FRESNO, Calif., July 17 /PRNewswire-FirstCall/ -- Dennis R. Woods,
President and Chief Executive Officer of United Security Bancshares
http://www.unitedsecuritybank.com/ (Nasdaq Global Select: UBFO)
reported today the results of operations for the second quarter of
2006. Year-to-date basic earnings per share for 2006 were $0.61
compared with $0.46 in 2005, up 32.6%. Year-to-date diluted earning
per share for 2006 were $0.60 compared with $0.46 in 2005, a 30.4%
increase. Basic earnings per share for the second quarter 2006 were
$0.27 compared with $0.23 in 2005, a 17.4% increase. Diluted
earnings per share for the second quarter 2006 were $0.27 compared
with $0.23 a year ago. Net income was $6.9 million for the six
months ended June 30, 2006, compared with $5.3 million in 2005, an
increase of 31.9%. Net income for the second quarter of 2006 was
$3.1 million, as compared with $2.6 million in 2005, up 18.3%.
Woods added, "I am very pleased to announce record year-to-date
earnings of $6.9 million which reflect the continuation of efforts
to build shareholder value." Return on average equity (ROAE) for
the second quarter of 2006 was 19.1% and the return on average
assets (ROAA) was 1.93%. For the second quarter 2005, ROAE and ROAA
were 18.7% and 1.69%, respectively. For the six months ended June
30, 2006, ROAE and ROAA were 22.3% and 2.20%, respectively. For the
same six-month period in 2005, ROAE and ROAA were 19.3% and 1.73%,
respectively. These key performance ratios demonstrate the banks'
consistent ability to build shareholder value. The 71st consecutive
quarterly cash dividend of $0.11 per share, up from $0.09 for a
22.2% increase from a year ago, was declared on June 27, 2006 to be
paid on July 19, 2006 to shareholders of record on July 7, 2006. At
the end of the quarter, Shareholders' equity was $63.4 million, an
increase of 13.0% from June 30, 2005. Dividends of $4.4 million
were paid out of shareholders' equity to shareholders during the
past 12 months. During the last 12 months, $532,359 of
shareholders' equity was used to purchase and retire 27,283 shares
at an average price of $19.51 per share. During the second quarter
of 2006, 13,125 shares were repurchased at an average price of
$23.13. Net interest income for the second quarter of 2006 was $8.1
million, an increase of $1.0 million or 14.5% from 2005. Second
quarter net interest margin increased from 5.25% in 2005 to 5.78%
in 2006. For the six months ended June 30, the net interest margin
was 5.72% and 5.31% in 2006 and 2005, respectively. The increase is
primarily attributable to growth in average earning assets and
rising interest rates. Average earning assets increased by $4.9
million over the past 12 months, averaging $561.9 million and
$557.0 million in the second quarter of 2006 and 2005,
respectively. Noninterest income for the second quarter 2006 was
$1.7 million compared with $1.8 million for the same period last
year. Noninterest income for the six months ended June 30, 2006 was
$4.9 million, an increase of $1.8 million from the same period in
2005. The increase resulted in part from a $1.8 million gain on the
sale of an investment in the 1st quarter of 2006 and was partially
offset by a gain of $294,000 from the sale of other real estate
owned in 2005. Second quarter operating expenses increased from
$4.5 million in 2005 to $5.2 million in 2006. For the six months
ended June 30, operating expenses increased $1.2 million or 14.1%
from $8.5 million in 2005 to $9.7 million in 2006. The increase is
partially attributable to $933,581 of additional operating costs
associated with foreclosed properties. The efficiency ratio was
46.7% for the second quarter of 2006 compared to 49.3% for the same
period in 2005. The provision for loan losses was $363,000 for the
six months ended June 30, 2006 and $498,000 for same period in
2005. Provisions for loan losses are determined on the basis of
management's periodic credit review of the loan portfolio. Based on
the condition of the loan portfolio, management believes the
provisions made to the allowance for loan losses are sufficient to
cover risk elements in the loan portfolio. Net charge-offs were
$30,000 for the second quarter of 2006 and $105,000 for the same
period in 2005. Other real estate owned totaled $4.4 million at the
end of the second quarter of 2006 and $45,000 for the same period
in 2005. Nonperforming assets were $12.9 million or 1.95% of total
assets on June 30, 2006 and $22.1 million or 3.54% of total assets
on June 30, 2005. United Security Bancshares is a $660+ 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 about the company for
which the company claims the protection of the safe harbor
provisions 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 Riches; 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 deposit interest
rates, among other things, could slow the rate of growth or put
pressure on current deposit levels. 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 Quarterly Report on Form 10-K
and Form 10-Q for the year ended December 31, 2005, or the quarter
ended March 31, 2006 and particularly the section of Management's
Discussion and Analysis. United Security Bancshares Consolidated
Balance Sheets (unaudited) (Dollars in thousands) June 30, June 30,
2006 2005 Cash & noninterest-bearing deposits in other banks
$30,833 $28,505 Interest-bearing deposits in other banks 7,772
7,540 Federal funds sold 5,600 28,210 Investment securities AFS
91,237 112,147 Loans, net of unearned fees 481,895 408,203 Less:
allowance for loan losses (8,039) (7,503) Loans, net 473,856
400,700 Premises and equipment, net 12,463 8,213 Intangible assets
3,283 3,820 Other assets 39,227 33,899 TOTAL ASSETS $664,271
$623,033 Deposits: Noninterest-bearing demand & NOW $196,343
$190,312 Savings 36,781 34,974 Time 327,983 319,971 Total deposits
$561,107 $545,257 Borrowed funds $17,100 $0 Other liabilities 7,165
6,161 Junior subordinated debentures 15,464 15,464 TOTAL
LIABILITIES $600,836 $566,882 Shareholders' equity: Common shares
outstanding: 11,361,913 at Jun. 30, 2006 11,369,192 at Jun. 30,
2005 $22,019 $22,235 Retained earnings 43,107 35,086 Other
comprehensive income (loss) (1,691) (1,169) Total shareholders'
equity $63,435 $56,152 TOTAL LIABILITIES & SHAREHOLDERS' EQUITY
$664,271 $623,033 United Security Bancshares Consolidated
Statements of Income (dollars in 000's, except per share amounts)
(unaudited) Three Three Six Six Months Months Months Months Ended
Ended Ended Ended 6/30/2006 6/30/2005 6/30/2006 6/30/2005 Interest
income $11,410 $9,379 $21,961 $18,489 Interest expense 3,311 2,303
6,050 4,260 Net interest income 8,099 7,076 15,911 14,229 Provision
for loan losses 123 247 363 498 Other income 1,741 1,763 4,948
3,086 Other expenses 5,183 4,514 9,731 8,530 Income before income
tax provision 4,534 4,078 10,766 8,287 Provision for income taxes
1,472 1,490 3,839 3,035 NET INCOME $3,062 $2,588 $6,926 $5,252
Basic Earnings Per Share $0.27 $0.23 $0.61 $0.46 Diluted Earning
Per Share $0.27 $0.23 $0.60 $0.46 Annualized Return on: Average
Assets 1.93% 1.69% 2.20% 1.73% Average Equity 19.13% 18.67% 22.33%
19.25% Net Interest Margin 5.78% 5.25% 5.72% 5.31% Net Charge-offs
to Average Loans 0.02% 0.03% 0.02% 0.06% 6/30/2006 6/30/2005 Book
Value Per Share $5.58 $4.94 Tangible Book Value Per Share $5.29
$4.60 Efficiency Ratio 46.65% 49.26% Non Performing Assets to Total
Assets 1.83% 3.54% Allowance for Loan Losses to Total Loans 1.67%
1.84% Shares Outstanding - period end 11,361,913 11,369,192 Basic
Shares - average weighted 11,367,629 11,370,850 Diluted Shares -
average weighted 11,500,893 11,443,940 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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