled $7.1 million in the
third quarter of 2017, compared to $7.2 million in the third
quarter of 2016. The decrease was due primarily to the
collection of interest associated with the previously mentioned
judgment filed on a nonaccrual asset totaling approximately
$100,000 in 2016 that was not repeated in 2017. Average loans
totaled $331.2 million during the third quarter of 2017, compared
to $312.5 million during the third quarter of 2016. Net yield
on interest-earning assets was 5.11% for the third quarter of 2017,
compared to 5.20% during the third quarter of 2016. For the
nine months ended September 30, 2017, pre-provision net interest
income totaled $21.1 million, compared to $20.8 million during the
same period of 2016. Average loans totaled $327.3 million and
$283.0 million during the nine months ended September 30, 2017 and
2016, respectively. Net yield on interest-earning assets was
5.08% during the first nine months of 2017, compared to 5.16%
during the first nine months of 2016.
- The provision for loan losses was $373,000 for the third
quarter of 2017, compared to $680,000 during the third quarter of
2016. The decrease resulted in large part from the resolution
of an impaired loan relationship at the Bank during the third
quarter of 2017. The resolution of this loan allowed the
Bank’s reserve to be reduced by $130,000 during the
quarter. For the nine months ended September 30, 2017,
the provision for loan losses totaled $1.5 million, compared to
$1.4 million for the nine months ended September 30, 2016.
The Company’s allowance for loan losses as a percentage of
loans was 1.40% as of September 30, 2017, compared to 1.48% as of
December 31, 2016.
- Non-interest income totaled $1.2 million in the third quarter
of 2017, compared to $1.6 million in the third quarter of
2016. For the nine months ended September 30, 2017,
non-interest income totaled $3.3 million, compared to $4.0 million
for the first nine months of the previous year. The decrease
in non-interest income in both the three- and nine-month periods of
2017 resulted from reductions in gains on the sale and prepayment
of investment securities at the Bank, as well as reductions in
credit insurance revenues and other ancillary revenues at
ALC. Additionally, approximately $150,000 in settlement
amounts associated with the previously mentioned judgment on a
nonaccrual asset was recognized as other income during the third
quarter of 2016 and not repeated in 2017.
- Non-interest expense totaled $7.2 million in the third quarter
of 2017, compared to $7.3 million in the third quarter of
2016. For the nine months ended September 30, 2017 and 2016,
non-interest expense totaled $21.1 million and $21.7 million,
respectively. The decrease in non-interest expense in both
periods resulted primarily from reductions in regulatory
assessments, insurance expense, occupancy and equipment expense,
professional services fees and impairment charges associated with
closed branches. These reductions were partially offset by
increases in salaries and benefits expense, telephone and data
communications expense and write-downs of OREO.
Balance Sheet Management
- Net loans totaled $338.0 million as of September 30, 2017,
compared to $322.8 million as of December 31, 2016. The increase in
net loans included increases of $11.5 million and $3.8 million at
the Bank and ALC, respectively. The growth in loan volume was
funded primarily through cash flows generated from the scheduled
maturity of investment securities. Investment securities
totaled $185.8 million as of September 30, 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, the Company expects cash flows from the investment
portfolio to continue to serve as a significant source of liquidity
available for the funding of future loan growth.
- Premises and equipment increased by $7.9 million during the
nine months ended September 30, 2017 due to capital expenditures
associated with the construction of an office complex in the
Birmingham, Alabama area. Initial construction of the office
complex was completed during the third quarter, and the complex
houses a new retail branch of the Bank that became operational
during the same period. At the end of the third quarter, the
Company and the Bank relocated their headquarters to the
complex.
- Liabilities increased to $535.7 million as of September 30,
2017, compared to $530.7 million as of December 31, 2016. The
increase resulted from an increase in deposits of $10.8 million,
partially offset by decreases in short-term borrowings and
long-term debt totaling $4.5 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 $78.9 million, or $12.98 per
outstanding common share, as of September 30, 2017, compared to
$76.2 million, or $12.62 per outstanding common share, as of
December 31, 2016. The increase in shareholders’ equity resulted
from continued growth in retained earnings and increases in other
comprehensive income due to 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 third quarter of 2017. This amount is
consistent with the Company’s quarterly dividend declarations for
the first and second quarters of 2017 and each quarter of
2016.
- During the third 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 September 30, 2017, the Bank’s
common equity Tier 1 capital and Tier 1 risk-based capital ratios
were each 19.02%. Its total capital ratio was 20.24%, and its Tier
1 leverage ratio was 12.32%.
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
SUBSIDIARIESSELECTED FINANCIAL DATA – LINKED
QUARTERS(Dollars in Thousands, Except Per Share
Data) |
|
|
|
Quarter Ended |
|
|
2017 |
2016 |
|
|
September30, |
|
June30, |
|
March31, |
|
December31, |
|
September30, |
|
|
|
|
|
|
|
|
|
|
Results of
Operations: |
|
|
|
|
|
Interest income |
$ |
7,820 |
|
$ |
7,683 |
|
$ |
7,510 |
|
$ |
7,721 |
|
$ |
7,760 |
|
Interest expense |
|
685 |
|
|
626 |
|
|
591 |
|
|
588 |
|
|
587 |
|
|
|
|
|
|
|
Net
interest income |
|
7,135 |
|
|
7,057 |
|
|
6,919 |
|
|
7,133 |
|
|
7,173 |
|
Provision for loan
losses |
|
373 |
|
|
576 |
|
|
515 |
|
|
1,814 |
|
|
680 |
|
|
|
|
|
|
|
Net interest income
after provision for loan losses |
|
6,762 |
|
|
6,481 |
|
|
6,404 |
|
|
5,319 |
|
|
6,493 |
|
Non-interest
income |
|
1,236 |
|
|
930 |
|
|
1,167 |
|
|
1,165 |
|
|
1,567 |
|
Non-interest
expense |
|
7,190 |
|
|
6,863 |
|
|
7,037 |
|
|
6,826 |
|
|
7,348 |
|
|
|
|
|
|
|
Income (loss) before
income taxes |
|
808 |
|
|
548 |
|
|
534 |
|
|
(342 |
) |
|
712 |
|
Provision for (benefit
from) income taxes |
|
173 |
|
|
132 |
|
|
130 |
|
|
(237 |
) |
|
162 |
|
|
|
|
|
|
|
Net
income (loss) |
$ |
635 |
|
$ |
416 |
|
$ |
404 |
|
$ |
(105 |
) |
$ |
550 |
|
|
|
|
|
|
|
Per Share Data: |
|
|
|
|
|
Basic net income (loss)
per share |
$ |
0.10 |
|
$ |
0.07 |
|
$ |
0.07 |
|
$ |
(0.02 |
) |
$ |
0.09 |
|
|
|
|
|
|
|
Diluted net income
(loss) per share |
$ |
0.10 |
|
$ |
0.06 |
|
$ |
0.06 |
|
$ |
(0.02 |
) |
$ |
0.09 |
|
|
|
|
|
|
|
Dividends declared |
$ |
0.02 |
|
$ |
0.02 |
|
$ |
0.02 |
|
$ |
0.02 |
|
$ |
0.02 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Period-End Balance
Sheet: |
|
|
|
|
|
Total assets |
$ |
614,599 |
|
$ |
616,218 |
|
$ |
619,827 |
|
$ |
606,892 |
|
$ |
600,307 |
|
Loans, net of allowance
for loan losses |
|
338,026 |
|
|
330,526 |
|
|
317,677 |
|
|
322,772 |
|
|
317,121 |
|
Allowance for loan
losses |
|
4,808 |
|
|
4,905 |
|
|
4,879 |
|
|
4,856 |
|
|
3,668 |
|
Investment securities,
net |
|
185,802 |
|
|
200,831 |
|
|
213,497 |
|
|
207,814 |
|
|
209,566 |
|
Total deposits |
|
508,385 |
|
|
509,245 |
|
|
509,078 |
|
|
497,556 |
|
|
493,828 |
|
Short-term
borrowings |
|
10,635 |
|
|
10,692 |
|
|
10,750 |
|
|
10,119 |
|
|
5,337 |
|
Long-term debt |
|
10,000 |
|
|
10,000 |
|
|
15,000 |
|
|
15,000 |
|
|
15,000 |
|
Total shareholders’
equity |
|
78,854 |
|
|
78,373 |
|
|
77,297 |
|
|
76,241 |
|
|
78,848 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Key Ratios: |
|
|
|
|
|
Return on average
assets (annualized) |
|
0.41 |
% |
|
0.27 |
% |
|
0.27 |
% |
|
(0.07 |
%) |
|
0.36 |
% |
Return on average
equity (annualized) |
|
3.21 |
% |
|
2.14 |
% |
|
2.12 |
% |
|
(0.53 |
%) |
|
2.78 |
% |
Loans to deposits |
|
66.5 |
% |
|
64.9 |
% |
|
62.4 |
% |
|
64.9 |
% |
|
64.2 |
% |
Allowance for loan
losses as % of loans |
|
1.40 |
% |
|
1.46 |
% |
|
1.51 |
% |
|
1.48 |
% |
|
1.14 |
% |
Nonperforming assets as
% of total assets |
|
0.94 |
% |
|
1.01 |
% |
|
1.10 |
% |
|
1.20 |
% |
|
1.28 |
% |
|
|
|
|
|
|
FIRST US BANCSHARES, INC. AND
SUBSIDIARIESINTERIM CONDENSED CONSOLIDATED BALANCE
SHEETS(Dollars in Thousands, Except Per Share
Data) |
|
|
|
|
|
September30, |
|
December31, |
|
2017 |
|
2016 |
|
(Unaudited) |
|
|
ASSETS |
Cash and
due from banks |
$ |
8,705 |
|
|
$ |
7,018 |
|
Interest-bearing deposits in banks |
|
23,849 |
|
|
|
16,512 |
|
Total cash and cash equivalents |
|
32,554 |
|
|
|
23,530 |
|
Investment securities available-for-sale, at fair value |
|
158,425 |
|
|
|
181,910 |
|
Investment securities held-to-maturity, at amortized cost |
|
27,377 |
|
|
|
25,904 |
|
Federal
Home Loan Bank stock, at cost |
|
1,396 |
|
|
|
1,581 |
|
Loans,
net of allowance for loan losses of $4,808 and $4,856,
respectively |
|
338,026 |
|
|
|
322,772 |
|
Premises
and equipment, net |
|
26,242 |
|
|
|
18,340 |
|
Cash
surrender value of bank-owned life insurance |
|
14,843 |
|
|
|
14,603 |
|
Accrued
interest receivable |
|
1,877 |
|
|
|
1,987 |
|
Other
real estate owned |
|
3,819 |
|
|
|
4,858 |
|
Other
assets |
|
10,040 |
|
|
|
11,407 |
|
Total assets |
$ |
614,599 |
|
|
$ |
606,892 |
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS’
EQUITY |
Deposits |
$ |
508,385 |
|
|
$ |
497,556 |
|
Accrued
interest expense |
|
281 |
|
|
|
241 |
|
Other
liabilities |
|
6,444 |
|
|
|
7,735 |
|
Short-term borrowings |
|
10,635 |
|
|
|
10,119 |
|
Long-term
debt |
|
10,000 |
|
|
|
15,000 |
|
Total liabilities |
|
535,745 |
|
|
|
530,651 |
|
|
|
|
|
Shareholders’ equity: |
|
|
|
Common
stock, par value $0.01 per share, 10,000,000 shares
authorized; |
|
|
|
7,341,556 and 7,329,060 shares issued, respectively; 6,077,354 and
6,043,102 shares outstanding, respectively |
|
73 |
|
|
|
73 |
|
Surplus |
|
10,657 |
|
|
|
10,786 |
|
Accumulated other comprehensive income (loss), net of tax |
|
25 |
|
|
|
(1,277 |
) |
Retained
earnings |
|
88,525 |
|
|
|
87,434 |
|
Less
treasury stock: 1,264,202 and 1,285,958 shares at cost,
respectively |
|
(20,414 |
) |
|
|
(20,764 |
) |
Noncontrolling interest |
|
(12 |
) |
|
|
(11 |
) |
|
|
|
|
Total shareholders’ equity |
|
78,854 |
|
|
|
76,241 |
|
|
|
|
|
Total liabilities and shareholders’ equity |
$ |
614,599 |
|
|
$ |
606,892 |
|
|
|
|
|
FIRST US BANCSHARES, INC. AND
SUBSIDIARIESINTERIM CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS(Dollars in Thousands,
Except Per Share Data) |
|
|
|
|
|
Three Months Ended |
|
Nine Months Ended |
|
September 30, |
|
September 30, |
|
2017 |
|
2016 |
|
2017 |
|
2016 |
|
(Unaudited) |
Interest income: |
|
|
|
|
|
|
|
Interest
and fees on loans |
$ |
6,802 |
|
$ |
6,773 |
|
$ |
19,928 |
|
$ |
19,192 |
Interest
on investment securities |
|
1,018 |
|
|
987 |
|
|
3,085 |
|
|
3,242 |
Total
interest income |
|
7,820 |
|
|
7,760 |
|
|
23,013 |
|
|
22,434 |
|
|
|
|
|
|
|
|
Interest expense: |
|
|
|
|
|
|
|
Interest
on deposits |
|
617 |
|
|
532 |
|
|
1,713 |
|
|
1,568 |
Interest
on borrowings |
|
68 |
|
|
55 |
|
|
189 |
|
|
115 |
Total
interest expense |
|
685 |
|
|
587 |
|
|
1,902 |
|
|
1,683 |
|
|
|
|
|
|
|
|
Net interest
income |
|
7,135 |
|
|
7,173 |
|
|
21,111 |
|
|
20,751 |
|
|
|
|
|
|
|
|
Provision for loan
losses |
|
373 |
|
|
680 |
|
|
1,464 |
|
|
1,383 |
|
|
|
|
|
|
|
|
Net interest income
after provision for loan losses |
|
6,762 |
|
|
6,493 |
|
|
19,647 |
|
|
19,368 |
|
|
|
|
|
|
|
|
Non-interest
income: |
|
|
|
|
|
|
|
Service and
other charges on deposit accounts |
|
481 |
|
|
463 |
|
|
1,406 |
|
|
1,306 |
Credit insurance
income |
|
160 |
|
|
256 |
|
|
459 |
|
|
570 |
Net gain on
sales and prepayments of investment securities |
|
178 |
|
|
259 |
|
|
228 |
|
|
657 |
Other income,
net |
|
417 |
|
|
589 |
|
|
1,240 |
|
|
1,503 |
Total
non-interest income |
|
1,236 |
|
|
1,567 |
|
|
3,333 |
|
|
4,036 |
|
|
|
|
|
|
|
|
Non-interest
expense: |
|
|
|
|
|
|
|
Salaries and
employee benefits |
|
4,370 |
|
|
4,334 |
|
|
13,048 |
|
|
12,734 |
Net occupancy
and equipment |
|
806 |
|
|
830 |
|
|
2,276 |
|
|
2,381 |
Other real
estate/foreclosure expense, net |
|
244 |
|
|
124 |
|
|
461 |
|
|
370 |
Other
expense |
|
1,770 |
|
|
2,060 |
|
|
5,305 |
|
|
6,184 |
Total
non-interest expense |
|
7,190 |
|
|
7,348 |
|
|
21,090 |
|
|
21,669 |
|
|
|
|
|
|
|
|
Income before income
taxes |
|
808 |
|
|
712 |
|
|
1,890 |
|
|
1,735 |
Provision for income
taxes |
|
173 |
|
|
162 |
|
|
435 |
|
|
406 |
Net income |
$ |
635 |
|
$ |
550 |
|
$ |
1,455 |
|
$ |
1,329 |
Basic net income per
share |
$ |
0.10 |
|
$ |
0.09 |
|
$ |
0.24 |
|
$ |
0.22 |
Diluted net income per
share |
$ |
0.10 |
|
$ |
0.09 |
|
$ |
0.22 |
|
$ |
0.21 |
Dividends per
share |
$ |
0.02 |
|
$ |
0.02 |
|
$ |
0.06 |
|
$ |
0.06 |
|
|
|
|
|
|
|
|
Contact: Thomas S. Elley
205-582-1200
First US Bancshares (NASDAQ:FUSB)
Historical Stock Chart
From Aug 2024 to Sep 2024
First US Bancshares (NASDAQ:FUSB)
Historical Stock Chart
From Sep 2023 to Sep 2024