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FIRST US BANCSHARES, INC.

FUSB
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Business Summary

First US Bancshares, Inc. operates as a bank holding company registered under the Bank Holding Company Act of 1956, with one wholly-owned banking subsidiary, First US Bank, an Alabama banking corporation headquartered in Birmingham, Alabama. The Bank conducts a general commercial banking business and offers banking services such as demand, savings, individual retirement account and time deposits, personal and commercial loans, safe deposit box services and remote deposit capture. The Bank operates and serves its customers through 15 full-service banking offices located in Birmingham, Butler, Calera, Centreville, Gilbertown, Grove Hill, Harpersville, Jackson, Thomasville, Tuscaloosa and Woodstock, Alabama; Knoxville and Powell, Tennessee; and Rose Hill, Virginia; as well as loan production offices in Mobile, Alabama and the Chattanooga, Tennessee area. The Bank also performs indirect lending through third-party retailers and currently conducts this lending in 17 states, including Alabama, Arkansas, Florida, Georgia, Indiana, Iowa, Kansas, Kentucky, Mississippi, Missouri, Nebraska, North Carolina, Oklahoma, South Carolina, Tennessee, Texas and Virginia.

The Company faces strong competition in making loans and acquiring deposits from numerous other financial services providers, including commercial banks, online banks, credit unions, finance companies, mutual funds, insurance companies, investment banking companies, brokerage firms and other financial intermediaries operating in Alabama and elsewhere. Many of these competitors, some of which are affiliated with large bank holding companies, have substantially greater resources and lending limits than the Company does. In addition, many of the Company's non-bank competitors are not subject to the same extensive federal regulations that govern bank holding companies and federally insured banks. The financial services industry is likely to become more competitive as further technological advances enable more companies to provide financial services.

The Company generates revenue primarily through net interest income, which is the difference between interest and fee income generated from earning assets and the interest expense paid on deposits and borrowed funds. The Bank provides a wide range of commercial banking services to small- and medium-sized businesses, property managers, business executives, professionals and other individuals. The Bank also performs indirect lending through third-party retailers. The Bank is the Company's only reportable operating segment upon which management makes decisions regarding how to allocate resources and assess performance.

The Company's loan portfolio includes commercial and industrial loans, commercial real estate loans (including owner occupied, investor, and real estate construction loans), 1-4 family residential real estate loans, multi-family residential loans, construction, land development and other land loans, and consumer loans (including indirect lending through third-party retailers and direct consumer loans). As of December 31, 2025, CRE loans, including owner occupied, investor, and real estate construction loans, totaled $293.2 million or 257.1% of total regulatory capital. As of December 31, 2025, 1-4 family residential real estate loans represented approximately 8% of the Company's total loan portfolio. The Company also earns non-interest income from service charges and other fees on deposit accounts, bank-owned life insurance, lease income, ATM fee income, and other income. For the year ended December 31, 2025, non-interest income totaled $3,579 thousand , compared to $3,583 thousand for the year ended December 31, 2024.

The Company's investment securities portfolio is used to provide liquidity, generate interest income, and for use as collateral for public deposits and wholesale funding. As of December 31, 2025, available-for-sale securities totaled $168.1 million , or 99.7% of the total investment portfolio, compared to $167.9 million , or 99.6% of the total investment portfolio, as of December 31, 2024. Available-for-sale securities consisted of residential and commercial mortgage-backed securities, U.S. Treasury securities, corporate notes, obligations of U.S. government-sponsored agencies, and obligations of state and political subdivisions. Held-to-maturity securities totaled $0.5 million , or 0.3% of the total investment portfolio, as of December 31, 2025, compared to $0.7 million , or 0.4% of the total investment portfolio, as of December 31, 2024. Net unrealized losses in the available-for-sale portfolio totaled $1.0 million as of December 31, 2025, compared to $6.7 million as of December 31, 2024. During the year ended December 31, 2025, the Company purchased $43.6 million in taxable U.S. agency-sponsored securities that are included in the available-for-sale portfolio. The purchased securities partially offset $50.0 million in proceeds received by the Company associated with maturities, calls and prepayments in the portfolio.

During 2025, the Company completed share repurchases totaling 128,000 shares of its common stock at a weighted average price of $13.76 per share. The repurchases were completed under the Company's previously announced share repurchase program, which was expanded in 2025 to authorize the purchase of 1,000,000 additional shares. As of December 31, 2025, a total of 1,784,813 shares remained available for repurchase under the program. The Company declared cash dividends totaling $0.28 per share on its common stock during 2025, compared to cash dividends totaling $0.22 per share on its common stock during 2024. As of December 31, 2025, the Bank categorized $137.9 million , or 13.4% of its deposit liabilities, as brokered deposits.

For the year ended December 31, 2025, the Company earned net income of $6.0 million , or $1.00 per diluted common share, compared to net income of $8.2 million , or $1.33 per diluted common share, for the year ended December 31, 2024. Net interest income increased by $1.3 million , or 3.6% , comparing the year ended December 31, 2025 to the year ended December 31, 2024. Net interest margin totaled 3.54% in 2025, compared to 3.59% in 2024. The provision for credit losses was $4.0 million for the year ended December 31, 2025, compared to $0.6 million during the year ended December 31, 2024. Non-interest expense increased to $29.1 million for the year ended December 31, 2025, compared to $28.4 million for the year ended December 31, 2024, an increase of $0.7 million , or 2.5% . As of December 31, 2025, the Company's assets totaled $1,154.8 million , compared to $1,101.1 million as of December 31, 2024, an increase of 4.9% .

Business Outlook

The Company's longer-term growth strategy seeks to grow loan production offices to levels that support limited branching, expansion of the customer base through digital banking offerings, and consideration of acquisition opportunities to enter new markets. The Company regularly evaluates opportunities to strengthen its current market position through acquisitions, subject to regulatory approval. The Company's strategy focuses on increasing franchise value by building and maintaining a strong and diversified balance sheet through continued loan and deposit growth that leverages the branch network, loan production offices, and digital market capabilities.

The Company's strategy focuses on increasing franchise value by building and maintaining a strong and diversified balance sheet through continued loan and deposit growth that leverages the branch network, loan production offices, and digital market capabilities. The Company fosters a culture that adheres to effective credit underwriting standards, pricing discipline, and expense control.The filing does not contain a specific operational outlook regarding supply chain, manufacturing capacity, technology infrastructure investments, or headcount strategy beyond general statements about digital banking offerings.

During 2025, the Company completed share repurchases totaling 128,000 shares of its common stock at a weighted average price of $13.76 per share. The share repurchase program was expanded in 2025 to authorize the purchase of 1,000,000 additional shares. As of December 31, 2025, a total of 1,784,813 shares remained available for repurchase under the program. The Company declared cash dividends totaling $0.28 per share on its common stock during 2025, compared to cash dividends totaling $0.22 per share on its common stock during 2024. The filing does not provide specific R&D spending levels or capital expenditure plans.

The Company faces significant competitive pressure to acquire and maintain deposit balances in the current environment. Competition for both loans and deposits remains intense and continues to place pressure on net interest margin. The interest rate environment has been characterized by declining short-term market interest rates and increased volatility, which has had, and continues to have, a significant impact on the Company and the banking industry in general. Following reductions in the federal funds rate in both late 2024 and late 2025, the Company experienced downward repricing of variable-rate interest-earning assets, while reductions in the cost of interest-bearing liabilities occurred more gradually. As a result, interest-earning assets generally repriced downward more quickly than interest-bearing liabilities during portions of both 2025 and 2024.

The Company is subject to extensive governmental regulation under both federal and state law, including supervision and examination by the Federal Reserve, the FDIC, and the Alabama State Banking Department. The Company faces risks related to credit, liquidity, market conditions, competition, technological changes, cybersecurity, and regulatory compliance. The Company's business and operations are sensitive to general business and economic conditions in the United States generally, and in its local markets in particular. The current economic environment is characterized by high inflation levels and relatively high interest rates, despite recent FRB reductions in rates.

Risk Factors

The Company faces significant credit risk, as loan losses greater than anticipated could adversely affect earnings. As of December 31, 2025, CRE loans totaled $293.2 million or 257.1% of total regulatory capital, exposing the Company to increased lending risks given that CRE loans generally involve a greater degree of credit risk than residential mortgage loans. The Company is subject to liquidity risk, and as of December 31, 2025, the Bank categorized $137.9 million , or 13.4% of its deposit liabilities, as brokered deposits, which may be less stable than core deposits. The Company faces significant interest rate risk, as changes in market interest rates can impact net interest income and the valuation of assets and liabilities; net interest margin decreased to 3.54% in 2025 from 3.59% in 2024. The Company is subject to extensive governmental regulation, and the costs of complying with such regulation could have an adverse impact on operations. The Company faces risks related to cybersecurity and information security, as unauthorized access to customer information could expose the Company to reputational harm and litigation.

Management Priorities

Management's discussion emphasizes that the Company's strategy focuses on increasing franchise value by building and maintaining a strong and diversified balance sheet through continued loan and deposit growth that leverages the branch network, loan production offices, and digital market capabilities, while fostering a culture that adheres to effective credit underwriting standards, pricing discipline, and expense control. Management notes that the Company continues to maintain excess funding capacity sufficient to provide adequate liquidity for loan growth, capital expenditures and ongoing operations. Management states that the Company benefits from a strong core deposit base, a liquid investment securities portfolio and access to funding from a variety of sources. Management believes the Company remains well positioned to respond to a range of economic outcomes; however, adverse changes in economic conditions, credit quality, competitive dynamics, or interest rate movements could negatively impact the Company's financial condition and results of operations.

View Source Annual Report on SEC.gov ↗

References

  1. [1] Item 1A, Risk Factors — CRE lending may expose us to increased lending risks
  2. [2] Item 1A, Risk Factors — CRE lending may expose us to increased lending risks
  3. [3] Item 1A, Risk Factors — Weakness in the residential real estate markets could adversely affect our performance
  4. [4] Item 7, MD&A — Non-Interest Income
  5. [5] Item 7, MD&A — Non-Interest Income
  6. [6] Item 7, MD&A — Investment Securities
  7. [7] Item 7, MD&A — Investment Securities
  8. [8] Item 7, MD&A — Investment Securities
  9. [9] Item 7, MD&A — Investment Securities
  10. [10] Item 7, MD&A — Investment Securities
  11. [11] Item 7, MD&A — Investment Securities
  12. [12] Item 7, MD&A — Investment Securities
  13. [13] Item 7, MD&A — Investment Securities
  14. [14] Item 7, MD&A — Investment Securities
  15. [15] Item 7, MD&A — Investment Securities
  16. [16] Item 7, MD&A — Investment Securities
  17. [17] Item 7, MD&A — Investment Securities
  18. [18] Item 7, MD&A — Executive Overview, Share Repurchases
  19. [19] Item 7, MD&A — Executive Overview, Share Repurchases
  20. [20] Item 7, MD&A — Executive Overview, Share Repurchases
  21. [21] Item 7, MD&A — Executive Overview, Share Repurchases
  22. [22] Item 7, MD&A — Executive Overview, Cash Dividends
  23. [23] Item 7, MD&A — Executive Overview, Cash Dividends
  24. [24] Item 1, Business — Brokered Deposits
  25. [25] Item 1, Business — Brokered Deposits
  26. [26] Item 7, MD&A — Executive Overview
  27. [27] Item 7, MD&A — Executive Overview
  28. [28] Item 7, MD&A — Executive Overview
  29. [29] Item 7, MD&A — Executive Overview
  30. [30] Item 7, MD&A — Net Interest Income and Margin
  31. [31] Item 7, MD&A — Net Interest Income and Margin
  32. [32] Item 7, MD&A — Net Interest Income and Margin
  33. [33] Item 7, MD&A — Net Interest Income and Margin
  34. [34] Item 7, MD&A — Provision for Credit Losses
  35. [35] Item 7, MD&A — Provision for Credit Losses
  36. [36] Item 7, MD&A — Non-Interest Expense
  37. [37] Item 7, MD&A — Non-Interest Expense
  38. [38] Item 7, MD&A — Non-Interest Expense
  39. [39] Item 7, MD&A — Non-Interest Expense
  40. [40] Item 7, MD&A — Executive Overview, Total Assets
  41. [41] Item 7, MD&A — Executive Overview, Total Assets
  42. [42] Item 7, MD&A — Executive Overview, Total Assets
  43. [43] Item 7, MD&A — Executive Overview, Share Repurchases
  44. [44] Item 7, MD&A — Executive Overview, Share Repurchases
  45. [45] Item 7, MD&A — Executive Overview, Share Repurchases
  46. [46] Item 7, MD&A — Executive Overview, Share Repurchases
  47. [47] Item 7, MD&A — Executive Overview, Cash Dividends
  48. [48] Item 7, MD&A — Executive Overview, Cash Dividends
  49. [49] Item 1A, Risk Factors — CRE lending may expose us to increased lending risks
  50. [50] Item 1A, Risk Factors — CRE lending may expose us to increased lending risks
  51. [51] Item 1, Business — Brokered Deposits
  52. [52] Item 1, Business — Brokered Deposits
  53. [53] Item 7, Selected Financial Data
  54. [54] Item 7, Selected Financial Data
  55. [55] Item 7, Selected Financial Data
  56. [56] Item 7, Selected Financial Data
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  73. [73] Item 7, Selected Financial Data
  74. [74] Item 7, Selected Financial Data
  75. [75] Item 7, Selected Financial Data
  76. [76] Item 7, Selected Financial Data
  77. [77] Item 7, MD&A — Provision for Income Taxes
  78. [78] Item 7, MD&A — Provision for Income Taxes
  79. [79] Item 7, Selected Financial Data
  80. [80] Item 7, Selected Financial Data
  81. [81] Item 7, Selected Financial Data
  82. [82] Item 7, Selected Financial Data
  83. [83] Item 7, Selected Financial Data
  84. [84] Item 7, Selected Financial Data
  85. [85] Item 7, Selected Financial Data
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  87. [87] Item 7, Selected Financial Data
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  91. [91] Item 7, Selected Financial Data

Analysis on 6/21/2026