THOMASVILLE, Ala., April 29, 2016 (GLOBE NEWSWIRE) -- United Security Bancshares, Inc. (Nasdaq:USBI) (the “Company”) today reported net income of $0.3 million, or $0.05 per diluted share, for the quarter ended March 31, 2016. The results represent a decrease of $0.02 per share compared to the prior quarter and a decrease of $0.08 per share compared to the first quarter of 2015.
First Quarter Highlights
“We are pleased to report a second consecutive quarter of loan growth, continued improvement in asset quality, and forward movement in expanding the Bank’s presence in the Birmingham area” said James F. House, President and Chief Executive Officer of United Security Bancshares, Inc. “The expansion of our presence in a larger metropolitan market is a significant milestone in our efforts to grow the Bank’s commercial loan portfolio.”
“Although we have experienced solid growth in the Bank’s loan portfolio during the last two quarters, earnings remain constrained. At both the Bank and ALC, management has focused intently over the past several years on problem asset resolution. We have sacrificed some volume and yield as a result of these efforts; however, we believe that we have substantially improved the health of our balance sheet and are now well-positioned for growth at both entities. We are also optimistic that the steps we have taken to open a new branch in Tuscaloosa during the fourth quarter of 2015, and now to expand our presence in Birmingham, will significantly enhance the Bank’s opportunities to grow its commercial lending portfolio with high quality assets,” continued Mr. House.
Results of Operations
Balance Sheet Management
About United Security Bancshares, Inc.
United Security Bancshares, Inc. is a bank holding company that operates twenty-one banking offices in Alabama through First US 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. 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)
Quarter Ended | |||||||||||||||
2016 | 2015 | ||||||||||||||
March 31, | December 31, | September 30, | June 30, | March 31, | |||||||||||
Results of Operations: | |||||||||||||||
Interest income | $ | 7,196 | $ | 7,513 | $ | 7,328 | $ | 7,735 | $ | 7,321 | |||||
Interest expense | 535 | 549 | 561 | 565 | 614 | ||||||||||
Net Interest income | 6,661 | 6,964 | 6,767 | 7,170 | 6,707 | ||||||||||
Provision (reduction in reserve) for loan losses | 167 | 415 | (78 | ) | 45 | (166 | ) | ||||||||
Net interest income after provision (reduction in reserve) for loan losses | 6,494 | 6,549 | 6,845 | 7,125 | 6,873 | ||||||||||
Non-interest income | 989 | 1,176 | 996 | 1,068 | 1,291 | ||||||||||
Non-interest expense | 7,066 | 7,203 | 7,090 | 7,107 | 6,977 | ||||||||||
Income before income taxes | 417 | 522 | 751 | 1,086 | 1,187 | ||||||||||
Provision for income taxes | 100 | 81 | 207 | 312 | 351 | ||||||||||
Net income | $ | 317 | $ | 441 | $ | 544 | $ | 774 | $ | 836 | |||||
Per Share Data: | |||||||||||||||
Basic net income per share | $ | 0.05 | $ | 0.07 | $ | 0.09 | $ | 0.13 | $ | 0.14 | |||||
Diluted net income per share | $ | 0.05 | $ | 0.07 | $ | 0.09 | $ | 0.12 | $ | 0.13 | |||||
Dividends declared | $ | 0.02 | $ | 0.02 | $ | 0.02 | $ | 0.02 | $ | 0.02 | |||||
Period-End Balance Sheet: | |||||||||||||||
Total assets | $ | 575,582 | $ | 575,782 | $ | 548,537 | $ | 560,650 | $ | 564,882 | |||||
Loans, net of allowance for loan losses | 263,975 | 255,432 | 237,715 | 244,993 | 239,218 | ||||||||||
Allowance for loan losses | 3,375 | 3,781 | 4,345 | 5,008 | 5,401 | ||||||||||
Investment securities, net | 231,466 | 231,202 | 239,009 | 246,176 | 249,864 | ||||||||||
Total deposits | 485,537 | 479,258 | 463,266 | 471,141 | 475,288 | ||||||||||
Long-term debt | 5,000 | 5,000 | - | 5,000 | 5,000 | ||||||||||
Total shareholders’ equity | 77,727 | 76,316 | 76,283 | 75,783 | 75,745 | ||||||||||
Performance Ratios: | |||||||||||||||
Return on average assets (annualized) | 0.22 | % | 0.31 | % | 0.39 | % | 0.55 | % | 0.59 | % | |||||
Return on average equity (annualized) | 1.65 | % | 2.28 | % | 2.84 | % | 4.09 | % | 4.47 | % | |||||
Asset Quality: | |||||||||||||||
Allowance for loan losses as % of loans | 1.26 | % | 1.46 | % | 1.80 | % | 2.00 | % | 2.21 | % | |||||
Nonperforming assets as % of total assets | 1.50 | % | 1.59 | % | 1.98 | % | 1.96 | % | 2.27 | % | |||||
UNITED SECURITY BANCSHARES, INC. AND SUBSIDIARIES
INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in Thousands, Except Share and Per Share Data)
March 31, | December 31, | ||||||
2016 | 2015 | ||||||
(Unaudited) | |||||||
ASSETS | |||||||
Cash and due from banks | $ | 8,479 | $ | 7,088 | |||
Interest-bearing deposits in banks | 22,007 | 36,984 | |||||
Total cash and cash equivalents | 30,486 | 44,072 | |||||
Federal funds sold | 3,000 | - | |||||
Investment securities available-for-sale, at fair value | 199,488 | 198,843 | |||||
Investment securities held-to-maturity, at amortized cost | 31,978 | 32,359 | |||||
Federal Home Loan Bank stock, at cost | 730 | 1,025 | |||||
Loans, net of allowance for loan losses of $3,375 and $3,781, respectively | 263,975 | 255,432 | |||||
Premises and equipment, net | 15,058 | 12,084 | |||||
Cash surrender value of bank-owned life insurance | 14,370 | 14,292 | |||||
Accrued interest receivable | 1,756 | 1,833 | |||||
Other real estate owned | 5,356 | 6,038 | |||||
Other assets | 9,385 | 9,804 | |||||
Total assets | $ | 575,582 | $ | 575,782 | |||
LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||
Deposits | $ | 485,537 | $ | 479,258 | |||
Accrued interest expense | 179 | 180 | |||||
Other liabilities | 6,693 | 7,674 | |||||
Short-term borrowings | 446 | 7,354 | |||||
Long-term debt | 5,000 | 5,000 | |||||
Total liabilities | 497,855 | 499,466 | |||||
Shareholders’ equity: | |||||||
Common stock, par value $0.01 per share, 10,000,000 shares authorized; | |||||||
7,329,060 shares issued; 6,038,554 shares outstanding | 73 | 73 | |||||
Surplus | 10,649 | 9,844 | |||||
Accumulated other comprehensive income, net of tax | 946 | 536 | |||||
Retained earnings | 86,889 | 86,693 | |||||
Less treasury stock: 1,290,506 shares at cost | (20,817 | ) | (20,817 | ) | |||
Noncontrolling interest | (13 | ) | (13 | ) | |||
Total shareholders’ equity | 77,727 | 76,316 | |||||
Total liabilities and shareholders’ equity | $ | 575,582 | $ | 575,782 | |||
UNITED SECURITY BANCSHARES, INC. AND SUBSIDIARIES
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in Thousands, Except Per Share Data)
Three Months Ended | |||||||
March 31, | |||||||
2016 | 2015 | ||||||
(Unaudited) | |||||||
Interest income: | |||||||
Interest and fees on loans | $ | 6,053 | $ | 6,135 | |||
Interest on investment securities | 1,143 | 1,186 | |||||
Total interest income | 7,196 | 7,321 | |||||
Interest expense: | |||||||
Interest on deposits | 523 | 607 | |||||
Interest on borrowings | 12 | 7 | |||||
Total interest expense | 535 | 614 | |||||
Net interest income | 6,661 | 6,707 | |||||
Provision (reduction in reserve) for loan losses | 167 | (166 | ) | ||||
Net interest income after provision (reduction in reserve) for loan losses | 6,494 | 6,873 | |||||
Non-interest income: | |||||||
Service and other charges on deposit accounts | 417 | 454 | |||||
Credit insurance income | 152 | 75 | |||||
Other income | 420 | 762 | |||||
Total non-interest income | 989 | 1,291 | |||||
Non-interest expense: | |||||||
Salaries and employee benefits | 4,164 | 4,192 | |||||
Net occupancy and equipment | 769 | 823 | |||||
Other real estate/foreclosure expense, net | 117 | 220 | |||||
Other expense | 2,016 | 1,742 | |||||
Total non-interest expense | 7,066 | 6,977 | |||||
Income before income taxes | 417 | 1,187 | |||||
Provision for income taxes | 100 | 351 | |||||
Net income | $ | 317 | $ | 836 | |||
Basic net income per share | $ | 0.05 | $ | 0.14 | |||
Diluted net income per share | $ | 0.05 | $ | 0.13 | |||
Dividends per share | $ | 0.02 | $ | 0.02 | |||