fusb-11k_20211231.htm

* All other schedules required by Section 2520.103-10 of the Department of Labor’s Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974 have been omitted because they are not applicable.

We have audited the accompanying statements of net assets available for benefits of the First US Bancshares, Inc. 401(k) Plan (the Plan) as of December 31, 2021 and 2020, and the related statement of changes in net assets available for benefits for the year ended December 31, 2021, and the related notes and schedules (collectively referred to as the financial statements). In our opinion, the financial statements present fairly, in all material respects, the net assets available for benefits of the Plan as of December 31, 2021 and 2020, and the changes in net assets available for benefits for the year ended December 31, 2021, in conformity with accounting principles generally accepted in the United States of America.

These financial statements are the responsibility of the Plan's management. Our responsibility is to express an opinion on the Plan's financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Plan in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Plan is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Plan’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

The supplemental information contained in the schedule of assets (held at end of year) as of December 31, 2021 has been subjected to audit procedures performed in conjunction with the audit of the Plan’s financial statements. The supplemental information is the responsibility of the Plan’s management. Our audit procedures included determining whether the supplemental information reconciles to the financial statements or the underlying accounting and other records, as applicable, and performing procedures to test the completeness and accuracy of the information presented in the supplemental information. In forming our opinion on the supplemental information, we evaluated whether the supplemental information, including its form and content, is presented in conformity with the Department of Labor’s Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. In our opinion, the supplemental information is fairly stated, in all material respects, in relation to the financial statements as a whole.

	December 31,
	2021		2020
Assets
Non-interest-bearing cash	$	4,695	$	47,849
Investments, at fair value:
Interest-bearing cash		51,074		29,973
Mutual Funds		15,041,273		12,984,884
Stable Value Fund		2,269,166		1,723,783
First US Bancshares, Inc. common stock		2,288,929		1,936,200
Total investments, at fair value		19,650,442		16,674,840

Receivables:
Employee contributions		23,841		-
Employer contributions		35,400		22,842
Total receivables		59,241		22,842

Net assets available for benefits	$	19,714,378	$	16,745,531

	2021
Additions to net assets attributed to:
Investment income:
Interest and dividends	$	295,549
Net appreciation in fair value of investments		2,490,922
Total investment income		2,786,471
Contributions:
Employer		476,260
Participant		814,674
Rollover		5,014
Total contributions		1,295,948
Total additions		4,082,419
Deductions from net assets attributed to:
Administrative expenses		91,112
Benefit payments to participants		1,022,460
Total deductions		1,113,572

Net increase in net assets available for benefits		2,968,847

Net assets available for benefits at beginning of year		16,745,531

Net assets available for benefits at end of year	$	19,714,378

The following brief description of the First US Bancshares, Inc. 401(k) Plan (the “Plan”) provides only general information. Participants should refer to the Plan document for a more complete description of the Plan’s provisions.

The Plan is a controlled group defined contribution plan, which provides savings benefits for substantially all employees of the following members of the controlled group of First US Bancshares, Inc. (the “Company” and the “Plan Sponsor,” as applicable):

The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 , as amended (“ERISA”).

Beginning in 2020, the COVID-19 pandemic severely restricted economic activity through the world, triggering volatility in financial markets and a significant negative impact on the global economy. Although economic conditions have improved, the values of the Plan’s individual investments may continue to fluctuate in response to changing market conditions.

Participants elect to make contributions on a pre-tax basis (traditional 401(k)) or on an after-tax basis (Roth 401(k)), as defined in the Plan, in amounts up to the applicable limitations of the Internal Revenue Code (“IRC”). Participants age 50 or over may make “catch-up” contributions to their accounts. Participants may roll over amounts representing distributions from other qualified defined benefit or defined contribution plans and conduit individual retirement accounts. The Plan provides that the Plan Sponsor will make a safe harbor matching contribution in an amount equal to 100% of the first 4% of compensation deferred. Under the terms of the Plan, the Plan Sponsor also has the discretion to make additional contributions in the form of matching contributions and non-elective contributions. There were no such discretionary contributions made during the year ended December 31, 2021.

Participants can elect to invest up to 20% of incoming contributions (measured at the time of investment) in the Plan in the form of Company common stock. The Plan held 238,514 and 214,056 shares of Company common stock as of December 31, 2021 and 2020, respectively.

Each participant’s account is credited with the participant’s contributions, the Plan Sponsor’s match, the Plan Sponsor’s discretionary contribution, and earnings thereon, and is reduced for any participant withdrawals or distributions and certain administrative expenses. Allocations are based on participant earnings or account balances, as defined in the Plan. The benefit to which a participant is entitled is the benefit that can be provided from the participant’s account. Participants direct the investment of their accounts among any of the Plan’s investment options.

All employees are eligible to participate in the Plan on the first day of the month following their date of commencement of employment. Participants are immediately vested in their contributions, the Company’s matching contributions, discretionary employer contributions and earnings thereon.

Participants are immediately vested in their contributions, the Company’s matching contributions, discretionary employer contributions and earnings thereon; therefore, the Plan has no forfeitures.

Plan provisions allow for administrative expenses, including, but not limited to, audit fees, custodial and trustee fees, investment manager fees and recordkeeping fees, to be paid by the Plan and allocated to participant accounts. Any expenses not borne by the Plan are paid by the Company. For the year ended December 31, 2021, the Company paid the Plan’s audit fees, which totaled $24,900.

Participants are eligible to receive a distribution upon termination, retirement or disability. Upon termination or retirement, participants may elect to receive distributions in a lump sum or installments, or they may roll over their account balances into other qualified plans. If a participant dies, the total account balance will be paid to the designated beneficiary or to the participant’s estate.

Participants are also eligible to receive hardship distributions from their accounts when a financial need is present that is deemed to be heavy and immediate, as defined in the Plan. Non-hardship in-service withdrawals are available to participants once they have attained age 59½.

Although it has not expressed any intent to do so, the Company has the right under the Plan to discontinue its contributions at any time and to terminate the Plan, subject to the provisions of ERISA. See discussion of the partial Plan termination in Note 6.

The financial statements of the Plan are prepared on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America (“GAAP”).

The Plan’s investments generally are reported at fair value. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. See Note 3 for discussion of fair value measurements.

Purchases and sales of securities are recorded on a trade date basis. Dividends are recorded on the ex-dividend date. Interest income is recorded when earned. Net appreciation (depreciation) includes the Plan’s gains and losses on investments bought, sold or held during the year.

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and changes therein and disclosure of contingent assets and liabilities. Actual results could differ from those estimates and assumptions.

The Plan uses GAAP’s three-level hierarchy for the recognition and disclosure of fair value measurements. That framework provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are described below:

Level 1 - Inputs to the valuation methodology are unadjusted quoted prices for identical assets or liabilities in active markets that the Plan has the ability to access at the measurement date.

If the asset or liability has a specified (contractual) term, the Level 2 input must be observable for substantially the full term of the asset or liability.

Level 3 - Inputs to the valuation methodology are unobservable and significant to the fair value measurement.

The asset’s or liability’s fair value measurement level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. The valuation methodologies used maximize the use of observable inputs and minimize the use of unobservable inputs.

The following is a description of the valuation methodologies used for assets measured at fair value. There have been no changes in the methodologies used as of December 31, 2021 and 2020.

Mutual Funds: The fair value of mutual funds is at the quoted market prices in active markets.

Stable Value Fund: The stable value fund is a form of common collective trust funds, which is composed primarily of fully benefit-responsive investment contracts and is valued at the net asset value (“NAV”) of units of the collective trust. The NAV is used as a practical expedient to estimate fair value. The practical expedient would not be used if it is determined to be probable that the fund will sell the investment for an amount different from the reported NAV. The stable value fund generally permits redemptions daily. If the fund experiences periods of insufficient liquidity then the stable value fund may defer honoring any payment request until liquidity is sufficient. The Plan is permitted to redeem investment units at NAV daily.

First US Bancshares, Inc. common stock: The fair value of First US Bancshares, Inc. common stock is valued at the closing price reported on the active market.

The methods described above may produce a fair value calculation that might not be indicative of net realizable value or reflective of future fair values. Furthermore, while the Plan’s management believes that the Plan’s valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date.

The following table sets forth by level, within the fair value hierarchy, the Plan’s assets measured at fair value as of December 31, 2021 and 2020:

	Assets at Fair Value as of December 31, 2021
Description	Level 1		Level 2		Level 3		Total

Interest-bearing cash	$	51,074	$	—	$	—	$	51,074
Mutual funds		15,041,273		—		—		15,041,273
First US Bancshares, Inc. common stock		2,288,929		—		—		2,288,929
Total	$	17,381,276	$	—	$	—	$	17,381,276
Stable Value Fund ^(A)								2,269,166
Total Investments at Fair Value							$	19,650,442

	Assets at Fair Value as of December 31, 2020
Description	Level 1		Level 2		Level 3		Total

Interest-bearing cash	$	29,973	$	—	$	—	$	29,973
Mutual funds		12,984,884		—		—		12,984,884
First US Bancshares, Inc. common stock		1,936,200		—		—		1,936,200
Total	$	14,951,057	$	—	$	—	$	14,951,057
Stable Value Fund ^(A)								1,723,783
Total Investments at Fair Value							$	16,674,840

The following table summarizes information related to the stable value fund that is measured at fair value based on NAV per share as of December 31, 2021 and 2020, respectively. The stable value fund is maintained by investment companies and holds investments in accordance with a stated set of fund objectives.

Redemption Frequency

Redemption

Year-End

Fair Value

Unfunded Commitments

(if currently eligible)

Notice Period

December 31, 2021

2,269,166

—

Daily

None

December 31, 2020

1,723,783

—

Daily

None

From January 1, 2021 to December 9, 2021, the trustee and custodian of the Plan was Matrix Trust Company. Effective December 10, 2021, MidAtlantic Trust Company became the trustee and custodian of the Plan. Recordkeeping services were performed by Warren Averett Asset Management, LLC. Expenses paid by the Plan for all administrative services, including custodial and trustee fees, investment manager fees and recordkeeping fees, totaled $91,112 for the year ended December 31, 2021, and these transactions qualify as party-in-interest transactions.

The Plan’s investment in Company common stock was $2,288,929 and $1,936,200 as of December 31, 2021 and December 31, 2020, respectively. During the year ended December 31, 2021, the Plan purchased 9,608 units of the Collective Trust Fund (which is primarily composed of Company common stock) at a cost of $92,582. During the year ended December 31, 2021, the Plan sold 25,838 units of the Collective Trust Fund for $253,846. During the year ended December 31, 2021, dividend income was recorded in the Collective Trust Fund related to its shares of Company common stock totaling $18,383.

The Internal Revenue Service (“IRS”) has determined and informed the Plan Sponsor by letter dated January 24, 2018 that the Plan and related trust are designed in accordance with applicable sections of the IRC. GAAP requires Plan management to evaluate uncertain tax positions taken by the Plan. The financial statement effects of a tax position are recognized when the position is more likely than not, based on the technical merits, to be sustained upon examination by the IRS. The Plan’s management has analyzed the tax positions taken by the Plan and has concluded that, as of December 31, 2021, there were no uncertain positions taken or expected to be taken. The Plan has recognized no interest or penalties related to uncertain tax positions. The Plan is subject to routine audits by taxing jurisdictions; however, there are currently no audits for any tax periods in progress.

In September 2021, ALC ceased new business development and permanently closed its 20 branch lending locations to the public. This initiative resulted in the reduction in the Plan Sponsor’s workforce, and the Plan experienced a partial plan termination as defined by ERISA in 2021. Under ERISA, a partial plan termination may occur if a significant percentage of the Plan participants are terminated because of an action taken by the Plan Sponsor. If a partial plan termination occurs, full vesting in the employer’s contribution is required for the affected participants, but the remaining participants’ vesting continues to be determined per the plan provisions.

All affected employees who were participants in the Plan were fully vested in their account balances as of the date of the partial Plan termination described above.

The Plan provides for investment options in various funds that invest in equity and debt securities and other investments. Such investments are exposed to risks and uncertainties, such as interest rate risk, credit risk, economic changes, political unrest, regulatory changes and foreign currency risk. The Plan’s exposure to a concentration of credit risk is dependent upon funds selected by participants. These risks and uncertainties could impact participants’ account balances and the amounts reported in the financial statements. Approximately 12% of the Plan’s net assets were invested in Company common stock as of both December 31, 2021 and 2020. The underlying value of the Company common stock is impacted by the performance of the Company, the market’s evaluation of such performance and other factors. Accordingly, the Plan has a concentration risk regarding the performance of the Company common stock.

In addition, as a result of funds selected by participants, certain other funds individually represent a concentration of greater than 10% of the Plan’s net assets available for benefits. Although these individual funds maintain a level of diversification through investment in multiple equity, debt or other investments, there may be a concentration of risk as a result of the fact that the funds are invested at the direction of a single fund manager. The Vanguard Growth Index Fund, the Vanguard Total Bond Market Index Fund, the Vanguard Value Index Fund, and the Insight Stable Value Fund (formerly known as the BNY Mellon Stable Value Fund) all represented greater than 10% of the Plan’s net assets available for benefits as of December 31, 2021 and 2020.

The Plan’s management evaluated subsequent events through the date on which the financial statements were issued. There were no events or transactions discovered during this evaluation that require recognition in the financial statements.

(a)	(b) Identity of Issue, Borrower, Lessor or Similar Party	(c) Description of Investment, including Maturity Date, Rate of Interest, Collateral, Par or Maturity Value	(d) Cost	(e) Current Value
	Cash	Interest-bearing cash	**	$	51,074
*	First US Bancshares, Inc. Common Stock	Stock; 238,514 shares	**		2,288,929
	DFA Inflation Protected Sec Portfolio	Mutual funds; 5,731 shares	**		76,278
	DFA International Small Co. Portfolio	Mutual funds; 21,946 shares	**		477,978
	DFA International Value Fd	Mutual funds; 53,733 shares	**		1,029,534
	DFA Micro Cap Portfolio	Mutual funds; 1,127 shares	**		30,981
	Insight Stable Value Fd Class M	Common collective trust fund; 2,269,166 shares	**		2,269,166
	Vanguard Emerging Mrkts Stock Index Fd ADMI	Mutual funds; 13,924 shares	**		570,895
	Vanguard Growth Index Fd - ADMR	Mutual funds; 17,831 shares	**		2,944,844
	Vanguard High-Yield Corp Fd - ADM	Mutual funds; 25,048 shares	**		149,037
	Vanguard INT_TRM Corp Fd - ADM	Mutual funds; 88,466 shares	**		880,236
	Vanguard Mid-Cap Growth Index	Mutual funds; 15,644 shares	**		1,713,832
	Vanguard Mid-Cap Value Index Fund	Mutual funds; 15,603 shares	**		1,214,525
	Vanguard REIT Index Fd - ADM	Mutual funds; 1,402 shares	**		230,250
	Vanguard Small-Cap Growth Index	Mutual funds; 6,160 shares	**		609,908
	Vanguard Small-Cap Value Index Fund	Mutual funds; 6,952 shares	**		533,980
	Vanguard Total BD MKT Index - ADMR	Mutual funds; 188,682 shares	**		2,111,352
	Vanguard Value Index Fd - ADMR	Mutual funds; 43,005 shares	**		2,467,643
				$	19,650,442

*	Party-in-interest (see Note 4).
**	Cost not required; funds are participant directed.

	See report of independent registered public accounting firm.

The Plan. Pursuant to the requirements of the Securities Exchange Act of 1934, the trustees (or other persons who administer the employee benefit plan) have duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized.

		Page

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM		1

FINANCIAL STATEMENTS

Statements of Net Assets Available for Benefits		2
Statement of Changes in Net Assets Available for Benefits		3
Notes to Financial Statements		4

SUPPLEMENTAL SCHEDULE*

Schedule H, Line 4i – Schedule of Assets (Held at End of Year)		9


SIGNATURE		10

EXHIBIT INDEX		11

		FIRST US BANCSHARES, INC. 401(k) PLAN

		By:		/s/ Thomas S. Elley
				Thomas S. Elley
				Chief Financial Officer of First US Bancshares, Inc. and First US Bank
				June 21, 2022