UBFO United Security Bancshares

FRESNO, Calif., Sept. 25 /PRNewswire-FirstCall/ -- Dennis R. Woods, President and Chief Executive Officer of United Security Bancshares http://www.unitedsecuritybank.com/ (NASDAQ:UBFO) reported that the Board of Directors of United Security Bancshares has declared a third quarter 2008 stock dividend of one percent (1%). The third quarter 2008 stock dividend replaces the quarterly cash dividend and reflects a similar value. The third quarter stock dividend will be paid to shareholders of record on October 10, 2008 and the dividend shares will be issued on October 22, 2008. Regarding the announcement, Woods said, "The Company has paid out $25 million from shareholders equity over the past two years in cash dividends and in purchasing shares for retirement, to benefit shareholders. The change in the dividend from cash to stock was employed as a precaution against the uncertainties in the 1-4 family residential real estate market and its impact on the Company's construction and related land and lot loan portfolio. The Company's capital position remains strong. However, the Board of Directors decided, given the current uncertainties in the economy and unprecedented declines in real estate valuations in our markets, it is prudent to retain capital in this environment. The U.S. Congress is currently working with the Secretary of the Treasury and others to develop appropriate legislation to help mitigate depreciation in real estate values. Until those actions are in place and have time to work, the Board's action is in line with conservative management of the Company over the long term: allowing capital to accumulate during times of uncertainty while positioning the Company for future growth opportunities. Many of our shareholders use the cash dividends to purchase additional shares each quarter and the stock dividend will make that unnecessary. Shareholders who prefer cash may sell all or a portion of the stock dividend shares in the open market to meet their cash needs. This change in dividend policy is in concert with managing the capital of the Company in the best interest of the shareholders. After the uncertainties in the economy subside, the Board of Directors expects to resume paying the quarterly cash dividend." DATASOURCE: United Security Bancshares CONTACT: Dennis R. Woods, President and Chief Executive Officer of United Security Bank, +1-559-248-4928 Web site: http://www.unitedsecuritybank.com/

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