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United Security Bancshares, Inc. Reports Growth In Fourth Quarter And 2012 Net Income

Net interest income declined to $34.2 million in 2012, compared with $35.3 million in 2011. The decline in net interest income was due primarily to lower interest earning assets, primarily loans, in 2012 compared with the prior year. Net loans were down $43.7 million to $337.4 million at December 31, 2012, compared with $381.1 million at December 31, 2011. Net interest margin increased to 6.21% in 2012 from 6.17% in 2011. The growth in net interest margin in 2012 resulted from a lower cost of funds compared with 2011.

Provision for loan losses declined to $4.3 million in 2012, or 1.15% annualized of average loans, compared with $18.8 million, or 4.63% annualized of average loans, in 2011. Net charge-offs totaled $7.3 million in 2012, compared with $17.5 million in 2011.

Non-interest income declined to $5.6 million in 2012, compared with $8.7 million in 2011, primarily due to lower gains on the sale of investment securities in 2012 compared with 2011.

Non-interest expense declined 19.4% to $32.5 million in 2012, compared with $40.3 million in 2011. Non-interest expense declined in every major category in 2012 compared with the prior year except for salary expense, which was up 0.7%, and furniture and equipment expense, which was up 0.8%, as compared with 2011. Impairment on other real estate declined $2.8 million from 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. Specifically, with respect to statements relating to loan demand and 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)

 
    December 31,     December 31,
2012 2011
(Unaudited)
ASSETS
 
Cash and Due from Banks $ 12,181 $ 9,491
Interest-Bearing Deposits in Banks   41,945     43,306  
Total Cash and Cash Equivalents 54,126 52,797
Federal Funds Sold 5,000 -
Investment Securities Available-for-Sale, at fair market value 92,614 122,170
Investment Securities Held-to-Maturity, at cost 21,136 1,170
Federal Home Loan Bank Stock, at cost 936 2,861
Loans, net of allowance for loan losses of $19,278 and $22,267, respectively 337,400 381,085
Premises and Equipment, net 8,902 9,050
Cash Surrender Value of Bank-Owned Life Insurance 13,303 12,922
Accrued Interest Receivable 3,101 3,958
Investment in Limited Partnerships 836 1,456
Other Real Estate Owned 13,286 16,774
Other Assets   16,492     17,567  
Total Assets $ 567,132   $ 621,810  
 
LIABILITIES AND SHAREHOLDERS’ EQUITY
Deposits $ 489,034 $ 527,073
Accrued Interest Expense 413 790
Short-Term Borrowings 638 356
Long-Term Debt - 20,000
Other Liabilities   8,400     7,383  
Total Liabilities   498,485     555,602  
 
Shareholders’ Equity:

Common Stock, par value $0.01 per share, 10,000,000 shares authorized; 7,327,560 and 7,322,560 shares issued, respectively; 6,023,622 and 6,015,737 shares outstanding, respectively

73

73

Surplus 9,284 9,259
Accumulated Other Comprehensive Income, net of tax 3,139 3,005
Retained Earnings 77,286 75,091
Less Treasury Stock: 1,303,938 and 1,306,823 shares at cost, respectively (21,123 ) (21,208 )
Noncontrolling Interest   (12 )   (12 )
 
Total Shareholders’ Equity   68,647     66,208  
 
Total Liabilities and Shareholders’ Equity $ 567,132   $ 621,810  
 

 

UNITED SECURITY BANCSHARES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Dollars in Thousands, Except Per Share Data)

 
    Three Months Ended     Twelve Months Ended
December 31, December 31,
2012     2011 2012     2011
 
INTEREST INCOME:
Interest and Fees on Loans $ 8,919 $ 9,365 $ 35,373 $ 37,064
Interest on Investment Securities   748   1,231     3,380   5,282  
Total Interest Income 9,667 10,596 38,753 42,346
 
INTEREST EXPENSE:
Interest on Deposits 884 1,518 4,433 6,260
Interest on Borrowings   4   127     123   759  
Total Interest Expense   888   1,645     4,556   7,019  
 
NET INTEREST INCOME 8,779 8,951 34,197 35,327
 
PROVISION FOR LOAN LOSSES   1,163   13,626     4,338   18,802  
 

NET INTEREST INCOME (LOSS) AFTER PROVISION FOR LOAN LOSSES

 

7,616

 

(4,675

 

)

 

29,859

 

16,525

 
NON-INTEREST INCOME:

Service and Other Charges on Deposit Accounts

652

719

2,522

2,888

Credit Life Insurance Income 342 348 955 924
Other Income   513   2,681     2,088   4,916  
Total Non-Interest Income 1,507 3,748 5,565 8,728
 
NON-INTEREST EXPENSE:
Salaries and Employee Benefits 3,678 3,253 14,590 14,491
Occupancy Expense 483 460 1,899 1,922
Furniture and Equipment Expense 323 331 1,293 1,282
Impairment on Other Real Estate Owned 342 2,548 3,583 6,390
Goodwill Impairment - 4,098 - 4,098
Loss on Sale of Other Real Estate 251 771 1,283 1,607
Other Expense   2,575   2,648     9,836   10,497  
Total Non-Interest Expense   7,652   14,109     32,484   40,287  
 

INCOME (LOSS) BEFORE INCOME TAXES

1,471

(15,036

)

2,940

(15,034

)

PROVISION FOR (BENEFIT FROM) INCOME TAXES

 

588

 

(5,547

)

 

745

 

(5,958

)

NET INCOME (LOSS) $ 883 $ (9,489 ) $ 2,195 $ (9,076 )

Less: Net Loss Attributable to Noncontrolling Interest

 

-

 

-

   

-

 

(1

)

NET INCOME (LOSS) ATTRIBUTABLE TO USBI

$

883

$

(9,489

)

$

2,195

$

(9,075

)

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

$

0.15

$

(1.58

)

$

0.36

$

(1.51

)

 
DIVIDENDS PER SHARE $ 0.00 $ 0.00   $ 0.00 $ 0.04  
 




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