FRESNO, Calif., Nov. 21, 2011 /PRNewswire/ -- United Security
Bancshares (http://www.unitedsecuritybank.com/) (Nasdaq Global
Select: UBFO) reported today an unaudited consolidated net loss of
$1.46 million or ($0.11) per basic and diluted common share for
the three months ended September 30,
2011, as compared to net income of $411,000 or $0.03
per basic and diluted common share for the three months ended
September 30, 2010. On a year-to-date
basis, the Company reported an unaudited consolidated net loss of
$7.5 million or ($0.56) per basic and diluted common share, as
compared to net income of $1.4
million or $0.10 per basic and
diluted common share for the nine months ended September 30, 2010.
Annualized return on average equity (ROE) for the three months
ended September 30, 2011 was (9.05%),
compared to 2.07% for the same period in 2010, and was (13.68%) for
the nine months ended September 30,
2011 compared to 2.35% for the same nine-month period in
2010. Annualized return on average assets (ROA) was (0.88%) for the
three months ended September 30, 2011
compared to 0.23% for the same three-month period in 2010, and was
(1.50%) for the nine months ended September
30, 2011 compared to 0.26% to the same nine-month period in
2010
Shareholders' equity at September 30,
2011 was $65.4 million, down
$7.9 million from the $73.3 million in shareholder's equity reported at
December 31, 2010.
Net interest income before provision for credit loss totaled
$6.2 million for the three months
ended September 30, 2011 and
$18.7 million for the nine months
ended September 30, 2011, down
$583,000 from $6.8 million reported during the three months
ended September 30, 2010 and down
$2.6 million from the $21.4 million reported during the nine months
ended September 30, 2010,
respectively. The net interest margin was 4.42% for the three
months ended September 30, 2011, and
4.45% for the nine months ended September
30, 2011 as compared to 4.45% for the three months ended
September 30, 2010 and 4.66% for the
nine months ended September 30, 2010.
On a nine-month comparative basis, the Company continues to benefit
from reduced costs on interest-bearing liabilities, which partially
offset declines in yields on interest-earning assets between the
two nine-month periods.
Noninterest income for the three months ended September 30, 2011 totaled $3.3 million, an increase of $1.8 million from $1.5
million in noninterest income reported for the three months
ended September 30, 2010. Noninterest
income of $5.6 million reported for
the nine months ended September 30,
2011 increased $134,000 from
$5.5 million in noninterest income
reported for the nine months ended September
30, 2010. Customer service fees continue to provide the
majority of the Company's noninterest income, totaling $956,000 for the three months ended September 30, 2011, as compared to $940,000 for the three months ended September 30, 2010, and $2.7 million for the nine months ended
September 30, 2011, as compared to
$2.9 million for the nine months
ended September 30, 2010. Changes in
noninterest income on a quarter-to-quarter comparative basis is
largely the result of an increase in $1.7
million in fair value gains recorded on the Company's junior
subordinated debt. On a nine-month comparative basis, changes in
noninterest income are primarily the result of decreases of
$509,000 in gains realized on the
sale of loans, off set by an increase of $933,000 in fair value gains recorded on the
Company's junior subordinated debt.
Noninterest expense totaled $8.1
million for the three months ended September 30, 2011, up $1.6 million from the $6.6
million reported for the three months ended September 30, 2010, while noninterest expense
totaled $22.4 million for the nine
months ended September 30, 2011, up
$1.5 million from $21.0 million reported for the nine months ended
September 30, 2010. Between the
three-month quarterly comparative periods, increases in OREO
related expenses totaling $2.0
million were offset in part by decreases in other expenses.
On a nine-month comparative basis, increases in OREO related
expenses of $2.1 million and
increases in professional fees totaling $444,000, were offset by a decrease in impairment
losses on investment securities totaling $780,000.
For the three months ended September 30,
2011 the provision for loan loss was $2.4 million, compared to $1.2 million for the three months ended
September 30, 2010 representing an
increase of $1.2 million between the
three-month comparative periods. The provision for loan losses
totaled $12.5 million for the nine
months ended September 30, 2011
compared to $3.4 million for the nine
months ended September 2010,
reflecting an increase of $9.1
million between the two nine-month periods. Net loan
charge-offs totaled $15.1 million for
the nine months ended September 30,
2011 as compared to $5.4
million for the nine months ended September 30, 2010. At September 30, 2011, the allowance for loan losses
represented 3.34% of total loans, compared to 3.75% of total loans
at December 31, 2010. In determining
the adequacy of the allowance for loan losses, Management's
judgment is the primary determining factor for establishing the
amount of the provision for loan losses and management considers
the allowance for loan and lease losses at September 30, 2011 to be adequate.
Non-performing assets comprised of nonaccrual loans, OREO,
troubled debt restructurings and loans more than 90 days past days
and still accruing interest, decreased approximately $23.9 million between December 31, 2010 and September 30, 2011, and decreased $11.1 million during the quarter ended
September 30, 2011. Nonperforming
assets decreased as a percentage of total assets from 14.07% of
total assets at December 31, 2010 to
10.71% of total assets at September 30,
2011 as the Company continues to successfully work out or
dispose of problem assets. Nonaccrual loans decreased $13.7 million between December 31, 2010 and September 30, 2011, and $0.01 million during the quarter ended
September 30, 2011, while OREO
decreased $5.2 million and $1.7
million during the same periods, respectively. Impaired
loans totaled $35.0 million at
September 30, 2011, decreasing
$16.0 million from the balance of
$51.0 million at December 31, 2010 and decreasing $2.0 million from the balance of $43.0 million at June 30,
2011. Troubled debt restructurings totaled $19.9 million at September
30, 2011, decreasing $5.0
million from the balance of $24.9
million at December 31, 2010
and decreasing $3.0 million from the
balance of $29.1 million at
June 30, 2011.
Total assets at September 30, 2011
were $668.5 million compared to
$678.2 million at December 31, 2010, a year-to-date decrease of
$9.7 million, and compared to
$655.6 million at June 30, 2011, a decrease of $12.8 million during the quarter. Total deposits
at September 30, 2011 were
$562.4 million compared to
$557.5 million at December 31, 2010, an increase of $4.9 million for the nine-month period, and
compared to $547.6 million at
June 30, 2011, an increase of
$14.8 million for the three month
period.
The Board of Directors of United Security Bancshares declared a
third quarter 2011 stock dividend of one percent (1%) on
September 27, 2011. The stock
dividend was payable to shareholders of record as of October 14, 2011, and shares were issued on
October 26, 2011.
Dennis R. Woods, President and
Chief Executive Officer of the Company, shares his thoughts: "As
the economic malaise reaches its fourth birthday, no clear sign of
its ending in the near term is evident. However, during this time,
the Company has successfully, and without governmental assistance,
managed and reduced its problem assets; all the while deleveraging
the balance sheet, improving liquidity and continuing to offer
premium products and services to our customers. In fact,
$154 million in adversely classified
assets have been removed from the balance sheet since June 2009, brokered deposits have dropped
$75 million, and overnight
investments rose nearly $95 million
since September 2007, and the Company
currently has $0 in borrowed funds.
The additions made to the loan loss reserve during the quarter and
year-to-date supports a long-term commitment to assisting our
borrowers and the communities we serve, by focusing on their needs,
and allowing for mutually beneficial workout strategies. Although
we have booked a substantial loss, the pace of our concentrated
efforts is accelerating as evidenced by incoming recoveries on past
losses. The Bank is committed to further reducing its level of
problem assets and continues to maintain adequate levels of capital
and liquidity, keeping us positioned for opportunities when local
and global recoveries begin."
United Security Bancshares is a $650+ million bank holding
company. United Security Bank, its principal subsidiary is a
California state chartered bank
and member of the Federal Reserve Bank of San Francisco.
FORWARD-LOOKING STATEMENTS
This news release contains forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended,
and Section 21E of the Securities Exchange Act of 1934, as amended
and the Company intends such statements to be covered by the safe
harbor provisions for forward-looking statements contained in the
Private Securities Litigation Reform Act of 1995.
Forward-looking statements are based on management's knowledge
and belief as of today and include information concerning the
Company's possible or assumed future financial condition, and its
results of operations, business and earnings outlook. These
forward-looking statements are subject to risks and uncertainties.
A number of factors, some of which are beyond the Company's ability
to control or predict, could cause future results to differ
materially from those contemplated by such forward-looking
statements. These factors include (1) changes in interest rates,
(2) significant changes in banking laws or regulations, (3)
increased competition in the company's market, (4)
other-than-expected credit losses, (5) earthquake or other natural
disasters impacting the condition of real estate collateral, (6)
the effect of acquisitions and integration of acquired businesses,
(7) the impact of proposed and/or recently adopted changes in laws,
and regulations on the Company and its business, including
California tax legislation and the
subsequent Dec. 31, 2003,
announcement by the Franchise Tax Board regarding the taxation of
REITs and RICs; (8) changing bank regulatory conditions, policies,
whether arising as new legislation or regulatory initiatives or
changes in our regulatory classifications, that could lead to
restrictions on activities of banks generally or as to the Bank,
including specifically the formal order between the Federal Reserve
Bank of San Francisco and the
Company and the Bank, (9) failure to comply with the regulatory
agreement under which the Company is subject and (10) unknown
economic impacts caused by the State of
California's budget issues. Management cannot predict at
this time the severity or duration of the effects of the recent
business slowdown on our specific business activities and
profitability. Weaker or a further decline in capital and consumer
spending, and related recessionary trends could adversely affect
our performance in a number of ways including decreased demand for
our products and services and increased credit losses. Likewise,
changes in interest rates, among other things, could slow the rate
of growth or put pressure on current deposit levels and affect the
ability of borrowers to repay loans. Forward-looking statements
speak only as of the date they are made, and the company does not
undertake to update forward-looking statements to reflect
circumstances or events that occur after the date the statements
are made, or to update earnings guidance including the factors that
influence earnings. For a more complete discussion of these risks
and uncertainties, see the Company's Annual Report on Form 10-K for
the year ended December 31, 2010, and
particularly the section of Management's Discussion and Analysis.
Readers should carefully review all disclosures we file from
time to time with the Securities and Exchange Commission
("SEC").
United Security
Bancshares
|
|
Consolidated Balance Sheets -
(unaudited)
|
|
(dollars in
thousands)
|
|
|
September 30,
|
|
December 31,
|
|
|
2011
|
|
2010
|
|
Assets
|
|
|
|
|
Cash and
noninterest-bearing deposits in other banks
|
$23,588
|
|
$13,259
|
|
Cash and due from Federal
Reserve Bank
|
96,882
|
|
85,171
|
|
Federal funds
sold
|
0
|
|
0
|
|
Cash and
cash equivalents
|
120,470
|
|
98,430
|
|
Interest-bearing deposits
in other banks
|
2,178
|
|
4,396
|
|
Investment securities (AFS
at market value)
|
47,063
|
|
51,503
|
|
Loans and leases, net of
unearned fees
|
416,942
|
|
441,046
|
|
Less: Allowance
for credit losses
|
(13,936)
|
|
(16,520)
|
|
Net loans
|
403,006
|
|
424,526
|
|
Premises and equipment -
net
|
12,663
|
|
12,909
|
|
Bank owned life
insurance
|
16,017
|
|
15,493
|
|
Intangible
assets
|
5,190
|
|
7,186
|
|
Other real estate
owned
|
30,388
|
|
35,580
|
|
Other assets
|
31,515
|
|
28,187
|
|
Total assets
|
$668,490
|
|
$678,210
|
|
Deposits:
|
|
|
|
|
Noninterest
bearing demand and NOW
|
$247,714
|
|
$199,675
|
|
Money market and
savings
|
162,705
|
|
158,253
|
|
Time
|
151,937
|
|
199,538
|
|
Total
deposits
|
562,356
|
|
557,466
|
|
Borrowed funds
|
25,000
|
|
32,000
|
|
Other
liabilities
|
6,692
|
|
4,828
|
|
Junior subordinated
debentures (at fair value)
|
9,048
|
|
10,646
|
|
Total liabilities
|
603,096
|
|
604,940
|
|
Shareholders'
equity:
|
|
|
|
|
Common shares
outstanding:
|
|
|
|
|
13,397,847
at September 30, 2011
|
|
|
|
|
13,003,840
at December 31, 2010
|
41,129
|
|
39,869
|
|
Retained
earnings
|
25,108
|
|
33,807
|
|
Accumulated other
comprehensive income
|
(843)
|
|
(406)
|
|
Total shareholders'
equity
|
65,394
|
|
73,270
|
|
Total liabilities and
shareholders' equity
|
$668,490
|
|
$678,210
|
|
|
|
|
|
|
|
United Security
Bancshares
|
|
Consolidated Statements of
Income (unaudited)
|
|
(dollars in 000s, except per
share amounts)
|
|
|
Three Months
Ended
|
Three Months
Ended
|
Nine Months
Ended
|
Nine Months
Ended
|
|
|
September
30,
|
September
30,
|
September
30,
|
September
30,
|
|
|
2011
|
2010
|
2011
|
2010
|
|
Interest
income:
|
|
|
|
|
|
Interest and fees on
loans and leases
|
$6,378
|
$7,283
|
$19,235
|
$22,592
|
|
Interest on investment
securities
|
507
|
642
|
1,644
|
2,241
|
|
Interest on Federal funds
sold and
|
|
|
|
|
|
Deposits in
other banks
|
52
|
39
|
166
|
77
|
|
Total
interest income
|
6,937
|
7,964
|
21,045
|
24,910
|
|
Interest
expense:
|
|
|
|
|
|
Interest on
deposits
|
615
|
1,045
|
2,051
|
3,266
|
|
Interest on other
borrowed funds
|
82
|
96
|
250
|
281
|
|
Total
interest expense
|
697
|
1,141
|
2,301
|
3,547
|
|
Net interest income before
provision for credit losses
|
6,240
|
6,823
|
18,744
|
21,363
|
|
Provision for credit
losses
|
2,446
|
1,226
|
12,497
|
3,376
|
|
Net interest income
|
3,794
|
5,597
|
6,247
|
17,987
|
|
Noninterest
income:
|
|
|
|
|
|
Customer service
fees
|
956
|
940
|
2,717
|
2,904
|
|
Increase in cash
surrender value of
|
|
|
|
|
|
bank owned
life insurance
|
143
|
142
|
424
|
414
|
|
Gain (loss) on sale of
loans
|
0
|
(2)
|
0
|
509
|
|
(Loss) gain on sale of
other real estate owned
|
(85)
|
(11)
|
(129)
|
97
|
|
Gain (loss) on Fair Value
Option of Financial Assets
|
1,923
|
221
|
1,778
|
845
|
|
Other noninterest
income
|
353
|
178
|
802
|
689
|
|
Total noninterest
income
|
3,290
|
1,468
|
5,592
|
5,458
|
|
Noninterest
expense:
|
|
|
|
|
|
Salaries and employee
benefits
|
2,263
|
2,241
|
6,804
|
6,629
|
|
Occupancy
expense
|
864
|
949
|
2,666
|
2,823
|
|
Professional
fees
|
642
|
598
|
2,061
|
1,617
|
|
Regulatory insurance
assessments
|
366
|
559
|
1,354
|
1,465
|
|
Impairment losses and
other expenses on OREO
|
2,668
|
680
|
4,741
|
2,673
|
|
Impairment losses on
goodwill and intangible assets
|
0
|
0
|
1,525
|
1,471
|
|
Impairment losses on
investment securities
|
308
|
386
|
308
|
1,088
|
|
Other noninterest
expense
|
1,032
|
1,167
|
2,981
|
3,187
|
|
Total noninterest
expense
|
8,143
|
6,580
|
22,440
|
20,953
|
|
Income before income tax
provision
|
(1,059)
|
485
|
(10,601)
|
2,492
|
|
Provision for income
taxes
|
401
|
74
|
3,148
|
1,124
|
|
Net (Loss) Income
|
($1,460)
|
$411
|
($7,453)
|
$1,368
|
|
|
|
|
|
|
|
|
|
|
United Security
Bancshares
|
|
Selected Financial
Data
|
|
(dollars in 000's, except per
share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
Quarter
Ended Sept 30,
|
|
Nine Months
Ended Sept 30,
|
|
|
2011
|
|
2010
|
|
2011
|
|
2010
|
|
Basic earnings per
share
|
($0.11)
|
|
$0.03
|
|
($0.56)
|
|
$0.10
|
|
Diluted earnings per
share
|
($0.11)
|
|
$0.03
|
|
($0.56)
|
|
$0.10
|
|
Weighted average basic shares
for EPS
|
13,397,847
|
|
13,397,847
|
|
13,397,847
|
|
13,397,847
|
|
Weighted average diluted shares
for EPS
|
13,397,847
|
|
13,397,847
|
|
13,397,847
|
|
13,397,847
|
|
|
|
|
|
|
|
|
|
|
Annualized return on:
|
|
|
|
|
|
|
|
|
Average assets
|
-0.88%
|
|
0.23%
|
|
-1.50%
|
|
0.26%
|
|
Average equity
|
-9.05%
|
|
2.07%
|
|
-13.68%
|
|
2.35%
|
|
Yield on interest-earning
assets
|
4.90%
|
|
5.20%
|
|
5.00%
|
|
5.43%
|
|
Cost of interest-bearing
liabilities
|
0.69%
|
|
0.91%
|
|
0.74%
|
|
0.95%
|
|
Net interest margin
|
4.41%
|
|
4.45%
|
|
4.45%
|
|
4.66%
|
|
Annualized net charge-offs to
average loans
|
4.67%
|
|
1.69%
|
|
4.67%
|
|
1.45%
|
|
|
|
|
|
|
|
|
|
|
|
September
30,
|
|
December
31,
|
|
|
|
|
|
|
2011
|
|
2010
|
|
|
|
|
|
Shares outstanding - period
end
|
13,397,847
|
|
13,003,849
|
|
|
|
|
|
Book value per share
|
$4.88
|
|
$5.63
|
|
|
|
|
|
Tangible book value per
share
|
$4.49
|
|
$5.08
|
|
|
|
|
|
Efficiency ratio
|
92.21%
|
|
85.76%
|
|
|
|
|
|
Nonperforming assets to total
assets
|
10.71%
|
|
14.07%
|
|
|
|
|
|
Allowance for loan losses to
total loans
|
3.34%
|
|
3.75%
|
|
|
|
|
|
Tier 1 leverage -
consolidated
|
9.32%
|
|
11.68%
|
|
|
|
|
|
Tier 1 leverage -
Bank
|
9.77%
|
|
11.19%
|
|
|
|
|
|
Tier 1 risk-based capital -
consolidated
|
11.89%
|
|
13.03%
|
|
|
|
|
|
Tier 1 risk-based capital -
Bank
|
12.41%
|
|
12.47%
|
|
|
|
|
|
Total risk-based capital -
consolidated
|
13.15%
|
|
14.30%
|
|
|
|
|
|
Total 1 risk-based capital -
Bank
|
13.64%
|
|
13.70%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SOURCE United Security Bancshares