FRESNO, Calif., July 17,
2014 /PRNewswire/ -- United Security Bancshares
(http://www.unitedsecuritybank.com/) (Nasdaq Global Select: UBFO)
reported today unaudited consolidated net income of $2,956,000 or $0.20
per basic and diluted common share for the six months ended
June 30, 2014, as compared to $2,472,000 or $0.16
per basic and diluted shares for the six months ended June 30,
2013. United Security Bancshares reported consolidated net
income of $2,047,000 or $0.14 per basic and diluted common share for the
quarter ended June 30, 2014, as compared to $1,397,000 or $0.09
per basic and diluted common shares for the quarter ended
June 30, 2013.
Annualized return on average equity (ROAE) for the six months
ended June 30, 2014 was 7.64%, compared to 7.04% for the six
months ended June 30, 2013. Annualized return on average
assets (ROAA) was 0.90% for the six months ended June 30,
2014, compared to 0.78% for the six months ended June 30,
2013. On a year to date comparative basis, changes in income
were the result of an increase of $1,196,000 in non-interest income, an increase of
$529,000 in total interest income,
and a $250,000 decrease in interest
expense, partially offset by an increase of $1,311,000 in non-interest expense.
Annualized return on average equity (ROAE) for the quarter ended
June 30, 2014 was 10.44%, compared to 7.85% for the same
period in 2013. Annualized return on average assets (ROAA)
was 1.25% for the quarter ended June 30, 2014, compared to
0.88% for the same period in 2013. Change in net income on a
quarter-to-quarter comparative basis between the second quarters of
2014 and 2013 is largely the result of a $472,000 increase interest income and a
$998,000 increase in non-interest
income.
The Board of Directors of United Security Bancshares declared a
second quarter 2014 stock dividend of one percent (1%) on
June 24, 2014. The stock dividend was
payable to shareholders of record on July
11, 2014, and the shares will be issued on July 23, 2014.
Dennis R. Woods, President and
Chief Executive Officer of the Company, states, "We continue to see
positive momentum with growth in loan demand, increasing net
earnings, and reductions in non-performing assets. During the
first half of 2014, we have grown our loan portfolio by
$27.1 million and look forward to
continued loan growth and strengthening our core earnings during
the remainder of 2014." Shareholders' equity at June 30,
2014 was $79,537,000, up $2,994,000 from shareholders' equity of
$76,543,000 at December 31,
2013.
Net interest income before provision for credit losses for the
six months ended June 30, 2014 totaled $11,381,000, an increase of $779,000 from the $10,602,000 reported for the six months ended
June 30, 2013. The net interest margin was 3.97% for the
six months ended June 30, 2014, as compared to 3.94% for the
six months ended June 30, 2013. Net interest income
before provision for credit losses for the quarter ended
June 30, 2014 totaled $5,916,000, an increase of $574,000 from $5,342,000 reported for the quarter ended
June 30, 2013. The net interest margin was 4.14% for the
quarter ended June 30, 2014, as compared to 3.94% for the
quarter ended June 30, 2013. The Company experienced a
slight improvement in net interest margin due to an increase in the
balance of high-yielding loans as a percentage of total earning
assets.
Noninterest income for the six months ended June 30, 2014
totaled $2,822,000, reflecting an
increase of $1,196,000 from
$1,626,000 in noninterest income
reported for the six months ended June 30, 2013.
Customer service fees continue to provide the majority of the
Company's noninterest income, totaling $1,682,000 and $1,681,000 for the six months ended June 30, 2014 and 2013, respectively. On a
year over year comparative basis, non-interest income increased
primarily due to a decrease of $531,000 on loss on fair value option of
financial assets and a $691,000 gain
on the sale of investment during the six months ended June 30,
2014. Noninterest income for the quarter ended June 30,
2014 totaled $2,105,000, reflecting
an increase of $998,000 from
$1,107,000 in noninterest income
reported for the quarter ended June 30, 2013. Customer
service fees totaled $888,000 for the
quarter ended June 30, 2014, as compared to $902,000 for the quarter ended June 30,
2013. Changes in noninterest income on a quarter-to-quarter
comparative basis between the second quarters of 2014 and 2013 are
largely the result of $319,000 in
reduction in losses on fair value option of financial assets and a
$691,000 gain on the sale of
investment during the quarter ended June 30, 2014.
For the six months ended June 30, 2014, noninterest expense
totaled $9,538,000, an increase of
$1,311,000 as compared to
$8,227,000 for the six months ended
June 30, 2013. On a year over year comparative basis,
noninterest expense increased primarily due to a $364,000 net cost on OREO during the six months
ended June 30, 2014, compared to a net gain on OREO of
$1,218,000 for the same period ended
June 30, 2013. Partially offsetting the increase due to
net cost on OREO were reductions in professional fees and
regulatory assessments. Noninterest expense totaled
$4,744,000 for the quarter ended
June 30, 2014, a increase of $590,000 as compared to $4,154,000 reported for the quarter ended
June 30, 2013. Between the second quarters of 2014 and 2013,
net cost on OREO increased $420,000,
partially offset by decreases in professional fees and regulatory
assessments of $48,000 and
$100,000, respectively.
The Company had a negative provision for loan loss of
$140,000 for the six months ended
June 30, 2014, compared to a provision of $30,000 for the six months ended June 30,
2013. Net loan recoveries totaled $200,000 for the six months ended June 30,
2014, as compared to net charge-offs of $657,000 for the six months ended June 30,
2013. The Company had a negative provision for loan loss of
$93,000 for the quarter ended
June 30, 2014, compared to a provision of $39,000 for the quarter ended June 30,
2013. Net loan recoveries totaled $57,000 for the quarter ended June 30, 2014,
as compared to net charge-offs of $285,000 for the quarter ended June 30,
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 2.62% of total
loans at June 30, 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 June 30, 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 $3,379,000 between December 31, 2013 and
June 30, 2014. Additionally, nonperforming assets as a
percentage of total assets decreased from 5.04% at
December 31, 2013 to 4.39% at June 30, 2014.
Nonaccrual loans decreased $2,792,000
between December 31, 2013 and June 30, 2014, while OREO
increased $154,000 during the same
period. Impaired loans totaled $14,486,000 at June 30, 2014, a decrease of
$3,646,000 from the balance of
$18,132,000 at December 31,
2013.
United Security Bancshares is a $650+ 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)
|
|
|
|
June 30,
2014
|
|
December 31,
2013
|
Assets
|
|
|
|
Cash and
noninterest-bearing deposits in other banks
|
$
|
22,014
|
|
$
|
20,193
|
Cash and due from
Federal Reserve Bank
|
98,685
|
|
115,019
|
Cash and cash
equivalents
|
120,699
|
|
135,212
|
Interest-bearing
deposits in other banks
|
1,518
|
|
1,515
|
Investment securities
(AFS at market value)
|
51,258
|
|
43,616
|
Loans and leases, net
of unearned fees
|
422,168
|
|
395,013
|
Less: Allowance for
credit losses
|
(11,049
|
|
(10,988
|
Net loans
|
411,119
|
|
384,025
|
Premises and
equipment - net
|
11,965
|
|
12,122
|
Other real estate
owned
|
14,100
|
|
13,946
|
Goodwill and
intangible assets
|
4,488
|
|
4,550
|
Cash surrender value
of life insurance
|
17,458
|
|
17,203
|
Deferred income
taxes
|
11,667
|
|
11,630
|
Other
assets
|
8,538
|
|
12,110
|
Total
assets
|
$
|
652,810
|
|
$
|
635,929
|
Deposits:
|
|
|
|
Noninterest bearing
demand deposits
|
$227,092
|
|
$ 214,317
|
Money market, NOW,
and savings
|
244,333
|
|
244,686
|
Time
|
84,640
|
|
83,486
|
Total
deposits
|
556,065
|
|
542,489
|
Accrued interest
payable
|
39
|
|
44
|
Other
liabilities
|
7,087
|
|
5,728
|
Junior subordinated
debentures (at fair value)
|
10,082
|
|
11,125
|
Total
liabilities
|
573,273
|
|
559,386
|
Shareholders'
equity:
|
|
|
|
|
|
|
|
Common stock, no par
value 20,000,000 shares authorized, 15,097,282 issued and
outstanding at June 30, 2014, and 14,799,888 at December 31,
2013
|
47,478
|
|
45,778
|
Retained
earnings
|
32,155
|
|
30,884
|
Accumulated other
comprehensive loss
|
(96)
|
|
(119)
|
Total shareholders' equity
|
79,537
|
|
76,543
|
Total liabilities
and shareholders' equity
|
$
|
652,810
|
|
$
|
635,929
|
|
|
|
|
|
|
United Security
Bancshares
|
|
Consolidated
Statements of Income (unaudited)
|
|
|
(in
thousands)
|
|
|
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
Interest income:
Interest and fees on
loans
|
$
|
5,940
|
|
$
|
5,554
|
|
$
|
11,415
|
|
$
|
11,020
|
Interest on
investment securities
|
233
|
|
140
|
|
461
|
|
338
|
Interest on deposits
in FRB
|
64
|
|
70
|
|
147
|
|
135
|
Interest on deposits
in other banks
|
1
|
|
2
|
|
3
|
|
4
|
Total interest
income
|
6,238
|
|
5,766
|
|
12,026
|
|
11,497
|
Interest
expense:
|
|
|
|
|
|
|
|
|
Interest on
deposits
|
259
|
|
331
|
|
521
|
|
742
|
Interest on other
borrowed funds
|
63
|
|
93
|
|
124
|
|
153
|
Total interest
expense
|
322
|
|
424
|
|
645
|
|
895
|
Net interest
income before provision for credit losses
|
5,916
|
|
5,342
|
|
11,381
|
|
10,602
|
Provision for
credit losses
|
(93)
|
|
39
|
|
(140)
|
|
30
|
Net interest
income
|
6,009
|
|
5,303
|
|
11,521
|
|
10,572
|
Non-interest
income:
|
|
|
|
|
|
|
|
|
Customer service
fees
|
888
|
|
902
|
|
1,682
|
|
1,681
|
Increase in cash
surrender value of bank owned life insurance
|
128
|
|
140
|
|
255
|
|
277
|
Gain (loss) on Fair
Value Option of Financial Assets
|
216
|
|
(103)
|
|
(129)
|
|
(660)
|
Gain on sale of other
investment
|
|
691
|
|
—
|
|
691
|
|
—
|
Gain on sale of fixed
assets
|
25
|
|
—
|
|
25
|
|
—
|
Other non-interest
income
|
157
|
|
168
|
|
298
|
|
328
|
Total non-interest
income
|
2,105
|
|
1,107
|
|
2,822
|
|
1,626
|
Non-interest
expense:
|
|
|
|
|
|
|
|
Salaries and employee
benefits
|
2,279
|
|
2,113
|
|
4,805
|
|
4,474
|
Occupancy
expense
|
956
|
|
883
|
|
1,829
|
|
1,788
|
Data
processing
|
28
|
|
33
|
|
69
|
|
93
|
Professional
fees
|
327
|
|
375
|
|
507
|
|
820
|
Regulatory
assessments
|
239
|
|
339
|
|
472
|
|
698
|
Director
fees
|
61
|
|
59
|
|
117
|
|
117
|
Amortization of
intangibles
|
15
|
|
46
|
|
62
|
|
93
|
Correspondent bank
service charges
|
30
|
|
81
|
|
59
|
|
157
|
Loss on California
tax credit partnership
|
24
|
|
32
|
|
47
|
|
65
|
Net cost (gain) on
operation of OREO
|
84
|
|
(336)
|
|
364
|
|
(1,218)
|
Other non-interest
expense
|
|
701
|
|
529
|
|
1,207
|
|
1,140
|
Total non-interest
expense
|
4,744
|
|
4,154
|
|
9,538
|
|
8,227
|
Income before
income tax provision
|
3,370
|
|
2,256
|
|
4,805
|
|
3,971
|
Provision for
income taxes
|
1,323
|
|
859
|
|
1,849
|
|
1,499
|
Net
Income
|
$
|
2,047
|
|
$
|
1,397
|
|
$
|
2,956
|
|
$
|
2,472
|
|
|
|
|
|
|
|
|
|
|
|
|
United Security
Bancshares
|
|
|
|
|
|
|
|
Selected Financial
Data (unaudited)
|
|
|
|
|
|
|
|
(dollars in
thousands, except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
Basic earnings per
share
|
$0.14
|
|
$0.09
|
|
$0.20
|
|
$0.16
|
Diluted earnings per
share
|
$0.14
|
|
$0.09
|
|
$0.20
|
|
$0.16
|
Weighted average
basic shares for EPS
|
15,097,282
|
|
15,095,299
|
|
15,097,282
|
|
15,093,567
|
Weighted average
diluted shares for EPS
|
15,106,620
|
|
15,096,979
|
|
15,105,488
|
|
15,097,626
|
|
|
Annualized return
on:
|
|
Average
assets
|
1.25%
|
|
0.88%
|
|
0.90%
|
|
0.78%
|
Average
equity
|
10.44%
|
|
7.85%
|
|
7.64%
|
|
7.04%
|
Yield on
interest-earning assets
|
4.36%
|
|
4.25%
|
|
4.19%
|
|
4.27%
|
Cost of
interest-bearing liabilities
|
0.38%
|
|
0.50%
|
|
0.38%
|
|
0.52%
|
Net interest
margin
|
4.14%
|
|
3.94%
|
|
3.97%
|
|
3.94%
|
Annualized net
(recoveries) charge-offs to average loans
|
(0.06)%
|
|
0.29%
|
|
(0.10)%
|
|
0.34%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30,
2014
|
|
December 31,
2013
|
|
|
|
|
Shares outstanding -
period end
|
15,097,282
|
|
14,799,888
|
|
|
|
|
Book value per
share
|
$5.27
|
|
$5.17
|
|
|
|
|
Tangible book value
per share
|
$4.97
|
|
$4.86
|
|
|
|
|
Efficiency
ratio
|
64.16%
|
|
70.47%
|
|
|
|
|
Total nonperforming
assets
|
$28,669
|
|
$32,048
|
|
|
|
|
Nonperforming assets
to total assets
|
4.39%
|
|
5.04%
|
|
|
|
|
Total impaired
loans
|
$14,486
|
|
$18,132
|
|
|
|
|
Total nonaccrual
loans
|
$9,549
|
|
$12,341
|
|
|
|
|
Allowance for credit
losses to total loans
|
2.62%
|
|
2.78%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SOURCE United Security Bancshares