United Security Bancshares, Inc. (Nasdaq: USBI) today reported an increase in net income for the third quarter and nine months ended September 30, 2012, compared with the same periods in 2011. Net income attributable to USBI was $1.2 million, or $0.20 per diluted share, for the third quarter ended September 30, 2012, compared with a net loss attributable to USBI of $1.3 million, or $(0.22) per diluted share, for the third quarter of 2011. Net income attributable to USBI for the first nine months of 2012 rose to $1.3 million, or $0.22 per diluted share, compared with net income attributable to USBI of $414,000, or $0.07 per diluted share, for the same period of 2011. “We are pleased with our continued improvement in net income since last year,” stated James F. House, President and CEO of United Security Bancshares, Inc. “This is our second consecutive quarter of improved earnings resulting from reduced non-interest expenses and charges related to non-performing loans, including significant reductions in our provision for loan losses and impairment of other real estate owned (OREO) compared with the prior year.” “We continue to focus on improving our asset quality as part of our strategy to grow our earnings. As of September 30, 2012, OREO was down $9.4 million from the third quarter of last year and $3.2 million from December 31, 2011. As of September 30, 2012, non-accrual loans increased 58.7% to $31.6 million from the third quarter of last year, and loans 90 days or more past due and still accruing were down 32.4% to $2.1 million compared with the prior year. The increase in non-accrual loans was primarily due to one large loan relationship, which reached 90 days past due and was required to be placed on non-accrual status. We are optimistic that the past due status of this loan relationship is temporary in nature and that this relationship will return to accrual status in the fourth quarter with all interest and fees paid at that time. Our earnings outlook has improved since last year due to reduced losses from non-performing assets. However, we still have a higher-than-normal level of classified loans and OREO, and we remain focused on reducing our problem assets as the key to improving our future earnings,” continued Mr. House.