Core Viewpoint - First US Bancshares, Inc. reported a net income of $1.9 million for Q3 2025, showing a significant increase from $0.2 million in Q2 2025 but a decrease from $2.2 million in Q3 2024. For the nine months ended September 30, 2025, net income totaled $3.9 million, down from $6.5 million in the same period of 2024 [1][2]. Financial Performance - Net interest income for Q3 2025 was $9.66 million, a 2.0% increase from Q2 2025 and a 5.2% increase from Q3 2024. The net interest margin remained stable at 3.60% [7][21]. - The provision for credit losses was $0.6 million in Q3 2025, significantly lower than $2.7 million in Q2 2025 and $0.2 million in Q3 2024. For the nine months ended September 30, 2025, the total provision was $3.8 million, compared to $0.2 million in the same period of 2024 [8][9]. Asset Quality - Nonperforming assets decreased to $2.2 million as of September 30, 2025, down from $5.5 million at the end of 2024, representing 0.19% of total assets [11]. - Net charge-offs for Q3 2025 were $1.3 million, with a net charge-off rate of 0.61% of average loans, compared to 0.79% in Q2 2025 [11][12]. Deposits and Borrowings - Total deposits increased by $15.6 million, or 1.6%, during Q3 2025, with core deposits making up 83.6% of total deposits [10]. - Short-term borrowings stood at $20 million as of September 30, 2025, up from $10 million at the end of 2024, aimed at maintaining liquidity [10]. Shareholder Equity and Dividends - Shareholders' equity reached $104.2 million as of September 30, 2025, representing 9.09% of total assets, an increase from $98.6 million at the end of 2024 [12]. - The company declared a cash dividend of $0.07 per share in Q3 2025, consistent with the previous two quarters [12]. Growth and Expansion - The company is renovating a banking center in Daphne, Alabama, expected to open in the first half of 2026, and has opened a new automated banking facility in Mountain Brook, Alabama [16].

Financial Performance - The company reported revenue of $156 million and net income of $43 million, marking a 48% increase in net income compared to the same quarter last year [5][11] - Earnings per diluted share increased to $0.34 from $0.23 in the first quarter of 2024 [5] - The net interest margin expanded by 45 basis points to 3.87%, attributed to lower cost of funds and increased asset yields [10][11] - Non-interest income decreased by $11.7 million due to prior quarter transactions but showed a 19% increase year-over-year [11][15] Business Line Performance - Average commercial loans increased by $121 million or 6.2% compared to the previous quarter, reflecting a strategic shift towards commercial lending [12] - The consumer loan segment saw modest growth, capitalizing on stronger demand for indirect loans [12] - The commercial real estate (CRE) portfolio declined by 3.5%, while residential mortgage and home equity portfolios decreased by 1.9% and 1.3%, respectively [13] Market Data - Average total deposits increased by $60 million quarter-over-quarter, with consumer non-brokered deposits rising by $68 million [13] - The cost of deposits decreased by nine basis points to 1.59%, maintaining a competitive position relative to peers [14] Company Strategy and Industry Competition - The company is focused on sustainable, responsible, and profitable growth, with a renewed emphasis on enhancing its retail banking franchise [6][7] - A merger with Pennswoods Bancorp is underway, expected to close by late July, which will position the company among the top 100 banks in the U.S. by asset size [8][9] - The company is actively pursuing de novo branch opportunities, particularly in Columbus and Indianapolis [7] Management Commentary on Operating Environment and Future Outlook - The current operating environment is characterized by significant market volatility and economic uncertainty, but the company remains focused on managing controllable factors [9][10] - The company expects to maintain its margin performance and is cautious about loan growth due to unpredictable economic conditions [20][21] Other Important Information - The adjusted efficiency ratio improved to 57.7%, reflecting disciplined expense management [16] - The company has a stable credit risk profile, with non-performing loans and assets at five-quarter lows [18] Q&A Session Summary Question: Margin guidance and economic outlook - Management indicated a core margin of 3.48% and expects to be at the high end of the range, with potential impacts from future Fed rate cuts [27][28] Question: Deposit growth drivers - The company is transitioning from CDs to more liquid products, with new money market rates around 3.75% [30][32] Question: Credit trends and industry exposure - Management noted potential impacts from tariffs on industries like manufacturing and transportation, with aggregate exposure at about 8% of the loan portfolio [42][43] Question: Commercial loan build-out - The company continues to take share in newer verticals and has seen stronger pipelines compared to the previous year [44][51] Question: Impact of Pennswoods acquisition on financial metrics - Management refrained from providing specific guidance on tangible book value dilution or purchase accounting due to market volatility [40][72] Question: Future M&A activity - The company remains open to future acquisitions but is currently focused on internal efficiencies and execution due to market conditions [76][78]