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United Security Bancshares, Inc. (NASDAQ: USBI) today reported its results for the first quarter of 2012. The Company reported a net loss of $(1.2) million, or $(0.21) per diluted share, for the first quarter of 2012, compared with net income of $819,000, or $0.14 per diluted share, for the first quarter of 2011.
“United Security’s operations remained sound in the first quarter with $8.6 million in net interest income, but our profitability was reduced by a higher provision for loan losses and impairment charges related to other real estate owned (OREO) compared with the first quarter of last year,” stated James F. House, President and CEO of United Security Bancshares, Inc. “We continue to experience higher than normal charges related to real-estate based loans where the market remains weak in terms of sales and prices. Our first quarter charges included a $2.8 million write-down in value on repossessed properties to reflect lower appraisals and a $2.2 million replenishment of our allowance for loan losses. We remain aggressive in recognizing problem loans and taking appropriate charge-downs and impairments to recognize these losses.”
“We are pleased to report that OREO declined for the fourth consecutive quarter. The first quarter’s decrease was due to sales and write-downs of OREO more than offsetting new additions. We believe that our progress in reducing OREO is a solid indicator of the progress that we are making to restore our profitability. We remain focused on reducing the level of non-performing assets and believe that this will be key to restoring our historical earnings performance.”
“Our deposit base is up and reflects our strong market position and financial condition. United Security continues to be ranked as ‘well-capitalized,’ the highest regulatory rating. We are proud of maintaining this excellent rating through the economic downturn,” continued Mr. House.
First Quarter Results
Net interest income was $8.6 million for the quarter ended March 31, 2012, and was basically even with the prior year’s first quarter. Net interest margin was 6.01%, compared with 6.24% in the first quarter of 2011. The decline in net interest margin was due in large part to lower earning assets, primarily loans, and to a lower yield on interest earning assets.