UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant to
Section 13 or 15(d) of the
Securities
Exchange Act of 1934
Date of Report (Date of
earliest event reported): April 30, 2015
UNITED
SECURITY BANCSHARES, INC.
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(Exact name of registrant as specified in its charter)
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Delaware
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0-14549
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63-0843362
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(State or other jurisdiction
of incorporation)
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(Commission File Number)
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(IRS Employer
Identification Number)
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131 West Front Street, P.O. Box 249, Thomasville, Alabama 36784
(Address
of principal executive offices, including zip code)
(334)
636-5424
(Registrant’s telephone number, including area code)
N/A
(Former
name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any
of the following provisions (see General Instruction A.2. below):
⃞
Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
⃞
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
⃞
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
⃞
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
Item 2.02 Results of Operations and Financial Condition.
On April 30, 2015, United Security Bancshares, Inc. issued a press
release announcing financial results for the first quarter ended March
31, 2015. The press release is attached as Exhibit 99.1 to this
Form 8-K and is furnished to, but not filed with, the Commission.
Item
9.01 Financial Statements and Exhibits.
(d)
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Exhibits.
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Exhibit Number
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Exhibit
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99.1
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Press Release dated April 30, 2015
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
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UNITED SECURITY BANCSHARES, INC.
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By:
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/s/ Thomas S. Elley
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Name:
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Thomas S. Elley
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Vice President, Treasurer and Assistant Secretary,
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Chief Financial Officer and Principal Accounting Officer
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Dated:
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April 30, 2015
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INDEX TO EXHIBITS
Exhibit Number
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Exhibit
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99.1
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Press Release dated April 30, 2015*
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*This exhibit is furnished to, but not filed with, the Commission by
inclusion herein.
Exhibit 99.1
United
Security Bancshares, Inc. Reports Improved First Quarter Results
THOMASVILLE, Ala.--(BUSINESS WIRE)--April 30, 2015--United Security
Bancshares, Inc. (Nasdaq: USBI) today reported net income rose to
$836,000, or $0.13 per diluted share, for the first quarter ended March
31, 2015, compared with net income of $774,000, or $0.13 per diluted
share, for the first quarter of 2014.
“We continued to make solid progress in the first quarter with growth in
net income and solid reduction in non-performing assets,” stated James
F. House, President and CEO of United Security Bancshares, Inc.
“Non-performing assets were down 33.6%, compared with March 31, 2014, to
$12.8 million. Our progress in reducing non-performing assets resulted
from a 17.1% reduction in other real estate owned to $8.6 million and a
66% drop in non-accrual loans to $2.5 million compared with the first
quarter of 2014. We believe that continued progress in these areas, as
well as our focus on quality loan production, will be an important part
of improving our profitability.”
“Loan demand remains soft in many of our rural service areas, especially
for quality commercial and real-estate based loans. We experienced loan
payoffs and pay downs during the first quarter at a faster rate than our
generation of new quality loans. This affected our yield on earning
assets and interest generated from loans, our largest source of income.
We are working on plans to expand into contiguous metropolitan markets
that have greater commercial loan potential, including a new branch in
Tuscaloosa, Alabama, which is expected to open later this year.”
“We are also making investments throughout the Bank to improve operating
efficiency and to provide better customer service. We are expanding our
office in Thomasville to consolidate operations staff and departments
and expect that the new facility will result in improved efficiencies
and enhanced opportunities to develop and cross-train staff. We are also
investing in new technology that will leverage our existing
infrastructure to improve services and to control costs. We are
introducing new mobile and commercial banking services, including online
check deposit, expanded internet banking and a new cash management
service for commercial customers that we expect to be very competitive
in our service areas. We also recently changed the Bank’s name to ‘First
US Bank’ as part of our rebranding program to improve our visibility in
our existing service areas, as well as potential expansion markets. We
remain very positive about the progress made in strengthening core
operations and opportunities to grow the Bank in the future,” continued
Mr. House.
First Quarter Results
Net income rose to $836,000, or $0.13 per diluted share, for the quarter
ended March 31, 2015, compared with net income of $774,000, or $0.13 per
diluted share, for the first quarter of 2014.
Interest income totaled $7.3 million in the first quarter of 2015,
compared with $7.8 million in the first quarter of 2014. The decline in
interest income was due primarily to a decrease in total loans, offset
partially by higher interest income from investment securities, compared
with the first quarter of 2014.
Interest expense declined 4.8% to $614,000 in the first quarter of 2015,
compared with $645,000 in the first quarter of 2014. The decrease
resulted primarily from a decline in interest bearing deposits and lower
interest rates paid compared with the prior period.
Net interest income was $6.7 million in the first quarter of 2015,
compared with $7.2 million in the first quarter of 2014. The decline in
net interest income was due to a decrease in loans, combined with a 38
basis point decline in net interest margin, compared with the first
quarter of 2014. Net interest margin was 5.19% in the first quarter of
2015, compared with 5.57% in the first quarter of 2014. The decline in
net interest margin was due primarily to the payoff of higher yielding
loans, the competitive loan market and a change in Acceptance Loan
Company’s (“ALC”) loan origination criteria that has focused on improved
credit quality, with a slight offset in lower interest rates charged.
Net loans declined to $239.2 million in the first quarter of 2015,
compared with $276.7 million at March 31, 2014. The decrease in net
loans was due to loan payoffs and pay downs outpacing new loan
production at the Bank. An overall sluggish economy in the geographical
areas that we serve, primarily centered in the real estate sector, has
been a significant factor in lower loan demand at the Bank during the
past year.
Provision for loan losses was a credit of $166,000 in the first quarter
of 2015, compared with a charge of $414,000 in the first quarter of
2014. The credit in the provision for loan losses was reflected as a
reduction in the reserve for loan losses. The reduction in the provision
resulted primarily from pay down of loans, recoveries of loans
previously charged off and improvement in the credit quality of several
loan relationships. Net charge-offs totaled approximately $600,000 in
the first quarter of 2015, compared with $1.2 million in the first
quarter of 2014.
Total non-interest income rose to $1.3 million in the first quarter of
2015, compared with $1.1 million in the first quarter of 2014. The
increase in non-interest income was due to growth in other income,
offset partially by lower service charges and credit life insurance
income, compared with the first quarter of 2014.
Total non-interest expense increased 1.4% to $7.0 million in the first
quarter of 2015, compared with $6.9 million in the first quarter of
2014. The increase in non-interest expense was due primarily to higher
salaries and benefits, occupancy, furniture and equipment expense and
other real estate/foreclosure expense, offset partially by lower other
expense. Total OREO related expenses increased to $220,000 in the first
quarter of 2015, compared with $100,000 in the first quarter of 2014,
primarily due to reductions in gains on sale of OREO, which are netted
in this expense category. Salaries and benefits increased $110,000 in
the first quarter of 2015 compared with the first quarter of 2014.
Effective as of the first quarter of 2015, United Security Bancshares
and First US Bank are now subject to the revised regulatory capital
standards promulgated under the Basel III Final Rule. As of March 31,
2015, both the common equity Tier 1 capital and Tier 1 risk based
capital ratios were 23.85% for the Company and 24.09% for the Bank. The
total capital ratio was 25.11% for the Company and 25.34% for the Bank.
The Tier 1 leverage ratio was 12.56% for the Company and 12.70% for the
Bank. Each of these ratios is higher than the ratios required to be
considered a “well-capitalized” institution under the revised framework.
About United Security Bancshares, Inc.
United Security Bancshares, Inc. is a bank holding company that operates
nineteen banking offices in Alabama through First US Bank. In addition,
the Company’s operations include Acceptance Loan Company, Inc., a
consumer loan company, and FUSB Reinsurance, Inc., an underwriter of
credit life and credit accident and health insurance policies sold to
the Bank’s and ALC’s consumer loan customers. The Company’s stock is
traded on the Nasdaq Capital Market under the symbol “USBI.”
Forward-Looking Statements
This press release contains forward-looking statements, as defined by
federal securities laws. Statements contained in this press release that
are not historical facts are forward-looking statements. These
statements may address issues that involve significant risks,
uncertainties, estimates and assumptions made by management. USBI
undertakes no obligation to update these statements following the date
of this press release, except as required by law. In addition,
USBI, through its senior management, may make from time to time
forward-looking public statements concerning the matters described
herein. Such forward-looking statements are necessarily estimates
reflecting the best judgment of USBI’s senior management based upon
current information and involve a number of risks and uncertainties. Certain
factors that could affect the accuracy of such forward-looking
statements are identified in the public filings made by USBI with the
Securities and Exchange Commission, and forward-looking statements
contained in this press release or in other public statements of USBI or
its senior management should be considered in light of those factors.
Specifically, with respect to statements relating to loan demand,
growth and earnings potential and the adequacy of the allowance for loan
losses for USBI, these factors include, but are not limited to, the rate
of growth (or lack thereof) in the economy, the relative strength and
weakness in the consumer and commercial credit sectors and in the real
estate markets and collateral values. There can be no assurance
that such factors or other factors will not affect the accuracy of such
forward-looking statements.
UNITED SECURITY BANCSHARES, INC. AND SUBSIDIARIES CONDENSED
CONSOLIDATED BALANCE SHEETS (Dollars in Thousands,
Except Share and Per Share Data)
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March
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December
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31,
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31,
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2015
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2014
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(Unaudited)
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ASSETS
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Cash and due from banks
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$
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8,396
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$
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9,697
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Interest bearing deposits in banks
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21,921
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24,469
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Total cash and cash equivalents
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30,317
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34,166
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Investment securities available-for-sale, at fair value
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209,790
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204,966
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Investment securities held-to-maturity, at amortized cost
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40,074
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29,120
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Federal Home Loan Bank stock, at cost
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740
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738
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Loans, net of allowance for loan losses of $5,401 and $6,168,
respectively
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239,218
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259,516
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Premises and equipment, net
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10,505
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9,764
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Cash surrender value of bank-owned life insurance
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14,054
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13,975
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Accrued interest receivable
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1,941
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2,235
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Other real estate owned
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8,608
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7,735
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Other assets
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9,635
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10,394
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Total assets
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$
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564,882
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$
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572,609
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LIABILITIES AND SHAREHOLDERS’ EQUITY
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Deposits
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$
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475,288
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$
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483,659
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Accrued interest expense
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208
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221
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Other liabilities
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7,961
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8,131
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Short-term borrowings
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680
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436
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Long-term debt
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5,000
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5,000
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Total liabilities
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489,137
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497,447
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Shareholders’ equity:
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Common stock, par value $0.01 per share, 10,000,000 shares
authorized; 7,329,060 shares issued; 6,034,059 shares outstanding
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73
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73
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Surplus
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9,615
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9,577
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Accumulated other comprehensive income, net of tax
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1,659
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1,829
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Retained earnings
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85,297
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84,582
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Less treasury stock: 1,295,001 shares at cost
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(20,886
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)
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(20,886
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)
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Noncontrolling interest
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(13
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)
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(13
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Total shareholders’ equity
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75,745
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75,162
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Total liabilities and shareholders’ equity
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$
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564,882
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$
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572,609
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UNITED SECURITY BANCSHARES, INC. AND SUBSIDIARIES CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS (Dollars in
Thousands, Except Per Share Data)
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Three Months Ended
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March 31,
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2015
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2014
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(Unaudited)
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Interest income:
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Interest and fees on loans
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$
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6,135
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$
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6,797
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Interest on investment securities
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1,186
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1,049
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Total interest income
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7,321
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7,846
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Interest expense:
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Interest on deposits
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607
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637
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Interest on borrowings
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7
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8
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Total interest expense
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614
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645
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Net interest income
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6,707
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7,201
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Provision (reduction in reserve) for loan losses
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(166
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)
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414
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Net interest income after provision (reduction in reserve) for loan
losses
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6,873
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6,787
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Non-interest income:
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Service and other charges on deposit accounts
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454
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500
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Credit insurance income
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75
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140
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Other income
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762
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507
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Total non-interest income
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1,291
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1,147
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Non-interest expense:
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Salaries and employee benefits
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4,192
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4,082
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Net occupancy and equipment
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823
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815
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Other real estate/foreclosure expense, net
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220
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100
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Other expense
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1,742
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1,887
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Total non-interest expense
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6,977
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6,884
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Income before income taxes
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1,187
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1,050
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Provision for income taxes
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351
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276
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Net income
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$
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836
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$
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774
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Basic net income per share
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$
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0.14
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$
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0.13
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Diluted net income per share
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$
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0.13
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$
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0.13
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Dividends per share
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$
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0.02
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$
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-
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CONTACT:
United Security Bancshares, Inc.
Thomas S. Elley,
334-636-5424
First US Bancshares (NASDAQ:FUSB)
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