FRESNO, Calif., Oct. 15, 2014 /PRNewswire/ -- United Security
Bancshares (http://www.unitedsecuritybank.com/) (Nasdaq Global
Select: UBFO) reported today unaudited consolidated net income of
$4,659,000 or $0.31 per basic and diluted common share for the
nine months ended September 30, 2014, as compared to
$4,323,000 or $0.28 per basic and diluted shares for the nine
months ended September 30, 2013. United Security
Bancshares reported consolidated net income of $1,703,000 or $0.11
per basic and diluted common share for the quarter ended
September 30, 2014, as compared to $1,852,000 or $0.12
per basic and diluted common shares for the quarter ended
September 30, 2013.
Annualized return on average equity (ROAE) for the nine months
ended September 30, 2014 was 7.90%, compared to 8.10% for the
nine months ended September 30, 2013. Annualized return
on average assets (ROAA) was 0.94% for the nine months ended
September 30, 2014, compared to 0.90% for the nine months
ended September 30, 2013. On a year to date comparative
basis, changes in income were the result of an increase of
$1,095,000 in non-interest income, an
increase of $1,216,000 in total
interest income, and a $265,000
decrease in interest expense, partially offset by a $1,019,000 increase in the provision for credit
losses and an increase of $974,000 in
non-interest expense.
Annualized return on average equity (ROAE) for the quarter ended
September 30, 2014 was 8.39%, compared to 10.14% for the same
period in 2013. Annualized return on average assets (ROAA)
was 1% for the quarter ended September 30, 2014, compared to
1.14% for the same period in 2013. Change in net income on a
quarter-to-quarter comparative basis between the third quarters of
2014 and 2013 is primarily the result of a negative provision for
loan loss of $1,150,000 during 2013,
compared to a provision of $39,000,
partially offset by a $687,000
increase in interest income during the third quarter of 2014.
The Board of Directors of United Security Bancshares declared a
third quarter 2014 stock dividend of one percent (1%) on
September 23, 2014. The stock
dividend was payable to shareholders of record on October 10, 2014, and the shares will be issued
on October 22, 2014.
Dennis R. Woods, President and
Chief Executive Officer of the Company, states, "We continue to see
positive momentum with strong loan and deposit growth, increasing
net earnings, and reductions in non-performing assets. We have
grown our loan portfolio by over $50
million year to date and look forward to continued success
during the fourth quarter of 2014." Shareholders' equity at
September 30, 2014 was $81,295,000, up $4,752,000 from shareholders' equity of
$76,543,000 at December 31,
2013.
Net interest income before provision for credit losses for the
nine months ended September 30, 2014 totaled $17,510,000, an increase of $1,481,000 from the $16,029,000 reported for the nine months ended
September 30, 2013. The net interest margin was 4.01%
for the nine months ended September 30, 2014, as compared to
3.90% for the nine months ended September 30, 2013. Net
interest income before provision for credit losses for the quarter
ended September 30, 2014 totaled $6,129,000, an increase of $702,000 from $5,427,000 reported for the quarter ended
September 30, 2013. The net interest margin was 4.11% for the
quarter ended September 30, 2014, as compared to 3.84% for the
quarter ended September 30, 2013. The Company
experienced an 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 nine months ended September 30,
2014 totaled $4,133,000, reflecting
an increase of $1,095,000 from
$3,038,000 in noninterest income
reported for the nine months ended September 30, 2013.
Customer service fees continue to provide the majority of the
Company's noninterest income, totaling $2,639,000 and $2,554,000 for the nine months ended September 30, 2014 and 2013, respectively.
On a year over year comparative basis, non-interest income
increased primarily due to a decrease of $485,000 on loss on fair value option of
financial assets and a $691,000 gain
on the sale of investment during the nine months ended
September 30, 2014. Noninterest income for the quarter
ended September 30, 2014 totaled $1,311,000, reflecting a decrease of $102,000 from $1,413,000 in noninterest income reported for the
quarter ended September 30, 2013. Customer service fees
totaled $957,000 for the quarter
ended September 30, 2014, as compared to $873,000 for the quarter ended September 30,
2013. Changes in noninterest income on a quarter-to-quarter
comparative basis between the third quarters of 2014 and 2013 are
largely the result of a $46,000
reduction in gain on fair value option of financial assets during
the quarter ended September 30, 2014.
For the nine months ended September 30, 2014, noninterest
expense totaled $14,155,000, an
increase of $974,000 as compared to
$13,181,000 for the nine months ended
September 30, 2013. On a year over year comparative
basis, noninterest expense increased primarily due to a
$480,000 net cost on OREO during the
nine months ended September 30, 2014, compared to a net gain
on OREO of $1,036,000 for the same
period ended September 30, 2013. Partially offsetting
the increase due to net cost on OREO were reductions in
professional fees, correspondent bank service charges, and
regulatory assessments. Noninterest expense totaled
$4,617,000 for the quarter ended
September 30, 2014, a decrease of $337,000 as compared to $4,954,000 reported for the quarter ended
September 30, 2013. Noninterest expenses fell during the third
quarters of 2014 and 2013 primarily as a result of decreases in
loss on tax credit partnership, net cost of OREO, and regulatory
assessments of $148,000, $66,000, and $106,000, respectively.
The Company had a negative provision for loan loss of
$101,000 for the nine months ended
September 30, 2014, compared to a negative provision of
$1,120,000 for the nine months ended
September 30, 2013. Net loan recoveries totaled
$228,000 for the nine months ended
September 30, 2014, as compared to net charge-offs of
$112,000 for the nine months ended
September 30, 2013. The Company had a provision for loan
loss of $39,000 for the quarter ended
September 30, 2014, compared to a negative provision of
$1,150,000 for the quarter ended
September 30, 2013. Net loan recoveries totaled
$27,000 for the quarter ended
September 30, 2014, as compared to net loan recoveries of
$545,000 for the quarter ended
September 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 2.48% of total loans at September 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
September 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 $3,437,000 between December 31, 2013 and
September 30, 2014. Additionally, nonperforming assets
as a percentage of total assets decreased from 5.04% at
December 31, 2013 to 4.14% at September 30, 2014.
Nonaccrual loans decreased $2,586,000
between December 31, 2013 and September 30, 2014, while
OREO increased $397,000 during the
same period. Impaired loans totaled $14,369,000 at September 30, 2014, a
decrease of $3,763,000 from the
balance of $18,132,000 at
December 31, 2013.
United Security Bancshares is a $680+ 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)
|
|
September 30,
2014
|
|
December 31,
2013
|
Assets
|
|
|
|
Cash and
noninterest-bearing deposits in other banks
|
$
|
19,039
|
|
$
|
20,193
|
Cash and due from
Federal Reserve Bank
|
115,846
|
|
115,019
|
Cash and cash
equivalents
|
134,885
|
|
135,212
|
Interest-bearing
deposits in other banks
|
1,520
|
|
1,515
|
Investment securities
(AFS at market value)
|
49,624
|
|
43,616
|
Loans and leases, net
of unearned fees
|
447,011
|
|
395,013
|
Less: Allowance for
credit losses
|
(11,115)
|
|
(10,988)
|
Net loans
|
435,896
|
|
384,025
|
Premises and
equipment - net
|
11,764
|
|
12,122
|
Other real estate
owned
|
14,343
|
|
13,946
|
Goodwill and
intangible assets
|
4,488
|
|
4,550
|
Cash surrender value
of life insurance
|
17,587
|
|
17,203
|
Deferred income
taxes
|
11,660
|
|
11,630
|
Other
assets
|
8,627
|
|
12,110
|
Total
assets
|
$
|
690,394
|
|
$
|
635,929
|
Deposits:
|
|
|
|
Noninterest bearing
demand deposits
|
$
|
241,863
|
|
$
|
214,317
|
Money market, NOW,
and savings
|
272,504
|
|
244,686
|
Time
|
76,580
|
|
83,486
|
Total
deposits
|
590,947
|
|
542,489
|
Accrued interest
payable
|
42
|
|
44
|
Other
liabilities
|
8,063
|
|
5,728
|
Junior subordinated
debentures (at fair value)
|
10,047
|
|
11,125
|
Total
liabilities
|
609,099
|
|
559,386
|
Shareholders'
equity:
|
|
|
|
|
|
|
|
Common stock, no par
value 20,000,000 shares authorized, 15,272,382 issued and
outstanding at September 30, 2014, and 14,799,888 at December 31,
2013
|
48,420
|
|
45,778
|
Retained
earnings
|
33,019
|
|
30,884
|
Accumulated other
comprehensive loss
|
(144)
|
|
(119)
|
Total
shareholders' equity
|
81,295
|
|
76,543
|
Total liabilities
and shareholders' equity
|
$
|
690,394
|
|
$
|
635,929
|
United Security
Bancshares
|
Consolidated
Statements of Income (unaudited)
|
(in
thousands)
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
Interest
income:
|
|
|
|
|
|
|
|
Interest and fees on
loans
|
$
|
6,187
|
|
$
|
5,545
|
|
$
|
17,602
|
|
$
|
16,565
|
Interest on
investment securities
|
227
|
|
157
|
|
688
|
|
495
|
Interest on deposits
in FRB
|
63
|
|
88
|
|
210
|
|
223
|
Interest on deposits
in other banks
|
2
|
|
2
|
|
5
|
|
6
|
Total interest
income
|
6,479
|
|
5,792
|
|
18,505
|
|
17,289
|
Interest
expense:
|
|
|
|
|
|
|
|
Interest on
deposits
|
291
|
|
301
|
|
812
|
|
1,043
|
Interest on other
borrowed funds
|
59
|
|
64
|
|
183
|
|
217
|
Total interest
expense
|
350
|
|
365
|
|
995
|
|
1,260
|
Net interest
income before provision for credit losses
|
6,129
|
|
5,427
|
|
17,510
|
|
16,029
|
Provision for
credit losses
|
39
|
|
(1,150)
|
|
(101)
|
|
(1,120)
|
Net interest
income
|
6,090
|
|
6,577
|
|
17,611
|
|
17,149
|
Non-interest
income:
|
|
|
|
|
|
|
|
Customer service
fees
|
957
|
|
873
|
|
2,639
|
|
2,554
|
Increase in cash
surrender value of bank owned life insurance
|
129
|
|
140
|
|
384
|
|
417
|
Gain (loss) on Fair
Value Option of Financial Assets
|
95
|
|
141
|
|
(34)
|
|
(519)
|
Gain on sale of other
investment
|
—
|
|
—
|
|
691
|
|
—
|
Gain on sale of fixed
assets
|
—
|
|
—
|
|
25
|
|
—
|
Other non-interest
income
|
130
|
|
259
|
|
428
|
|
586
|
Total non-interest
income
|
1,311
|
|
1,413
|
|
4,133
|
|
3,038
|
Non-interest
expense:
|
|
|
|
|
|
|
|
Salaries and employee
benefits
|
2,303
|
|
2,210
|
|
7,108
|
|
6,684
|
Occupancy
expense
|
966
|
|
905
|
|
2,795
|
|
2,693
|
Data
processing
|
32
|
|
33
|
|
101
|
|
126
|
Professional
fees
|
452
|
|
316
|
|
959
|
|
1,136
|
Regulatory
assessments
|
228
|
|
334
|
|
700
|
|
1,032
|
Director
fees
|
59
|
|
58
|
|
176
|
|
175
|
Amortization of
intangibles
|
—
|
|
47
|
|
62
|
|
140
|
Correspondent bank
service charges
|
30
|
|
72
|
|
89
|
|
229
|
(Gain) loss on
California tax credit partnership
|
(62)
|
|
86
|
|
(15)
|
|
151
|
Net cost (gain) on
operation of OREO
|
116
|
|
182
|
|
480
|
|
(1,036)
|
Other non-interest
expense
|
493
|
|
711
|
|
1,700
|
|
1,851
|
Total non-interest
expense
|
4,617
|
|
4,954
|
|
14,155
|
|
13,181
|
Income before
income tax provision
|
2,784
|
|
3,036
|
|
7,589
|
|
7,006
|
Provision for
income taxes
|
1,081
|
|
1,184
|
|
2,930
|
|
2,683
|
Net
Income
|
$
|
1,703
|
|
$
|
1,852
|
|
$
|
4,659
|
|
$
|
4,323
|
United Security
Bancshares
|
Selected Financial
Data (unaudited)
|
(dollars in
thousands, except per share amounts)
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
Basic earnings per
share
|
$0.11
|
|
$0.12
|
|
$0.31
|
|
$0.28
|
Diluted earnings per
share
|
$0.11
|
|
$0.12
|
|
$0.31
|
|
$0.28
|
Weighted average
basic shares for EPS
|
15,262,501
|
|
15,248,221
|
|
15,253,192
|
|
15,245,874
|
Weighted average
diluted shares for EPS
|
15,267,808
|
|
15,248,426
|
|
15,260,748
|
|
15,247,149
|
|
|
|
|
|
|
|
|
Annualized return
on:
|
|
|
|
|
|
|
|
Average
assets
|
1.00%
|
|
1.14%
|
|
0.94%
|
|
0.90%
|
Average
equity
|
8.39%
|
|
10.14%
|
|
7.90%
|
|
8.10%
|
Yield on
interest-earning assets
|
4.34%
|
|
4.10%
|
|
4.24%
|
|
4.21%
|
Cost of
interest-bearing liabilities
|
0.39%
|
|
0.42%
|
|
0.38%
|
|
0.49%
|
Net interest
margin
|
4.11%
|
|
3.84%
|
|
4.01%
|
|
3.90%
|
Annualized net
charge-offs (recoveries) to average loans
|
(0.02)%
|
|
(0.55)%
|
|
(0.07)%
|
|
0.04%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30,
2014
|
|
December 31,
2013
|
|
|
|
|
Shares outstanding -
period end
|
15,272,382
|
|
14,799,888
|
|
|
|
|
Book value per
share
|
$5.32
|
|
$5.17
|
|
|
|
|
Tangible book value
per share
|
$5.03
|
|
$4.86
|
|
|
|
|
Efficiency
ratio
|
62.90%
|
|
70.47%
|
|
|
|
|
Total nonperforming
assets
|
$28,611
|
|
$32,048
|
|
|
|
|
Nonperforming assets
to total assets
|
4.14%
|
|
5.04%
|
|
|
|
|
Total impaired
loans
|
$14,369
|
|
$18,132
|
|
|
|
|
Total nonaccrual
loans
|
$9,755
|
|
$12,341
|
|
|
|
|
Allowance for credit
losses to total loans
|
2.48%
|
|
2.78%
|
|
|
|
|
SOURCE United Security Bancshares