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United Security Bancshares, Inc. Reports Second Quarter Results

Non-interest expense was up 7.7% to $15.6 million in the first six months of 2011, compared with $14.5 million in the first six months of 2010. The increase was due to higher salary, occupancy, impairment of ORE and other expenses, partially offset by lower furniture and equipment expense, and a lower loss on sale of ORE.

Shareholders’ equity was $77.9 million, or $12.96 per share, at June 30, 2011, compared with $74.5 million, or $12.40 per share, at December 31, 2010 and $83.2 million, or $13.84 per share, at June 30, 2010. United Security did not declare a cash dividend on its common stock for the second quarter of 2011.

About United Security Bancshares, Inc.

United Security Bancshares, Inc. is a bank holding company that operates nineteen banking offices in Alabama through First United Security Bank. In addition, the Company’s operations include Acceptance Loan Company, Inc., a consumer loan company, and FUSB Reinsurance, Inc., an underwriter of credit life and credit accident and health insurance policies sold to the bank’s and ALC’s consumer loan customers. The Company’s stock is traded on the Nasdaq Capital Market under the symbol “USBI.”

Forward-Looking Statements

This press release contains forward-looking statements, as defined by federal securities laws. Statements contained in this press release that are not historical facts are forward-looking statements. These statements may address issues that involve significant risks, uncertainties, estimates and assumptions made by management. USBI undertakes no obligation to update these statements following the date of this press release, except as required by law. In addition, USBI, through its senior management, may make from time to time forward-looking public statements concerning the matters described herein. Such forward-looking statements are necessarily estimates reflecting the best judgment of USBI’s senior management based upon current information and involve a number of risks and uncertainties. Certain factors that could affect the accuracy of such forward-looking statements are identified in the public filings made by USBI with the Securities and Exchange Commission, and forward-looking statements contained in this press release or in other public statements of USBI or its senior management should be considered in light of those factors. With respect to the adequacy of the allowance for loan losses for USBI, these factors include, but are not limited to, the rate of growth (or lack thereof) in the economy, the relative strength and weakness in the consumer and commercial credit sectors and in the real estate markets and collateral values. There can be no assurance that such factors or other factors will not affect the accuracy of such forward-looking statements.

   
UNITED SECURITY BANCSHARES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(Dollars in Thousands, Except Per Share Data)
 
June 30, December 31,
2011 2010
(Unaudited)
ASSETS
Cash and Due from Banks $ 9,995 $ 10,330
Interest Bearing Deposits in Banks   22,147     3,201  
Total Cash and Cash Equivalents 32,142 13,531
Investment Securities Available-for-Sale, at fair market value 136,186 135,877
Investment Securities Held-to-Maturity, at cost 1,210 1,210
Federal Home Loan Bank Stock, at cost 4,034 5,093
Loans, net of allowance for loan losses of $19,010 and $20,936, respectively 390,652 387,478
Premises and Equipment, net 9,193 16,609
Cash Surrender Value of Bank-Owned Life Insurance 12,711 12,499
Accrued Interest Receivable 4,384 5,110
Goodwill 4,098 4,098
Investment in Limited Partnerships 1,495 1,766
Other Real Estate Owned 25,270 25,632
Other Assets   11,312     12,836  
Total Assets $ 632,687   $ 621,739  
 
LIABILITIES AND SHAREHOLDERS’ EQUITY
Deposits $ 524,703 $ 503,530
Accrued Interest Expense 882 2,235
Short-Term Borrowings 1,111 970
Long-Term Debt 20,000 30,000
Other Liabilities   8,090     10,481  
Total Liabilities   554,786     547,216  
Commitments and Contingencies
Shareholders’ Equity:

Common Stock, par value $0.01 per share, 10,000,000 shares authorized; 7,317,560 shares issued; 6,010,737 and 6,011,012 shares outstanding, respectively

73

73

Surplus 9,233 9,233
Accumulated Other Comprehensive Income, net of tax 3,926 3,412
Retained Earnings 85,889 84,408
Less Treasury Stock: 1,306,823 and 1,306,548 shares at cost, respectively (21,208 ) (21,205 )
Noncontrolling Interest   (12 )   (1,398 )
 
Total Shareholders’ Equity   77,901     74,523  
 
Total Liabilities and Shareholders’ Equity $ 632,687   $ 621,739  
 

     
UNITED SECURITY BANCSHARES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in Thousands, Except Per Share Data)
 
Three Months Ended Six Months Ended
June 30, June 30,
2011   2010 2011   2010
(Unaudited) (Unaudited)
INTEREST INCOME:
Interest and Fees on Loans $ 9,270 $ 9,540 $ 18,357 $ 18,846
Interest on Investment Securities   1,337     1,645     2,694     3,593  
Total Interest Income 10,607 11,185 21,051 22,439
 
INTEREST EXPENSE:
Interest on Deposits 1,579 1,975 3,176 3,958
Interest on Borrowings   200     556     470     1,496  
Total Interest Expense   1,779     2,531     3,646     5,454  
 
NET INTEREST INCOME 8,828 8,654 17,405 16,985
 
PROVISION FOR LOAN LOSSES   1,609     3,682     2,914     5,425  
 

NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES

7,219

4,972

14,491

11,560

 
NON-INTEREST INCOME:

Service and Other Charges on Deposit Accounts

722

796

1,438

1,449

Credit Life Insurance Income 218 211 340 342
Other Income   1,256     436     1,607     5,248  
Total Non-Interest Income 2,196 1,443 3,385 7,039
 
NON-INTEREST EXPENSE:
Salaries and Employee Benefits 3,851 3,625 7,421 7,086
Occupancy Expense 467 479 943 928
Furniture and Equipment Expense 317 326 620 626
Impairment on Other Real Estate 402 237 886 400
Loss on Sale of Other Real Estate 169 290 508 512
Other Expense   2,945     2,284     5,208     4,914  
Total Non-Interest Expense   8,151     7,241     15,586     14,466  
 

INCOME (LOSS) BEFORE INCOME TAXES

1,264

(826

)

2,290

4,133

PROVISION FOR (BENEFIT FROM) INCOME TAXES

 

361

   

(478

)

 

568

   

1,321

 
NET INCOME (LOSS) $ 903   $ (348 ) $ 1,722   $ 2,812  

Less: Net Loss Attributable to Noncontrolling Interest

 

(1

)

 

-

   

(1

)

 

(125

)

NET INCOME (LOSS) ATTRIBUTABLE TO USBI

$

904

 

$

(348

)

$

1,723

 

$

2,937

 

BASIC AND DILUTED NET INCOME (LOSS) ATTRIBUTABLE TO USBI PER SHARE

$

0.15

 

$

(0.06

)

$

0.29

 

$

0.49

 
 
DIVIDENDS PER SHARE $ -   $ 0.11   $ 0.04   $ 0.22  




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