Total deposits rose 4.7% in 2011 to $527.1 million, compared with $503.5 million at year-end 2010. “We are pleased that our strong balance sheet continued to attract new deposit accounts,” stated Mr. House. “We are also pleased to report that our capital remains above the ‘well-capitalized’ guidelines, the highest regulatory rating. We have maintained our high regulatory rating without government loans and remain focused on protecting our capital base for our shareholders and depositors.”
Net interest income rose to $35.3 million in 2011, compared with $34.8 million in 2010. The increase in net interest income was due primarily to an increase in net interest margin to 6.17% in 2011, compared with 5.83% in 2010. The growth in 2011’s net interest margin resulted primarily from a lower cost of funds compared with 2010.
Provision for loan losses declined to $18.8 million in 2011, or 4.63% annualized of average loans, compared with $19.1 million, or 4.64% annualized of average loans, in 2010. Net charge-offs totaled $17.5 million in 2011, compared with $8.2 million in 2010.
Non-interest income declined to $8.7 million in 2011, compared with $10.2 million in 2010, primarily due to the inclusion of a $4.2 million insurance settlement in the 2010 results.Non-interest expense rose to $40.3 million in 2011, compared with $32.1 million in 2010. The increase was due primarily to a $2.9 million increase in impairment costs on OREO and the $4.1 million non-cash goodwill impairment. Fourth Quarter Results United Security reported a net loss attributable to USBI of ($9.5 million), or ($1.58) per diluted share, for the fourth quarter of 2011, compared with a net loss attributable to USBI of ($6.5 million), or ($1.08) per diluted share, for the fourth quarter of 2010. The 2011 fourth quarter’s results include the $4.1 million non-cash write-off of goodwill. Interest income totaled $10.6 million in the fourth quarter of 2011, compared with $11.0 million in the fourth quarter of 2010. The decrease in interest income was due primarily to lower interest earned on loans and securities due to a decline in average loans and securities for the quarter.