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| 8-K - FIRST US BANCSHARES INC | v183372_8k.htm |
Contact: Robert
Steen
334-636-5424
UNITED
SECURITY BANCSHARES, INC. REPORTS
FIRST
QUARTER RESULTS
First
Quarter Net Income Increases to $3.3 Million
THOMASVILLE,
Ala. (May 4, 2010) -- United Security Bancshares, Inc. (Nasdaq: USBI) today
reported net income of $3.3 million, or $0.55 per diluted share, for the first
quarter of 2010, compared with net income of $1.3 million, or $0.21 per diluted
share, for the first quarter of 2009. The 2010 results include an
insurance settlement of $4.15 million, which represents $0.41 per diluted share
after tax and related expenses.
“Our
strong first quarter earnings resulted in large part from the insurance proceeds
that we received following a settlement with our insurance carrier for a bond
claim filed in December 2009,” stated R. Terry Phillips, President and Chief
Executive Officer of United Security Bancshares, Inc. “The claim was
related to certain loan irregularities and fraudulent activities at Acceptance
Loan Company that resulted in losses during 2007. We are pleased that
this matter was settled without going to trial.”
“Our
operating results reflected the continued impact of the soft
economy. Loan demand is weak in many of our markets due to a slowdown
in real estate sales and declining real estate values. In addition,
the weakness in the real estate markets has pressured the underlying collateral
values of loans and has contributed in large part to the increase in
non-performing assets since last year. We have increased our
allowance for loan losses since last year to $10.3 million, or 2.5% of net
loans, and believe that this amount provides adequate coverage for potential
loan losses based on our current projections. We remain focused on
working off the higher level of non-performing assets and believe that our
success in this area will be a major factor in growing our future earnings,”
continued Mr. Phillips.
First
Quarter Results
Interest
income totaled $11.3 million in the first quarter of 2010, compared with $12.0
million in the first quarter of 2009. Interest and fees on loans
were down 4.4% to $9.3 million due to lower interest rates and an 11 basis point
decrease in the net interest margin to 5.49%, compared with 5.60% in the first
quarter of 2009.
Interest
expense declined 18.1% to $2.9 million in the first quarter of 2010, compared
with $3.6 million in the first quarter of 2009. The decline in interest
expense was due primarily to a decline in interest rates paid on interest
bearing deposits, partially offset by higher average balances in interest
bearing accounts.
Net
interest income decreased 0.8% to $8.3 million in the first quarter of 2010,
compared with $8.4 million in the first quarter of the prior
year. The decline in net interest income was due primarily to lower
net interest margin related to an increase in interest bearing deposits, offset
somewhat by slightly higher loan balances.
Provision
for loan losses decreased to $1.7 million in the first quarter of 2010, or 1.7%
of annualized average loans, compared with $1.9 million, or 1.9% of annualized
average loans, in the first quarter of 2009.
“Our loan
loss provision declined from the first quarter of last year and is down
considerably from the fourth quarter of 2009,” stated Mr.
Phillips. “We benefited from a lower level of net charge-offs and
remain focused on working through our problem loans to minimize potential
losses. In addition, we are continuing to emphasize credit quality
over loan growth until the economy begins to show signs of
recovery.”
Total
non-interest income increased $4.1 million to $5.4 million in the first
quarter of 2010, compared with $1.2 million in the first quarter of the prior
year. The increase in non-interest income was due primarily to the
insurance settlement of $4.15 million arising from the proceeds of the
Company’s bond claim. The insurance proceeds were offset somewhat by
lower service charges on deposit accounts, as customers have reduced overdraft
and related fees, and a decrease in credit life insurance income.
Non-interest
expense increased to $7.0 million in the first quarter of 2010, compared with
$6.0 million in the first quarter of 2009. Salary and employee benefits
increased $310,000, and other expenses rose $716,000 due to an increase in FDIC
insurance ($108,000), legal fees related to the insurance settlement ($333,000)
and higher carrying costs associated with other real estate owned.
“United
Security Bancshares and First United Security Bank continue to be
well-capitalized, which is the highest regulatory rating, and we believe that
our capital position highlights the safety and soundness of our
operations. We are pleased to report this level of capital, without
the assistance of any bail-out funds provided by the government, and we remain
focused on preserving our capital during this weak economic period,” concluded
Mr. Phillips.
Shareholders' equity
increased to $84.0 million, or $13.95 per share, for the three months ended
March 31, 2010, compared with $79.1 million, or $13.14 per share, for the three
months ended March 31, 2009. Return on
average assets at March 31, 2010 was 0.83%, and return on average equity was
6.92%, each adjusted for the one-time payment of the insurance
settlement. Regular quarterly dividends were $0.11 per share for the
first quarter of 2010, compared with $0.27 per share for the first quarter of
2009.
About
United Security Bancshares, Inc.
United
Security Bancshares, Inc. is a bank holding company that operates nineteen
banking offices in Alabama through First United Security Bank. In
addition, the Company’s operations include Acceptance Loan Company, Inc., a
consumer loan company, and FUSB Reinsurance, Inc., an underwriter of credit life
and credit accident and health insurance policies sold to the bank’s and ALC’s
consumer loan customers. The Company’s stock is traded on the Nasdaq
Capital Market under the symbol “USBI.”
Forward-Looking
Statements
This
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. USBI undertakes no obligation to update these statements
following the date of this press release, except as required by law. In
addition, USBI, 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 USBI’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 USBI with the Securities and Exchange Commission, and forward-looking
statements contained in this press release or in other public statements of USBI
or its senior management should be considered in light of those factors. With
respect to the adequacy of the allowance for loan losses for USBI, these factors
include, but are not limited to, the rate of growth (or lack thereof) in the
economy, 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
CONDENSED
CONSOLIDATED STATEMENTS OF INCOME
(Dollars
in Thousands, Except Per Share Data)
|
Three
Months Ended
|
||||||||
|
March
31,
|
||||||||
|
2010
|
2009
|
|||||||
|
(Unaudited)
|
||||||||
|
INTEREST
INCOME:
|
||||||||
|
Interest
and Fees on Loans
|
$ | 9,305 | $ | 9,735 | ||||
|
Interest
on Investment Securities Available-for-Sale
|
1,949 | 2,234 | ||||||
|
Total
Interest Income
|
11,254 | 11,969 | ||||||
|
INTEREST
EXPENSE:
|
||||||||
|
Interest
on Deposits
|
1,983 | 2,654 | ||||||
|
Interest
on Borrowings
|
940 | 916 | ||||||
|
Total
Interest Expense
|
2,923 | 3,570 | ||||||
|
NET
INTEREST INCOME
|
8,331 | 8,399 | ||||||
|
PROVISION
FOR LOAN LOSSES
|
1,743 | 1,909 | ||||||
|
NET
INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES
|
6,588 | 6,490 | ||||||
|
NON-INTEREST
INCOME:
|
||||||||
|
Service
and Other Charges on Deposit Accounts
|
653 | 661 | ||||||
|
Credit
Life Insurance Income
|
131 | 158 | ||||||
|
Other
Income
|
4,590 | 418 | ||||||
|
Total
Non-Interest Income
|
5,374 | 1,237 | ||||||
|
NON-INTEREST
EXPENSE:
|
||||||||
|
Salaries
and Employee Benefits
|
3,461 | 3,151 | ||||||
|
Occupancy
Expense
|
449 | 454 | ||||||
|
Furniture
and Equipment Expense
|
300 | 305 | ||||||
|
Other
Expense
|
2,793 | 2,077 | ||||||
|
Total
Non-Interest Expense
|
7,003 | 5,987 | ||||||
|
INCOME
BEFORE INCOME TAXES
|
4,959 | 1,740 | ||||||
|
PROVISION
FOR INCOME TAXES
|
1,799 | 471 | ||||||
|
NET
INCOME
|
$ | 3,160 | $ | 1,269 | ||||
|
Less: Net
Income Attributable to Noncontrolling Interest
|
125 | 0 | ||||||
|
NET
INCOME ATTRIBUTABLE TO UNITED SECURITY BANCSHARES,
INC.
|
$ | 3,285 | $ | 1,269 | ||||
|
BASIC
AND DILUTED NET INCOME PER SHARE
|
$ | 0.55 | $ | 0.21 | ||||
|
DIVIDENDS
PER SHARE
|
$ | 0.11 | $ | 0.27 | ||||
UNITED
SECURITY BANCSHARES, INC. AND SUBSIDIARIES
CONDENSED
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(Dollars
in Thousands, Except Per Share Data)
|
March
31,
|
December
31,
|
|||||||
|
2010
|
2009
|
|||||||
|
(Unaudited)
|
||||||||
|
ASSETS
|
||||||||
|
Cash
and Due from Banks
|
$ | 12,014 | $ | 12,323 | ||||
|
Interest-Bearing
Deposits in Other Banks
|
126 | 126 | ||||||
|
Total
Cash and Cash Equivalents
|
12,140 | 12,449 | ||||||
|
Federal
Funds Sold
|
14,850 | 4,545 | ||||||
|
Investment
Securities Available-for-Sale, at fair market value
|
164,963 | 194,754 | ||||||
|
Investment
Securities Held-to Maturity, at fair market value
|
1,250 | 1,250 | ||||||
|
Federal
Home Loan Bank Stock, at cost
|
5,700 | 5,700 | ||||||
|
Loans,
net of allowance for loan losses of $10,268 and $10,004,
respectively
|
403,337 | 402,504 | ||||||
|
Premises
and Equipment, net
|
16,905 | 17,253 | ||||||
|
Cash
Surrender Value of Bank-Owned Life Insurance
|
12,161 | 12,037 | ||||||
|
Accrued
Interest Receivable
|
4,937 | 5,095 | ||||||
|
Goodwill
|
4,098 | 4,098 | ||||||
|
Investment
in Limited Partnerships
|
1,854 | 1,925 | ||||||
|
Other
Real Estate Owned
|
21,782 | 21,439 | ||||||
|
Other
Assets
|
9,797 | 8,705 | ||||||
|
Total
Assets
|
$ | 673,774 | $ | 691,754 | ||||
|
LIABILITIES
AND SHAREHOLDERS’ EQUITY
|
||||||||
|
Deposits
|
$ | 521,722 | $ | 513,053 | ||||
|
Accrued
Interest Expense
|
2,357 | 2,477 | ||||||
|
Short-Term
Borrowings
|
776 | 620 | ||||||
|
Long-Term
Debt
|
54,000 | 85,000 | ||||||
|
Other
Liabilities
|
10,932 | 9,140 | ||||||
|
Total
Liabilities
|
589,787 | 610,290 | ||||||
|
Shareholders’
Equity:
|
||||||||
|
Common
Stock, par value $0.01 per share, 10,000,000 shares
authorized;
|
||||||||
|
7,317,560
shares issued; 6,017,489 and 6,017,582 shares outstanding,
|
||||||||
|
respectively
|
73 | 73 | ||||||
|
Surplus
|
9,233 | 9,233 | ||||||
|
Accumulated
Other Comprehensive Income, net of tax
|
4,344 | 4,316 | ||||||
|
Retained
Earnings
|
92,864 | 90,242 | ||||||
|
Less
Treasury Stock: 1,300,071 and 1,299,978 shares at cost,
respectively
|
(21,129 | ) | (21,127 | ) | ||||
|
Noncontrolling
Interest
|
(1,398 | ) | (1,273 | ) | ||||
|
Total
Shareholders’ Equity
|
83,987 | 81,464 | ||||||
|
Total
Liabilities and Shareholders’ Equity
|
$ | 673,774 | $ | 691,754 | ||||