United Security Bancshares and First United Security Bank continued to be rated as ‘well-capitalized,’ the highest regulatory rating, at the end of the second quarter of 2012. Total risk-based capital was 16.3% for the Company and 16.4% for the Bank, compared with a regulatory requirement of 10.0% for a well-capitalized institution and a minimum regulatory requirement of 8.0%. Tier 1 risk-based capital was 9.8% for the Company and for the Bank, both measures significantly above the requirement of 6.0% for a well-capitalized institution and minimum regulatory requirement of 4.0%.
Six Months Results
For the first six months of 2012, net income attributable to USBI was $133,000, or $0.02 per diluted share, compared with $1.7 million, or $0.29 per diluted share, for the first six months of 2011. The lower level of earnings in 2012 was due to a $2.9 million charge made in the first quarter to write-down the value of foreclosed properties to reflect lower appraisals and a $2.2 million replenishment of our allowance for loan losses.
For the six months ended June 30, 2012, net interest income was $17.1 million, compared with $17.4 million for the same period of 2011. Net interest margin declined to 6.09% for the first six months of 2012 from 6.18% in the first six months of 2011.Provision for loan losses was $2.7 million in the first six months of 2012, compared with $2.9 million in the first six months of 2011. Non-interest income declined to $2.6 million for the first six months of 2012, compared with $3.4 million for the same period of 2011. The 2011 results included a $401,000 gain on security sales and a $258,000 reimbursement of attorney fees from a previous fidelity bond claim in other income. No similar gains were booked in the first six months of 2012. Non-interest expense was up 10.8% to $17.3 million in the first six months of 2012, compared with $15.6 million in the first six months of 2011. The increase was due primarily to a $2.9 million impairment charge on OREO in the 2012 period, compared with a $0.9 million charge in the 2011 period.