FRESNO, Calif., Feb. 9 /PRNewswire-FirstCall/ -- Dennis R. Woods,
President and Chief Executive Officer of United Security Bancshares
http://www.unitedsecuritybank.com/ (NASDAQ:UBFO) reported today the
results of operation for the 4th quarter and twelve months ended
December 31, 2008. The Company earned $842,000 for the 4th quarter
of 2008, as compared with net income of $689,000 for the 4th
quarter in 2007. Basic and diluted earnings per share for the 4th
quarter 2008 were $0.07 compared with $0.06 for the 4th quarter
2007. For the twelve months ended December 31, 2008, net income was
$4,070,000 compared with $11,257,000 in 2007. For the twelve months
ended December 31, 2008, return on average equity was 4.93% and the
return on average assets was .52%. For the same period in 2007,
return on average equity was 13.73% and return on average assets
was 1.47%. The low interest rate environment, weak real estate
market and economy all combined to impact earnings adversely. The
Board of Directors of United Security Bancshares declared a 1st
quarter 2009 stock dividend of one percent (1%). The 1st quarter
2009 stock dividend replaces the quarterly cash dividend and
reflects a similar value. The stock dividend was paid to
shareholders of record on January 9, 2009 and the shares were
issued on January 21, 2009. Woods added, "We've watched, with great
interest, the US Government's several attempts to unlock the credit
markets and stem the tide of real estate foreclosures by pouring
billions of dollars into the financial rescue of Wall Street and
the nation's largest financial institutions. Very few dollars have
been directed towards the millions of struggling homeowners and
small business owners. The bailout dollars for banks are a
short-term fix to assist through difficult times. Essentially the
bailout dollars are ten-year loans, at 5% after tax, (8.62% pre-
tax equivalent) for the first five years moving up to 9% (15.52%
pre-tax equivalent) after five years. Along with the high rates of
interest, the TARP (Treasury Asset Recovery Plan) dollars come with
restrictions, a US Government right to buy shares (warrants) in the
Company, and the TARP agreement provides for the US Government to
change any part of the deal in the future. The Board will weight
all factors prior to making a decision regarding TARP. We are
confident the new administration in Washington is focused on
helping struggling homeowners and stimulating the economy and
expect legislation will be passed aimed more directly at resolving
those problems. In the meantime, we continue to strengthen our
balance sheet and ask that our customers do the same. We remain
committed to providing the very best banking services to business
and individuals in the communities we serve. We'll let the US
Government focus on rescuing the economy." Shareholders' equity at
quarter end was $79.6 million. During the past 12 months, dividends
of $4.6 million were paid out of shareholders' equity to
shareholders and $1.2 million was utilized to purchase and retire
shares of Company stock at an average price of $13.70 per share.
Net interest income for the 4th quarter 2008 was $7.07 million,
down $1.7 million from the 4th quarter of 2007 for a decrease of
19.6%. The net interest margin decreased from 4.92% in the 4th
quarter of 2007 to 4.02% in the 4th quarter of 2008. For the twelve
months ended December 31, 2008 net interest income was $30.2
million, down $6.4 million from $36.6 million for the same period
in 2007. The net interest margin decreased from 5.35% for the
twelve months in 2007 to 4.33% for the same period in 2008. The
lower interest rate environment and increase in nonaccrual loans
are the primary factors for the declines. Noninterest income for
the 4th quarter of 2008 was $2,697,000, up $587,000 from $2,110,000
in 2007 for an increase of 27.8%. The increase resulted from the
gain from the fair value adjustment to the carrying amount of Trust
Preferred Securities during the 4th quarter of 2008 that was up
$629,000 compared with the 4th quarter of 2007. For the twelve
months ended December 31, 2008, noninterest income was $8,343,000,
down $1,321,000 from $9,664,000 for the same period in 2007. The
net result of a gain from the fair value adjustment to the carrying
amount of Trust Preferred Securities and a drop in ATM fees account
for most of the net decline in noninterest income in 2008, compared
to 2007. Other operating expenses for the three months ended
December 31, 2008 were $6,253,000 and $6,724,000 for 2007, a
decrease of $474,000 or 7%. For the twelve months ended December
31, 2008, other operating expenses totaled $23,279,000, up $548,000
from $22,731,000 for the same period in 2007. Several expense items
in combination account for the differences. For the 4th quarter,
OREO write-downs and OREO expense were up $960,000 while salaries
and benefits declined by $449,000 during the 4th quarter 2008
compared with the same period in 2007. The drop in salaries and
benefits in 2008 were primarily the result of reversals of accruals
for bonuses and no accruals for 401k and ESOP were expensed for the
period. For the year 2008, the primarily difference with 2007
results from OREO write-downs and OREO expenses that were up
$1,096,000 along with a loss from the fair value adjustment to the
carrying value of core- deposit intangibles that was up $648,000.
Offsetting these increases in expense were lower salaries and
benefits by $220,000 and a decline in loss on write-downs on assets
of $820,000 that occurred in 2007 but did not occur in 2008. The
provision for loan loss was $2,383,000 for the 4th quarter of 2008
and $3,337,000 for 4th quarter of 2007. For the twelve months ended
December 31, 2008, the provision was $9,598,000 compared with
$5,697,000 for the same period in 2007. 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, 2008 to be adequate.
Non-performing assets increased to 10.68% of total assets on
December 31, 2008 from 7.96% on September 30, 2008. United Security
Bancshares is a $760+ million bank holding company. United Security
Bank, its principal subsidiary is a 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 regulatory, judicial, or
legislative tax treatment of business transactions, particularly
recently enacted California tax legislation and the subsequent Dec.
31, 2003, announcement by the Franchise Tax Board regarding the
taxation of REITs and RICs; and (8) 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, 2007, and particularly the section of
Management's Discussion and Analysis. United Security Bancshares
Consolidated Balance Sheets (unaudited) (Dollars in thousands)
December 31, December 31, 2008 2007 Cash & nonint.-bearing
deposits in banks $19,426 $25,300 Interest-bearing deposits in
banks 20,431 2,909 Federal funds sold 0 0 Investment securities AFS
92,749 89,415 Loans, net of unearned fees 548,742 596,481 Less:
allowance for loan losses (15,071) (10,901) Loans, net 533,671
585,580 Premises and equipment, net 14,285 15,574 Intangible assets
13,417 15,038 Other assets 67,097 37,899 TOTAL ASSETS $761,077
$771,715 Deposits: Noninterest-bearing demand & NOW 190,363
184,506 Savings & Money Market 133,367 148,282 Time 184,756
301,829 Total deposits 508,486 634,617 Borrowed funds 155,045
32,280 Other liabilities 6,010 9,047 Junior subordinated debentures
11,926 13,341 TOTAL LIABILITIES $681,467 $689,285 Shareholders'
equity: Common shares outstanding: 12,010,372 at Dec. 31, 2008
11,855,192 at Dec. 31, 2007 $34,811 $32,587 Retained earnings
47,722 49,997 Fair Value Adjustment - Hedge 0 (2) Accumulated other
comprehensive income (2,923) (151) Total shareholders' equity
$79,610 $82,430 TOTAL LIABILITIES & SHAREHOLDERS' EQUITY
761,077 771,715 United Security Bancshares Consolidated Statements
of Income (dollars in 000's, except per share Three Months Three
Months Twelve Months Twelve Months amounts) Ended Ended Ended Ended
(unaudited) December 31, December 31, December 31, December 31,
2008 2007 2008 2007 Interest income $10,036 $14,245 $45,146 $57,156
Interest expense 2,967 5,450 14,937 20,573 Net interest income
7,069 8,795 30,209 36,582 Provision for loan losses 2,383 3,337
9,598 5,697 Other income 2,698 2,110 8,343 9,664 Other expenses
6,254 6,724 23,279 22,731 Income before income tax provision 1,130
845 5,675 17,818 Provision for income taxes 289 156 1,605 6,561 NET
INCOME $842 $689 $4,070 $11,257 United Security Bancshares Selected
Financial Data Three Three Twelve Twelve (dollars in 000's except
Months Months Months Months per share amounts) Ended Ended Ended
Ended December 31, December 31, December 31, December 31, 2008 2007
2008 2007 Basic Earnings Per Share $0.07 $0.06 $0.34 $0.93 Diluted
Earning Per Share $0.07 $0.06 $0.34 $0.92 Annualized Return on:
Average Assets 0.43% 0.34% 0.52% 1.47% Average Equity 4.18% 3.22%
4.93% 13.73% Net Interest Margin 4.02% 4.92% 4.33% 5.35% Net
Charge-offs to Average Loans 2.31% 2.18% 0.92% 0.90% December 31,
December 31, 2008 2007 Book Value Per Share $6.63 $6.95 Tangible
Book Value Per Share $5.51 $5.71 Efficiency Ratio 60.38% 47.38% Non
Performing Assets to Total Assets 10.68% 3.66% Allowance for Loan
Losses to Total Loans 2.75% 1.83% Shares Outstanding - period end
12,010,372 11,855,192 Basic Shares - YTD average weighted
12,048,728 12,165,475 Diluted Shares - YTD average weighted
12,052,150 12,200,920 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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