This Top Pick bank has just extended its share repurchase program to 642,785 shares. The company has already repurchased approximately 400,482 shares under the program.
First US Bancshares, Inc. (FUSB)
From Contra the Heard Investment Letter
First US Bancshares, Inc. (FUSB) is expanding with the takeover of The Peoples Bank, moving it beyond Alabama into Tennessee and Virginia. CEO/President James F. House who has been the head man since 2011 stated, “As we complete the integration of our organizations and move beyond the nonrecurring acquisition expenses, the acquisition should quickly begin to bring improved efficiency and earnings growth.”
In 2014, the bank recommenced a dividend of a penny a quarter after a three-year hiatus. This is now two cents. Prior to the financial crisis, it was $0.27 a quarter. Given that the share count has remained flat, further increases are likely in the cards.
FUSB seems cheap. Book value is $12.31, about one-third more than the trading price. The capitalization ratios are excellent with Tier 1 capital and Tier 1 risk-based capital ratios each 12.28%. Its total capital ratio is 13.20%, and its Tier 1 leverage ratio is 8.78%. Insiders own about 5.6%.
First U.S. used to trade at much higher levels. It would not surprise to see this one move back to the $25 level. And it could provide a good tuck-in takeover for a larger player that wants to
expand.
Benj Gallander, Contra the Heard Investment Letter, gall@pathcom.com, www.contratheheard.com, 416-410-4431, December 15, 2018