Exhibit 99.1
United Security Bancshares - 3rd Quarter ROE - 22.3%
FRESNO, CA, October 10, 2003 -- Dennis R. Woods, President and Chief Executive Officer of United Security Bank http://www.unitedsecuritybank.com/ (NasdaqNM: UBFO) reported today the results of operations for the third quarter of 2003. Net income of $2,452,000 was up 30.7% or $576,000 over the third quarter for 2002. Year to date net income for the nine months ended Setember 30, 2003 was $6,309,000, up $997,000 or 18.8% over the same period in 2002. The annualized Return on Equity for the 3rd quarter was 22.3% compared with 20.0% for the same period last year.
Basic earnings per share for the quarter were $0.45 compared with $0.35 for 2002, an increase of 28.6%. Diluted earnings per share for the quarter were $0.45 compared with $0.34 a year ago for an increase of 32.4%. Basic earnings per share for the nine months were $1.16 compared with $.98 for 2002, an increase of 18.3%. Diluted earnings per share for the nine months were $1.15 compared with $.97 a year ago for an increase of 18.6%.
Woods added, “With near term stability of interest rates and continued reductions in nonperforming loans we expect to continue with strong earnings through year end. " The year-to-date return on average equity for 2003 was 19.6% and the return on average assets was 1.65% compared with an ROE of 18.7% and ROA of 1.45% for the same quarter in 2002.
The 60th consecutive quarterly cash dividend of $0.145 per share, up from $0.115 a year ago, was declared on September 23, 2003 to be paid on October 22, 2003, to shareholders of record on October 10, 2003. Shareholders’ equity ended the quarter at $45,110,000, an increase of 12.0% over September 30, 2002. Dividends of $3.0 million were paid out of shareholders' equity to shareholders during the past 12 months, and $1.2 million was utilized to purchase and retire 62,561 shares of stock at an average price per share of $18.77.
Third quarter 2003 net interest income increased by $654,000 over the same period in 2002, from $4,621,000 to $5,275,000, an increase of 14.1%. The net interest margin increased from 3.74% for the third quarter in 2002 to 4.48% for 2003. Noninterest income for the third quarter of 2003 was $2,115,000, up from $1,309,000 in 2002 for an increase of $806,000 or 61.5%. The increase is primarily the result of shared appreciation income which increased by $1,025,000 above the year ago quarter. Third quarter operating expenses for the nine months ended Setember 30 were $3,502,000 for 2003 and $2,928,000 for 2002, an increase of $574,000 or 20.0%. Year to date, noninterest expense was $9,068,000 for nine months of 2003 compared with $8,206,000 in 2002, an increase of $862,000 or 10.5%. The primary factors contributing to the rise were expenses connected with resolution of nonperforming assets.
The provision for loan loss was $872,000 year to date for 2003, down $318,000 from 2002. The level of allowance for loan and lease losses is maintained in accordance with the levels of oustanding and non-performing loans. Non-performing assets were 4.37% of total assets on September 30, 2003, down from 4.49% at June 30, 2003. Other Real Estate Owned was .53% of total assets on Septeber 30, 2003.
This press release may include forward-looking statements that involve inherent risks and uncertainties. A number of important factors could cause actual results to differ materially from those in the forward-looking statements. Those factors include fluctuations in interest rates, inflation, government regulations, the progress of integrating acquisitions and economic conditions and competition in the geographic and business areas in which the Company conducts its operations.
United Security Bancshares
Consolidated Balance Sheets (unaudited)
(Dollars in thousands)
Sep 30, Sep 30,
2003 2002
Cash & noninterest-bearing deposits in ---------------- ----------------
other banks $18,465 $19,169
Interest-bearing deposits in other banks 8,132 7,012
Federal funds sold 15,085 2,950
Investment securities 89,128 116,242
Loans, net of unearned fees 354,668 363,370
Less: allowance for loan losses (5,298) (5,523)
---------------- ----------------
Loans, net 349,370 357,846
Premises and equipment, net 5,255 2,714
Intangible assets 2,035 2,390
Other assets 21,233 24,690
---------------- ----------------
TOTAL ASSETS $508,703 $533,014
================ ================
Deposits:
Noninterest-bearing demand & NOW $117,814 $112,968
Savings 25,247 20,881
Time 290,618 304,676
---------------- ----------------
Total deposits 433,679 438,525
Borrowed funds 10,415 36,109
Other liabilities 4,500 3,088
---------------- ----------------
TOTAL LIABILITIES $448,593 $477,722
Subordinated Debentures 15,000 15,000
Shareholders' equity:
Common shares outstanding:
5,506,466 at Sep. 30, 2003
5,429,130 at Sep. 30, 2002 $18,218 $18,017
Retained earnings 26,740 21,765
Unallocated ESOP shares (374) (664)
Other comprehensive income (loss) 527 1,175
---------------- ----------------
Total shareholders' equity $45,110 $40,293
TOTAL LIABILITIES &
SHAREHOLDERS' EQUITY $508,703 $533,015
================ ================
United Security Bancshares
Consolidated Statements of Income
(unaudited) Three Three Nine Nine
Months Months Months Months
Ending Ending Ending Ending
Sep 30 Sep 30 Sep 30 Sep 30
2003 2002 2003 2002
---------------- ---------------- ---------------- ----------------
Interest income $6,905 $7,417 $20,027 $21,453
Interest expense 1,630 2,795 5,681 8,205
-------------- -------------- -------------- --------------
Net interest income 5,275 4,621 14,346 13,247
Provision for loan losses 371 325 872 1,189
Other income 2,115 1,309 4,714 3,709
Other expenses 3,502 2,928 9,068 8,206
-------------- -------------- -------------- --------------
Income before income taxes 3,518 2,677 9,122 7,561
Provision for income taxes 1,066 802 2,812 2,249
-------------- -------------- -------------- --------------
NET INCOME $2,452 $1,876 $6,309 $5,312
United Security Bancshares
Selected Financial Data
Three Three Nine Nine
Months Months Months Months
Ended Ended Ended Ended
09/30/2003 09/30/2002 09/30/2003 09/30/2002
--------------- --------------- --------------- ---------------
Basic Earnings Per Share $0.45 $0.35 $1.16 $0.98
Diluted earning per share $0.45 $0.34 $1.15 $0.97
Annualized Return on:
Average Assets 1.92% 1.52% 1.65% 1.45%
Average Equity 22.34% 19.98% 19.63% 18.68%
Net Interest Margin 4.48% 4.12% 4.08% 3.98%
Net Charge-offs to Average Loans 0.04% 0.02% 0.28% 0.02%
09/30/2003 09/30/2002
--------------- ---------------
Book Value Per Share $8.19 $7.42
Tangible Book Value Per Share $7.82 $6.98
Efficiency Ratio 47.57% 48.39%
Non Performing Assets to Total Assets 4.37% 4.44%
Allowance for Loan Losses
to Total Loans 1.49% 1.52%
Shares Outstanding - period end 5,506,466 5,429,130