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United Security Bancshares 4th Quarter - Improving Trends Continue

"Our employees have a strong commitment to an approach that benefits customers and shareholders alike and parallels our commitment to provide excellent bank services in the communities we serve. Our business plan reduces nonperforming assets, adds to our strong capital base while providing customers with more options.  Fortunately, strong core earnings allow us greater flexibility for accomplishing these goals."

Net interest income for the 4th quarter 2009 was $7.25 million, up $176,000 from the 4th quarter of 2008 for an increase of 2.5%. The net interest margin increased from 4.02% in the 4th quarter 2008 to 4.67% in 2009. For the twelve months ended December 31, 2009 net interest income was $28,347,000, down $1,862,000 from $30,209,000 for the same period in 2008 for an 6.16% decline. The net interest margin was 4.36% for the twelve month period ended December 31, 2008 and 4.51% for the same period in 2009.

Noninterest income for the 4th quarter of 2009 was $2,870,000, up $172,000 from $2,698,000 in 2008 for an increase of 6.4%. For the twelve months ended December 31, 2009, noninterest income was $6,307,000, down $2,036,000 from $8,343,000 for the same period in 2008. Several categories of noninterest income declined in 2009 relative to 2008 including but not limited to: ATM fees (down $148,000); service charges (down $113,000); gains on sale of OREO (down $861,000); miscellaneous income (down $279,000); financial service income (down $452,000) and OREO rent (down $312,000).

Other operating expenses for the three months ended December 31, 2009 were $6,353,000 and $6,271,000 for 2008, an increase of $82,000 or 1.32%. For the twelve months ended December 31, 2009, other operating expenses totaled $27,967,000, up $4,615,000 from $23,351,000 for the same period in 2008. Five expense components accounted for the much of differences for the twelve month period. 1) FDIC assessments increased by $683,000, 2) write-downs on foreclosed properties were up $437,000, 3) foreclosed property expenses were up $1,194,000, 4) sundry losses associated with a lawsuit were up $817,000 and 5) a goodwill impairment expense was up $3,026,000 in 2009 over 2008.

The provision for loan loss was $4,781,000 for the 4th quarter of 2009 and $2,366,000 for 4th quarter of 2008. For the twelve months ended December 31, 2009, the provision was $13,375,000 compared with $9,526,000 for the same period in 2008. 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, 2009 to be adequate. Non-performing assets decreased to 10.32% of total assets on December 31, 2009 from 12.43% on September 30, 2009. At year-end 2008 non-performing assets were 10.68% of total assets.  

United Security Bancshares is a $690+ 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.


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