FIRST US BANCSHARES, INC.
For the period ended Jun 30, 2025. Filed Aug 7, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2025 · Filed Aug 7, 2025
FUSB$16.450.0%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-03-31; filed 2025-05-08.
0000950170-25-066717
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSCurrent report: 10-Q
Period ended 2025-06-30; filed 2025-08-07.
0000950170-25-104822
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 111 previous paragraphs and 115 current paragraphs.
63 unchanged; 38 reworded; 13 added; 10 removed; 0 previous and 1 current paragraphs rearranged.
Tables are not compared: 14 previous and 18 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (13)
Current report
The impacts of new trade and other economic policies in the U.S., including tariffs and the One Big Beautiful Bill Act, along with the threat to implement additional tariffs, have created economic uncertainty which will continue to evolve and impact our business in future periods. There is a risk that these policy changes could have a negative impact on certain of our customers, causing increased difficulty in repaying their loans or other obligations which could result in a higher level of credit losses in our loan portfolios with a corresponding impact on our results of operations. In the Company’s local markets, competition for deposits has remained at elevated levels causing difficulty in lowering funding costs amid a declining interest rate environment. Uncertainty has continued with respect to commercial lending as business firms assess the potential impact of trade tariffs and the interest rate environment on their activities. However, while consumer spending has generally slowed on a macro-basis, the Company has experienced significant growth in consumer indirect lending at the higher end of the credit spectrum during the first six months of 2025. Management continues to monitor ongoing developments related to economic conditions, the federal funds rate and market interest rates. The competitive environment, combined with ongoing economic uncertainty, provides a challenging environment in which to maintain and increase the Company’s net interest margin. Should economic conditions worsen, the Company is exposed to increased credit risk from both commercial and consumer borrowers. Furthermore, should market interest rates or the federal funds rate increase or decrease at significant levels, particularly over a short period of time, the Company’s net interest margin and net interest income could be negatively impacted.
Current report
Net interest income increased by $0.2 million, or 0.9%, comparing the six months ended June 30, 2025 to the six months ended June 30, 2024. Net interest margin was 3.56% for the six months ended June 30, 2025, compared to 3.67% for the six months ended June 30, 2024. The increase in net interest income comparing the two six-month periods resulted from a combination of increased average interest-earning-asset balances and decreased average rates on deposits. While net interest income increased modestly, net interest margin decreased due to the significance increase in average interest-earning assets over the period, combined with a declining interest rate environment. Average interest-earnings assets increased by $42.9 million comparing the six months ended June 30, 2025 to the six months ended June 30, 2024, driven by growth in consumer indirect loans and, to a lesser extent, investment securities.
Current report
Non-interest expense remained consistent, totaling $14.4 million for both the six months ended June 30, 2025 and 2024.
Current report
During the six months ended June 30, 2025, the Company declared cash dividends totaling $0.14 per share on its common stock, compared to cash dividends totaling $0.10 per share on its common stock during the six months ended June 30, 2024.
Current report
Interest income increased by $49 thousand, comparing the six months ended June 30, 2025 to the six months ended June 30, 2024. While increased average earning-asset balances contributed $1.0 million in interest income growth, this growth was mostly offset by reductions in average yield. Amid a declining interest rate environment, average yields decreased in all interest-earning categories, except investment securities which provided the majority of interest income growth comparing the two six-month periods.
Current report
Interest expense decreased by $0.1 million, comparing the six months ended June 30, 2025 to the six months ended June 30, 2024. While a decrease in average rates paid on deposits contributed $0.5 million to the decrease in interest expense, these savings were partially offset by the impact of growth in average deposits and borrowings which increased interest expense by $0.4 million comparing the two six-month periods.
Current report
The Company recorded a provision for credit losses of $3.2 million during the six months ended June 30, 2025. No provision for credit losses was recorded during the six months ended June 30, 2024. Of the total provision recorded during the 2025 period, $2.3 million was associated with the consumer indirect loan portfolio, while $0.9 million was associated with specific reserves added for two individually evaluated commercial loans. The increased provision associated with the consumer indirect portfolio was attributable to both significant growth in the portfolio during the six months ended June 30, 2025, as well as an increase in net charge-offs.
Current report
Net charge-offs totaled $2.0 million and $0.4 million for the six months ended June 30, 2025 and 2024, respectively. Of the net charge-offs recorded during the six months ended June 30, 2025, $1.2 million was associated with one individually evaluated commercial loan and $0.9 million was associated with the consumer indirect loan portfolio. These net charge-offs were partially offset by $0.1 million in net recoveries associated with the consumer direct portfolio. The $1.2 million charge-off on the individually evaluated commercial loan had been fully reserved during 2024. Of the net charge-offs recorded during the six months ended June 30, 2024, $0.5 million was associated with the consumer indirect portfolio, partially offset by $0.1 million in net recoveries in the consumer direct portfolio.
Current report
As of June 30, 2025, the Company’s ACL as a percentage of total loans and leases was 1.31%, compared to 1.24% as of December 31, 2024. While we believe that the methodologies and calculations that have been used in the determination of the ACL are adequate, the determination of the appropriateness of the ACL is complex and requires judgment by management about the effects of matters that are inherently uncertain. Factors beyond our control, such as changes in economic forecasts related to the national economy, changes in consumer behavior, or economic deterioration in service areas in which the Company operates, may negatively and materially affect asset quality and the adequacy of the ACL, as well as the resulting provision for credit losses.
Current report
Non-interest expense totaled $14.4 million during both the six months ended June 30, 2025 and 2024. In recent years, as a result of strategic initiatives introduced by management beginning in 2021, the Company was able to reduce and then maintain non-interest expense at relatively flat levels. While this trend has continued through the six months ended June 30, 2025, the majority of efficiency improvements from the Company’s strategic initiatives have now been realized. Therefore, we would expect non-interest expense to increase over time in accordance with inflationary trends, market competition for personnel, the pace of technological change, and other factors including the Company’s ongoing growth.
Current report
In July 2025, the One Big Beautiful Bill Act (the "OBBBA") was signed into law, which includes a broad range of tax reform provisions affecting businesses, including extending and modifying certain key provisions from the Tax Cuts and Jobs Act of 2017 and expanding certain incentives from the Inflation Reduction Act of 2022 while accelerating the phase-out of others. We do not anticipate a material impact on our income tax expense and taxes payable from the tax provisions of the OBBBA
Current report
The following tables present details on the composition of the Company's deposits for the periods indicated:
Current report
During the six months ended June 30, 2025, the Company declared cash dividends totaling $0.14 per share on its common stock, compared to cash dividends totaling $0.10 per share on its common stock during the six months ended June 30, 2024.
Removed paragraphs (10)
Previous report
In addition, the Company continues to monitor the potential impact of evolving trade policies, including the impact of additional tariffs imposed by the U.S. While no specific tariffs were implemented during the reporting period that materially affected the Company’s operations, the potential for future changes in cross-border trade arrangements and import/export duties contributes to broader economic uncertainty. Should the impact of tariffs lead to higher inflation levels or higher interest rates for a sustained period, the Company’s financial position and result of operations could be negatively impacted.
Previous report
Net interest income decreased by $0.1 million, or 1.6%, comparing the three months ended March 31, 2025 to the three months ended March 31, 2024. Net interest margin was 3.53% for the three months ended March 31, 2025, compared to 3.65% for the three months ended March 31, 2024. The decrease in net interest income and margin comparing the three months ended March 31, 2025 to the three months ended March 31, 2024 resulted primarily from yield reductions on loans that occurred following the reduction of the federal funds rate during the latter part of 2024. The reduction in interest income was partially offset by an increase in average earning asset volumes, particularly investment securities, as well as reductions in expense on interest-bearing liabilities.
Previous report
For the three months ended March 31, 2025, non-interest expense totaled $6.9 million, compared to $7.1 million for the three months ended March 31, 2024. The expense reduction comparing the three months ended March 31, 2025 to the three months ended March 31, 2024 resulted primarily from decreases in salaries and benefits and fees for professional services. These reductions were partially offset by an increase in other expense that resulted primarily from a recovery of check fraud expense that occurred during the three months ended March 31, 2024, but was not repeated during the three months ended March 31, 2025.
Previous report
During the three months ended March 31, 2025, the Company declared a cash dividend of $0.07 per share on its common stock, consistent with the dividend paid in the previous quarter. The Company’s cash dividend was increased during the fourth quarter of 2024, compared to a dividend declared of $0.05 per share in each of the first three quarters of 2024.
Previous report
Interest income decreased by $0.3 million, comparing the three months ended March 31, 2025 to the three months ended March 31, 2024. Of the decrease, $0.4 million was attributable to lower average yields on interest-earning assets, which was partially offset by $0.1 million growth in interest-earning assets comparing the two periods.
Previous report
The decrease in interest income was offset by a decrease in interest expense of $0.1 million, comparing the three months ended March 31, 2025 to the three months ended March 31, 2024. The decrease was primarily attributable to the reductions in market interest rates.
Previous report
The Company recorded a provision for credit losses of $0.5 million during the three months ended March 31, 2025, compared to the three months ended March 31, 2024, in which no provision for credit losses was recorded. The increase in the provision for credit losses comparing the three months ended March 31, 2025 to the corresponding period of 2024 was due primarily to an increase in loan volume. As of March 31, 2025, the Company’s ACL on loans and leases as a percentage of total loans was 1.23%, compared to 1.24% as of December 31, 2024.
Previous report
Net charge-offs totaled $0.3 million and $0.2 million for the three months ended March 31, 2025 and 2024, respectively. The ongoing timing of charge-offs, economic developments, and other factors that could impact the provision for credit losses cannot be fully predicted with certainty. Among other things, sustained levels of high inflation or an economic downturn in the Company's operating territories could negatively impact the Company’s borrowers, and could lead to increased provisions for credit losses in the future.
Previous report
Non-interest expense totaled $6.9 million and $7.1 million during the three months ended March 31, 2025 and 2024, respectively. The expense reduction comparing the three months ended March 31, 2025 to the three months ended March 31, 2024 resulted primarily from decreases in salaries and benefits and fees for professional services. These reductions were partially offset by an increase in other expense that resulted primarily from a recovery of check fraud expense that occurred during the three months ended March 31, 2024, but was not repeated during the three months ended March 31, 2025.
Previous report
During the three months ended March 31, 2025, the Company declared a cash dividend of $0.07 per share on its common stock, consistent with the dividend paid in the previous quarter. The Company’s cash dividend was increased during the fourth quarter of 2024, compared to a dividend declared of $0.05 per share in each of the first three quarters of 2024.
Reworded paragraphs (38)
Previous wording
Delivery of the best possible financial services to customers remains an overall operational focus of the Company. The Company recognizes that attention to detail and responsiveness to customers’ desires are critical to customer satisfaction. The Company continues to upgrade technology, both in its financial services and in the training of its 147 full-time equivalent employees (as of March 31, 2025), to ensure customer satisfaction and convenience.
Current wording
Delivery of the best possible financial services to customers remains an overall operational focus of the Company. The Company recognizes that attention to detail and responsiveness to customers’ desires are critical to customer satisfaction. The Company continues to upgrade technology, both in its financial services and in the training of its 148 full-time equivalent employees (as of June 30, 2025), to ensure customer satisfaction and convenience.
Previous wording
The emphasis of this discussion is a comparison of assets, liabilities and shareholders’ equity as of March 31, 2025 to December 31, 2024, while comparing income and expense for the three months ended March 31, 2025 and 2024. All yields and ratios presented and discussed herein are recorded and presented on the accrual basis and not on the tax-equivalent basis, unless otherwise indicated.
Current wording
The emphasis of this discussion is a comparison of assets, liabilities and shareholders’ equity as of June 30, 2025 to December 31, 2024, while comparing income and expense for the six months ended June 30, 2025 and 2024. All yields and ratios presented and discussed herein are recorded and presented on the accrual basis and not on the tax-equivalent basis, unless otherwise indicated.
Previous wording
The banking industry continued to be impacted by economic volatility during the three months ended March 31, 2025. The U.S. inflation rate, as measured by the consumer price index, slowed to 2.4% in March 2025, however, it remained elevated above the Federal Reserve Bank’s (“FRB”) longer run target of 2%. The U.S. unemployment rate moved up modestly to 4.2% in March 2025. The Open Market Committee of the FRB did not change the federal funds rate during the period, keeping the rate at a level of 4.25% to 4.50%. Treasury rates generally trended lower during the period, indicating sentiment of further rate reductions to come later in 2025. U.S. gross domestic product (“GDP”) contracted during the first quarter of 2025 for the first time since 2022, decreasing 0.3% on an annualized basis, due primarily to a surge in imports during the quarter. The combination of the continued heightened inflation level with negative GDP provides a difficult environment in which to predict future movement in the federal funds rate. Remarks from the Open Market Committee following its March 2025 meetings remained cautious, noting that uncertainty around its economic outlook had increased and that it would “carefully assess incoming data, the evolving outlook, and the balance of risks” in its consideration of the extent and timing of additional adjustments to the federal funds rate.
Current wording
Economic volatility continued through the six months ended June 30, 2025 due to a number of factors, including reductions in U.S. gross domestic product (“GDP”) during the first quarter of 2025, modest increases in the inflation rate as the second quarter came to a close, and ongoing uncertainty around the ultimate impact of trade tariffs introduced by the Trump administration in April 2025. In addition, geopolitical uncertainty continued with a number of ongoing military conflicts on the global front. The U.S. inflation rate, as measured by the consumer price index, accelerated to 2.7% in June 2025, the highest level since February 2025, and remains elevated above the Federal Reserve Bank’s (“FRB”) longer run target of 2%. The U.S. unemployment rate edged down to 4.1% in June 2025. The unemployment rate has held within a narrow 4.0% - 4.2% range since May 2024. First quarter 2025 GDP reflected annualized contraction of 0.5%, a decline from previous estimates. The weaker GDP figure was largely driven by significant declines in consumer spending and an increase in imports as businesses and consumers stockpiled goods ahead of expected price increases following tariff announcements. Preliminary estimates indicated that second quarter 2025 GDP grew by an annualized rate of 3.0%. The expansion in second quarter primarily reflected a substantial reduction in imports, largely offsetting the surge of import growth in the first quarter. Throughout the first six months of 2025, the Open Market Committee of the FRB did not change the federal funds rate, keeping the rate at a level of 4.25% to 4.50%. Minutes from the Committee’s June 2025 meetings indicated a shift toward higher expectations for interest rates through 2026, and implied two 25 basis point rate cuts in 2025 and two additional in 2026. Although volatile at times, treasury rates generally trended lower during the six-month period, indicating sentiment of further rate reductions to come later in 2025 and 2026. The combination of the continued heightened inflation level, stable employment levels, and volatile GDP provides a difficult environment in which to predict future movement in the federal funds rate and treasury rates.
Previous wording
The Company earned net income of $1.8 million, or $0.29 per diluted common share, during the three months ended March 31, 2025, compared to $2.1 million, or $0.34 per diluted common share, for the three months ended March 31, 2024.
Current wording
The Company earned net income of $0.2 million, or $0.03 per diluted common share, during the three months ended June 30, 2025, compared to $2.1 million, or $0.34 per diluted common share, for the three months ended June 30, 2024. For the six months ended June 30, 2025, net income totaled $1.9 million, or $0.32 per diluted share, compared to $4.2 million, or $0.68 per diluted share for the six months ended June 30, 2024. The decrease in net income during both the three months and the six months ended June 30, 2025, compared to the previous periods, resulted primarily from an increase in the Company’s provision for credit losses on loans and leases.
Previous wording
Summarized condensed consolidated statements of operations are included below for the three months ended March 31, 2025 and 2024.
Current wording
Summarized condensed consolidated statements of operations are included below for the three and six months ended June 30, 2025 and 2024.
Previous wording
The discussion that follows summarizes the most significant activity that drove changes in the Company’s operating results during the three months ended March 31, 2025, as compared to the three months ended March 31, 2024.
Current wording
The discussion that follows summarizes the most significant activity that drove changes in the Company’s operating results during the six months ended June 30, 2025, as compared to the six months ended June 30, 2024.
Previous wording
For the three months ended March 31, 2025, the Company recorded a provision for credit losses of $0.5 million, compared to the three months ended March 31, 2024, in which no provision for credit losses was recorded. The increase in the provision for credit losses comparing the three months ended March 31, 2025 to the three months ended March 31, 2024 was primarily attributable to loan growth during the quarter. As of March 31, 2025, the Company’s allowance for credit losses ("ACL") on loans and leases as a percentage of total loans was 1.23%, compared to 1.24% as of December 31, 2024.
Current wording
For the six months ended June 30, 2025, the Company recorded a provision for credit losses of $3.2 million. No provision for credit losses was recorded for the six months ended June 30, 2024. Of the total provision recorded during the 2025 period, $2.3 million was associated with the consumer indirect loan portfolio, while $0.9 million was associated with specific reserves added for two individually evaluated commercial loans. The increased provision associated with the consumer indirect portfolio was attributable to both significant growth in the portfolio during the six months ended June 30, 2025, as well as an increase in net charge-offs. As of June 30, 2025, the Company’s allowance for credit losses ("ACL") on loans and leases as a percentage of total loans was 1.31%, compared to 1.24% as of December 31, 2024.
Previous wording
Non-interest income remained relatively consistent, totaling $0.9 million for both the three months ended March 31, 2025 and 2024.
Current wording
Non-interest income remained relatively consistent, totaling $1.7 million for both the six months ended June 30, 2025 and 2024.
Previous wording
As of March 31, 2025, the Company’s assets totaled $1,127.0 million, compared to $1,101.1 million as of December 31, 2024, an increase of 2.4%.
Current wording
As of June 30, 2025, the Company’s assets totaled $1,143.4 million, compared to $1,101.1 million as of December 31, 2024, an increase of 3.8%.
Previous wording
Total loans increased by $25.3 million, or 3.1%, as of March 31, 2025, compared to December 31, 2024. The increase was driven primarily by growth of $41.3 million in consumer indirect loans during the quarter. The indirect lending platform focuses on recreational and equipment consumer lending on the higher end of the credit spectrum. Collateral financed in the indirect portfolio primarily includes boats, recreational vehicles, campers, horse trailers and cargo trailers. The weighted average credit score of new indirect loans financed during the quarter reached 800, while the weighted average credit score for the entire portfolio was 779. In addition to the indirect portfolio, the Company also grew its multi-family residential real estate and commercial and industrial lending categories during the quarter by $5.3 million and $0.9 million, respectively. Loan growth during the quarter was partially offset by reductions of $22.2 million in other lending categories, primarily construction and non-residential commercial real estate. Total loan volume averaged $824.5 million during the three months ended March 31, 2025, compared to $822.0 million during the three months ended March 31, 2024.
Current wording
Total loans increased by $48.4 million, or 5.9%, as of June 30, 2025, compared to December 31, 2024. The increase was driven primarily by growth of $66.4 million in consumer indirect loans during the six months ended June 30, 2025. The indirect lending platform focuses on recreational and equipment consumer lending on the higher end of the credit spectrum. Collateral financed in the indirect portfolio primarily includes boats, recreational vehicles/campers, horse trailers and cargo trailers. The weighted average credit score of new indirect loans financed during the six months ended June 30, 2025 was 798, while the weighted average credit score for the entire portfolio was 781. In addition to the indirect portfolio, the Company also grew its multi-family residential real estate lending category during the six months ended June 30, 2025 by $17.8 million. Loan growth during the six months ended June 30, 2025 was partially offset by reductions of $35.8 million in other lending categories, primarily construction and non-residential commercial real estate. For the six months ended June 30, 2025, average loan balances increased by $20.4 million, or 2.5%, compared to the six months ended June 30, 2024.
Previous wording
Nonperforming assets, including loans in non-accrual status and other real estate owned, totaled $5.0 million as of March 31, 2025, compared to $5.5 million as of December 31, 2024. As a percentage of total assets, nonperforming assets totaled 0.44% as of March 31, 2025, compared to 0.50% as of December 31, 2024. Net charge-offs as a percentage of average loans totaled 0.13% during the three months ended March 31, 2025, compared to 0.09% during the three months ended March 31, 2024.
Current wording
Nonperforming assets, including loans in non-accrual status and other real estate owned, totaled $3.7 million as of June 30, 2025, compared to $5.5 million as of December 31, 2024. As a percentage of total assets, nonperforming assets totaled 0.33% as of June 30, 2025, compared to 0.50% as of December 31, 2024. For the six months ended June 30, 2025, net charge-offs as a percentage of average loans totaled 0.47%, compared to 0.10% for the six months ended June 30, 2024. The increase in net charge-offs during the six months ended June 30, 2025 was due to a partial charge-off of one individually evaluated commercial loan of $1.2 million, as well as an increase in charge-offs associated with the indirect portfolio. For the six months ended June 30, 2025, net charge-offs associated with the indirect portfolio totaled $0.9 million, or 0.55% of average loans, compared to $0.5 million, or 0.33% of average loans, for the six months ended June 30, 2024.
Previous wording
Total deposits decreased by $10.6 million, or 1.1%, during the three months ended March 31, 2025, due primarily to reductions in interest-bearing demand deposit accounts, and to a lesser extent, reductions in non-interest-bearing demand deposit accounts. These reductions resulted in part from lower deposit pricing implemented by management during the quarter in an effort to improve net interest margin. Core deposits, which exclude time deposits of $250 thousand or more and all wholesale brokered deposits, totaled $813.9 million, or 84.6% of total deposits, as of March 31, 2025, compared to $837.7 million, or 86.1% of total deposits, as of December 31, 2024.
Current wording
Total deposits increased by $14.3 million, or 1.5%, during the six months ended June 30, 2025, due primarily to increases in interest-bearing demand deposit accounts, as well as the addition of brokered certificates of deposit obtained to assist in the management of deposit costs. Core deposits, which exclude time deposits of $250 thousand or more and all wholesale brokered deposits, totaled $816.1 million, or 82.7% of total deposits, as of June 30, 2025, compared to $837.7 million, or 86.1% of total deposits, as of December 31, 2024.
Previous wording
As of March 31, 2025, the Company had $45.0 million in short-term borrowings outstanding, compared to $10.0 million outstanding as of December 31, 2024. The short-term borrowings were held as part of the Company’s efforts to maintain on-balance sheet liquidity levels while repricing deposits at lower rates. As of both March 31, 2025 and December 31, 2024, all outstanding short-term borrowings had remaining maturities of less than 30 days. The amount outstanding as of March 31, 2025 included $25.0 million borrowed from the Federal Home Loan Bank of Atlanta (“FHLB”) and $20.0 million borrowed from the Federal Reserve Bank’s (“FRB”) discount window. As of December 31, 2024, all short-term borrowings outstanding were borrowed exclusively from the FHLB.
Current wording
As of June 30, 2025, the Company had $35.0 million in short-term borrowings outstanding, compared to $10.0 million outstanding as of December 31, 2024. The short-term borrowings were held as part of the Company’s efforts to maintain on-balance sheet liquidity levels while repricing deposits at lower rates. As of both June 30, 2025 and December 31, 2024, all outstanding short-term borrowings had remaining maturities of less than 30 days. The amount outstanding as of June 30, 2025 included $20.0 million borrowed from the Federal Home Loan Bank of Atlanta (“FHLB”) and $15.0 million borrowed from the Federal Reserve Bank’s (“FRB”) discount window. As of December 31, 2024, all short-term borrowings outstanding were borrowed exclusively from the FHLB.
Previous wording
As of March 31, 2025, the Company held cash, federal funds sold and securities purchased under reverse repurchase agreements totaling $61.5 million, or 5.5% of total assets, compared to $52.9 million, or 4.8% of total assets, as of December 31, 2024. Investment securities, including both the available-for-sale and held-to-maturity portfolios, totaled $161.9 million as of March 31, 2025, compared to $168.6 million as of December 31, 2024. As of March 31, 2025, the expected average life of securities in the investment portfolio was 4.0 years, compared to 3.6 years as of December 31, 2024.
Current wording
As of June 30, 2025, the Company held cash, federal funds sold and securities purchased under reverse repurchase agreements totaling $58.8 million, or 5.1% of total assets, compared to $52.9 million, or 4.8% of total assets, as of December 31, 2024. Investment securities, including both the available-for-sale and held-to-maturity portfolios, totaled $157.1 million as of June 30, 2025, compared to $168.6 million as of December 31, 2024. As of June 30, 2025, the expected average life of securities in the investment portfolio was 3.7 years, compared to 3.6 years as of December 31, 2024.
Previous wording
Shareholders’ equity increased by $2.6 million, or 2.6%, as of March 31, 2025, compared to December 31, 2024. The increase in shareholders’ equity during the three months ended March 31, 2025 resulted primarily from earnings, net of dividends paid and repurchases of shares of the Company's common stock. In addition, shareholders' equity was positively impacted during the quarter by reductions in the Company's accumulated other comprehensive loss resulting from changes in market interest rates, as well as the maturity of lower yielding investment securities.
Current wording
Shareholders’ equity increased by $3.3 million, or 3.3%, as of June 30, 2025, compared to December 31, 2024. The increase in shareholders’ equity during the six months ended June 30, 2025 resulted primarily from earnings, net of dividends paid and repurchases of shares of the Company's common stock. In addition, shareholders' equity was positively impacted during the six months ended June 30, 2025 by reductions in the Company's accumulated other comprehensive loss resulting from changes in market interest rates, as well as the maturity of lower yielding investment securities.
Previous wording
During the three months ended March 31, 2025, the Company completed the repurchase of 40,000 shares of its common stock at a weighted average price of $13.38 per share. The repurchases were completed under the Company’s previously announced share repurchase program. As of March 31, 2025, 872,813 shares remained available for repurchase under the program.
Current wording
During the six months ended June 30, 2025, the Company completed the repurchase of 40,000 shares of its common stock at a weighted average price of $13.38 per share. The repurchases were completed under the Company’s previously announced share repurchase program. As of June 30, 2025, 872,813 shares remained available for repurchase under the program.
Previous wording
During the three months ended March 31, 2025, the Bank continued to maintain capital ratios at higher levels than required to be considered a “well-capitalized” institution under applicable banking regulations. As of March 31, 2025, the Bank’s common equity Tier 1 capital and Tier 1 risk-based capital ratios were each 11.08%. Its total capital ratio was 12.23%, and its Tier 1 leverage ratio was 9.55%.
Current wording
During the six months ended June 30, 2025, the Bank continued to maintain capital ratios at higher levels than required to be considered a “well-capitalized” institution under applicable banking regulations. As of June 30, 2025, the Bank’s common equity Tier 1 capital and Tier 1 risk-based capital ratios were each 10.70%. Its total capital ratio was 11.93%, and its Tier 1 leverage ratio was 9.23%.
Previous wording
During the three months ended March 31, 2025, the Company continued its renovation of a banking center office in Daphne, Alabama that was purchased from another financial institution. This location is expected to serve as the Bank’s initial deposit gathering facility in the Daphne/Mobile area. It is currently anticipated that the location will open to the public by the fourth quarter of 2025.
Current wording
During the six months ended June 30, 2025, the Company continued its renovation of a banking center office in Daphne, Alabama that was purchased from another financial institution. This location is expected to serve as the Bank’s initial deposit gathering facility in the Daphne/Mobile area. It is currently anticipated that the location will open to the public during the first half of 2026. In addition, during the six months ended June 30, 2025, the Company purchased land in Mobile, Alabama. The Company intends to develop the land into an office complex that will house the Company’s indirect lending operation, as well as provide an additional banking center in the area.
Previous wording
The following tables show the average balances of each principal category of assets, liabilities and shareholders’ equity for the three months ended March 31, 2025 and 2024. Additionally, the tables provide an analysis of interest revenue or expense associated with each category, along with the accompanying yield or rate percentage. Net interest margin is calculated for each period presented as net interest income divided by average total interest-earning assets.
Current wording
The following tables show the average balances of each principal category of assets, liabilities and shareholders’ equity for the three and six months ended June 30, 2025 and 2024. Additionally, the tables provide an analysis of interest revenue or expense associated with each category, along with the accompanying yield or rate percentage. Net interest margin is calculated for each period presented as net interest income divided by average total interest-earning assets.
Previous wording
The Company’s net interest income and net interest margin during the first three months of 2025 continued to be impacted by changes in the interest rate environment that occurred during the latter months of 2024. Notably, between September and December 2024, the federal funds rate was reduced by 100 basis points, and generally, the Company’s earning assets repriced more quickly than interest-bearing liabilities during the latter part of 2024, reducing the Company’s net interest margin to 3.41% during the three months ended December 31 2024. During the first quarter of 2025, management continued efforts to both maximize earning asset growth and reduce interest expense, resulting in an improvement in net interest margin by 12 basis points, comparing the first quarter of 2025 to the fourth quarter of 2024. While net interest margin improved compared to the prior quarter, it remained below the levels recorded during the earlier periods of 2024. For the three months ended March 31, 2025, net interest margin was 3.53%, compared to 3.65% for the three months ended March 31, 2024. While management is continuing efforts to improve net interest margin, the results of these efforts cannot be fully predicted. Should market interest rates increase or decrease at significant levels, particularly over a short period of time, the Company’s net interest margin and net interest income could be negatively impacted.
Current wording
The Company’s net interest income and net interest margin during the six months ended June 30, 2025 continued to be impacted by changes in the interest rate environment that began during the latter months of 2024. Notably, between September and December 2024, the federal funds rate was reduced by 100 basis points, and generally, the Company’s earning assets repriced more quickly than interest-bearing liabilities during the latter part of 2024, reducing the Company’s net interest margin to 3.41% during the three months ended December 31 2024. During the six months ended June 30, 2025, management continued efforts to both maximize earning asset growth and reduce interest expense, resulting in an improvement in net interest margin by 12 basis points, comparing the first quarter of 2025 to the fourth quarter of 2024, and an additional six basis points, comparing the second quarter of 2025 to the first quarter of 2025. While net interest margin improved for two consecutive quarters, it remained below the levels recorded during the earlier periods of 2024. For the six months ended June 30, 2025, net interest margin was 3.56%, compared to 3.67% for the six months ended June 30, 2024. While management is continuing efforts to improve net interest margin, the results of these efforts cannot be fully predicted. Should market interest rates increase or decrease at significant levels, particularly over a short period of time, the Company’s net interest margin and net interest income could be negatively impacted.
Previous wording
The Company’s non-interest income remained relatively consistent, totaling $0.9 million for both the three months ended March 31, 2025 and 2024.
Current wording
The Company’s non-interest income remained relatively consistent, totaling $1.7 million for both the six months ended June 30, 2025 and 2024. Management continues to evaluate opportunities to add non-interest revenue streams and grow existing streams; however, significant variation in non-interest income is not expected in the near term.
Previous wording
The provision for income taxes was $0.6 million and $0.7 million for the three months ended March 31, 2025 and 2024, respectively. The Company’s effective tax rate was 23.8% and 23.6%, respectively, for the same periods.
Current wording
The provision for income taxes was $0.6 million and $1.3 million for the six months ended June 30, 2025 and 2024, respectively. The Company’s effective tax rate was 22.6% and 23.0%, respectively, for the same periods.
Previous wording
The investment securities portfolio is used by management to provide liquidity, to generate interest income and for use as collateral for public deposits and wholesale funding. Risk and return can be adjusted by altering the duration, composition and/or balance of the portfolio. The expected average life of securities in the investment portfolio was 4.0 years and 3.6 years as of March 31, 2025 and December 31, 2024, respectively.
Current wording
The investment securities portfolio is used by management to provide liquidity, to generate interest income and for use as collateral for public deposits and wholesale funding. Risk and return can be adjusted by altering the duration, composition and/or balance of the portfolio. The expected average life of securities in the investment portfolio was 3.7 years and 3.6 years as of June 30, 2025 and December 31, 2024, respectively.
Previous wording
Available-for-sale securities are recorded at estimated fair value, with unrealized gains or losses recognized, net of taxes, in accumulated other comprehensive loss, a separate component of shareholders’ equity. As of March 31, 2025, available-for-sale securities totaled $161.3 million, or 99.6% 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 bonds, obligations of U.S. government-sponsored agencies, and obligations of state and political subdivisions.
Current wording
Available-for-sale securities are recorded at estimated fair value, with unrealized gains or losses recognized, net of taxes, in accumulated other comprehensive loss, a separate component of shareholders’ equity. As of June 30, 2025, available-for-sale securities totaled $156.6 million, or 99.6% of the total investment portfolio, compared to $167.9 million, or 99.6% of the total investment portfolio, as of December 31, 2024.
Previous wording
Net unrealized losses in the available-for-sale portfolio totaled $4.0 million as of March 31, 2025, compared to $6.7 million as of December 31, 2024. Net unrealized losses within the available-for-sale portfolio were recognized, net of tax, in accumulated other comprehensive loss.
Current wording
Net unrealized losses in the available-for-sale portfolio totaled $3.0 million as of June 30, 2025, compared to $6.7 million as of December 31, 2024. Net unrealized losses within the available-for-sale portfolio were recognized, net of tax, in accumulated other comprehensive loss.
Previous wording
The Company’s total loan portfolio increased by $25.3 million, or 3.1%, as of March 31, 2025, compared to December 31, 2024. The tables below summarize loan balances by portfolio category, as well as the ACL, as of the end of each of the most recent five quarters as of March 31, 2025:
Current wording
The Company’s total loan portfolio increased by $48.4 million, or 5.9%, as of June 30, 2025, compared to December 31, 2024. The tables below summarize loan balances by portfolio category, as well as the ACL, as of the end of each of the most recent five quarters as of June 30, 2025:
Previous wording
As of both March 31, 2025 and December 31, 2024, the Company’s reserve for unfunded commitments, which is recorded in other liabilities in the Company’s consolidated balance sheets, totaled $0.4 million.
Current wording
As of June 30, 2025 and December 31, 2024, the Company’s reserve for unfunded commitments, which is recorded in other liabilities in the Company’s consolidated balance sheets, totaled $0.5 million and $0.4 million, respectively.
Previous wording
While no portion of the ACL is in any way restricted to any individual loan or group of loans and the entire allowance is available to absorb losses from any and all loans, the following table shows an allocation of the ACL as of March 31, 2025 and December 31, 2024:
Current wording
While no portion of the ACL is in any way restricted to any individual loan or group of loans and the entire allowance is available to absorb losses from any and all loans, the following table shows an allocation of the ACL for the periods indicated:
Previous wording
Total deposits decreased to $962.0 million as of March 31, 2025, from $972.6 million as of December 31, 2024, a decrease of 1.1%. The decrease was due primarily to reductions in interest-bearing demand deposit accounts, and to a lesser extent, reductions in non-interest-bearing demand deposit accounts. These reductions resulted in part from lower deposit pricing implemented by management during the quarter in an effort to improve net interest margin. Core deposits, which exclude time deposits of $250 thousand or more and all brokered deposits, provide a relatively stable funding source that supports earning assets. Core deposits totaled $813.9 million, or 84.6% of total deposits, as of March 31, 2025, compared to $837.7 million, or 86.1% of total deposits, as of December 31, 2024.
Current wording
Total deposits increased to $986.8 million as of June 30, 2025, from $972.6 million as of December 31, 2024, an increase of 1.5%. The increase was due primarily to increases in interest-bearing money market accounts, as well as the addition of brokered certificates of deposit obtained to assist in the management of deposit costs over specific terms. Core deposits, which exclude time deposits of $250 thousand or more and all brokered deposits, provide a relatively stable funding source that supports earning assets. Core deposits totaled $816.1 million, or 82.7% of total deposits, as of June 30, 2025, compared to $837.7 million, or 86.1% of total deposits, as of December 31, 2024.
Previous wording
Other interest-bearing liabilities that are used by the Company as an alternative source of funds consist of federal funds purchased, securities sold under agreements to repurchase, FHLB advances, and subordinated debt. As of March 31, 2025, other interest-bearing liabilities totaled 6.5% of total interest-bearing liabilities, compared to 2.5% as of December 31, 2024.
Current wording
Other interest-bearing liabilities that are used by the Company as an alternative source of funds consist of federal funds purchased, securities sold under agreements to repurchase, FHLB advances, and subordinated debt. As of June 30, 2025, other interest-bearing liabilities totaled 5.2% of total interest-bearing liabilities, compared to 2.5% as of December 31, 2024.
Previous wording
As of March 31, 2025, shareholders’ equity totaled $101.2 million, or 9.0% of total assets, compared to $98.6 million, or 9.0% of total assets, as of December 31, 2024. The increase in shareholders’ equity during the three months ended March 31, 2025 resulted primarily from earnings, net of dividends paid and repurchases of shares of the Company's common stock. In addition, shareholders' equity was positively impacted during the three months ended March 31, 2025 by reductions in the Company's accumulated other comprehensive loss resulting from changes in market interest rates, as well as the maturity of lower yielding investment securities.
Current wording
As of June 30, 2025, shareholders’ equity totaled $101.9 million, or 8.9% of total assets, compared to $98.6 million, or 9.0% of total assets, as of December 31, 2024. The increase in shareholders’ equity during the six months ended June 30, 2025 resulted primarily from earnings, net of dividends paid and repurchases of shares of the Company's common stock. In addition, shareholders' equity was positively impacted during the six months ended June 30, 2025 by reductions in the Company's accumulated other comprehensive loss resulting from changes in market interest rates, as well as the maturity of lower yielding investment securities.
Previous wording
In addition, during the three months ended March 31, 2025, the Company completed the repurchase of 40,000 shares of its common stock at a weighted average price of $13.38 per share. The repurchases were completed under the Company’s previously announced share repurchase program. As of March 31, 2025, 872,813 shares remained available for repurchase under the program. No shares were repurchased by the Company during the three months ended March 31, 2024.
Current wording
In addition, during the six months ended June 30, 2025, the Company completed the repurchase of 40,000 shares of its common stock at a weighted average price of $13.38 per share. The repurchases were completed under the Company’s previously announced share repurchase program. As of June 30, 2025, 872,813 shares remained available for repurchase under the program. During the six months ended June 30, 2024, the Company repurchased 77,000 shares of its common stock at a weighted average price of $10.60 per share.
Previous wording
The asset portion of the balance sheet provides liquidity primarily from the following sources: (1) excess cash and interest-bearing deposits in banks, (2) federal funds sold and securities purchased under reverse repurchase agreements, (3) principal payments and maturities of loans and (4) principal payments and maturities from the investment portfolio. Loans maturing or repricing in one year or less amounted to $264.4 million as of March 31, 2025 and $279.0 million as of December 31, 2024. Investment securities forecasted to mature or reprice in one year or less were estimated to be $27.6 million and $29.6 million of the investment portfolio as of March 31, 2025 and December 31, 2024, respectively.
Current wording
The asset portion of the balance sheet provides liquidity primarily from the following sources: (1) excess cash and interest-bearing deposits in banks, (2) federal funds sold and securities purchased under reverse repurchase agreements, (3) principal payments and maturities of loans and (4) principal payments and maturities from the investment portfolio. Loans maturing or repricing in one year or less amounted to $272.2 million as of June 30, 2025 and $279.0 million as of December 31, 2024. Investment securities forecasted to mature or reprice in one year or less were estimated to be $26.1 million and $29.6 million as of June 30, 2025 and December 31, 2024, respectively.
Previous wording
Although some securities in the investment portfolio have legal final maturities exceeding 10 years, a substantial percentage of the portfolio provides monthly principal and interest payments and consists of securities that are readily marketable and easily convertible into cash on short notice. The investment securities portfolio had an estimated average life of 4.0 years and 3.6 years as of March 31, 2025 and December 31, 2024, respectively. However, management does not rely solely upon the investment portfolio to generate cash flows to fund loans, capital expenditures, dividends, debt repayment and other cash requirements. These activities are also funded by cash flows from loan payments, as well as increases in deposits and short-term borrowings.
Current wording
Although some securities in the investment portfolio have final maturities exceeding 10 years, a substantial percentage of the portfolio provides monthly principal and interest payments and consists of securities that are readily marketable and easily convertible into cash on short notice. The investment securities portfolio had an estimated average life of 3.7 years and 3.6 years as of June 30, 2025 and December 31, 2024, respectively. However, management does not rely solely upon the investment portfolio to generate cash flows to fund loans, capital expenditures, dividends, debt repayment and other cash requirements. These activities are also funded by cash flows from loan payments, as well as increases in deposits and short-term borrowings.
Previous wording
The Company had $25.0 million and $10.0 million of outstanding borrowings under FHLB advances as of March 31, 2025 and December 31, 2024, respectively. The Company's use of FHLB advances varies depending on fluctuations in deposits and other funding sources, as well as their use in interest rate hedging strategies. The Company had up to $285.3 million and $319.9 million in remaining unused credit from the FHLB (subject to available collateral, which may include eligible investment securities and loans) as of March 31, 2025 and December 31, 2024, respectively.
Current wording
The Company had $20.0 million and $10.0 million of outstanding borrowings under FHLB advances as of June 30, 2025 and December 31, 2024, respectively. The Company's use of FHLB advances varies depending on fluctuations in deposits and other funding sources, as well as their use in interest rate hedging strategies. The Company had up to $298.0 million and $319.9 million in remaining unused credit from the FHLB (subject to available collateral, which may include eligible investment securities and loans) as of June 30, 2025 and December 31, 2024, respectively.
Previous wording
The Company also has access to the FRB’s discount window. The discount window allows borrowing on pledged collateral that includes eligible investment securities and loans. The Company maintains pledges of its consumer indirect loan portfolio and selected investment securities with the FRB as collateral to provide immediate access to funding through the discount window. As of March 31, 2025 and December 31, 2024 the Company had $160.0 and $165.1 million, respectively, in borrowing capacity with the FRB’s discount window. As of March 31, 2025 and December 31, 2024, the Bank had $20.0 million and zero, respectively, in outstanding federal funds purchased from the FRB's discount window.
Current wording
The Company also has access to the FRB’s discount window. The discount window allows borrowing on pledged collateral that includes eligible investment securities and loans. The Company maintains pledges of its consumer indirect loan portfolio and selected investment securities with the FRB as collateral to provide immediate access to funding through the discount window. As of June 30, 2025 and December 31, 2024 the Company had $181.9 and $165.1 million, respectively, in borrowing capacity with the FRB’s discount window. As of June 30, 2025 and December 31, 2024, the Bank had $15.0 million and zero, respectively, in outstanding federal funds purchased from the FRB's discount window.
Previous wording
The unused lendable collateral value at the FHLB presented in the table represents only the amount immediately available to the Company from loans already pledged by the Company to the FHLB as of each consolidated balance sheet date presented. As of March 31, 2025 and December 31, 2024, the Company's total remaining credit availability with the FHLB was $285.3 million and $319.9 million, respectively, subject to the pledging of additional collateral which may include eligible investment securities and loans. In addition, the Company has access to additional sources of liquidity that generally could be obtained over a period of time. For example, the Company has access to unsecured brokered deposits through the wholesale funding markets. Management believes the Company’s on-balance sheet and other readily available liquidity provide strong indicators of the Company’s ability to fund obligations in a stressed liquidity environment.
Current wording
The unused lendable collateral value at the FHLB presented in the table represents only the amount immediately available to the Company from loans already pledged by the Company to the FHLB as of each consolidated balance sheet date presented. As of June 30, 2025 and December 31, 2024, the Company's total remaining credit availability with the FHLB was $298.0 million and $319.9 million, respectively, subject to the pledging of additional collateral which may include eligible investment securities and loans. In addition, the Company has access to additional sources of liquidity that generally could be obtained over a period of time. For example, the Company has access to unsecured brokered deposits through the wholesale funding markets. Management believes the Company’s on-balance sheet and other readily available liquidity provide strong indicators of the Company’s ability to fund obligations in a stressed liquidity environment.
Previous wording
Excluding wholesale brokered deposits, as of March 31, 2025, the Company had approximately 29 thousand deposit accounts with an average balance of approximately $30.0 thousand per account. Estimated uninsured deposits (calculated as deposit amounts per deposit holder in excess of $250 thousand, the maximum amount of federal deposit insurance, and excluding deposits secured by pledged assets) totaled $202.6 million, or 21.1% of total deposits, as of March 31, 2025. As of December 31, 2024, estimated uninsured deposits totaled $216.8 million, or 22.2% of total deposits.
Current wording
Excluding wholesale brokered deposits, as of June 30, 2025, the Company had approximately 28 thousand deposit accounts with an average balance of approximately $31.1 thousand per account. Estimated uninsured deposits (calculated as deposit amounts per deposit holder in excess of $250 thousand, the maximum amount of federal deposit insurance, and excluding deposits secured by pledged assets) totaled $202.5 million, or 20.5% of total deposits, as of June 30, 2025. As of December 31, 2024, estimated uninsured deposits totaled $216.8 million, or 22.2% of total deposits.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
Available-for-sale securities consisted of residential and commercial mortgage-backed securities, U.S. Treasury securities, corporate bonds, obligations of U.S. government-sponsored agencies, and obligations of state and political subdivisions.