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United Security Bancshares, Inc. Reports 2011 Results

Stocks in this article: USBI

United Security Bancshares, Inc. (Nasdaq: USBI) today reported a net loss attributable to USBI of ($9.1 million), or ($1.51) per diluted share, for the twelve months ended December 31, 2011, compared with a net loss attributable to USBI of ($3.2 million), or ($0.53) per diluted share, for the 2010 fiscal year. Net loss attributable to USBI for the fourth quarter of 2011 was ($9.5 million), or ($1.58) per diluted share, compared with a net loss attributable to USBI of ($6.5 million), or ($1.08) per diluted share, for the fourth quarter of 2010.

“United Security has completed a difficult period for the Company in the fourth quarter of 2011. However, our growth in net interest income and higher non-interest income for the quarter ended December 31, 2011, is one of the Company’s fundamental strengths,” stated James F. House, President and CEO of United Security Bancshares, Inc. “We also made solid progress in reducing problem assets that will be key to improving our earnings performance in the future.”

“Our management team has made a concerted effort to identify and recognize problem loans across our system, and we believe that we have taken appropriate charge-downs and impairments to recognize these liabilities. We are pleased to report that our non-performing loans are down over 18% to $18.8 million compared to the third quarter of 2011. Our 90-day past due loans declined from $3.1 million at September 30, 2011 to $2.3 million at year-end, and we strengthened our reserves for loan losses during 2011. Other real estate owned (OREO) declined to $16.8 million at the end of the fourth quarter 2011 due to real estate sales and write-downs that more than offset new additions to OREO. This was the fifth consecutive quarterly decrease in OREO. The Bank’s liquidity position is extremely strong compared to industry standards.”

“Our loss for the fourth quarter and 2011 was primarily due to higher charge-offs and write-downs of OREO to reflect the continuation of the soft real estate market. In addition, our fourth quarter and 2011 results included a $4.1 million non-cash write-off of goodwill. The goodwill impairment charge was an accounting adjustment as required by FASB Codification 350 - Goodwill and Other Intangible Assets. It is important to note that the write-off of goodwill is a non-cash charge and does not affect our cash flows, liquidity, tangible book capital, regulatory capital or regulatory capital ratios. Similarly, it will not affect United Security’s future operations,” continued Mr. House.

Twelve Month Results

For the year ended December 31, 2011, net loss attributable to USBI was ($9.1 million), or ($1.51) per diluted share, compared with ($3.2 million), or ($0.53) per diluted share, for the year ended December 31, 2010. The 2011 results include the $4.1 million non-cash write-off of goodwill.

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