First US Bancshares(FUSB) - 2025 Q2 - Quarterly Results

Executive Summary & Financial Highlights Second Quarter 2025 Highlights First US Bancshares, Inc. reported a significant decrease in net income for Q2 2025 and the six months ended June 30, 2025, primarily due to an increased provision for credit losses on loans and leases Net Income and EPS Overview | Period | Net Income | Diluted EPS | | :------------------- | :--------- | :---------- | | Q2 2025 | $0.2 million | $0.03 | | Q1 2025 | $1.8 million | $0.29 | | Q2 2024 | $2.1 million | $0.34 | | Six Months Ended June 30, 2025 | $1.9 million | $0.32 | | Six Months Ended June 30, 2024 | $4.2 million | $0.68 | - The decrease in net income for both Q2 2025 and the six months ended June 30, 2025, was primarily driven by an increase in the provision for credit losses on loans and leases[2] Selected Financial Data Summary A summary of key financial data shows a decline in net income and EPS across comparative periods, alongside an increase in the provision for credit losses. Total assets and loans have generally increased, while key profitability ratios like Return on Average Assets and Return on Average Common Equity have decreased significantly in Q2 2025 Key Financial Data (Q2 2025 vs. Q2 2024 & YTD) (Millions of Dollars) | Metric | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :------------------------------------ | :------ | :------ | :------- | :------- | | Net Interest Income | $9.476 | $9.176 | $18.373 | $18.216 | | Provision for Credit Losses | $2.717 | $— | $3.245 | $— | | Net Income | $0.155 | $2.127 | $1.927 | $4.234 | | Diluted EPS | $0.03 | $0.34 | $0.32 | $0.68 | | Total Assets (Period End) | $1,143.379 | $1,083.313 | N/A | N/A | | Total Loans (Period End) | $871.431 | $819.126 | N/A | N/A | | Return on Average Assets (annualized) | 0.06% | 0.80% | 0.35% | 0.80% | | Return on Average Common Equity (annualized) | 0.61% | 9.23% | 3.86% | 9.24% | | Net Interest Margin | 3.59% | 3.69% | 3.56% | 3.67% | - The Allowance for Credit Losses (ACL) on loans and leases as a percentage of total loans increased to 1.31% as of June 30, 2025, from 1.24% as of December 31, 2024[4] CEO Commentary The CEO acknowledged the significant impact of increased credit loss provisions on Q2 and year-to-date earnings, driven by growth in indirect consumer lending, higher net charge-offs in that category, and additional reserves on commercial loans. Despite this, the CEO highlighted positive trends in net interest margin, total loan growth, and pre-tax pre-provision net revenue as foundational for future performance - The significant provision for credit losses in Q2 2025 was attributed to growth in indirect consumer lending, an uptick in net charge-offs in that category, and additional reserves on two individually evaluated commercial loans[5] - Positive trends include a 6 basis point expansion in net interest margin compared to Q1 2025, 2.7% total loan growth during Q2 2025 (5.9% year-to-date), and increases in pre-tax pre-provision net revenue (0.9% QoQ and 5.2% YoY)[5] Financial Results Analysis Loans and Leases Total loans increased by $23.1 million in Q2 2025, primarily driven by a $25.1 million growth in consumer indirect loans. This growth was partially offset by reductions in construction and C&I loan categories. The indirect lending platform focuses on higher credit spectrum recreational and equipment consumer lending Loan Balances by Portfolio Category (Millions of Dollars) | Category | June 30, 2025 | March 31, 2025 | December 31, 2024 | September 30, 2024 | June 30, 2024 | | :------------------------------------------ | :------------ | :------------- | :---------------- | :----------------- | :------------ | | Construction, land development and other land loans | $48.101 | $58.572 | $65.537 | $53.098 | $72.183 | | Secured by 1-4 family residential properties | 67.587 | 68.523 | 69.999 | 70.067 | 70.272 | | Secured by multi-family residential properties | 118.807 | 106.374 | 101.057 | 100.627 | 97.527 | | Secured by non-residential commercial real estate | 215.035 | 214.065 | 227.751 | 224.611 | 218.386 | | Commercial and industrial loans ("C&I") | 40.986 | 45.166 | 44.238 | 44.872 | 46.249 | | Consumer loans: Direct | 4.836 | 4.610 | 4.774 | 5.018 | 5.272 | | Consumer loans: Indirect | 376.079 | 351.025 | 309.683 | 305.015 | 309.237 | | Total loans and leases held for investment | $871.431 | $848.335 | $823.039 | $803.308 | $819.126 | - Total loans increased by $23.1 million in Q2 2025, primarily due to a $25.1 million growth in consumer indirect loans. Multi-family residential real estate loans also grew by $12.4 million[7] - The indirect lending platform focuses on recreational and equipment consumer lending with a weighted average credit score of 798 for new loans in H1 2025 and 781 for the entire portfolio[7] Net Interest Income and Margin Net interest income increased quarter-over-quarter and year-over-year, while net interest margin saw a slight increase from the prior quarter but a decrease compared to Q2 2024. The QoQ improvement was driven by higher average loan volume and increased yields on loans and investments, whereas the YoY decline was due to yield reductions on loans following Federal Funds rate cuts in late 2024 Net Interest Income and Margin Trends (Millions of Dollars) | Metric | Q2 2025 | Q1 2025 | Q2 2024 | H1 2025 | H1 2024 | | :------------------ | :------ | :------ | :------ | :------ | :------ | | Net Interest Income | $9.476 | $8.897 | $9.176 | $18.373 | $18.216 | | Net Interest Margin | 3.59% | 3.53% | 3.69% | 3.56% | 3.67% | - The increase in net interest margin compared to the prior quarter (Q1 2025) resulted from increased average loan volume and higher yields on loans and investments[8] - The decrease in net interest margin compared to Q2 2024 was primarily due to loan yield reductions following Federal Funds rate cuts in late 2024[8] Provision for Credit Losses The Company recorded a significant provision for credit losses of $2.7 million in Q2 2025, totaling $3.2 million for the first six months of 2025, compared to no provision in the prior year periods. This increase was primarily driven by growth in the consumer indirect portfolio, higher net charge-offs in this category, and additional specific reserves for two commercial loans Provision for Credit Losses (Millions of Dollars) | Period | Provision for Credit Losses | | :------------------- | :-------------------------- | | Q2 2025 | $2.7 | | Six Months Ended June 30, 2025 | $3.2 | | Q2 2024 | $0 | | Six Months Ended June 30, 2024 | $0 | - Key drivers for the provision included $1.4 million for the indirect consumer portfolio and $0.9 million for specific reserves on two individually evaluated commercial loans in Q2 2025. For the six months, these figures were $2.3 million and $0.9 million, respectively[9][11] - The Allowance for Credit Losses (ACL) on loans and leases as a percentage of total loans increased to 1.31% as of June 30, 2025, from 1.24% as of December 31, 2024[11] Pre-tax Pre-provision Net Revenue (PPNR) Pre-tax Pre-provision Net Revenue (PPNR) remained consistent at $2.9 million in Q2 2025 and Q1 2025, showing an increase compared to Q2 2024. For the six-month period, PPNR also increased year-over-year. PPNR as a percentage of average assets remained relatively stable Pre-tax Pre-provision Net Revenue (PPNR) (Millions of Dollars) | Metric | Q2 2025 | Q1 2025 | Q2 2024 | H1 2025 | H1 2024 | | :------------------------------------ | :------ | :------ | :------ | :------- | :------- | | PPNR | $2.9 | $2.9 | $2.7 | $5.7 | $5.5 | | PPNR as % of Average Assets (annualized) | 1.03% | 1.06% | 1.03% | 1.05% | 1.04% | - PPNR increased by 0.9% compared to Q1 2025 and by 5.2% compared to Q2 2024[5] Deposits Total deposits increased by $24.9 million (2.6%) in Q2 2025, driven by increases in interest-bearing demand deposit accounts and the strategic addition of brokered certificates of deposit to manage deposit costs. Core deposits, however, decreased as a percentage of total deposits - Total deposits increased by $24.9 million, or 2.6%, during Q2 2025[13] - The increase was primarily due to growth in interest-bearing demand deposit accounts and the addition of brokered certificates of deposit[13] Core Deposits (Millions of Dollars) | Metric | June 30, 2025 | December 31, 2024 | | :------------------------------------ | :------------ | :---------------- | | Core Deposits | $816.1 | $837.7 | | Core Deposits as % of Total Deposits | 82.7% | 86.1% | Borrowings Short-term Borrowings Short-term borrowings significantly increased to $35.0 million as of June 30, 2025, from $10.0 million at December 31, 2024. These borrowings, primarily from FHLB and FRB, were used to maintain on-balance sheet liquidity while repricing deposits at lower rates Short-term Borrowings Outstanding (Millions of Dollars) | Period | Amount Outstanding | | :------------------- | :------------------------------- | | June 30, 2025 | $35.0 | | December 31, 2024 | $10.0 | - As of June 30, 2025, short-term borrowings included $20.0 million from FHLB and $15.0 million from the FRB's discount window, all with maturities less than 30 days[14] Deployment of Funds (Cash & Securities) Cash, federal funds sold, and reverse repurchase agreements increased to $58.8 million (5.1% of total assets) as of June 30, 2025, from $52.9 million (4.8% of total assets) at December 31, 2024. Investment securities, however, decreased to $157.1 million from $168.6 million over the same period Cash and Investment Securities (Millions of Dollars) | Metric | June 30, 2025 | December 31, 2024 | | :---------------------------------------------------------------- | :------------ | :---------------- | | Cash, federal funds sold and securities purchased under reverse repurchase agreements | $58.8 | $52.9 | | % of Total Assets | 5.1% | 4.8% | | Investment Securities | $157.1 | $168.6 | - The expected average life of securities in the investment portfolio slightly increased to 3.7 years as of June 30, 2025, from 3.6 years at December 31, 2024[15] Asset Quality Nonperforming assets decreased to $3.7 million (0.33% of total assets) as of June 30, 2025, from $5.5 million (0.50% of total assets) at December 31, 2024. However, net charge-offs as a percentage of average loans significantly increased in Q2 2025 and for the six-month period, primarily due to a partial charge-off of a commercial loan and increased charge-offs in the indirect portfolio Nonperforming Assets and Net Charge-offs (Millions of Dollars) | Metric | June 30, 2025 | December 31, 2024 | | :------------------------------------ | :------------ | :---------------- | | Nonperforming Assets | $3.7 | $5.5 | | Nonperforming Assets as % of Total Assets | 0.33% | 0.50% | | Net Charge-offs as % of Average Loans (Q2) | 0.79% | 0.10% (Q2 2024) | | Net Charge-offs as % of Average Loans (H1) | 0.47% | 0.10% (H1 2024) | - The increase in net charge-offs was due to a $1.2 million partial charge-off of one individually evaluated commercial loan and increased charge-offs associated with the indirect portfolio ($0.6 million in Q2 2025 vs. $0.3 million in Q2 2024)[16] Non-interest Income Non-interest income remained relatively consistent across Q2 2025, Q1 2025, and Q2 2024, totaling approximately $0.8 million to $0.9 million. The six-month totals for 2025 and 2024 were also consistent at $1.7 million Non-interest Income Trends (Millions of Dollars) | Period | Non-interest Income | | :------------------- | :------------------------------ | | Q2 2025 | $0.8 | | Q1 2025 | $0.9 | | Q2 2024 | $0.8 | | Six Months Ended June 30, 2025 | $1.7 | | Six Months Ended June 30, 2024 | $1.7 | Non-interest Expense Non-interest expense increased to $7.4 million in Q2 2025 from $6.9 million in Q1 2025, primarily due to higher salaries and benefits and professional services fees. The Q2 2025 expense was comparable to Q2 2024, and the six-month totals for 2025 and 2024 were consistent at $14.4 million Non-interest Expense Trends (Millions of Dollars) | Period | Non-interest Expense | | :------------------- | :------------------------------- | | Q2 2025 | $7.4 | | Q1 2025 | $6.9 | | Q2 2024 | $7.3 | | Six Months Ended June 30, 2025 | $14.4 | | Six Months Ended June 30, 2024 | $14.4 | - The quarter-over-quarter increase in non-interest expense was mainly driven by increases in salaries and benefits and fees for professional services[18] Shareholders' Equity Shareholders' equity increased to $101.9 million (8.91% of total assets) as of June 30, 2025, from $98.6 million (8.96% of total assets) at December 31, 2024. This growth was primarily due to earnings (net of dividends and share repurchases) and a positive impact from reductions in accumulated other comprehensive loss Shareholders' Equity (Millions of Dollars) | Metric | June 30, 2025 | December 31, 2024 | | :------------------------------------ | :------------ | :---------------- | | Shareholders' Equity | $101.9 | $98.6 | | Shareholders' Equity as % of Total Assets | 8.91% | 8.96% | | Tangible Common Equity to Tangible Assets | 8.31% | 8.33% | - The increase in shareholders' equity was primarily driven by earnings (net of dividends and share repurchases) and a reduction in accumulated other comprehensive loss due to market interest rate changes and maturity of lower-yielding investment securities[19] Capital Management Cash Dividend The Company declared a cash dividend of $0.07 per share in Q2 2025, consistent with Q1 2025. This represents an increase from the $0.05 per share dividend paid in the first three quarters of 2024 Cash Dividends Declared | Period | Dividend Per Share | | :------------------- | :----------------- | | Q2 2025 | $0.07 | | Q1 2025 | $0.07 | | Q4 2024 | Increased from $0.05 | | Q1-Q3 2024 | $0.05 | Share Repurchases No shares were repurchased in Q2 2025. In Q1 2025, the Company repurchased 40,000 shares at a weighted average price of $13.38 per share. As of June 30, 2025, 872,813 shares remained available under the repurchase program - No share repurchases occurred in Q2 2025[22] - In Q1 2025, 40,000 shares were repurchased at a weighted average price of $13.38 per share[22] - As of June 30, 2025, 872,813 shares remained available for repurchase under the program[22] Regulatory Capital As of June 30, 2025, First US Bank maintained capital ratios above the 'well-capitalized' thresholds. Its common equity Tier 1 capital and Tier 1 risk-based capital ratios were both 10.70%, total capital ratio was 11.93%, and Tier 1 leverage ratio was 9.23% - The Bank maintained capital ratios higher than required for a 'well-capitalized' institution[23] Regulatory Capital Ratios (June 30, 2025) | Ratio | Value | | :-------------------------- | :---- | | Common Equity Tier 1 Capital Ratio | 10.70% | | Tier 1 Risk-Based Capital Ratio | 10.70% | | Total Capital Ratio | 11.93% | | Tier 1 Leverage Ratio | 9.23% | Liquidity The Company maintained sufficient funding capacity as of June 30, 2025, supported by a strong core deposit base, a liquid investment securities portfolio, and access to various funding sources including federal funds lines, FHLB advances, FRB discount window, and brokered deposits - The Company maintained sufficient funding capacity for loan growth, capital expenditures, and ongoing operations[24] - Liquidity sources include a strong core deposit base, a liquid investment securities portfolio, and access to federal funds lines, FHLB advances, FRB discount window, and brokered deposits[24] Banking Center Growth The Company continued renovation of a banking center in Daphne, Alabama, expected to open in H1 2026. Additionally, land was purchased in Mobile, Alabama, for a future office complex to house indirect lending operations and an additional banking center - Renovation of a banking center in Daphne, Alabama, is ongoing, with an anticipated opening in the first half of 2026[25] - Land was purchased in Mobile, Alabama, for a new office complex to house indirect lending operations and an additional banking center[25] Company Information About First US Bancshares, Inc. First US Bancshares, Inc. is a bank holding company operating banking offices in Alabama, Tennessee, and Virginia through First US Bank. The Company's stock is traded on the Nasdaq Capital Market under the symbol 'FUSB' - First US Bancshares, Inc. is a bank holding company operating banking offices in Alabama, Tennessee, and Virginia through First US Bank[26] - The Company's stock is traded on the Nasdaq Capital Market under the symbol 'FUSB'[26] Forward-Looking Statements The press release contains forward-looking statements subject to significant risks, uncertainties, estimates, and assumptions. The Company does not undertake to update these statements, which are based on management's best judgment and involve factors such as credit risk, real estate market weakness, liquidity risks, economic conditions, competition, interest rate changes, technological impacts, cybersecurity, AI risks, regulatory compliance, and acquisition integration difficulties. Dividend payments are discretionary and subject to various factors - Forward-looking statements are subject to significant risks, uncertainties, estimates, and assumptions, and the Company does not commit to updating them[27] - Key risk factors include credit risk (loan losses, commercial real estate lending), residential real estate market weakness, liquidity risks, national and local market conditions, competition, interest rate and monetary policy changes, technological changes, cybersecurity, AI risks, governmental regulation, accounting standards, tax laws, and acquisition integration[28] - The payment of cash dividends is at the discretion of the Board of Directors, based on current conditions including earnings, leverage, financial condition, and capital requirements[28][29] Financial Statements & Non-GAAP Reconciliations Net Interest Margin Analysis Three Months Ended June 30, 2025 and 2024 For Q2 2025, total interest-earning assets increased, but the annualized yield decreased compared to Q2 2024. Loans saw a higher average balance but a lower yield. Total interest-bearing deposits increased, with a lower overall cost of funds. Net interest income increased, but net interest margin slightly decreased year-over-year Net Interest Margin Analysis (Q2 2025 vs. Q2 2024) (Millions of Dollars) | Metric | Q2 2025 Average Balance | Q2 2025 Interest | Q2 2025 Annualized Yield/Rate % | Q2 2024 Average Balance | Q2 2024 Interest | Q2 2024 Annualized Yield/Rate % | | :------------------------------------------ | :----------------------------------- | :------------------------------ | :------------------------------ | :----------------------------------- | :------------------------------ | :------------------------------ | | Loans | $857.707 | $12.989 | 6.07% | $819.590 | $12.930 | 6.35% | | Investment securities | 154.576 | 1.335 | 3.46% | 143.112 | 1.108 | 3.11% | | Total interest-earning assets | 1,059.163 | 14.854 | 5.63% | 999.486 | 14.546 | 5.85% | | Total interest-bearing deposits | 833.521 | 5.125 | 2.47% | 798.005 | 5.210 | 2.63% | | Borrowings | 22.966 | 0.253 | 4.42% | 14.838 | 0.160 | 4.34% | | Net interest income | N/A | $9.476 | N/A | N/A | $9.176 | N/A | | Net interest margin | N/A | N/A | 3.59% | N/A | N/A | 3.69% | Six Months Ended June 30, 2025 and 2024 For the six months ended June 30, 2025, average interest-earning assets increased, but the overall yield decreased compared to the same period in 2024. Loan yields declined, while investment securities yields improved. The cost of interest-bearing deposits decreased, but the cost of borrowings increased. Net interest income slightly increased, but net interest margin decreased year-over-year Net Interest Margin Analysis (H1 2025 vs. H1 2024) (Millions of Dollars) | Metric | H1 2025 Average Balance | H1 2025 Interest | H1 2025 Annualized Yield/Rate % | H1 2024 Average Balance | H1 2024 Interest | H1 2024 Annualized Yield/Rate % | | :------------------------------------------ | :----------------------------------- | :------------------------------ | :------------------------------ | :----------------------------------- | :------------------------------ | :------------------------------ | | Loans | $841.210 | $25.230 | 6.05% | $820.787 | $25.783 | 6.32% | | Investment securities | 160.377 | 2.747 | 3.45% | 138.915 | 1.973 | 2.86% | | Total interest-earning assets | 1,041.273 | 28.872 | 5.59% | 998.357 | 28.823 | 5.81% | | Total interest-bearing deposits | 816.563 | 9.994 | 2.47% | 798.254 | 10.309 | 2.60% | | Borrowings | 23.184 | 0.505 | 4.39% | 14.692 | 0.298 | 4.08% | | Net interest income | N/A | $18.373 | N/A | N/A | $18.216 | N/A | | Net interest margin | N/A | N/A | 3.56% | N/A | N/A | 3.67% | Interim Condensed Consolidated Balance Sheets As of June 30, 2025, total assets increased to $1.14 billion from $1.10 billion at December 31, 2024, primarily driven by growth in net loans and leases. Total deposits also increased, while short-term borrowings saw a significant rise. Shareholders' equity grew to $101.9 million Key Balance Sheet Items (Millions of Dollars) | Item | June 30, 2025 | December 31, 2024 | | :------------------------------------------ | :------------ | :---------------- | | Total assets | $1,143.379 | $1,101.086 | | Net loans and leases held for investment | 860.043 | 812.855 | | Total deposits | 986.846 | 972.557 | | Short-term borrowings | 35.000 | 10.000 | | Total shareholders' equity | 101.892 | 98.624 | - Allowance for credit losses on loans and leases increased to $11.388 million from $10.184 million[35] Interim Condensed Consolidated Statements of Operations For Q2 2025, net income significantly decreased to $0.155 million from $2.127 million in Q2 2024, primarily due to a $2.717 million provision for credit losses. Total interest income slightly increased, while total interest expense remained stable. Non-interest income was consistent, but non-interest expense increased Key Income Statement Items (Millions of Dollars) | Item | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :------------------------------------------ | :------ | :------ | :------ | :------ | | Total interest income | $14.854 | $14.546 | $28.872 | $28.823 | | Total interest expense | 5.378 | 5.370 | 10.499 | 10.607 | | Net interest income | 9.476 | 9.176 | 18.373 | 18.216 | | Provision for credit losses | 2.717 | — | 3.245 | — | | Net interest income after provision for credit losses | 6.759 | 9.176 | 15.128 | 18.216 | | Total non-interest income | 0.849 | 0.835 | 1.724 | 1.700 | | Total non-interest expense | 7.444 | 7.272 | 14.362 | 14.419 | | Income before income taxes | 0.164 | 2.739 | 2.490 | 5.497 | | Net income | $0.155 | $2.127 | $1.927 | $4.234 | | Diluted net income per share | $0.03 | $0.34 | $0.32 | $0.68 | Non-GAAP Financial Measures The Company provides non-GAAP financial measures, including liquidity, pre-tax pre-provision net revenue (PPNR), tangible assets, and equity, to offer enhanced understanding of financial performance and position. These measures are supplemental to GAAP and are used by management, analysts, and investors for evaluation and comparison - Non-GAAP measures are provided to enhance overall understanding of the Company's current financial performance and position, offering meaningful comparisons across periods[37] - Management believes both GAAP and non-GAAP measures should be considered together, and non-GAAP results should not be considered in isolation[37] Liquidity Measures Total readily available liquidity decreased to $384.0 million as of June 30, 2025, from $397.7 million at December 31, 2024. This includes on-balance sheet cash and equivalents, unencumbered investment securities, and unused lendable collateral at FHLB and FRB, as well as unsecured lines of credit. Estimated uninsured deposits decreased to 20.5% of total deposits Readily Available Liquidity (Millions of Dollars) | Source | June 30, 2025 | December 31, 2024 | | :---------------------------------------------------------------- | :------------ | :---------------- | | Total liquidity from cash, federal funds sold and reverse repurchase agreements | $58.805 | $52.943 | | Total liquidity from pledgable investment securities | 84.200 | 86.296 | | Liquidity from unused lendable collateral (loans) at FHLB | 11.175 | 45.388 | | Liquidity from unused lendable collateral (loans and securities) at FRB | 181.861 | 165.061 | | Unsecured lines of credit with banks | 48.000 | 48.000 | | Total readily available liquidity | $384.041 | $397.688 | - Estimated uninsured deposits totaled $202.5 million, or 20.5% of total deposits, as of June 30, 2025, down from $216.8 million, or 22.2%, at December 31, 2024[44] - The Company's total remaining credit availability with the FHLB was $298.0 million as of June 30, 2025, subject to pledging additional collateral[43] Pre-tax Pre-provision Net Revenue (PPNR) Reconciliation PPNR is used as a supplemental measure of profitability, excluding provisions for credit losses and income taxes, to assess core operating profitability. The reconciliation shows PPNR of $2.881 million in Q2 2025, with an annualized PPNR as a percentage of average assets at 1.03% - PPNR measures the Company's profitability before accounting for the provisions for credit losses and income taxes, providing a means to effectively measure core operating profitability on a trended basis[45] PPNR Reconciliation (Millions of Dollars) | Metric | Q2 2025 | Q1 2025 | Q4 2024 | Q3 2024 | Q2 2024 | H1 2025 | H1 2024 | | :------------------------------------ | :------ | :------ | :------ | :------ | :------ | :------ | :------ | | Net income | $0.155 | $1.772 | $1.714 | $2.222 | $2.127 | $1.927 | $4.234 | | Add: Provision for income taxes | 0.009 | 0.554 | 0.599 | 0.722 | 0.612 | 0.563 | 1.263 | | Add: Provision for credit losses | 2.717 | 0.528 | 0.470 | 0.152 | — | 3.245 | — | | Pre-tax pre-provision net revenue | $2.881 | $2.854 | $2.783 | $3.096 | $2.739 | $5.735 | $5.497 | | PPNR as a percentage of average assets (annualized) | 1.03% | 1.06% | 1.02% | 1.14% | 1.03% | 1.05% | 1.04% | Tangible Balances and Measures Reconciliation Tangible common equity measures are used to evaluate capital utilization and adequacy, reflecting capital available to withstand unexpected market conditions. As of June 30, 2025, tangible assets were $1.136 billion, and tangible common equity was $94.4 million, resulting in a tangible common equity to tangible assets ratio of 8.31% - Tangible common equity represents shareholders' equity less goodwill and identifiable intangible assets, while tangible assets represent total assets less goodwill and identifiable intangible assets[47] - These measures are important for reflecting capital available to withstand unexpected market conditions and for comparing capitalization among banking organizations[48] Tangible Balances and Measures (Millions of Dollars) | Metric | June 30, 2025 | March 31, 2025 | December 31, 2024 | September 30, 2024 | June 30, 2024 | | :------------------------------------------ | :------------ | :------------- | :---------------- | :----------------- | :------------ | | Total assets | $1,143.379 | $1,126.967 | $1,101.086 | $1,100.235 | $1,083.313 | | Less: Goodwill | 7.435 | 7.435 | 7.435 | 7.435 | 7.435 | | Less: Core deposit intangible | 0.012 | 0.030 | 0.049 | 0.067 | 0.097 | | Tangible assets | $1,135.932 | $1,119.502 | $1,093.602 | $1,092.733 | $1,075.781 | | Total shareholders' equity | $101.892 | $101.231 | $98.624 | $98.491 | $93.836 | | Less: Goodwill | 7.435 | 7.435 | 7.435 | 7.435 | 7.435 | | Less: Core deposit intangible | 0.012 | 0.030 | 0.049 | 0.067 | 0.097 | | Tangible common equity | $94.445 | $93.766 | $91.140 | $90.989 | $86.304 | | Tangible book value per common share | $16.41 | $16.34 | $16.00 | $15.92 | $15.03 | | Tangible common equity to tangible assets | 8.31% | 8.38% | 8.33% | 8.33% | 8.02% | | Return on average tangible common equity (annualized) | 0.66% | 7.79% | 7.49% | 9.99% | 10.05% |