Exhibit 99.1
UNITED SECURITY BANCSHARES -
YEAR-TO-DATE EARNINGS PER SHARE UP 32.6%
FRESNO, Calif., July 17 /PRNewswire-FirstCall/ -- Dennis R. Woods, President
and Chief Executive Officer of United Security Bancshares
http://www.unitedsecuritybank.com/ (Nasdaq Global Select: UBFO) reported today
the results of operations for the second quarter of 2006. Year-to-date basic
earnings per share for 2006 were $0.61 compared with $0.46 in 2005, up 32.6%.
Year-to-date diluted earning per share for 2006 were $0.60 compared with $0.46
in 2005, a 30.4% increase. Basic earnings per share for the second quarter 2006
were $0.27 compared with $0.23 in 2005, a 17.4% increase. Diluted earnings per
share for the second quarter 2006 were $0.27 compared with $0.23 a year ago.
Net income was $6.9 million for the six months ended June 30, 2006, compared
with $5.3 million in 2005, an increase of 31.9%. Net income for the second
quarter of 2006 was $3.1 million, as compared with $2.6 million in 2005, up
18.3%.
Woods added, "I am very pleased to announce record year-to-date earnings of
$6.9 million which reflect the continuation of efforts to build shareholder
value."
Return on average equity (ROAE) for the second quarter of 2006 was 19.1% and
the return on average assets (ROAA) was 1.93%. For the second quarter 2005, ROAE
and ROAA were 18.7% and 1.69%, respectively. For the six months ended June 30,
2006, ROAE and ROAA were 22.3% and 2.20%, respectively. For the same six-month
period in 2005, ROAE and ROAA were 19.3% and 1.73%, respectively. These key
performance ratios demonstrate the banks' consistent ability to build
shareholder value.
The 71st consecutive quarterly cash dividend of $0.11 per share, up from
$0.09 for a 22.2% increase from a year ago, was declared on June 27, 2006 to be
paid on July 19, 2006 to shareholders of record on July 7, 2006.
At the end of the quarter, Shareholders' equity was $63.4 million, an
increase of 13.0% from June 30, 2005. Dividends of $4.4 million were paid out of
shareholders' equity to shareholders during the past 12 months. During the last
12 months, $532,359 of shareholders' equity was used to purchase and retire
27,283 shares at an average price of $19.51 per share. During the second quarter
of 2006, 13,125 shares were repurchased at an average price of $23.13.
Net interest income for the second quarter of 2006 was $8.1 million, an
increase of $1.0 million or 14.5% from 2005. Second quarter net interest margin
increased from 5.25% in 2005 to 5.78% in 2006. For the six months ended June 30,
the net interest margin was 5.72% and 5.31% in 2006 and 2005, respectively. The
increase is primarily attributable to growth in average earning assets and
rising interest rates. Average earning assets increased by $4.9 million over the
past 12 months, averaging $561.9 million and $557.0 million in the second
quarter of 2006 and 2005, respectively.
Noninterest income for the second quarter 2006 was $1.7 million compared
with $1.8 million for the same period last year. Noninterest income for the six
months ended June 30, 2006 was $4.9 million, an increase of $1.8 million from
the same period in 2005. The increase resulted in part from a $1.8 million gain
on the sale of an investment in the 1st quarter of 2006 and was partially offset
by a gain of $294,000 from the sale of other real estate owned in 2005.
Second quarter operating expenses increased from $4.5 million in 2005 to
$5.2 million in 2006. For the six months ended June 30, operating expenses
increased $1.2 million or 14.1% from $8.5 million in 2005 to $9.7 million in
2006. The increase is partially attributable to $933,581 of additional operating
costs associated with foreclosed properties. The efficiency ratio was 46.7% for
the second quarter of 2006 compared to 49.3% for the same period in 2005.
The provision for loan losses was $363,000 for the six months ended June 30,
2006 and $498,000 for same period in 2005. Provisions for loan losses are
determined on the basis of management's periodic credit review of the loan
portfolio. Based on the condition of the loan portfolio, management believes the
provisions made to the allowance for loan losses are sufficient to cover risk
elements in the loan portfolio.
Net charge-offs were $30,000 for the second quarter of 2006 and $105,000 for
the same period in 2005.
Other real estate owned totaled $4.4 million at the end of the second
quarter of 2006 and $45,000 for the same period in 2005.
Nonperforming assets were $12.9 million or 1.95% of total assets on June 30,
2006 and $22.1 million or 3.54% of total assets on June 30, 2005.
United Security Bancshares is a $660+ million bank holding company. United
Security Bank, its principal subsidiary is a state chartered bank and member of
the Federal Reserve Bank of San Francisco.
FORWARD-LOOKING STATEMENTS
This news release contains forward-looking statements about the company for
which the company claims the protection of the safe harbor provisions 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 regulatory, judicial, or legislative tax treatment of
business transactions, particularly recently enacted California tax legislation
and the subsequent Dec. 31, 2003, announcement by the Franchise Tax Board
regarding the taxation of REITs and Riches; and (8) unknown economic impacts
caused by the State of California's budget issues. 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 deposit interest rates, among other things, could slow the
rate of growth or put pressure on current deposit levels. 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 Quarterly Report on Form 10-K and Form 10-Q for the year ended
December 31, 2005, or the quarter ended March 31, 2006 and particularly the
section of Management's Discussion and Analysis.
United Security Bancshares
Consolidated Balance Sheets (unaudited)
(Dollars in thousands)
June 30, June 30,
2006 2005
---------- ----------
Cash & noninterest-bearing
deposits in other banks $ 30,833 $ 28,505
Interest-bearing deposits in other banks 7,772 7,540
Federal funds sold 5,600 28,210
Investment securities AFS 91,237 112,147
Loans, net of unearned fees 481,895 408,203
Less: allowance for loan losses (8,039) (7,503)
Loans, net 473,856 400,700
Premises and equipment, net 12,463 8,213
Intangible assets 3,283 3,820
Other assets 39,227 33,899
TOTAL ASSETS $ 664,271 $ 623,033
Deposits:
Noninterest-bearing demand & NOW $ 196,343 $ 190,312
Savings 36,781 34,974
Time 327,983 319,971
Total deposits $ 561,107 $ 545,257
Borrowed funds $ 17,100 $ 0
Other liabilities 7,165 6,161
Junior subordinated debentures 15,464 15,464
TOTAL LIABILITIES $ 600,836 $ 566,882
Shareholders' equity:
Common shares outstanding:
11,361,913 at Jun. 30, 2006
11,369,192 at Jun. 30, 2005 $ 22,019 $ 22,235
Retained earnings 43,107 35,086
Other comprehensive income (loss) (1,691) (1,169)
Total shareholders' equity $ 63,435 $ 56,152
TOTAL LIABILITIES &
SHAREHOLDERS' EQUITY $ 664,271 $ 623,033
United Security Bancshares
Consolidated Statements of Income
(dollars in 000's, except per share amounts)
(unaudited)
Three Three Six Six
Months Months Months Months
Ended Ended Ended Ended
6/30/2006 6/30/2005 6/30/2006 6/30/2005
---------- ---------- ---------- ----------
Interest income $ 11,410 $ 9,379 $ 21,961 $ 18,489
Interest expense 3,311 2,303 6,050 4,260
Net interest income 8,099 7,076 15,911 14,229
Provision for loan losses 123 247 363 498
Other income 1,741 1,763 4,948 3,086
Other expenses 5,183 4,514 9,731 8,530
Income before
income tax provision 4,534 4,078 10,766 8,287
Provision for income taxes 1,472 1,490 3,839 3,035
NET INCOME $ 3,062 $ 2,588 $ 6,926 $ 5,252
Basic Earnings Per Share $ 0.27 $ 0.23 $ 0.61 $ 0.46
Diluted Earning Per Share $ 0.27 $ 0.23 $ 0.60 $ 0.46
Annualized Return on:
Average Assets 1.93% 1.69% 2.20% 1.73%
Average Equity 19.13% 18.67% 22.33% 19.25%
Net Interest Margin 5.78% 5.25% 5.72% 5.31%
Net Charge-offs
to Average Loans 0.02% 0.03% 0.02% 0.06%
6/30/2006 6/30/2005
-------------- --------------
Book Value Per Share $ 5.58 $ 4.94
Tangible Book Value Per Share $ 5.29 $ 4.60
Efficiency Ratio 46.65% 49.26%
Non Performing
Assets to Total Assets 1.83% 3.54%
Allowance for Loan Losses
to Total Loans 1.67% 1.84%
Shares Outstanding
- period end 11,361,913 11,369,192
Basic Shares
- average weighted 11,367,629 11,370,850
Diluted Shares
- average weighted 11,500,893 11,443,940
SOURCE United Security Bancshares
-0- 07/17/2006
/CONTACT: Dennis R. Woods, President and Chief Executive Officer of
United Security Bank, +1-559-248-4928/
/Web site: http://www.unitedsecuritybank.com/
(UBFO)