First US Bancshares (FUSB) Q3 2024 earnings summary

Executive summary

• Net income for 3Q2024 was $2.2 million ($0.36 per diluted share), up from $2.1 million ($0.33 per diluted share) in 3Q2023; trailing 12 months EPS reached $1.40 as of September 30, 2024.

• Total assets increased to $1.1 billion as of September 30, 2024, up 2.5% from year-end 2023.

• Tangible book value per share increased 10.0% year-to-date to $15.92.

• The company maintained strong capital and liquidity positions, with regulatory capital ratios above well-capitalized thresholds.

• CEO highlighted improved EPS and a balance sheet positioned for growth, despite a decline in loan volume.

Financial highlights

• Net interest margin compressed to 3.60% in 3Q2024 from 3.79% in 3Q2023, mainly due to interest rate environment and liability repricing.

• Net interest income for the nine months ended September 30, 2024, was $27.4 million, down 3.0% year-over-year.

• Non-interest expense decreased to $21.4 million from $21.7 million year-over-year, with a 4.0% reduction in salaries and benefits.

• Total loans decreased by $18.5 million (2.2%) to $803 million, while deposits grew to $981 million as of September 30, 2024.

• Efficiency ratio improved to 69.3% in 3Q2024 from 73.8% in 3Q2023.

Outlook and guidance

• Management expects continued pressure on net interest margin due to competitive deposit pricing and interest rate environment.

• Replacement of called brokered CDs with lower-rate deposits is expected to reduce interest expense over time.

• Strategic focus remains on prudent, diversified loan and deposit growth, expense control, and leveraging digital banking for efficiency and expansion.

• The company believes it is well positioned to respond to economic and industry challenges, with adequate liquidity and capital to support growth.

• New banking center in Knoxville opened; Daphne, Alabama location expected to open in early 2025.