United Security Bancshares operates a commercial banking subsidiary First United Security Bank. First United Security Bank has banking offices located in Thomasville Coffeeville Fulton Gilbertown Grove Hill Butler Jackson Brent Centreville Woodstock Harpersville Bucksville and Calera Alabama United Security Bancshares Inc. has a market cap of $140.9 million; its shares were traded at around $23.42 with a P/E ratio of 29.6 and P/S ratio of 2.4. The dividend yield of United Security Bancshares Inc. stocks is 1.9%. Highlight of Business Operations: Net income during the second quarter of 2009 was $2.9 million, compared to $1.5 million for the same period in 2008, resulting in an increase of basic net income per share from $0.25 to $0.48. For the six months, net income increased from $3.4 million in 2008 to $4.1 million in 2009, resulting in an increase of basic net income per share to $0.69 from $0.56. Annualized return on assets was 1.23% for the first six months of 2009, compared to 1.02% for the same period during 2008. Average return on shareholders equity increased to 10.53% for the first six months of 2009, from 8.49% during the first six months of 2008.
The provision for loan losses was $1.5 million, or 1.4% annualized of average loans, in the second quarter of 2009, compared to $2.2 million, or 2.1% annualized of average loans, in the second quarter of 2008. The provision for loan losses decreased to $3.4 million year-to-date 2009, compared to $3.5 million in 2008. The annualized provision as a percent of average loans was 1.7% for each of the first six months of 2008 and 2009. Charge-offs exceeded recoveries by $3.5 million for the 2009 six-month period, a decrease of approximately $700,000 over the same period in the prior year. See CREDIT QUALITY.
Total non-interest income increased $2.3 million, or 135.9%, for the second quarter of 2009, and $2.2 million, or 71.6%, for the first six months of 2009. Service charges and fees on deposit accounts decreased $84,000 quarter-to-date and $214,000 year-to-date 2009, compared to the same periods in 2008. Income on bank-owned life insurance increased $3,000 quarter-to-date and $6,000 year-to-date 2009, compared to the same periods in 2008. Commissions on credit insurance increased $86,000 quarter-to-date 2009 and $156,000 year-to-date, compared to the same periods in 2008. Letters of credit and commitment fees decreased $5,000 quarter-to-date and $16,000 year-to-date. Net gains on the sale of other real estate owned amounted to $268,000 in 2008 and have decreased to a net loss of $121,000 year-to-date 2009. All other fees increased as a result of a settlement received in the second quarter of 2009 related to a lawsuit filed against three accounting firms, which resulted in net settlement proceeds to the Company in the amount of $2.7 million. This non-recurring income represents earnings of $0.30 per share for the three- and six-month periods ended June 30, 2009.
Total non-interest expense increased $570,000, or 9.3%, quarter-to-date and increased $561,000, or 4.6%, year-to-date 2009, compared to the same periods in 2008. Salary and employee benefits increased $341,000, when comparing second quarter 2009 to 2008, and $272,000 year-to-date 2009, compared to the same period in 2008. For the three months ended June 30, 2009, advertising expense decreased $27,000, legal and professional fees decreased $80,000 and telephone and data circuit expense increased $7,000, each compared to the same quarter in 2008. On a year-to-date basis, advertising expense decreased $24,000, legal and professional fees increased $153,000 and telephone and data circuit expense increased $16,000, each compared to the same period in 2008. FDIC insurance assessments have increased $210,000 quarter-to-date and $296,000 year-to-date 2009, compared to the same periods in 2008.
In comparing financial condition at December 31, 2008 to June 30, 2009, total assets increased $17.4 million to $685.4 million, while liabilities increased $15.2 million to $604.6 million. Shareholders equity increased $2.1 million as a result of an increase in other comprehensive income of $307,000 and earnings in excess of dividends of $1.8 million.
Investment securities decreased $4.3 million, or 2.3%, during the first six months of 2009. Investments provide the Company with a stable form of liquidity while maximizing earnings yield. Loans, net of unearned income, increased $289,000, from $408.0 million at December 31, 2008, to $408.3 million at June 30, 2009. While quarter-end net loans have increased slightly over December 31, 2008, average loans have declined $7.2 million from December 31, 2008 and $17.6 million from June 30, 2008. Loan growth has been flat due to the slowdown in construction and real estate development in the trade areas served by the Company. Deposits increased $15.7 million, or 3.2%, during the first six months of 2009.
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