United Security Bancshares - Net Income $1.1 million for First Quarter 2012

FRESNO, Calif., April 20, 2012 /PRNewswire/ -- United Security Bancshares (http://www.unitedsecuritybank.com/) (Nasdaq Global Select: UBFO) reported today unaudited consolidated net income of $1,051,000 or $0.08 per basic and diluted common share for the three months ended March 31, 2012, as compared to $356,000 of $0.03 per basic and diluted common shares for the three months ended March 31, 2011.

Annualized return on average equity (ROE) for the three months ended March 31, 2012 was 8.21%, compared to 2.06% for the same period in 2011. Annualized return on average assets (ROA) was 0.68% for the three months ended March 31, 2012 compared to 0.22% for the same three-month period in 2011.

The Board of Directors of United Security Bancshares declared a first quarter 2012 stock dividend of one percent (1%) on March 27, 2012. The stock dividend was payable to shareholders of record on April 10, 2012, and the shares were issued on April 17, 2012.

Dennis R. Woods, President and Chief Executive Officer of the Company, added "We continue to reduce problem assets and  see reductions in the levels of  nonaccrual, impaired loans and OREO properties since the first quarter of 2011. Signs of real estate price stabilization are evident but we may experience price declines in some regions from time to time."

Shareholders' equity at March 31, 2012 was $63.4 million, up $1.2 million from shareholders' equity of $62.2 million at December 31, 2011.  

Net interest income before provision for credit loss for the three months ended March 31, 2012 totaled $6.1 million, down just $145,000 from $6.2 million reported for the three months ended March 31, 2011. The net interest margin was 4.62% for the three months ended March 31, 2012 as compared to 4.42% for the three months ended March 31, 2011 as the Company continues to benefit from decreasing costs on interest-bearing liabilities

Noninterest income for the three months ended March 31, 2011 totaled $894,000, reflecting a decrease of $234,000 from $1.1 million in noninterest income reported for the three months ended March 31, 2011. Customer service fees continue to provide the majority of the Company's noninterest income, totaling $903,000 for the three months ended March 31, 2011, as compared to $867,000 for the three months ended March 31, 2011. Changes in noninterest income on a quarter-to-quarter comparative basis are largely the result of a decrease of $217,000 on gains realized on the sale of other real estate owned and an increase of $110,000 on losses on the fair value of the Company's junior subordinated debt.

Noninterest expense totaled $5.5 million for the three months ended March 31, 2012, down $570,000 from $6.1 million reported for the three months ended March 31, 2011. Between the three-month comparative periods, decreases in impairment losses on other real estate owned, occupancy, professional fees and regulatory assessments, were partially offset by modest increases in salaries and employee benefits.

The Company had a provision for loan loss reserve of $2,000 for the three months ended March 31, 2012, compared to $1.1 million for the three months ended December 31, 2011, and $890,000 for the three months ended March 31, 2011. Net loan charge-offs totaled $600,000 for the three months ended March 31, 2012 as compared to $1.4 million for the three months ended December 31, 2011, and $665,000 for the three months ended March 31, 2011. With continued weakness in the economy and real estate markets within our service area, we have maintained an adequate allowance for loan losses which totaled 3.29% of total loans at March 31, 2011 compared to 3.34% of total loans at December 31, 2011, and 3.87% of total loans at March 31, 2012. In determining the adequacy of the allowance for loan losses, Management's judgment is the primary determining factor for establishing the amount of the provision for loan losses and management considers the allowance for loan and lease losses at March 31, 2012 to be adequate.

Non-performing assets, comprised of nonaccrual loans, other real estate owned through foreclosure (OREO), and loans more than 90 days past days and still accruing interest, decreased approximately $952,000 between December 31, 2011 and March 31, 2012. However, due to the overall shrinking of the Company's balance sheet as the Company continues to successfully work-out, or dispose of, problem assets, nonperforming assets as a percentage of total assets increased slightly from 8.75% at December 31, 2011 to 8.99% at March 31, 2012. Nonaccrual loans increased $1.4 million between December 31, 2011 and March 31, 2012, while OREO, decreased $933,000 during the same period. Impaired loans totaled $32.0 million at March 31, 2012, up minimally from the balance of $31.9 million at December 31, 2011.

United Security Bancshares is a $620+ million bank holding company. United Security Bank, its principal subsidiary is a state chartered bank and member of the Federal Reserve Bank of San Francisco.

FORWARD-LOOKING STATEMENTS

This news release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended and the Company intends such statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995.

Forward-looking statements are based on management's knowledge and belief as of today and include information concerning the Company's possible or assumed future financial condition, and its results of operations, business and earnings outlook. These forward-looking statements are subject to risks and uncertainties. A number of factors, some of which are beyond the Company's ability to control or predict, could cause future results to differ materially from those contemplated by such forward-looking statements. These factors include (1) changes in interest rates, (2) significant changes in banking laws or regulations, (3) increased competition in the company's market, (4) other-than-expected credit losses, (5) earthquake or other natural disasters impacting the condition of real estate collateral, (6) the effect of acquisitions and integration of acquired businesses, (7) the impact of proposed and/or recently adopted changes in laws, and regulations on the Company and its business; (8) changing bank regulatory conditions, policies, whether arising as new legislation or regulatory initiatives or changes in our regulatory classifications, that could lead to restrictions on activities of banks generally or as to the Bank, including specifically the formal order between the Federal Reserve Bank of San Francisco and the Company and the Bank, (9) failure to comply with the regulatory agreement under which the Company is subject and (10) unknown economic impacts caused by the State of California's budget issues. Management cannot predict at this time the severity or duration of the effects of the recent business slowdown on our specific business activities and profitability. Weaker or a further decline in capital and consumer spending, and related recessionary trends could adversely affect our performance in a number of ways including decreased demand for our products and services and increased credit losses. Likewise, changes in interest rates, among other things, could slow the rate of growth or put pressure on current deposit levels and affect the ability of borrowers to repay loans. Forward-looking statements speak only as of the date they are made, and the company does not undertake to update forward-looking statements to reflect circumstances or events that occur after the date the statements are made, or to update earnings guidance including the factors that influence earnings. For a more complete discussion of these risks and uncertainties, see the Company's Annual Report on Form 10-K for the year ended December 31, 2011, and particularly the section of Management's Discussion and Analysis.  Readers should carefully review all disclosures we file from time to time with the Securities and Exchange Commission ("SEC").

SOURCE United Security Bancshares