First Us Bancsh (FUSB) Financials

First US Bancshares (NASDAQ:FUSB) delivered a stronger year-over-year profit in the second quarter of 2026, although sequential results softened and cash flows showed pressure from deposit outflows and share repurchases. The company remains profitable, but investors should monitor funding stability, credit costs and the sustainability of recent non-interest income gains.

• Profitability improved sharply year over year. Net income rose to $1.75 million, or $0.31 per diluted share, from $155,000, or $0.03 per share, in Q2 2025. The comparison benefited from a much lower provision for credit losses of $939,000 versus $2.72 million a year earlier.
• Revenue continued to grow. Total revenue increased approximately 4.8% year over year to $10.82 million. Net interest income was relatively stable at $9.50 million, while non-interest income jumped to $1.32 million from $849,000.
• Loan balances expanded sequentially. Gross loans increased to $860.6 million from $843.7 million at the end of Q1 2026, while net loans rose to $849.8 million. This indicates renewed loan growth after balances declined during parts of 2025.
• Credit reserves declined while loan balances grew. The allowance for loan and lease losses fell to $10.9 million from $11.4 million in Q2 2025. Although this can support near-term earnings, the lower reserve level should be evaluated alongside future credit performance.
• Capital remained relatively stable. Total common equity was $104.3 million at quarter-end, up from $101.9 million a year earlier. Equity represented approximately 9.1% of total assets, providing a meaningful capital cushion.
• Investment portfolio liquidity remained substantial. Trading account securities totaled $166.0 million, up from $157.1 million a year earlier. The quarter also generated $20.4 million from investment sales and maturities, helping offset purchases of $24.0 million.
• Net interest income was broadly flat despite lower interest expense. Total interest income declined to $14.66 million from $14.85 million year over year, but interest expense also fell to $5.16 million from $5.38 million. Net interest income increased only modestly, suggesting limited margin expansion so far.
• Non-interest income included a notable investment gain. Net realized and unrealized investment gains contributed $455,000 in Q2 2026, compared with zero in the prior-year quarter. This improved results but may not be a recurring source of earnings.
• Operating cash flow weakened considerably. Cash provided by operating activities fell to $697,000 from $3.90 million in Q2 2025 and $4.10 million in Q1 2026. The decline was driven largely by a $2.01 million use of operating capital.
• Deposit outflows pressured financing cash flow and liquidity. Deposits declined by $40.9 million during Q2, producing negative financing cash flow of $17.8 million. The company issued $25 million of short-term debt during the quarter, and short-term debt rose from zero at the end of Q1 to $25 million.
• Cash balances declined despite investment activity. Net cash and equivalents fell by $7.65 million in Q2 after declining $6.96 million in Q1. Cash and due from banks increased to $11.7 million, but the broader decline highlights the need to track deposit retention and reliance on borrowed funds.
• Sequential earnings declined. Net income fell from $1.95 million in Q1 2026 to $1.75 million in Q2, while diluted EPS declined from $0.33 to $0.31. Non-interest expenses increased to $7.64 million from $7.34 million, and the provision for credit losses rose from $254,000 to $939,000.

Overall, FUSB’s multi-year financial data shows growth in assets, loans and equity since 2023, alongside consistently positive quarterly earnings. However, recent trends are mixed: loan growth has resumed and credit provisions are well below the elevated levels seen in Q2 2025, but deposits fell sharply in Q2 2026, operating cash generation weakened and new short-term borrowing was needed. For investors, the key questions are whether deposit losses stabilize, whether net interest income can accelerate and whether recent investment gains can be replaced with recurring banking revenue.