FRESNO, Calif., April 17,
2014 /PRNewswire/ -- United Security Bancshares
(http://www.unitedsecuritybank.com/) (Nasdaq Global Select: UBFO)
reported today unaudited consolidated net income of $908,000 or $0.06
per basic and diluted common share for the three months ended
March 31, 2014, as compared to $1,075,000 or $0.07
per basic and diluted shares for the three months ended
March 31, 2013.
Annualized return on average equity (ROAE) for the three months
ended March 31, 2014 was 4.77%, compared to 6.20% for the
three months ended March 31, 2013. Annualized return on
average assets (ROAA) was 0.55% for the three months ended
March 31, 2014, compared to 0.68% for the three months ended
March 31, 2013.
On a year to date comparative basis, changes in income were the
result of an increase of $722,000 in
non-interest expense, partially offset by a $148,000 decrease in interest expense, an
increase of $198,000 in non-interest
income, and a $57,000 increase in
total interest income.
The Board of Directors of United Security Bancshares declared a
first quarter 2014 stock dividend of one percent (1%) on
March 26, 2014. The stock dividend
was payable to shareholders of record on April 11, 2014, and the shares will be issued on
April 23, 2014.
Dennis R. Woods, President and
Chief Executive Officer of the Company, states, "We continue to see
improving trends with growth in loan demand, positive net earnings,
increased capital, and reductions in non-performing
assets. During the first quarter of 2014, we have grown our
loan portfolio by $16.4 million and
look forward to strengthening our core earnings during the
remainder of 2014." Shareholders' equity at March 31, 2014 was
$77,440,000, up $897,000 from shareholders' equity of
$76,543,000 at December 31,
2013.
Net interest income before provision for credit losses for the
three months ended March 31, 2014 totaled $5,465,000, an increase of $205,000 from the $5,260,000 reported for the three months ended
March 31, 2013. The net interest margin was 3.81% for the
three months ended March 31, 2014, as compared to 3.95% for
the three months ended March 31, 2013. The Company continues
to experience a decline in net interest margin due to decreases in
yields on investments as well as an increase in the balance of
low-yielding overnight federal funds sold as a percentage of total
earning assets.
Noninterest income for the three months ended March 31,
2014 totaled $717,000, reflecting an
increase of $198,000 from
$519,000 in noninterest income
reported for the three months ended March 31, 2013. Customer
service fees continue to provide the majority of the Company's
noninterest income, totaling $794,000
and $779,000 for the three months
ended March 31, 2014 and 2013,
respectively. On a year over year comparative basis, non-interest
income increased primarily due to a decrease of $212,000 on loss on fair value option of
financial assets during the three months ended March 31,
2014.
For the three months ended March 31, 2014, noninterest
expense totaled $4,795,000, an
increase of $722,000 as compared to
$4,073,000 for the three months ended
March 31, 2013. On a year over year comparative basis,
noninterest expense increased primarily due to a $281,000 net cost on OREO during the three months
ended March 31, 2014, compared to a net gain on OREO of
$882,000 for the same period ended
March 31, 2013. Partially offsetting the increase due to net
cost on OREO were reductions in professional fees and regulatory
assessments.
The Company had a negative provision for loan loss of
$47,000 for the three months ended
March 31, 2014, compared to a negative provision of
$9,000 for the three months ended
March 31, 2013. Net loan recoveries totaled $143,000 for the three months ended
March 31, 2014, as compared to net charge-offs of $371,000 for the three months ended
March 31, 2013. With a modest recovery in the economy and real
estate markets within the Bank's service area, the Company has
maintained an adequate allowance for loan losses which totaled
2.69% of total loans at March 31, 2014, compared to 2.78% of
total loans at December 31, 2013. 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 March 31, 2014 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 $2,340,000 between December 31, 2013 and
March 31, 2014. Additionally, nonperforming assets as a
percentage of total assets decreased from 5.04% at
December 31, 2013 to 4.48% at March 31, 2014. Nonaccrual
loans decreased $1,834,000 between
December 31, 2013 and March 31, 2014, while OREO
increased $516,000 during the same
period. Impaired loans totaled $15,269,000 at March 31, 2014, a decrease of
$2,863,000 from the balance of
$18,132,000 at December 31,
2013.
United Security Bancshares is a $660+ 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 the Company's specific business activities and
profitability. Weaker or a further decline in capital and consumer
spending, and related recessionary trends could adversely affect
the Company's 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, 2013, and
particularly the section of Management's Discussion and Analysis.
Readers should carefully review all disclosures the Company files
from time to time with the Securities and Exchange Commission
("SEC").
United Security
Bancshares
|
Consolidated
Balance Sheets (unaudited)
|
(in
thousands)
|
|
March 31,
2014
|
|
December 31,
2013
|
Assets
|
|
|
|
Cash and
noninterest-bearing deposits in other banks
|
$
|
20,149
|
|
$
|
20,193
|
Cash and due from
Federal Reserve Bank
|
116,458
|
|
115,019
|
Cash and cash
equivalents
|
136,607
|
|
135,212
|
Interest-bearing
deposits in other banks
|
1,516
|
|
1,515
|
Investment securities
(AFS at market value)
|
52,741
|
|
43,616
|
Loans and leases, net
of unearned fees
|
411,423
|
|
395,013
|
Less: Allowance for
credit losses
|
(11,084)
|
|
(10,988)
|
Net loans
|
400,339
|
|
384,025
|
Premises and
equipment - net
|
12,007
|
|
12,122
|
Other real estate
owned
|
14,462
|
|
13,946
|
Goodwill and
intangible assets
|
4,504
|
|
4,550
|
Cash surrender value
of life insurance
|
17,330
|
|
17,203
|
Deferred income
taxes
|
11,786
|
|
11,630
|
Other
assets
|
11,617
|
|
12,110
|
Total
assets
|
$
|
662,909
|
|
$
|
635,929
|
Deposits:
|
|
|
|
Noninterest bearing
demand deposits
|
$
|
236,502
|
|
$
|
214,317
|
Money market, NOW,
and savings
|
246,424
|
|
244,686
|
Time
|
85,356
|
|
83,486
|
Total
deposits
|
568,282
|
|
542,489
|
Accrued interest
payable
|
42
|
|
44
|
Other
liabilities
|
5,613
|
|
5,728
|
Junior subordinated
debentures (at fair value)
|
11,532
|
|
11,125
|
Total
liabilities
|
585,469
|
|
559,386
|
Shareholders'
equity:
|
|
|
|
|
|
|
|
Common stock, no par
value 20,000,000 shares authorized,14,947,834 issued and
outstanding at March 31, 2014, and 14,799,888 at December 31,
2013
|
46,640
|
|
45,778
|
Retained
earnings
|
30,939
|
|
30,884
|
Accumulated other
comprehensive loss
|
(139)
|
|
(119)
|
Total
shareholders' equity
|
77,440
|
|
76,543
|
Total liabilities
and shareholders' equity
|
$
|
662,909
|
|
$
|
635,929
|
United Security
Bancshares
|
Consolidated
Statements of Income (unaudited)
|
(in
thousands)
|
|
Three Months Ended
March 31,
|
|
2014
|
|
2013
|
Interest
income:
|
|
|
|
Interest and fees on
loans
|
$
|
5,475
|
|
$
|
5,466
|
Interest on
investment securities
|
228
|
|
198
|
Interest on deposits
in FRB
|
83
|
|
65
|
Interest on deposits
in other banks
|
2
|
|
2
|
Total interest
income
|
5,788
|
|
5,731
|
Interest
expense:
|
|
|
|
Interest on
deposits
|
262
|
|
411
|
Interest on other
borrowed funds
|
61
|
|
60
|
Total interest
expense
|
323
|
|
471
|
Net interest
income before provision for credit losses
|
5,465
|
|
5,260
|
Provision for
credit losses
|
(47)
|
|
(9)
|
Net interest
income
|
5,512
|
|
5,269
|
Non-interest
income:
|
|
|
|
Customer service
fees
|
794
|
|
779
|
Increase in cash
surrender value of bank owned life insurance
|
127
|
|
137
|
Loss on Fair Value
Option of Financial Assets
|
(345)
|
|
(557)
|
Other non-interest
income
|
141
|
|
160
|
Total non-interest
income
|
717
|
|
519
|
Non-interest
expense:
|
|
|
|
Salaries and employee
benefits
|
2,526
|
|
2,361
|
Occupancy
expense
|
873
|
|
905
|
Data
processing
|
41
|
|
60
|
Professional
fees
|
180
|
|
445
|
Regulatory
assessments
|
233
|
|
359
|
Director
fees
|
56
|
|
58
|
Amortization of
intangibles
|
47
|
|
47
|
Correspondent bank
service charges
|
29
|
|
76
|
Loss on California
tax credit partnership
|
23
|
|
33
|
Net cost (gain) on
operation of OREO
|
281
|
|
(882)
|
Other non-interest
expense
|
506
|
|
611
|
Total non-interest
expense
|
4,795
|
|
4,073
|
Income before
income tax provision
|
1,434
|
|
1,715
|
Provision for
income taxes
|
526
|
|
640
|
Net
Income
|
$
|
908
|
|
$
|
1,075
|
United Security
Bancshares
|
|
|
|
Selected Financial
Data (unaudited)
|
|
|
|
(dollars in
thousands, except per share amounts)
|
|
|
|
|
Three Months Ended
March 31,
|
|
2014
|
|
2013
|
Basic earnings per
share
|
$0.06
|
|
$0.07
|
Diluted earnings per
share
|
$0.06
|
|
$0.07
|
Weighted average
basic shares for EPS
|
14,947,834
|
|
14,942,421
|
Weighted average
diluted shares for EPS
|
14,954,862
|
|
14,944,356
|
|
|
|
|
Annualized return
on:
|
|
|
|
Average
assets
|
0.55%
|
|
0.68%
|
Average
equity
|
4.77%
|
|
6.20%
|
Yield on
interest-earning assets
|
4.03%
|
|
4.29%
|
Cost of
interest-bearing liabilities
|
0.38%
|
|
0.54%
|
Net interest
margin
|
3.81%
|
|
3.94%
|
Annualized net
charge-offs (recoveries) to average loans
|
(0.15)%
|
|
0.38%
|
|
|
|
|
|
|
|
|
|
March 31,
2014
|
|
December 31,
2013
|
Shares outstanding -
period end
|
14,947,834
|
|
14,799,888
|
Book value per
share
|
$5.18
|
|
$5.17
|
Tangible book value
per share
|
$4.88
|
|
$4.86
|
Efficiency
ratio
|
72.26%
|
|
70.47%
|
Total nonperforming
assets
|
$29,708
|
|
$32,048
|
Nonperforming assets
to total assets
|
4.48%
|
|
5.04%
|
Total impaired
loans
|
$15,269
|
|
$18,132
|
Total nonaccrual
loans
|
$10,507
|
|
$12,341
|
Allowance for credit
losses to total loans
|
2.69%
|
|
2.78%
|
SOURCE United Security Bancshares