 BIRMINGHAM, Ala., July 29, 2020 GLOBE NEWSWIRE -- First US Bancshares, Inc. Nasdaq: FUSB the Company, the parent company of First US Bank the Bank, today reported net income of 0.4 million, or 0.06 per diluted share, for the quarter ended June 30, 2020 2Q2020, compared to 0.8 million, or 0.13 per diluted share, for the quarter ended March 31, 2020 1Q2020 and 1.0 million, or 0.15 per diluted share, for the quarter ended June 30, 2019 2Q2019. For the six months ended June 30, 2020, the Companys net income totaled 1.3 million, or 0.19 per diluted share, compared to 2.2 million, or 0.33 per diluted share, for the six months ended June 30, 2019. Earnings for both the second quarter and six months ended June 30, 2020 were significantly impacted by the economic ramifications of the COVID-19 pandemic, including compression of net interest margin, increased provisions for loan losses, substantial growth in deposit balances and changes in borrowing activities. We remain focused on delivering for our customers, employees, communities and shareholders during this unprecedented time, stated James F. House, President and CEO of the Company. Our strong digital capabilities have enabled us to effectively support our customers and employees in a safe and effective manner throughout the pandemic. In addition, we continue to believe that the strength and stability of the Companys balance sheet will serve us well during the uncertain times that lie ahead, continued Mr. House.Second Quarter 2020 HighlightsNet Interest Income 2Q2020 net interest income decreased by 0.3 million and 0.6 million, respectively, compared to 1Q2020 and 2Q2019. The decrease compared to both prior quarters resulted primarily from margin compression, as interest-earning assets repriced more quickly than interest-bearing liabilities following the 150-basis point reduction in the federal funds rate in March. Net interest margin in 2Q2020 decreased 32 basis points compared to 1Q2020, and 56 basis points compared to 2Q2019. The COVID-19 pandemic has reduced economic activity and increased liquidity amongst deposit customers, consequently increasing the Companys cash balances significantly during the quarter. In the current environment, the excess cash balances earn low yields, which has put significant downward pressure on net interest margin. In addition, higher-yielding direct consumer loans at the Companys wholly owned subsidiary, Acceptance Loan Company ALC, decreased in 2Q2020 due to reduced economic activity and greater availability of cash amongst consumer borrowers. The decrease in direct consumer volume is contrary to historical seasonal trends at ALC.During 2Q2020, management continued efforts to reprice deposit products in a manner consistent with the declining interest rate environment. The weighted average annualized rate paid for interest-bearing liabilities decreased to 0.80 for 2Q2020, compared to 1.04 for 1Q2020 and 1.17 for 2Q2019. Annualized total funding costs including both interest-bearing and non-interest-bearing deposits and borrowings decreased to 0.64 for 2Q2020, compared to 0.87 for 1Q2020 and 0.98 for 2Q2019. If the current interest rate environment continues, management expects to further reduce interest costs as interest-bearing liabilities continue to reprice.Balance Sheet Growth Total assets as of June 30, 2020 increased by 57.2 million, or 7.3, compared to March 31, 2020. Liabilities experienced significant growth in 2Q2020 as a result of inflows of deposits during the quarter. Deposit growth reflected the impact of the COVID-19 pandemic on both business and consumer deposit holders, including preferences for liquidity, loan payment deferrals, tax payment deferrals, stimulus checks and lower consumer spending. Total deposits as of June 30, 2020 were 55.7 million, or 8.2, higher than deposit balances as of March 31, 2020. Of the total increase in deposits, 37.5 million represented non-interest-bearing deposits, while 18.2 million were interest-bearing. Lending Activity Total loans increased by 26.4 million during 2Q2020. Growth in indirect sales lending totaled 20.0 million for the quarter. The Companys indirect sales portfolio is comprised of loans secured by collateral that generally includes recreational vehicles, campers, boats and horse trailers. Effective January 1, 2020, the portfolio was transferred from ALC to the Bank, and, during the pandemic, demand for this financing grew substantially as consumers sought alternatives to more traditional travel and leisure activities. In addition to indirect lending, the Banks commercial lending activities resulted in growth of 13.8 million from the Paycheck Protection Program PPP administered by the Small Business Administration SBA, as well as 1.5 million in growth in real estate loans. Loan growth during the quarter was partially offset by decreases in the Banks commercial and industrial portfolio totaling 6.8 million, as well as a reduction in consumer lending, primarily through ALCs branch system, that totaled 1.6 million.Loan Loss Provisions The ratio of net charge-offs to average loans was 0.27 annualized for 2Q2020, compared to 0.28 annualized for 1Q2020 and 0.43 annualized for 2Q2019. Although net charge-off experience improved, due to uncertainty related to the ultimate economic impact of the pandemic, the Company continued to increase qualitative factors in the calculation of the allowance for loan and lease losses, resulting in increased loan loss provisioning during 2Q2020. The provision for loan and lease losses totaled 0.9 million during 2Q2020, compared to 0.6 million during 1Q2020 and 0.7 million during 2Q2019. The allowance as a percentage of total loans increased to 1.15 excluding PPP loans, which are guaranteed by the SBA as of June 30, 2020, compared to 1.09 as of March 31, 2020 and 0.98 as of June 30, 2019. In accordance with relevant accounting guidance for smaller reporting companies, the Company has not yet adopted the Current Expected Credit Loss CECL accounting model for the calculation of credit losses. Management believes that the allowance for loan and lease losses as of June 30, 2020, which was calculated under an incurred loss model, was sufficient to absorb losses in the Companys loan portfolio based on circumstances existing as of the balance sheet date. However, the economic environment as a result of the COVID-19 pandemic remains uncertain, and accordingly, management will continue to closely monitor the impact of changing economic circumstances on the Companys loan portfolio.Asset Quality Non-performing assets, including loans in non-accrual status and other real estate owned OREO, were 4.4 million as of June 30, 2020, compared to 4.8 million as of December 31, 2019. As a percentage of total assets, non-performing assets totaled 0.52 as of June 30, 2020, compared to 0.61 as of December 31, 2019. Non-interest Income Non-interest income remained consistent, totaling 1.3 million in 2Q2020, 1Q2020 and 2Q2019. However, as a result of reduced economic activity, the Company did experience reductions in certain components of non-interest income, including service charges and credit insurance income, during 2Q2020 as compared to 1Q2020. These reductions, which totaled approximately 0.3 million, were offset by gains on the sale of investment securities during the quarter. Non-interest income totaled 2.6 million for both of the six-month periods ended June 30, 2020 and 2019. Non-interest Expense Non-interest expense totaled 8.6 million during 2Q2020, compared to 8.5 million during both 1Q2020 and 2Q2019. For the six-month period ended June 30, 2020, non-interest expense totaled 17.1 million, compared to 17.0 million for the six months ended June 30, 2019.Provision for Income Taxes The Companys effective tax rate was 22.6 for 2Q2020, compared to 23.6 for 1Q2020 and 23.0 for 2Q2019. For the six months ended June 30, 2020, the Companys effective tax rate was 23.3, compared to 22.5 for the six months ended June 30, 2019.Cash Dividend The Company declared a cash dividend of 0.03 per share on its common stock in both 2Q2020 and 1Q2020, resulting in a dividend of 0.06 per share for the six months ended June 30, 2020, compared to 0.04 per share for the six months ended June 30, 2019. Regulatory Capital During 2Q2020, the Bank continued to maintain capital ratios at higher levels than the ratios required to be considered a well-capitalized institution under applicable banking regulations. As of June 30, 2020, the Banks common equity Tier 1 capital and Tier 1 risk-based capital ratios were each 12.84. Its total capital ratio was 13.94, and its Tier 1 leverage ratio was 9.36.Liquidity As of June 30, 2020, the Company continued to maintain excess funding capacity sufficient to provide adequate liquidity for loan growth, capital expenditures and ongoing operations. The Company benefits from a strong core deposit base, a liquid investment securities portfolio and access to funding from a variety of sources, including federal funds lines, Federal Home Loan Bank advances and brokered deposits. COVID-19 Borrower Support Actions Following the declaration of COVID-19 as a global pandemic in March 2020, the Company participated in a number of actions to support borrowers, including the origination of PPP loans to deliver funding to small business owners, as well as processing loan payment deferments for consumer and business borrowers.About First US Bancshares, Inc.First US Bancshares, Inc. is a bank holding company that operates banking offices in Alabama, Tennessee and Virginia through First US Bank. In addition, the Companys operations include Acceptance Loan Company, Inc. 