Reports Fourth Quarter Loan Growth and
Continued Reductions in Non-Performing Assets
United Security Bancshares, Inc. (Nasdaq: USBI) today reported
net income of $2.6 million, or $0.41 per diluted share, for the
year ended December 31, 2015, compared to net income of $3.5
million, or $0.57 per diluted share, for the year ended December
31, 2014. Net income for the fourth quarter of 2015 totaled
$441,000, or $0.07 per diluted share, compared to $720,000, or
$0.12 per diluted share, for the fourth quarter of 2014.
Fourth Quarter Highlights
- Net loans increased during the fourth
quarter by $17.7 million, or 29.8% on an annualized basis. For the
year ended December 31, 2015, net loans declined by $4.1 million,
or 1.6%.
- Non-performing assets decreased by $1.7
million during the fourth quarter and by $5.2 million for the year
ended December 31, 2015. Non-performing assets as a percentage of
total assets were reduced to 1.59% as of December 31, 2015,
compared to 1.98% as of September 30, 2015 and 2.50% as of December
31, 2014.
- During the fourth quarter, First US
Bank’s new branch in downtown Tuscaloosa, Alabama became
operational, and renovations to the Bank’s main office in
Thomasville, Alabama were completed.
“We are pleased to report significant loan growth in the fourth
quarter, as well as continued improvement in asset quality,” said
James F. House, President and Chief Executive Officer of United
Security Bancshares, Inc. “Our efforts to resolve problem assets
over the past several years have resulted in reductions in
non-performing assets at a faster pace than we originally expected.
As a result, we have now begun to focus more effort on generating
quality loans. We expect that continued progress in reducing
non-performing assets, combined with focused efforts on quality
commercial loan generation, will contribute to future growth in
earnings.”
“Earnings in 2015 were below last year’s results due primarily
to decreased loan volume at First US Bank. Although we had
substantial growth in the Bank’s loan portfolio during the fourth
quarter, we experienced decreases during the first three quarters
of the year. A portion of these decreases resulted from the
continued resolution of problem assets and the migration of loans
off of the balance sheet that did not meet the Bank’s current
credit standards. At this point, we believe that the Bank is
well-positioned to expand its commercial loan production
capabilities. We are already beginning to see increased opportunity
from the Bank’s new location in downtown Tuscaloosa, and we
continue to look for opportunities to expand in other markets as
well. We also remain optimistic about opportunities for expanding
our consumer loan portfolio through our subsidiary, Acceptance Loan
Company, Inc. (“ALC”). ALC experienced consistent loan growth
through 2015, ending the year with net loans of $81.7 million, an
increase of 13% over December 31, 2014,” continued Mr. House.
Results of Operations
- Pre-provision net interest income
totaled $7.0 million for the fourth quarter of 2015, compared to
$6.8 million for the prior quarter and $7.1 million for the fourth
quarter of 2014. The increase compared to the prior quarter was
attributable to loan growth in the fourth quarter. However, average
loan volumes remained below levels experienced in the fourth
quarter of 2014.
- Net interest income after the provision
for loan losses totaled $6.5 million for the fourth quarter of
2015, compared to $6.8 million in the prior quarter and $7.2
million in the fourth quarter of 2014. The reduction compared to
both prior quarters resulted primarily from increased loan loss
provisioning. The provision for loan losses totaled $415,000 for
the fourth quarter of 2015, compared to reductions in reserves
during the prior quarter and fourth quarter of 2014 totaling
$78,000 and $169,000, respectively. For the year ended December 31,
2015, the provision for loan losses totaled $216,000, compared to
reductions in reserves of $74,000 for the year ended December 31,
2014.
- Non-interest income totaled $1.2
million for the fourth quarter of 2015, compared to $1.0 million in
the prior quarter and $1.3 million in the fourth quarter of 2014.
For the year ended December 31, 2015, non-interest income totaled
$4.5 million, compared to $5.1 million for the year ended December
31, 2014. The reduction in 2015 resulted primarily from reduced
revenues from service charges on deposit accounts and credit
insurance income.
- Non-interest expense totaled $7.2
million in the fourth quarter of 2015, compared to $7.1 million in
the prior quarter and $7.2 million in the fourth quarter of 2014.
For the year ended December 31, 2015, non-interest expense totaled
$28.4 million, compared to $28.6 million for the year ended
December 31, 2014.
- The provision for income taxes totaled
$1.0 million for the year ended December 31, 2015, compared to $1.8
million in the prior year. The Company’s effective tax rate was
26.8% in 2015, compared to 34.0% in 2014. The reduction in
effective rate resulted primarily from increases in favorable
permanent tax items (primarily tax-exempt interest) as a percentage
of pre-tax income.
- Return on average assets was 0.46% for
2015, compared to 0.63% for 2014.
Balance Sheet Management
- The Bank maintained capital ratios at a
higher level than ratios required to be considered a
“well-capitalized” institution under the applicable regulatory
framework. As of December 31, 2015, both the Bank’s common equity
Tier 1 capital and Tier 1 risk-based capital ratios were 22.19%,
while the Bank’s total capital ratio was 23.35% and Tier 1 leverage
ratio was 13.02%.
- Deposit levels declined slightly year
over year, totaling $479.3 million as of December 31, 2015,
compared to $483.7 million as of December 31, 2014, a decrease of
0.9%. In addition to deposits, the Bank maintains significant
external sources of liquidity, including access to funding through
federal funds lines, Federal Home Loan Bank advances and brokered
deposits.
- Investment securities were maintained
at consistent levels throughout 2015, totaling $231.2 million as of
December 31, 2015, compared to $234.1 million as of December 31,
2014. The investment securities portfolio both enhances interest
income and serves as an additional source of liquidity.
- Shareholders’ equity increased to $76.3
million, or $12.65 per share, at December 31, 2015, compared
to $75.2 million, or $12.45 per share, at December 31, 2014. The
increase in shareholders’ equity resulted from continued growth in
retained earnings, offset partially by a $1.3 million decrease in
other comprehensive income that resulted from a decrease in the
market value of investment securities available-for-sale.
- The Company declared a cash dividend of
$0.02 per share on its common stock in each quarter of 2015.
Dividends declared for the year ended December 31, 2015 totaled
$0.08, compared to $0.03 for the year ended December 31, 2014.
About United Security Bancshares, Inc.
United Security Bancshares, Inc. is a bank holding company that
operates twenty 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. The Company undertakes no obligation to update these
statements following the date of this press release, except as
required by law. In addition, the Company, 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 the Company’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 the Company with the Securities and Exchange Commission,
and forward-looking statements contained in this press release or
in other public statements of the Company 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, geographic expansion and the adequacy of the allowance
for loan losses for the Company, these factors include, but are not
limited to, the rate of growth (or lack thereof) in the economy
generally and in the Bank’s and ALC’s service areas, the
availability of quality loans in the Bank’s and ALC’s service
areas, 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
SELECTED FINANCIAL DATA – LINKED
QUARTERS
(Dollars in Thousands, Except Per Share
Data)
Quarter Ended 2015 2014
December 31,
September 30,
June 30,
March 31,
December 31,
(Unaudited) Results of Operations: Interest income $
7,513 $ 7,328 $ 7,735 $ 7,321 $ 7,686 Interest expense 549
561 565 614
636 Net interest income 6,964 6,767 7,170 6,707 7,050
Provision (reduction in reserve) for loan losses 415
(78 ) 45 (166 ) (169 )
Net interest income after provision (reduction in reserve) for loan
losses
6,549
6,845 7,125 6,873 7,219 Non-interest income 1,176 996 1,068 1,291
1,279 Non-interest expense 7,203 7,090
7,107 6,977 7,246
Income before income taxes 522 751 1,086 1,187 1,252 Provision for
income taxes 81 207 312
351 532 Net income $ 441
$ 544 $ 774 $ 836 $ 720 Per
Share Data: Basic net income per share $ 0.07 $ 0.09
$ 0.13 $ 0.14 $ 0.12 Diluted net income
per share $ 0.07 $ 0.09 $ 0.12 $ 0.13 $
0.12 Dividends declared $ 0.02 $ 0.02 $
0.02 $ 0.02 $ 0.02 Period-End
Balance Sheet: Total assets $ 575,782 $ 548,537 $ 560,650 $ 564,882
$ 572,609 Loans, net of allowance for loan losses 255,432 237,715
244,993 239,218 259,516 Allowance for loan losses 3,781 4,345 5,008
5,401 6,168 Investment securities, net 231,202 239,009 246,176
249,864 234,086 Total deposits 479,258 463,266 471,141 475,288
483,659 Long-term debt 5,000 - 5,000 5,000 5,000 Total
shareholders’ equity 76,316 76,283 75,783 75,745 75,162
Performance Ratios: Return on average assets (annualized) 0.31 %
0.39 % 0.55 % 0.59 % 0.50 % Return on average equity (annualized)
2.28 % 2.84 % 4.09 % 4.47 % 3.83 % Asset Quality: Allowance
for loan losses as % of loans 1.46 % 1.80 % 2.00 % 2.21 % 2.32 %
Nonperforming assets as % of total assets 1.59 % 1.98 % 1.96 % 2.27
% 2.50 %
UNITED SECURITY BANCSHARES, INC. AND
SUBSIDIARIES
INTERIM CONDENSED CONSOLIDATED BALANCE
SHEETS
(Dollars in Thousands, Except Share and
Per Share Data)
December 31,
December 31,
2015 2014 (Unaudited) ASSETS Cash and
due from banks $ 7,088 $ 9,697 Interest-bearing deposits in banks
36,984 24,469 Total cash and cash
equivalents 44,072 34,166 Investment securities available-for-sale,
at fair value 198,843 204,966 Investment securities
held-to-maturity, at amortized cost 32,359 29,120 Federal Home Loan
Bank stock, at cost 1,025 738 Loans, net of allowance for loan
losses of $3,781 and $6,168, respectively 255,432 259,516 Premises
and equipment, net 12,084 9,764 Cash surrender value of bank-owned
life insurance 14,292 13,975 Accrued interest receivable 1,833
2,235 Other real estate owned 6,038 7,735 Other assets 9,804
10,394 Total assets $ 575,782 $ 572,609
LIABILITIES AND SHAREHOLDERS’ EQUITY Deposits
$ 479,258 $ 483,659 Accrued interest expense 180 221 Other
liabilities 7,674 8,131 Short-term borrowings 7,354 436 Long-term
debt 5,000 5,000 Total liabilities
499,466 497,447 Shareholders’
equity:
Common stock, par value $0.01 per share,
10,000,000 shares authorized; 7,329,060 shares issued; 6,038,554
and 6,034,059 shares outstanding, respectively
73 73 Surplus 9,844 9,577 Accumulated other comprehensive income,
net of tax 536 1,829 Retained earnings 86,693 84,582 Less treasury
stock: 1,290,506 and 1,295,001 shares at cost, respectively (20,817
) (20,886 ) Noncontrolling interest (13 ) (13 )
Total shareholders’ equity 76,316
75,162 Total liabilities and shareholders’ equity $
575,782 $ 572,609
UNITED SECURITY BANCSHARES, INC. AND
SUBSIDIARIES
INTERIM CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
(Dollars in Thousands, Except Per Share
Data)
Three Months Ended Twelve Months Ended
December 31, December 31, 2015
2014 2015 2014
(Unaudited) (Unaudited) Interest income: Interest and
fees on loans $ 6,362 $ 6,501 $ 25,177 $ 26,929 Interest on
investment securities 1,151 1,185 4,720
4,432 Total interest income 7,513 7,686 29,897 31,361
Interest expense: Interest on deposits 541 628 2,262 2,522
Interest on borrowings 8 8 27 31
Total interest expense 549 636
2,289 2,553 Net interest income 6,964 7,050
27,608 28,808 Provision (reduction in reserve) for loan
losses 415 (169 ) 216 (74 )
Net interest income after provision
(reduction in reserve) for loan losses
6,549
7,219
27,392
28,882
Non-interest income:
Service and other charges on deposit
accounts
453
524
1,844
2,096
Credit insurance income 162 271 501 694 Other income 561
484 2,186 2,301 Total
non-interest income 1,176 1,279 4,531 5,091 Non-interest
expense: Salaries and employee benefits 4,151 4,108 16,664 16,690
Net occupancy and equipment 769 810 3,116 3,226 Other real
estate/foreclosure expense, net 213 428 1,027 1,077 Other expense
2,070 1,900 7,570 7,602
Total non-interest expense 7,203 7,246
28,377 28,595 Income before income taxes 522
1,252 3,546 5,378 Provision for income taxes 81 532
951 1,829 Net income $ 441 $ 720
$ 2,595 $ 3,549 Basic net income per share $ 0.07 $ 0.12
$ 0.42 $ 0.58 Diluted net income per share $ 0.07 $
0.12 $ 0.41 $ 0.57 Dividends per share $ 0.02 $ 0.02
$ 0.08 $ 0.03
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version on businesswire.com: http://www.businesswire.com/news/home/20160128006410/en/
United Security Bancshares, Inc.Thomas S. Elley,
334-636-5424
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