Exhibit 99.1
UNITED SECURITY BANCSHARES AND LEGACY BANK, N.A. AGREE TO MERGE
FRESNO, Calif., Oct. 6 /PRNewswire-FirstCall/ -- United Security Bancshares
("USB") http://www.unitedsecuritybank.com/ (Nasdaq: UBFO) and Legacy Bank, N.A.
(OTC Bulletin Board: LCKB) announced today the signing of a definitive merger
agreement providing for the merger of Legacy Bank, N.A. with and into United
Security Bank, a wholly owned subsidiary of USB. Upon completion of the merger,
Legacy Bank's branch office will be operated as a branch office of United
Security Bank.
In the merger, USB will issue shares of its stock in a tax free exchange for
all of the Legacy Bank shares. The total value of the transaction is expected to
be approximately $21.7 million. The merger is expected to be completed in the
first quarter 2007.
Legacy Bank operates one banking office in Campbell, California serving
small business and retail banking clients. As of September 30, 2006, Legacy Bank
had total assets of $82 million and deposits of $72 million.
Dennis Woods, President and Chief Executive Officer of USB, stated, "The
addition of Legacy Bank to United Security Bank will open a dynamic new market
for us. Legacy Bank has built a solid business banking and retail franchise with
an excellent reputation for service. With its small business and retail banking
focus, Legacy Bank provides a unique opportunity for United Security Bank to
serve a loyal and growing small business niche and individual client base. The
merger is projected to be accretive to USB in 2007."
Thomas Ray, CEO of Legacy Bank, commented, "We have followed the success of
USB over the years and believe that its community banking philosophy fits
extremely well with the strong community commitment that Legacy has consistently
maintained. This merger will enable us to expand our ability to serve our
clients and increase our lending capabilities. We also believe this merger will
give us an opportunity to participate more fully in the economic growth of our
marketplace."
Terms of the Merger
The terms of the merger agreement provide for the shareholders of Legacy
Bank to receive USB shares with a market value of $13.00 based upon the average
closing price of USB shares during the 20 business day period prior to the
merger, less the net costs of termination of Legacy's data processing/technology
agreements divided by the outstanding number of shares of Legacy Bank common
stock, provided that there are no stock options or warrants exercised for shares
of Legacy Bank common stock. Legacy Bank currently has 1,672,373 shares of
common stock outstanding. Immediately prior to the merger, all outstanding
options and warrants will be cancelled by Legacy Bank and optionees and warrant
holders will receive a cash payment equal to the difference between the option
exercise price and the merger consideration for each share subject to an option
or a warrant. In the event any options or warrants for shares of Legacy Bank
common stock are exercised, the market value of USB shares Legacy shareholders
receive will decrease based upon a set formula. The merger is subject to certain
conditions, including the approval of the shareholders of Legacy Bank, and
regulatory approval. Upon consummation of the merger, former Legacy Bank
shareholders will own approximately 7% of USB's outstanding shares.
About United Security Bancshares
United Security Bancshares is a bank holding company registered with the
Board of Governors of the Federal Reserve System. USB's primary subsidiary is
United Security Bank a state chartered bank based in Fresno, California with
over $664 million in assets and with 10 branches and a construction lending
office. United Security Bank offers a full range of commercial banking services
primarily to the business and professional community and individuals located in
Fresno, Madera and Kern Counties.
About Legacy Bank, N.A.
Legacy Bank is a National Bank located in Campbell, California which began
operations in 2003 and has approximately $82 million in assets. Legacy Bank was
formed as a community bank and focuses primarily upon local banking service and
community needs including the banking needs of small-to-medium size businesses,
professionals, entrepreneurs, and hospitality industry clients.
As previously disclosed in its filings with the OCC, Legacy Bank has
recently experienced the loss of certain senior management and Legacy Bank
believes that the consummation of the merger will resolve this issue.
Additional Information about the Merger and Where to Find It
In connection with the Merger, USB intends to file with the Securities and
Exchange Commission a registration statement on Form S-4 that will contain a
Proxy Statement/Prospectus. Investors and security holders are urged to read the
Registration Statement and the Proxy Statement/Prospectus carefully when they
become available because they will contain important information about USB,
Legacy Bank and the merger. The Proxy Statement/Prospectus and other relevant
materials (when they become available), and any other documents filed by USB
with the SEC, may be obtained free of charge at the SEC's web site at
www.sec.gov. In addition, investors and security holders may obtain free copies
of other documents filed with the SEC by USB by directing a written request to:
United Security Bancshares, 1525 E. Shaw Avenue, Fresno, CA 93710 Attention:
Investor Relations. Investors and security holders are urged to read the Proxy
Statement/Prospectus and the other relevant materials when they become available
before making any voting or investment decision with respect to the Merger.
USB and its directors and executive officers and Legacy and its directors
and executive officers may be deemed to be participants in the solicitation of
proxies from the shareholders of Legacy Bank in connection with the Merger.
Information regarding the special interests of these directors and executive
officers in the Merger will be included in the Proxy Statement/Prospectus
referred to above. Additional information regarding the directors and executive
officers of USB is also included in USB's Proxy Statement dated April 17, 2006,
which was filed with the SEC on April 14, 2006. This document is available free
of charge at the SEC's web site (www.sec.gov) and from Investor Relations at USB
at the address described above. Information regarding directors and executive
officers of Legacy Bank is contained in its Proxy Statement dated May 26, 2006.
This document is available free of charge from Legacy Bank, Investor Relations,
125 E. Campbell Avenue, Campbell, CA 95008.
This communication shall not constitute an offer to sell or the solicitation
of an offer to buy any security, nor shall there be any sale of securities in
any jurisdiction in which such offer, solicitation or sale would be unlawful
prior to registration or qualification under the securities laws of any such
jurisdiction. No offering of securities shall be made except by means of a
prospectus meeting the requirements of Section 10 of the Securities Act of 1933,
as amended.
SOURCE United Security Bancshares
-0- 10/06/2006
/CONTACT: Dennis R. Woods, President & CEO, +1-559-248-4928, or Ken Donahue,
SVP & CFO, +1-559-248-4943, both of United Security Bancshares; or Tom Ray,
President & CEO of Legacy Bank, N.A., +1-408-8