United Security Bancshares - First Quarter Profits: $1.1 Million

       United Security Bancshares - First Quarter Profits: $1.1 Million

PR Newswire

FRESNO, Calif., April 17, 2013

FRESNO, Calif., April 17, 2013 /PRNewswire/ --United Security Bancshares
(http://www.unitedsecuritybank.com/) (Nasdaq Global Select: UBFO) reported
today unaudited consolidated net income of $1.1 million or $0.07 per basic and
diluted common share for both the three months ended March 31, 2013 and March
31, 2012.

Annualized return on average equity (ROAE) for the three months ended March
31, 2013 was 6.20%, compared to 6.69% for the same period in 2012. Annualized
return on average assets (ROAA) was 0.68% for the three moths ended March 31,
2013 compared to 0.67% for the same three-month period in 2012.

The Board of Directors of United Security Bancshares declared a first ^
quarter 2013 stock dividend of one percent (1%) on March 26, 2013. The stock
dividend was payable to shareholders of record on April 12, 2013, and the
shares will be issued on April 24, 2013.

Dennis R. Woods, President and Chief Executive Officer of the Company, states,
"The first quarter has been positive for the Company with continued reductions
in problem assets and OREO, increases in capital, and positive net earnings.
We continue to see improvements in the local economy and look forward to
continued success during the remainder of 2013." Shareholders' equity at
March 31, 2013 was $70.5 million, up $1.0 million from shareholders' equity of
$69.4 million at December 31, 2012. 

Net interest income before provision for credit losses totaled $5.3 million
for the three months ended March 31, 2013, down $819,000 from $6.1 million
reported for the three months ended March 31, 2012. The net interest margin
was 3.94% for the three months ended March 31, 2013, as compared to 4.63% for
the three months ended March 31, 2012.

Noninterest income for the three months ended March 31, 2013 totaled $1.5
million, reflecting an increase of $648,000 from the $896,000 in noninterest
income reported for the three months ended March 31, 2012. The increase
between the two periods is due, in large part, to gains recorded during the
first quarter of 2013 of more than $1.0 million from sales of other real
estate owned through foreclosure. Customer service fees continue to provide
the majority of the Company's noninterest income from operations, totaling
$779,000 for the three months ended March 31, 2013, as compared to $903,000
for the three months ended March 31, 2012. Reductions in customer service fees
between the two three-month periods is the result of decreases in several fee
categories including overdraft fees and account analysis fees, which may
fluctuate between periods.

Noninterest expense totaled $5.1 million for the three months ended March 31,
2013, down $390,000 from the $5.5 million reported for the three months ended
March 31, 2012. The primary component of the decline in noninterest expense
between the three-month periods is a decrease of $476,000 in impairment losses
and other expenses related to OREO.

The Company recorded a negative provision for credit losses of $9,000 for the
three months ended March 31, 2013 as compared to a provision of $2,000 for the
three months ended March 31, 2012. The Company realized net credit charge-offs
totaling $371,000 for the three months ended March 31, 2013, compared to net
charge-offs totaling $600,000 for the three months ended March 31, 2012. As a
result of provisions and net charge-offs, the allowance for credit losses
totaled 2.86% of total loans at March 31, 2013 compared to 2.95% of total
loans at December 31, 2012. In determining the adequacy of the allowance for
credit losses, Management's judgment is the primary determining factor for
establishing the amount of the provision for credit losses and management
considers the allowance for credit losses March 31, 2013 to be adequate.

Non-performing assets, comprised of nonaccrual loans, troubled debt
restructures (TDR), other real estate owned through foreclosure (OREO), and
loans more than 90 days past days and still accruing interest, decreased
approximately $3.2 million between December 31, 2012 and March 31, 2013.
Additionally, nonperforming assets as a percentage of total assets decreased
from 7.25% at December 31, 2012 to 6.89% at March 31, 2013. Nonaccrual loans
decreased $1.9 million between December 31, 2012 and March 31, 2013, while
OREO, decreased $2.0 million during the same period. Impaired loans totaled
$20.0 million at March 31, 2013, down $1.9 million from the balance of $21.9
million at December 31, 2012.

United Security Bancshares is a $635+ million bank holding company
headquartered in Fresno, California. United Security Bank, its principal
subsidiary is a California state chartered bank with 11 branches serving the
Central Valley and Campbell, and is a 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 written regulatory agreement under which
the Company is subject and (10) unknown economic impacts caused by the State
of California's budget issues, including the effect on Federal spending do to
sequestration required by the Budget Control Act of 2011. 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, 2012, 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").

United Security Bancshares
Consolidated Balance Sheets (unaudited)
(dollars in thousands)
                                                       March 31,  December 31,
                                                       2013       2012
Assets
 Cash and noninterest-bearing deposits in other      $19,874    $27,481
banks
 Cash and due from Federal Reserve Bank              116,576    114,146
 Federal funds sold                                  0          0
 Cash and cash equivalents                        136,450    141,627
 Interest-bearing deposits in other banks            1,509      1,507
 Investment securities (AFS at market value)          27,889     31,844
 Loans and leases, net of unearned fees              398,321    400,033
 Less: Allowance for credit losses                 (11,403)   (11,784)
 Net loans                                           386,918    388,249
 Premises and equipment - net                        12,040     12,262
 Bank owned life insurance                           16,809     16,681
 Intangible assets                                   4,690      4,737
 Other real estate owned                             21,958     23,932
 Deferred Income Taxes                              9,989      9,724
 Other assets                                        18,296     18,314
Total assets                                           $636,548   $648,877
 Deposits:
 Noninterest bearing demand and NOW                $266,288   $270,094
 Money market and savings                          187,014    193,808
 Time                                              96,517     99,385
 Total deposits                                   549,819    563,287
 Borrowed funds                                      0          0
 Other liabilities                                   5,579      6,081
 Junior subordinated debentures (at fair value)      10,685     10,068
Total liabilities                                      566,083    579,436
Shareholders' equity:
 Common shares outstanding:
 14,359,476 at March 31, 2013                     43,796     43,173
 Retained earnings                                   26,635     26,179
 Accumulated other comprehensive income              34         89
Total shareholders' equity                             70,465     69,441
Total liabilities and shareholders' equity             $636,548   $648,877



United Security Bancshares
Consolidated Statements of Income
(unaudited)
(dollars in 000s, except per share
amounts)
                                         Three months ended Three months ended
                                         March 31,          March 31,
                                         2013               2012
Interest income:
 Interest and fees on loans            $5,466             $6,041
 Interest on investment securities     198                520
 Interest on deposits in FRB            65                 51
 Interest on deposits in other banks   2                  10
 Total interest income              5,731              6,622
Interest expense:
 Interest on deposits                  411                478
 Interest on other borrowed funds      60                 65
 Total interest expense             471                543
Net interest income before provision for 5,260              6,079
credit losses
 Provision for credit losses           (9)                2
Net interest income                      5,269              6,077
Noninterest income:
 Customer service fees                 779                903
 Increase in cash surrender value of
 bank owned life insurance          137                137
Gain on sale of other real estate owned  1,025              63
Loss on Fair Value Option of Financial   (557)              (477)
Assets
 Other noninterest income               160                270
Total noninterest income                 1,544              896
Noninterest expense:
 Salaries and employee benefits         2,361              2,423
 Occupancy expense                      905                764
 Professional fees                      445                245
 Regulatory insurance assessments       359                367
 Impairment losses and other expenses   208                684
on OREO
 Impairment losses on investment        0                  22
securities
 Other noninterest expense              820                983
Total noninterest expense                5,098              5,488
Income before income tax provision       1,715              1,485
Provision for income taxes               640                434
Net Income                               $1,075             $1,051



United Security Bancshares
Selected Financial Data (unaudited)
(dollars in 000s, except per share
amounts)
                                         Three Months Ended Three Months Ended
                                         March 31,          March 31,
                                         2013               2012
Basic earnings per share                 $0.07              $0.07
Diluted earnings per share               $0.07              $0.07
Weighted average basic shares for EPS    14,359,476         14,222,006
Weighted average diluted shares for EPS  14,360,919         14,222,006
Annualized return on:
 Average assets                        0.68%              0.67%
 Average equity                        6.20%              6.69%
Yield on interest-earning assets         4.29%              5.04%
Cost of interest-bearing liabilities     0.54%              0.64%
Net interest margin                      3.94%              4.63%
Annualized net charge-offs to average    0.38%              0.60%
loans
                                         March 31,          December 31,
                                         2013               2012
Shares outstanding - period end          14,359,476         14,217,303
Book value per share                     $4.91              $4.88
Tangible book value per share            $4.58              $4.55
Efficiency ratio                         74.92%             70.47%
Total nonperforming assets               $43,840            $47,074
Nonperforming assets to total assets     6.89%              7.25%
Total Impaired loans                     $20,033            $21,931
Total nonaccrual loans                   $11,544            $13,425
Allowance for credit losses to total     2.86%              2.95%
loans

SOURCE United Security Bancshares

Website: http://www.unitedsecuritybank.com
Contact: Dennis R. Woods, President and Chief Executive Officer of United
Security Bank, +1-559-248-4928