United Security Bancshares, Inc. (NASDAQ: USBI) today reported net income of $774,000, or $0.13 per diluted share, for the first quarter ended March 31, 2014, compared with net income of $886,000, or $0.15 per diluted share, for the first quarter of 2013.
“We are pleased to report solid progress in reducing problem loans and associated costs since last year,” stated James F. House, President and CEO of United Security Bancshares, Inc. “This quarter marked our sixth consecutive quarter of reducing non-performing assets, which were down 45% from the first quarter of last year. We believe that our continued progress in reducing non-performing assets will be an important driver in building future earnings.
“We continue to attract deposits, and we are pleased with new loans generated from consumer, commercial and industrial customers, and a new first mortgage home loan product; however, total loan volume remained below the level of payoffs in the first quarter due to weak demand for commercial and real estate loans. Our team remains focused on generating quality loans in an environment that is becoming increasingly competitive for the best credits. Our capital position remains strong, and we have excellent liquidity to fund loan growth as our markets improve,” continued Mr. House.
First Quarter Results
Interest income totaled $7.8 million in the first quarter of 2014, compared with $8.6 million in the first quarter of 2013. The decline in interest income was due primarily to lower earning assets, primarily loans, as well as reduction in yield, compared with the first quarter of 2013.
Net loans totaled $276.7 million in the first quarter of 2014, compared with $321.0 million in the first quarter of 2013. The decrease in net loans was due to loan payoffs and write-downs outpacing new loan demand. An overall weak economy in our footprint, primarily centered in the real estate sector, has been a significant factor in lower loan demand over the past year.