- Net loans increased during the fourth quarter by $17.7 million, or 29.8% on an annualized basis. For the year ended December 31, 2015, net loans declined by $4.1 million, or 1.6%.
- Non-performing assets decreased by $1.7 million during the fourth quarter and by $5.2 million for the year ended December 31, 2015. Non-performing assets as a percentage of total assets were reduced to 1.59% as of December 31, 2015, compared to 1.98% as of September 30, 2015 and 2.50% as of December 31, 2014.
- During the fourth quarter, First US Bank's new branch in downtown Tuscaloosa, Alabama became operational, and renovations to the Bank's main office in Thomasville, Alabama were completed.
Results of Operations
- Pre-provision net interest income totaled $7.0 million for the fourth quarter of 2015, compared to $6.8 million for the prior quarter and $7.1 million for the fourth quarter of 2014. The increase compared to the prior quarter was attributable to loan growth in the fourth quarter. However, average loan volumes remained below levels experienced in the fourth quarter of 2014.
- Net interest income after the provision for loan losses totaled $6.5 million for the fourth quarter of 2015, compared to $6.8 million in the prior quarter and $7.2 million in the fourth quarter of 2014. The reduction compared to both prior quarters resulted primarily from increased loan loss provisioning. The provision for loan losses totaled $415,000 for the fourth quarter of 2015, compared to reductions in reserves during the prior quarter and fourth quarter of 2014 totaling $78,000 and $169,000, respectively. For the year ended December 31, 2015, the provision for loan losses totaled $216,000, compared to reductions in reserves of $74,000 for the year ended December 31, 2014.
- Non-interest income totaled $1.2 million for the fourth quarter of 2015, compared to $1.0 million in the prior quarter and $1.3 million in the fourth quarter of 2014. For the year ended December 31, 2015, non-interest income totaled $4.5 million, compared to $5.1 million for the year ended December 31, 2014. The reduction in 2015 resulted primarily from reduced revenues from service charges on deposit accounts and credit insurance income.
- Non-interest expense totaled $7.2 million in the fourth quarter of 2015, compared to $7.1 million in the prior quarter and $7.2 million in the fourth quarter of 2014. For the year ended December 31, 2015, non-interest expense totaled $28.4 million, compared to $28.6 million for the year ended December 31, 2014.
- The provision for income taxes totaled $1.0 million for the year ended December 31, 2015, compared to $1.8 million in the prior year. The Company's effective tax rate was 26.8% in 2015, compared to 34.0% in 2014. The reduction in effective rate resulted primarily from increases in favorable permanent tax items (primarily tax-exempt interest) as a percentage of pre-tax income.
- Return on average assets was 0.46% for 2015, compared to 0.63% for 2014.
- The Bank maintained capital ratios at a higher level than ratios required to be considered a "well-capitalized" institution under the applicable regulatory framework. As of December 31, 2015, both the Bank's common equity Tier 1 capital and Tier 1 risk-based capital ratios were 22.19%, while the Bank's total capital ratio was 23.35% and Tier 1 leverage ratio was 13.02%.
- Deposit levels declined slightly year over year, totaling $479.3 million as of December 31, 2015, compared to $483.7 million as of December 31, 2014, a decrease of 0.9%. In addition to deposits, the Bank maintains significant external sources of liquidity, including access to funding through federal funds lines, Federal Home Loan Bank advances and brokered deposits.
- Investment securities were maintained at consistent levels throughout 2015, totaling $231.2 million as of December 31, 2015, compared to $234.1 million as of December 31, 2014. The investment securities portfolio both enhances interest income and serves as an additional source of liquidity.
- Shareholders' equity increased to $76.3 million, or $12.65 per share, at December 31, 2015, compared to $75.2 million, or $12.45 per share, at December 31, 2014. The increase in shareholders' equity resulted from continued growth in retained earnings, offset partially by a $1.3 million decrease in other comprehensive income that resulted from a decrease in the market value of investment securities available-for-sale.
- The Company declared a cash dividend of $0.02 per share on its common stock in each quarter of 2015. Dividends declared for the year ended December 31, 2015 totaled $0.08, compared to $0.03 for the year ended December 31, 2014.
Forward-Looking StatementsThis 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. The Company undertakes no obligation to update these statements following the date of this press release, except as required by law. In addition, the Company, 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 the Company'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 the Company with the Securities and Exchange Commission, and forward-looking statements contained in this press release or in other public statements of the Company or its senior management should be considered in light of those factors. Specifically, with respect to statements relating to loan demand, growth and earnings potential, geographic expansion and the adequacy of the allowance for loan losses for the Company, these factors include, but are not limited to, the rate of growth (or lack thereof) in the economy generally and in the Bank's and ALC's service areas, the availability of quality loans in the Bank's and ALC's service areas, 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 SELECTED FINANCIAL DATA - LINKED QUARTERS (Dollars in Thousands, Except Per Share Data)|
|December 31,||September 30,||June 30,||March 31,||December 31,|
|Results of Operations:|
|Net interest income||6,964||6,767||7,170||6,707||7,050|
|Provision (reduction in reserve) for loan losses||415||(78||)||45||(166||)||(169||)|
|Net interest income after provision (reduction in reserve) for loan losses||6,549||6,845||7,125||6,873||7,219|
|Income before income taxes||522||751||1,086||1,187||1,252|
|Provision for income taxes||81||207||312||351||532|
|Per Share Data:|
|Basic net income per share||$||0.07||$||0.09||$||0.13||$||0.14||$||0.12|
|Diluted net income per share||$||0.07||$||0.09||$||0.12||$||0.13||$||0.12|
|Period-End Balance Sheet:|
|Loans, net of allowance for loan losses||255,432||237,715||244,993||239,218||259,516|
|Allowance for loan losses||3,781||4,345||5,008||5,401||6,168|
|Investment securities, net||231,202||239,009||246,176||249,864||234,086|
|Total shareholders' equity||76,316||76,283||75,783||75,745||75,162|
|Return on average assets (annualized)||0.31||%||0.39||%||0.55||%||0.59||%||0.50||%|
|Return on average equity (annualized)||2.28||%||2.84||%||4.09||%||4.47||%||3.83||%|
|Allowance for loan losses as % of loans||1.46||%||1.80||%||2.00||%||2.21||%||2.32||%|
|Nonperforming assets as % of total assets||1.59||%||1.98||%||1.96||%||2.27||%||2.50||%|
|UNITED SECURITY BANCSHARES, INC. AND SUBSIDIARIES INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS (Dollars in Thousands, Except Share and Per Share Data)|
|December 31,||December 31,|
|Cash and due from banks||$||7,088||$||9,697|
|Interest-bearing deposits in banks||36,984||24,469|
|Total cash and cash equivalents||44,072||34,166|
|Investment securities available-for-sale, at fair value||198,843||204,966|
|Investment securities held-to-maturity, at amortized cost||32,359||29,120|
|Federal Home Loan Bank stock, at cost||1,025||738|
|Loans, net of allowance for loan losses of $3,781 and $6,168, respectively||255,432||259,516|
|Premises and equipment, net||12,084||9,764|
|Cash surrender value of bank-owned life insurance||14,292||13,975|
|Accrued interest receivable||1,833||2,235|
|Other real estate owned||6,038||7,735|
|LIABILITIES AND SHAREHOLDERS' EQUITY|
|Accrued interest expense||180||221|
|Common stock, par value $0.01 per share, 10,000,000 shares authorized; 7,329,060 shares issued; 6,038,554 and 6,034,059 shares outstanding, respectively||73||73|
|Accumulated other comprehensive income, net of tax||536||1,829|
|Less treasury stock: 1,290,506 and 1,295,001 shares at cost, respectively||(20,817||)||(20,886||)|
|Total shareholders' equity||76,316||75,162|
|Total liabilities and shareholders' equity||$||575,782||$||572,609|
|UNITED SECURITY BANCSHARES, INC. AND SUBSIDIARIES INTERIM CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Dollars in Thousands, Except Per Share Data)|
|Three Months Ended||Twelve Months Ended|
|December 31,||December 31,|
|Interest and fees on loans||$||6,362||$||6,501||$||25,177||$||26,929|
|Interest on investment securities||1,151||1,185||4,720||4,432|
|Total interest income||7,513||7,686||29,897||31,361|
|Interest on deposits||541||628||2,262||2,522|
|Interest on borrowings||8||8||27||31|
|Total interest expense||549||636||2,289||2,553|
|Net interest income||6,964||7,050||27,608||28,808|
|Provision (reduction in reserve) for loan losses||415||(169||)||216||(74||)|
|Net interest income after provision (reduction in reserve) for loan losses||6,549||7,219||27,392||28,882|
|Service and other charges on deposit accounts||453||524||1,844||2,096|
|Credit insurance income||162||271||501||694|
|Total non-interest income||1,176||1,279||4,531||5,091|
|Salaries and employee benefits||4,151||4,108||16,664||16,690|
|Net occupancy and equipment||769||810||3,116||3,226|
|Other real estate/foreclosure expense, net||213||428||1,027||1,077|
|Total non-interest expense||7,203||7,246||28,377||28,595|
|Income before income taxes||522||1,252||3,546||5,378|
|Provision for income taxes||81||532||951||1,829|
|Basic net income per share||$||0.07||$||0.12||$||0.42||$||0.58|
|Diluted net income per share||$||0.07||$||0.12||$||0.41||$||0.57|
|Dividends per share||$||0.02||$||0.02||$||0.08||$||0.03|