Net loans totaled $337.4 million in the fourth quarter of 2012, compared with $381.1 million in the fourth quarter of 2011. The decrease in net loans was due to loan payoffs and write-downs outpacing new loan demand. An overall weak economy in the bank’s markets, primarily centered in the real estate sector, has been a significant factor in lower loan demand over the past year.

Interest expense declined 46% to $888,000 in the fourth quarter of 2012, compared with $1.6 million in the fourth quarter of 2011. The decline in interest expense was due primarily to lower average rates paid on interest bearing deposits.

Net interest income declined 1.9% to $8.8 million in the fourth quarter of 2012, compared with $9.0 million in the fourth quarter of the prior year.

Provision for loan losses dropped to $1.2 million in the fourth quarter of 2012, compared with $13.6 million in the fourth quarter of 2011. Net charge-offs totaled $1.8 million in the fourth quarter of 2012, compared with $6.6 million in the fourth quarter of 2011.

Total non-interest income was $1.5 million in the fourth quarter of 2012, compared with $3.7 million in the fourth quarter of 2011. The decline in non-interest income was due primarily to lower gains on the sale of investment securities in the fourth quarter of 2012 compared with the fourth quarter of 2011.

Non-interest expense declined to $7.7 million in the fourth quarter of 2012, compared with $14.1 million in the fourth quarter of 2011. The 2011 fourth quarter’s results included a $4.1 million impairment charge to goodwill and higher expenses related to other real estate. Total expenses related to other real estate declined $2.7 million to $0.6 million in the fourth quarter of 2012, compared with $3.3 million in the fourth quarter of 2011.

Twelve Month Results

For the year ended December 31, 2012, net income attributable to USBI increased to $2.2 million, or $0.36 per diluted share, compared with a net loss attributable to USBI of ($9.1 million), or ($1.51) per diluted share, for the year ended December 31, 2011.

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