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United Security Bancshares Inc. Reports Operating Results (10-Q)

August 09, 2010 | About:
10qk

10qk

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United Security Bancshares Inc. (USBI) filed Quarterly Report for the period ended 2010-06-30.

United Security Bancshares Inc. has a market cap of $55.06 million; its shares were traded at around $9.15 with a P/E ratio of 12.71 and P/S ratio of 1. The dividend yield of United Security Bancshares Inc. stocks is 4.81%.

Highlight of Business Operations:

Net loss attributable to USBI during the second quarter of 2010 was $348,000, compared to net income attributable to USBI of $2.9 million for the same period in 2009, resulting in a decrease of basic net income attributable to USBI per share from $0.48 to $(0.06). Net income attributable to USBI decreased from $4.1 million for the six months ended June 30, 2009 to $2.9 million for the six months ended June 30, 2010, resulting in a decrease in basic net income attributable to USBI per share to $0.49 from $0.69. Annualized return on assets was 0.87% for the first six months of 2010, compared to 1.23% for the same period in 2009. Average return on shareholders equity decreased to 7.13% for the first six months of 2010 from 10.53% for the first six months of 2009.

The provision for loan losses was $3.7 million, or 3.5% annualized of average loans, in the second quarter of 2010, compared to $1.5 million, or 1.4% annualized of average loans, in the second quarter of 2009. The provision for loan losses increased to $5.4 million for the six months ended June 30, 2010, compared to $3.4 million for the same period in 2009. The annualized provision as a percent of average loans was 2.6% and 1.7% for each of the first six months of 2010 and 2009, respectively. Charge-offs exceeded recoveries by $5.8 million for the six months ended June 30, 2010, an increase of approximately $2.3 million over the same period in the prior year. See CREDIT QUALITY. The provision for loan losses at the Bank increased to $4.5 million for the six months ended June 30, 2010, compared to $1.1 million for the same period in 2009. For the quarter ended June 30, 2010, the provision for loan losses was $3.5 million, an increase from $223,000 for the same quarter of 2009. Continued weakness in residential and commercial real estate and high unemployment levels in our market areas had a significant impact on our net charge-off levels and resulted in higher provisions for loan losses, particularly for the quarter ended June 30, 2010. The provision for loan losses at ALC decreased to $1.0 million for the six months ended June 30, 2010, compared to $2.3 million for the same period in 2009. For the quarter ended June 30, 2010, the provision for loan

Total non-interest income decreased $2.8 million, or 70.9%, for the second quarter of 2010 and increased $1.3 million, or 25.4%, for the first six months of 2010. Net loss on the sale of other real estate owned amounted to $121,000 in 2009 and has increased to $512,000 as of June 30, 2010. All other fees decreased $2.8 million for the 2010 second quarter due to non-recurring income received in the second quarter of 2009 as a result of a lawsuit settlement. All other fees increased $1.3 million for the six months ended June 30, 2010 compared to the same period of 2009 as a result of a $4.2 million insurance settlement received in the first quarter of 2010.

Total non-interest expense increased $258,000, or 3.9%, for the 2010 second quarter and increased $1.3 million, or 10.0%, for the six months ended June 30, 2010 compared to the same periods in 2009. Salary and employee benefits increased $139,000, when comparing second quarter 2010 to the same period in 2009, and increased $449,000 for the six months ended June 30, 2010 compared to the same period in 2009. For the 2010 second quarter, advertising expense increased $9,000, legal and professional fees decreased $178,000 and telephone and data circuit expense increased $7,000, each compared to the same quarter in 2009. For the six months ended June 30, 2010, advertising expense increased $2,000, legal and professional fees decreased $159,000 and telephone and data circuit expense increased $10,000, each compared to the same period in 2009. Insurance assessments imposed by the Federal Deposit Insurance Corporation (the FDIC) increased $95,000 for the 2010 second quarter and $203,000 for the six months ended June 30, 2010 compared to the same periods in 2009.

In comparing financial condition at June 30, 2010 to December 31, 2009, total assets decreased $18.1 million to $673.6 million, while liabilities decreased $19.8 million to $590.4 million. Shareholders equity increased $1.7 million as a result of an increase in other comprehensive income of $325,000 and earnings in excess of dividends of $1.6 million.

Investment securities decreased $32.4 million, or 16.6%, during the first six months of 2010. Investments provide the Company with a stable form of liquidity while maximizing earnings yield. Loans, net of unearned income, decreased $1.2 million, from $412.5 million at December 31, 2009 to $411.3 million at June 30, 2010. While net loans at June 30, 2010 decreased slightly over December 31, 2009, average loans increased $6.6 million from December 31, 2009 and $7.2 million from June 30, 2009. Loan growth at the Bank has been flat due to the slowdown in construction and real estate development in the trade areas served by the Company. Deposits increased $10.7 million, or 2.1%, during the first six months of 2010. Loans, net of unearned income at ALC decreased $4.6 million from $90.8 million at December 31, 2009 to $86.2 million at June 30, 2010. Loans at the Bank, after consolidation eliminations, increased $3.4 million from $321.7 million at December 31, 2009 to $325.1 million at June 30, 2010.

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