FRESNO, Calif., Jan. 28,
2014 /PRNewswire/ -- United Security Bancshares
(http://www.unitedsecuritybank.com/) (Nasdaq Global Select: UBFO)
reported today unaudited consolidated net income of $2,945,000 or $0.20
per basic and diluted common share for the quarter ended
December 31, 2013 and $7,269,000
or $0.49 per basic and diluted common
share for the year ended December 31, 2013, as compared to
$1,479,000 or $0.09 per basic and diluted common shares for the
quarter ended December 31, 2012 and $6,069,000 or $0.41
per basic and diluted shares for the year ended December 31,
2012.
Annualized return on average equity (ROAE) for the quarter ended
December 31, 2013 was 15.8%, compared to 8.56% for the same
period in 2012, and was 10.09% for the year ended December 31,
2013, compared to 9.20% for the year ended December 31, 2012.
Annualized return on average assets (ROAA) was 1.79% for the three
months ended December 31, 2013, compared to 0.93% for the same
period in 2012, and was 1.13% for the year ended December 31,
2013 compared to 0.97% for the year ended December 31,
2012.
Change in net income on a quarter-to-quarter comparative basis
between the fourth quarters of 2013 and 2012 is largely the result
of a $2,686,000 reversal of valuation
allowance on deferred tax during the quarter ended
December 31, 2013. Partially offsetting the reversal of
valuation allowance during the quarter ended December 31,
2013, compared to the same period ended December 31, 2012, was
a decrease of $209,000 in interest
income. On a twelve month comparative basis, changes in
income were the result of a $2,117,000 decrease in provision for credit
losses, a $2,686,000 reversal on
valuation allowance on deferred tax, and a $663,000 decrease in net cost of operation on
OREO, offset by a decrease of $1,739,000 on gains realized on the sale of other
investments and a $2,149,000 decrease
in total interest income.
The Board of Directors of United Security Bancshares declared a
fourth quarter 2013 stock dividend of one percent (1%) on
December 17, 2013. The stock dividend
was payable to shareholders of record on January 10, 2014, and the shares will be issued
on January 22, 2014.
Dennis R. Woods, President and
Chief Executive Officer of the Company, states, "2013 provided a
great deal of positive momentum for the Bank with reductions in
non-performing assets and stronger net income. The reversal of
all $2.7 million of the allowance for
deferred taxes is a further indication that the dynamics of the
Company are improving. We continue to see improvements in both the
local and the national economy and look forward to continued
success in 2014." Shareholders' equity at December 31,
2013 was $76,543,000, up $7,102,000 from shareholders' equity of
$69,441,000 at December 31,
2012.
Net interest income before provision for credit losses for the
quarter ended December 31, 2013 totaled $5,362,000 and $21,391,000 for the year ended December 31,
2013, a decrease of $62,000 from
$5,424,000 reported for the quarter
ended December 31, 2012 and a decrease of $1,699,000 from the $23,090,000 reported for the year ended
December 31, 2012, respectively. The net interest margin was
3.72% for the quarter ended December 31, 2013, and 3.87% for
the year ended December 31, 2013, as compared to 4.03% for the
quarter ended December 31, 2012 and 4.40% for the year ended
December 31, 2012. The Company continues to experience a
decline in net interest margin due to decreases in loan and
investment income.
Noninterest income for the quarter ended December 31, 2013
totaled $929,000, reflecting an
increase of $478,000 from
$451,000 in noninterest income
reported for the quarter ended December 31, 2012. Noninterest
income for the year ended December 31, 2013 totaled
$3,968,000, reflecting a decrease of
$1,508,000 from $5,476,000 in noninterest income reported for the
year ended December 31, 2012. Customer service fees continue
to provide the majority of the Company's noninterest income,
totaling $902,000 for the quarter
ended December 31, 2013, as compared to $883,000 for the quarter ended December 31,
2012, and $3,456,000 and $3,583,000 for the year ended December 31, 2013 and 2012, respectively. Changes
in noninterest income on a quarter-to-quarter comparative basis
between the fourth quarters of 2013 and 2012 are largely the result
of $233,000 in reduction in losses on
fair value option of financial assets during the quarter ended
December 31, 2013. The Company recorded a $68,000 impairment loss on investments during the
quarter ended December 31, 2012, compared to no loss for the
same period ended December 31, 2013. On a year
over year comparative basis, non-interest income decreased
primarily due to a $1,739,000 gain on
sale of investment during the year ended December 31, 2012,
compared to no gain for the same period ended December 31,
2013.
Noninterest expense totaled $5,902,000 for the quarter ended
December 31, 2013, a increase of $358,000 as compared to $5,544,000 reported for the quarter ended
December 31, 2012. For the year ended December 31, 2013,
noninterest expense totaled $19,083,000, a decrease of $862,000 as compared to $19,945,000 for the year ended December 31,
2012. Between the fourth quarters of 2013 and 2012, professional
fees and regulatory assessments decreased $476,000 and $233,000, respectively, partially offset by
increases in salaries expense and loss on tax credit
partnership. On a twelve month comparative basis, noninterest
expense decreased primarily due to a $271,000 net cost on OREO during the year ended
December 31, 2013, compared to a net cost on OREO of
$934,000 for the same period ended
December 31, 2012.
The Company had a provision for loan loss of $22,000 for the quarter ended December 31,
2013 and a negative provision for loan loss of $1,098,000 for the year ended December 31,
2013, compared to a provision of $9,000 for the quarter ended December 31,
2012 and $1,019,000 for the year
ended December 31, 2012. Net loan recoveries totaled
$414,000 for the quarter ended
December 31, 2013 and $302,000
for the year ended December 31, 2013, as compared to net
recoveries of $615,000 for the
quarter ended December 31, 2012, and net charge-offs of
$2,883,000 for the year ended
December 31, 2012. With a modest recovery in the economy and
real estate markets within our service area, we have maintained an
adequate allowance for loan losses which totaled 2.78% of total
loans at December 31, 2013 compared to 2.95% of total loans at
December 31, 2012. 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 December 31, 2013 to be adequate.
Non-performing assets, comprised of nonaccrual loans, troubled
debt restructures (TDR), other real estate owned through
foreclosure (OREO), and loans more than 90 days past due and still
accruing interest, decreased approximately $15,026,000 between December 31, 2012 and
December 31, 2013. Additionally, nonperforming assets as a
percentage of total assets decreased from 7.25% at
December 31, 2012 to 5.04% at December 31, 2013.
Nonaccrual loans decreased $1,084,000
between December 31, 2012 and December 31, 2013, while
OREO, decreased $9,986,000 during the
same period. Impaired loans totaled $18,132,000 at December 31, 2013, a decrease
of $3,799,000 from the balance of
$21,931,000 at December 31,
2012.
United Security Bancshares is a $630+ million bank holding
company headquartered in Fresno,
California. United Security Bank, its principal subsidiary
is a California state chartered
bank with 11 branches serving the Central Valley and Campbell, and is a 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; (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 written regulatory agreement under
which the Company is subject and (10) unknown economic impacts
caused by the State of
California's budget issues, including the effect on Federal
spending do to sequestration required by the Budget Control Act of
2011. 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, 2012, 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)
|
|
|
|
(in
thousands)
|
|
|
|
|
December 31,
2013
|
|
December 31,
2012
|
Assets
|
|
|
|
Cash and
noninterest-bearing deposits in other banks
|
20,193
|
|
|
27,481
|
|
Cash and due from
Federal Reserve Bank
|
115,019
|
|
|
114,146
|
|
Cash and cash
equivalents
|
135,212
|
|
|
141,627
|
|
Interest-bearing
deposits in other banks
|
1,515
|
|
|
1,507
|
|
Investment securities
(AFS at market value)
|
43,616
|
|
|
31,844
|
|
Loans and leases, net
of unearned fees
|
395,013
|
|
|
400,033
|
|
Less: Allowance for
credit losses
|
(10,988)
|
|
|
(11,784)
|
|
Net loans
|
384,025
|
|
|
388,249
|
|
Premises and
equipment - net
|
12,122
|
|
|
12,262
|
|
Other real estate
owned
|
13,946
|
|
|
23,932
|
|
Goodwill and
intangible assets
|
4,550
|
|
|
4,737
|
|
Cash surrender value
of life insurance
|
17,203
|
|
|
16,681
|
|
Deferred income
taxes
|
11,630
|
|
|
9,724
|
|
Other
assets
|
12,110
|
|
|
18,314
|
|
Total
assets
|
635,929
|
|
|
648,877
|
|
Deposits:
|
|
|
|
Noninterest bearing
demand deposits
|
214,317
|
|
|
217,014
|
|
Money market, NOW,
and savings
|
244,686
|
|
|
246,888
|
|
Time
|
83,486
|
|
|
99,385
|
|
Total
deposits
|
542,489
|
|
|
563,287
|
|
Accrued interest
payable
|
44
|
|
|
71
|
|
Other
liabilities
|
5,728
|
|
|
6,010
|
|
Junior subordinated
debentures (at fair value)
|
11,125
|
|
|
10,068
|
|
Total
liabilities
|
559,386
|
|
|
579,436
|
|
Shareholders'
equity:
|
|
|
|
|
|
|
|
Common stock, no par
value 20,000,000 shares authorized, 14,799,888 issued and
outstanding at December 31, 2013, and 14,217,303 at December 31,
2012
|
45,778
|
|
|
43,173
|
|
Retained
earnings
|
30,884
|
|
|
26,179
|
|
Accumulated other
comprehensive income
|
(119)
|
|
|
89
|
|
Total
shareholders' equity
|
76,543
|
|
|
69,441
|
|
Total liabilities
and shareholders' equity
|
$
|
635,929
|
|
|
$
|
648,877
|
|
|
|
|
|
|
|
|
|
United Security
Bancshares
|
|
|
|
|
|
|
Consolidated
Statements of Income (unaudited)
|
|
|
|
|
|
(in thousands,
except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
December 31,
|
|
|
Twelve Months
Ended December 31,
|
|
|
2013
|
|
|
2012
|
|
|
2013
|
|
|
2012
|
Interest
income:
|
|
|
|
|
|
|
|
|
|
|
|
Interest and fees on
loans
|
$
|
5,414
|
|
$
|
5,507
|
|
$
|
21,979
|
|
$
|
23,184
|
Interest on
investment securities
|
|
208
|
|
|
347
|
|
|
703
|
|
|
1,720
|
Interest on deposits
in FRB
|
|
89
|
|
|
67
|
|
|
312
|
|
|
224
|
Interest on deposits
in other banks
|
|
2
|
|
|
1
|
|
|
8
|
|
|
23
|
Total interest
income
|
|
5,713
|
|
|
5,922
|
|
|
23,002
|
|
|
25,151
|
Interest
expense:
|
|
|
|
|
|
|
|
|
|
|
|
Interest on
deposits
|
|
287
|
|
|
435
|
|
|
1,330
|
|
|
1,791
|
Interest on other
borrowed funds
|
|
64
|
|
|
63
|
|
|
281
|
|
|
270
|
Total interest
expense
|
|
351
|
|
|
498
|
|
|
1,611
|
|
|
2,061
|
Net interest
income before provision for credit losses
|
|
5,362
|
|
|
5,424
|
|
|
21,391
|
|
|
23,090
|
Provision for
credit losses
|
|
22
|
|
|
9
|
|
|
(1,098)
|
|
|
1,019
|
Net interest
income
|
|
5,340
|
|
|
5,415
|
|
|
22,489
|
|
|
22,071
|
Non-interest
income:
|
|
|
|
|
|
|
|
|
|
|
|
Customer service
fees
|
|
902
|
|
|
883
|
|
|
3,456
|
|
|
3,583
|
Increase in cash
surrender value of bank owned life insurance
|
|
139
|
|
|
137
|
|
|
556
|
|
|
564
|
Impairment loss on
investment securities, other than temporary loss
|
|
—
|
|
|
(68)
|
|
|
—
|
|
|
(284)
|
Loss on Fair Value
Option of Financial Assets
|
|
(257)
|
|
|
(490)
|
|
|
(776)
|
|
|
(774)
|
Loss on sale of
securities
|
|
—
|
|
|
(185)
|
|
|
—
|
|
|
(195)
|
Gain on sale of other
investment
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,739
|
Other non-interest
income
|
|
145
|
|
|
174
|
|
|
732
|
|
|
843
|
Total non-interest
income
|
|
929
|
|
|
451
|
|
|
3,968
|
|
|
5,476
|
Non-interest
expense:
|
|
|
|
|
|
|
|
|
|
|
|
Salaries and employee
benefits
|
|
2,530
|
|
|
2,406
|
|
|
9,214
|
|
|
9,082
|
Occupancy
expense
|
|
985
|
|
|
940
|
|
|
3,678
|
|
|
3,548
|
Data
processing
|
|
59
|
|
|
24
|
|
|
185
|
|
|
77
|
Professional
fees
|
|
139
|
|
|
615
|
|
|
1,275
|
|
|
1,707
|
Regulatory
assessments
|
|
118
|
|
|
351
|
|
|
1,150
|
|
|
1,409
|
Director
fees
|
|
57
|
|
|
60
|
|
|
232
|
|
|
256
|
Amortization of
intangibles
|
|
47
|
|
|
56
|
|
|
187
|
|
|
304
|
Correspondent bank
service charges
|
|
58
|
|
|
78
|
|
|
287
|
|
|
313
|
Loss (gain) on
California tax credit partnership
|
|
102
|
|
|
(168)
|
|
|
253
|
|
|
39
|
Net cost on operation
of OREO
|
|
1,307
|
|
|
696
|
|
|
271
|
|
|
934
|
Other non-interest
expense
|
|
500
|
|
|
486
|
|
|
2,351
|
|
|
2,276
|
Total non-interest
expense
|
|
5,902
|
|
|
5,544
|
|
|
19,083
|
|
|
19,945
|
Income before
income tax provision
|
|
367
|
|
|
322
|
|
|
7,374
|
|
|
7,602
|
Provision for
(Benefit from) income taxes
|
|
(2,578)
|
|
|
(1,157)
|
|
|
105
|
|
|
1,533
|
Net
Income
|
$
|
2,945
|
|
$
|
1,479
|
|
$
|
7,269
|
|
$
|
6,069
|
United Security
Bancshares
|
|
|
|
|
|
|
Selected Financial
Data (unaudited)
|
|
|
|
|
|
|
(in thousands,
except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
December 31,
|
|
|
Twelve Months
Ended December 31,
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
Basic earnings per
share
|
$0.20
|
|
$0.09
|
|
$0.49
|
|
$0.41
|
Diluted earnings per
share
|
$0.20
|
|
$0.09
|
|
$0.49
|
|
$0.41
|
Weighted average
basic shares for EPS
|
14,799,888
|
|
14,789,001
|
|
14,798,135
|
|
14,789,001
|
Weighted average
diluted shares for EPS
|
14,804,338
|
|
14,789,001
|
|
14,799,037
|
|
14,789,001
|
|
|
|
|
|
|
|
|
Annualized return
on:
|
|
|
|
|
|
|
|
Average
assets
|
1.79%
|
|
0.93%
|
|
1.13%
|
|
0.97%
|
Average
equity
|
15.80%
|
|
8.56%
|
|
10.09%
|
|
9.20%
|
Yield on
interest-earning assets
|
3.96%
|
|
4.40%
|
|
4.15%
|
|
4.79%
|
Cost of
interest-bearing liabilities
|
0.40%
|
|
0.56%
|
|
0.47%
|
|
0.60%
|
Net interest
margin
|
3.72%
|
|
4.03%
|
|
3.87%
|
|
4.40%
|
Annualized net
charge-offs (recoveries) to average loans
|
(0.42)%
|
|
(0.64)%
|
|
(0.08)%
|
|
0.74%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31,
2013
|
|
December 31,
2012
|
|
|
|
|
Shares outstanding -
period end
|
14,799,888
|
|
|
14,217,303
|
|
|
|
|
|
Book value per
share
|
$5.17
|
|
|
$4.88
|
|
|
|
|
|
Tangible book value
per share
|
$4.86
|
|
|
$4.55
|
|
|
|
|
|
Efficiency
ratio
|
73.45%
|
|
|
70.47%
|
|
|
|
|
|
Total nonperforming
assets
|
$32,048
|
|
|
$47,074
|
|
|
|
|
|
Nonperforming assets
to total assets
|
5.04%
|
|
|
7.25%
|
|
|
|
|
|
Total Impaired
loans
|
$18,132
|
|
|
$21,931
|
|
|
|
|
|
Total nonaccrual
loans
|
$12,341
|
|
|
$13,425
|
|
|
|
|
|
Allowance for credit
losses to total loans
|
2.78%
|
|
|
2.95%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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SOURCE United Security Bancshares