Executive Summary

EPS and profitability compressed on elevated credit costs: diluted EPS fell to $0.03 and net income to $0.2M as provision for credit losses surged to $2.7M, driven by indirect consumer loan growth, higher net charge-offs, and specific reserves on two commercial credits .
Core earnings power held: net interest income rose 6.5% QoQ to $9.48M, NIM expanded 6 bps to 3.59%, and PPNR was stable at $2.9M (up 0.9% QoQ), helping preserve operating momentum despite higher provisions .
Balance sheet growth and funding mix: total loans grew 2.7% QoQ (5.9% YTD), led by indirect consumer and multifamily; deposits increased 2.6% QoQ with use of brokered CDs; short‑term borrowings of $35M supported liquidity while repricing deposits lower .
Asset quality mixed: NPA ratio improved to 0.33%, but net charge‑offs rose to 0.79% of average loans, including a $1.2M partial charge‑off on a commercial loan and higher indirect consumer charge‑offs .
No sell‑side consensus available; comparisons vs. Wall Street estimates are unavailable for Q2 2025; dividend maintained at $0.07 per share . Consensus unavailable per S&P Global.*

What Went Well and What Went Wrong

What Went Well
- NIM and net interest income improved: NIM rose to 3.59% from 3.53% and net interest income increased to $9.48M, supported by higher average loan volumes and yields on loans/investments .
- Loan growth accelerated: total loans up $23.1M QoQ (2.7%), with strong indirect consumer (+$25.1M) and multifamily (+$12.4M); average loans rose to $857.7M (vs. $824.5M in Q1) .
- PPNR resiliency: PPNR of $2.88M was up QoQ and YoY; management highlighted this as a base for future performance .
What Went Wrong
- Credit costs spiked: provision for credit losses was $2.7M (vs. $0.5M in Q1 and none in Q2’24), including $1.4M tied to indirect consumer and $0.9M for two individually evaluated commercial loans .
- Charge‑offs increased: net charge‑offs/avg loans climbed to 0.79% (from 0.13% in Q1 and 0.10% in Q2’24), with indirect consumer charge‑offs at $0.6M and a $1.2M commercial partial charge‑off .
- Efficiency deteriorated: efficiency ratio rose to 72.1% (from 70.8% in Q1), reflecting higher salaries/benefits and professional fees, pressuring bottom‑line performance .

Financial Results

Metric	Q2 2024	Q1 2025	Q2 2025
Net Income ($USD Thousands)	$2,127	$1,772	$155
Diluted EPS ($)	$0.34	$0.29	$0.03
Net Interest Income ($USD Thousands)	$9,176	$8,897	$9,476
Non-interest Income ($USD Thousands)	$835	$875	$849
Provision for Credit Losses ($USD Thousands)	—	$528	$2,717
Net Interest Margin (%)	3.69%	3.53%	3.59%
Efficiency Ratio (%)	72.6%	70.8%	72.1%

Balance Sheet and Credit Metrics	Q2 2024	Q1 2025	Q2 2025
Total Loans ($USD Thousands)	$819,126	$848,335	$871,431
Total Deposits ($USD Thousands)	$954,455	$961,952	$986,846
Short-term Borrowings ($USD Thousands)	$15,000	$45,000	$35,000
ACL on Loans and Leases (% of Loans)	1.25%	1.23%	1.31%
Nonperforming Assets (% of Assets)	0.27%	0.44%	0.33%
Net Charge-offs (% of Avg Loans)	0.10%	0.13%	0.79%
Loans / Deposits (%)	85.8%	88.2%	88.3%

Loan Portfolio Breakdown ($USD Thousands)	Q2 2024	Q1 2025	Q2 2025
Construction, Land & Other Land	$72,183	$58,572	$48,101
1–4 Family Residential	$70,272	$68,523	$67,587
Multifamily Residential	$97,527	$106,374	$118,807
Non-residential Commercial RE	$218,386	$214,065	$215,035
Commercial & Industrial	$46,249	$45,166	$40,986
Consumer – Indirect	$309,237	$351,025	$376,079
Total Loans	$819,126	$848,335	$871,431

KPIs	Q2 2024	Q1 2025	Q2 2025
ROA (annualized)	0.80%	0.66%	0.06%
ROE (annualized)	9.23%	7.21%	0.61%
TCE / TA (%)	8.02%	8.38%	8.31%
Dividend per Share ($)	$0.05	$0.07	$0.07

Context and Drivers:

Provision detail: $1.4M tied to indirect consumer, $0.9M in specific reserves on two commercial loans; remainder from macro forecasts and unfunded commitments .
Charge-offs: $1.2M partial charge‑off on a single commercial loan; indirect net charge‑offs $0.6M (vs. $0.3M in Q1 and Q2’24) .
PPNR: $2.88M in Q2 2025 vs. $2.85M in Q1 2025 and $2.74M in Q2 2024 .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Quantitative financial guidance	FY/Q3 outlook	None provided	None provided	Maintained (no guidance)
Cash Dividend	Q2 2025	$0.07/share in Q1 2025	$0.07/share declared; payable July 1, 2025	Maintained

Management did not issue revenue, margin, expense, or tax rate guidance; dividend policy unchanged this quarter .

Earnings Call Themes & Trends

No earnings call transcript was available in the documents reviewed; management commentary is sourced from the press release/8‑K .

Topic	Previous Mentions (Q4 2024 and Q1 2025)	Current Period (Q2 2025)	Trend
Net Interest Margin and Funding Costs	4Q’24: NIM compressed on rapid Fed cuts; focus on growing earning assets and reducing funding costs . 1Q’25: NIM +12 bps QoQ; disciplined funds management .	NIM +6 bps QoQ to 3.59% on higher average loans and yields .	Improving sequentially; still below prior-year levels.
Loan Growth Mix	4Q’24: Broad uptick across construction, indirect, CRE . 1Q’25: +3.1% QoQ; indirect +$41.3M; multifamily up .	+2.7% QoQ; indirect +$25.1M; multifamily +$12.4M .	Growth concentrated in indirect and multifamily.
Credit Costs & Asset Quality	4Q’24: Provision $0.5M; ACL 1.24% . 1Q’25: Provision $0.5M; net charge‑offs 0.13% .	Provision $2.7M; NCOs 0.79%; $1.2M partial charge‑off; ACL 1.31% .	Deteriorated this quarter; risk focus on indirect and 2 commercial loans.
Capital & Liquidity	Year‑end TCE/TA 8.33%; robust liquidity capacity . 1Q’25 TCE/TA 8.38% .	TCE/TA 8.31%; Tier 1 leverage 9.23%; readily available liquidity $384M .	Stable capital; ample liquidity despite borrowing mix.
Footprint/Expansion	2024: Knoxville move; Daphne, AL renovation . 1Q’25: Daphne opening targeted 4Q’25 .	Daphne opening now 1H’26; purchased land in Mobile for indirect ops and banking center .	Continued Southeast expansion; indirect platform emphasis.

Management Commentary

“We recorded a significant provision for credit losses associated with growth in indirect consumer lending, combined with an uptick in net charge-offs in the category, as well as the application of additional reserves on two individually evaluated commercial loans.” — James F. House, President & CEO .
“We are encouraged by increases in both net interest margin and total loans during the quarter… NIM expanded by six basis points… total loans grew by 2.7%… PPNR also increased by 0.9% QoQ and by 5.2% YoY.” .
Liquidity and capital remained sound; Tier 1 leverage 9.23% and readily available liquidity of $384M support growth and operations .

Q&A Highlights

No Q2 2025 earnings call transcript was available in the filings and press releases reviewed; management communications for the quarter were delivered via the earnings press release and 8‑K .

Estimates Context

Metric	Q2 2025
EPS Consensus Mean	N/A*
Revenue Consensus Mean	N/A*
Target Price Consensus Mean	N/A*

There were no published sell‑side consensus estimates for Q2 2025 EPS or revenue for FUSB; comparisons vs. Wall Street consensus are unavailable as of the report date. Values retrieved from S&P Global.*

Key Takeaways for Investors

Credit costs are the swing factor: a sizable provision and higher net charge‑offs drove the EPS downdraft; watch indirect consumer credit performance and the two flagged commercial loans for normalization risk or additional reserve needs .
Core earnings capacity is intact: NIM and net interest income improved and PPNR was steady to up; if credit costs normalize, earnings power should inflect positively .
Growth engine remains indirect and multifamily: continued origination momentum with prime‑quality scores (weighted average new indirect FICO ~798 YTD) supports balances; but requires vigilant credit monitoring as the cycle evolves .
Funding and liquidity are well‑positioned: deposit growth and brokered CDs balanced with short‑term borrowings; readily available liquidity of $384M and stable capital ratios provide flexibility .
Operating efficiency slipped: elevated expenses lifted the efficiency ratio; continued discipline on salaries and professional fees will matter for incremental operating leverage .
Dividend maintained: $0.07/share underscores confidence in capital and liquidity while earnings absorb near‑term credit costs .
No Street coverage: absence of consensus reduces estimate‑driven volatility; stock may trade on internal credit updates and NIM trajectory rather than quarterly beats/misses. Values retrieved from S&P Global.*

References:

Q2 2025 8‑K and Exhibit 99.1 press release, including financial tables and CEO commentary .
Q2 2025 press release distribution (PRNewswire) mirroring exhibit content .
Q1 2025 press release for sequential trends .
Q4 2024 8‑K and press release for prior‑year comparisons and context .

Footnote: *Values retrieved from S&P Global.

FIRST US BANCSHARES, INC. (FUSB)·Q2 2025 Earnings Summary