United Security Bancshares, Inc. (Nasdaq: USBI) today reported net income of $904,000, or $0.15 per diluted share, for the third quarter ended September 30, 2013, compared with net income of $1.2 million, or $0.20 per diluted share, for the third quarter of 2012. Net income for the first nine months of 2013 rose to $3.0 million, or $0.49 per diluted share, compared with $1.3 million, or $0.22 per diluted share, for the first nine months of 2012.
“We are pleased to report our sixth consecutive quarter of positive net income, which highlights our progress in reducing non-performing loans, other real estate owned (OREO) and expenses related to OREO,” stated James F. House, President and CEO of United Security Bancshares, Inc. “Our non-performing assets are down 45% to $26.0 million compared with the third quarter of last year. This quarter marked our fifth consecutive quarter of reducing OREO and fourth consecutive quarter of reducing non-performing assets.”
“Although we have made excellent progress in reducing costs related to problem assets, our earnings growth has been constrained by weak demand for commercial and real estate loans and increased pricing pressure from other banks in our market. We remain focused on reducing non-performing assets while positioning our bank to grow earnings as loan demand recovers in our markets. We have a strong capital base that is well above the minimum regulatory requirements, and we believe that we have the capital to support our future growth,” continued Mr. House.
Third Quarter Results
Interest income totaled $8.3 million in the third quarter of 2013, compared with $9.3 million in the third quarter of 2012. The decline in interest income was due primarily to lower earning assets, primarily loans, as well as reduction in yield, compared with the third quarter of 2012.
Net loans totaled $304.8 million in the third quarter of 2013, compared with $344.7 million at September 30, 2012. The decrease in net loans was due to loan payoffs and write-downs outpacing new loan demand. An overall weak economy, primarily centered in the real estate sector, has been a significant factor in lower loan demand over the past year.