United Security Bancshares (Nasdaq: UBFO) today announced
its unaudited financial results for the nine months ended September
30, 2022. The Company recognized net income of $10.3 million, or
$0.61 per basic and diluted share, for the nine months ended
September 30, 2022, compared to net income of $6.7 million, or
$0.40 per basic and diluted share for the nine months ended
September 30, 2021.
Third Quarter 2022 Highlights (at or for the quarter
ended September 30, 2022, except where noted)
- Net income for the quarter increased 71.1% to $4.5 million,
compared to $2.6 million for the quarter ended September 30, 2021,
and increased 30.0% from $3.4 million for the trailing quarter
ended June 30, 2022. Loan interest income increased $2.4 million
and investment securities income increased $672,000 as a result of
growth in loan and investment securities portfolio balances and
increases in interest rates, when compared to the third quarter of
2021.
- Total assets increased 2.9% to $1.37 billion, compared to $1.33
billion at December 31, 2021.
- Total loans, net of unearned fees, increased to $962.2 million,
compared to $871.5 million at December 31, 2021 and $950.0 million
at June 30, 2022. Loan growth during the quarter is a result of
organic growth in the commercial real estate segment.
- Total investments increased 16.0% to $211.8 million, compared
to $182.6 million at December 31, 2021.
- Total deposits increased 4.4% to $1.24 billion, compared to
$1.19 billion at December 31, 2021.
- The allowance for credit losses as a percentage of gross loans
decreased to 1.05%, compared to 1.07% at December 31, 2021. The
decrease in the allowance for credit losses as a percentage of
gross loans is primarily the result of a change in loan mix
resulting from purchases of residential mortgage loans during the
first quarter.
- Net interest income before the provision for credit losses
increased 36.3% to $12.7 million, compared to $9.3 million for the
quarter ended September 30, 2021. For the trailing quarter ended
June 30, 2022, net interest income before the provision for credit
losses was $10.4 million.
- The Company recorded a provision for credit losses of $0.6
million for the quarter ended September 30, 2022, compared to a
provision of $0.5 million for the quarter ended September 30,
2021.
- Book value per share decreased to $6.28, compared to $7.06 at
December 31, 2021 primarily as a result of an increase in
accumulated other comprehensive loss related to unrealized losses
within the investment portfolio.
- Net interest margin increased to 3.95% for the quarter ended
September 30, 2022, compared to 3.17% and 3.38% for the quarters
ended September 30, 2021 and June 30, 2022.
- Annualized average cost of deposits was 0.22% for the quarter
ended September 30, 2022, and 0.17% for the quarters ended
September 30, 2021 and June 30, 2022.
- Net charge-offs totaled $451,000 for the quarter ended
September 30, 2022 , compared to net charge-offs of $509,000 for
the quarter ended September 30, 2021 and net recoveries of $25,000
for the quarter ended June 30, 2022.
- Capital position remains well-capitalized with a 9.56% Tier 1
Leverage Ratio compared to 9.79% as of December 31, 2021.
- Annualized return on average assets ("ROAA") increased to
1.28%, compared to 0.82% and 1.03% for the quarters ended September
30, 2021 and June 30, 2022. The increase in ROAA is due to increase
in net income outpacing the increase in average assets.
- Annualized return on average equity ("ROAE") increased to
15.61%, compared to 8.62% and 12.12% for the quarters ended
September 30, 2021 and June 30, 2022.
Dennis Woods, President and Chief Executive Officer, stated: "We
continued our positive earnings momentum in the third quarter as we
again posted increased earnings when compared to prior quarter and
third quarter 2021 results. Core net income for the nine months
ended September 30, 2022, which is a non-GAAP measure, grew 68%
over the prior year as a result of the successful execution of our
2021 and 2022 cash deployment strategies. Our credit quality,
capital, and liquidity levels remain strong and position us well
for potential economic headwinds over the coming quarters."
Provided at the end of this Press Release is a reconciliation of
Core Net Income, as a non-GAAP measure, to Net Income. This
reconciliation excludes Non-Core items such as the Fair Value
Adjustment for Trust Preferred Securities (TRUPs) and gain or loss
on sale of other real estate owned (OREO). Management believes that
financial results are more comparative excluding the impact of such
non-core items.
Results of Operations
Net income for the nine months ended September 30, 2022
increased 53.8% to $10.3 million, compared to the nine months ended
September 30, 2021. The increase is the result of increases of $4.4
million in loan interest income and fees, $1.4 million in
investment income, and a $437,000 decrease in the provision for
credit losses and was partially offset by a $1.8 million increase
in loss on fair value of junior subordinated debentures and
increase of $1,546,000 in provision for income taxes.. ROAE for the
nine months ended September 30, 2022 was 11.99%, compared to 7.55%
for the nine months ended September 30, 2021. ROAA was 1.03% for
the nine months ended September 30, 2022, compared to 0.75% for the
nine months ended September 30, 2021.
The annualized average cost of deposits was 0.19% for the nine
months ended September 30, 2022 and 0.17% for the nine months ended
September 30, 2021. Average interest-bearing deposits increased
15.5% between the periods ended September 30, 2021 and 2022 from
$630.8 million to $728.3 million.
Net interest income, before the provision for credit losses, for
the nine months ended September 30, 2022 totaled $32.6 million, an
increase of $6.3 million, or 24.0%, from the $26.3 million reported
for the same period ended September 30, 2021. The impact of the
Company's 2021 and 2022 cash deployment strategies, which included
over $350 million in investment and mortgage loan purchases, are
reflected in the increase in net interest income. The Company's net
interest margin increased from 3.18% for the nine months ended
September 30, 2021 to 3.48% for the nine months ended September 30,
2022. The increase in the net interest margin is due to increases
in yields on investment securities, and yields on interest-bearing
deposits at the Federal Reserve Bank, partially offset by increases
in average deposit balances and decreases in loan yields. Loan
yields decreased from 4.60% to 4.46% between the two periods. The
yield on interest-bearing liabilities increased from 0.32% to 0.35%
between the two periods. Included in interest income for the nine
months ended September 30, 2022 were $128,000 in fees related to
Small Business Administration Paycheck Protection Program loans,
compared to $778,000 for the same period ended September 30,
2021.
Noninterest income for the nine months ended September 30, 2022
totaled $789,000, a decrease of $1.3 million when compared to the
$2.1 million reported for the nine months ended September 30, 2021.
For the nine months ended September 30, 2022, a loss on the fair
value of TRUPs of $2.5 million was recorded, compared to a loss of
$691,000 for the same period in 2021. The change in the fair value
of TRUPs reflected in noninterest income was caused by fluctuations
in the LIBOR yield curve. Generally, an increase in the three month
LIBOR yield curve will result in negative fair value adjustments.
Conversely, a decrease in the three month LIBOR yield curve will
result in positive fair value adjustments. Customer service fees
totaled $2.3 million for the nine months ended September 30, 2022
and $2.1 million for the nine months ended September 30, 2021. Also
included in noninterest income for the nine months ended September
30, 2022 was $566,000 in nonrecurring income received from The
Central Valley Fund II (SBIC), Limited Partnership.
For the nine months ended September 30, 2022, noninterest
expense totaled $17.6 million, an increase of $272,000 compared to
$17.3 million for the nine months ended September 30, 2021. On a
year-over-year comparative basis, noninterest expense increased due
to increases in professional fees of $433,000 and regulatory
assessments of $83,000 and was partially offset by a decrease of
$228,000 in the provision for unfunded loans included in other non
interest expense and a decrease of $154,000 in occupancy
expense.
The efficiency ratio for the nine months ended September 30,
2022 decreased to 52.1%, compared to 60.9% for the nine months
ended September 30, 2021. This decrease is attributed to revenue
growth, as well as the $566,000 in noninterest income from the
investment in the limited partnership received during 2022.
The Company recorded an income tax provision of $4.2 million for
the nine months ended September 30, 2022, compared to $2.7 million
for the same period in 2021. The effective tax rate for the nine
months ended September 30, 2022 was 28.87%, compared to 28.28% for
the nine months ended September 30, 2021.
Quarter Ended September 30, 2022:
For the quarter ended September 30, 2022, the Company reported
net income of $4.5 million and earnings per basic and diluted share
of $0.26, compared to net income of $2.6 million and $0.15 per
basic and diluted share for the same period ended September 30,
2021. Net income for the quarter ended June 30, 2022 was $3.4
million and $0.20 per basic and diluted share.
Net interest income, before the provision for credit losses was
$12.7 million for the quarter ended September 30, 2022,
representing a $3.4 million, or 36.3%, increase from the $9.3
million reported at September 30, 2021. The increase in net
interest income was driven by growth in the loan and investment
portfolios. The Company's net interest margin increased from 3.17%
to 3.95% between the quarters ended September 30, 2021 and
September 30, 2022, respectively. The increase in the net interest
margin was due to increases in loan and investment balances, yields
on investment securities, and yields on interest-bearing deposits
at FRB, partially offset by increases in average deposit balances
and decreases in loan yields. Net interest income during the
quarter ended September 30, 2022 increased to $12.1 million, or
36.5%, from the $8.9 million reported during the quarter ended
September 30, 2021.
Noninterest income for the quarter ended September 30, 2022
totaled $392,000, a decrease of $538,000 from the $930,000 in
non-interest income reported for the quarter ended September 30,
2021. The decrease is primarily attributed to a loss of $600,000
recorded on the fair value of junior subordinated debentures for
the quarter ended September 30, 2022 compared to a loss of $35,000
recorded for the quarter ended September 30, 2021. The unrealized
loss on equity securities increased $135,000 between the two
periods. Customer service fees increased from $745,000 for the
quarter ended September 30, 2021 to $899,000 for the quarter ended
September 30, 2022. Noninterest income decreased $210,000 for the
quarter ended September 30, 2022 from the $602,000 reported for the
quarter ended June 30, 2022. This was primarily due to the $566,000
in income received from the limited partnership during the second
quarter and was partially offset by a decrease in the loss on the
fair value of junior subordinated debentures of $269,000 between
the two quarters.
Noninterest expense for the quarter ended September 30, 2022
totaled $6.21 million, reflecting a $47,000 increase from the $6.2
million reported for the quarter ended September 30, 2021, and a
$635,000 increase from the $5.6 million reported from the quarter
ended June 30, 2022. The increase between the quarters ended
September 30, 2022 and 2021 resulted in part due to increases of
$256,000 in professional fees and $77,000 in salaries and employee
benefits, and was partially offset by a decrease of $90,000 in
occupancy expense and $46,000 in regulatory assessments. The
increase between the quarters ended September 30, 2022 and June 30,
2022 was primarily the result of increases of $188,000 in salaries
and employee benefits and $170,000 in professional fees.
The Company recorded an income tax provision of $1.8 million for
the quarter ended September 30, 2022, compared to $1.0 million for
the quarter ended September 30, 2021, and $1.4 million for the
quarter ended June 30, 2022. The effective tax rate for the quarter
ended September 30, 2022 was 29.1%, compared to 28.5% and 28.9% for
the quarters ended September 30, 2021 and June 30, 2022,
respectively.
Balance Sheet Review
Total assets increased $38.3 million, or 2.9%, between December
31, 2021 and September 30, 2022. Gross loan balances grew $91.2
million and investment securities increased $29.2 million. Included
in the loan growth during the year were purchases of $35.6 million
in residential mortgage loans during the first quarter and organic
growth in the commercial real estate, commercial and industrial,
and real estate construction segments of the portfolio, partly
offset by reductions in the agricultural and student loan
portfolios and SBA PPP balances. Investment portfolio growth
included purchases of $91.4 million in investment securities,
partially offset by $44.9 million in sales of securities and $29.6
million in unrealized losses. In part, as a result of the loan and
investment activity, total cash and cash equivalents decreased
$93.2 million between December 31, 2021 and September 30, 2022.
Unfunded loan commitments decreased from $239.1 million at December
31, 2021 to $164.0 million at September 30, 2022. OREO balances
totaled $4.6 million at December 31, 2021 and September 30,
2022.
Total deposits increased $52.7 million, or 4.4%, to $1.2 billion
during the nine months ended September 30, 2022. This increase was
due to increases of $40.5 million in noninterest bearing deposits,
$16.9 million in savings accounts, and $7.4 million in time
deposits, offset by decreases of $12.0 million in NOW and money
market accounts. In total, NOW, money market and savings accounts
increased 0.8% to $648.6 million at September 30, 2022, compared to
$643.8 million at December 31, 2021. Noninterest bearing deposits
increased 8.5% to $517.2 million at September 30, 2022, compared to
$476.7 million at December 31, 2021. Core deposits, which are made
up of the balance of noninterest bearing deposits, NOW, money
market, savings, and time deposits accounts less than $250,000,
increased $52.2 million.
Shareholders’ equity at September 30, 2022 totaled $107.1
million, a decrease of $13.1 million from shareholders’ equity of
$120.2 million at December 31, 2021. This decrease in equity was
primarily attributed to an increase in accumulated other
comprehensive loss of $18.1 million and $5.6 million in dividends
paid, partially offset by $10.3 million in net income. At September
30, 2022, the accumulated other comprehensive loss totaled $19.3
million, compared to $1.2 million at December 31, 2021. The
increase in the loss was primarily the result of net unrealized
losses on investment securities of $20.8 million and was partially
offset by a $2.1 million gain on junior subordinated debentures
(TRUPs) caused by a change in market credit spreads during the nine
months ended September 30, 2022. The change in unrealized loss on
the investment portfolio is attributed to changes in interest
rates, and not credit quality. The Company does not intend to sell
and it is more likely than not that it will not be required to sell
any securities that have an unrealized loss.
The Board of Directors of United Security Bancshares declared a
cash dividend on common stock of $0.11 per share on September 27,
2022. The dividend is payable on October 25, 2022, to shareholders
of record as of October 11, 2022. No assurances can be provided as
to the amount and/or declaration and payment of future dividends,
if any. The Company continues to be well capitalized and expects to
maintain adequate capital levels.
Credit Quality
The Company recorded a provision for credit losses of $1.2
million for the nine months ended September 30, 2022, compared to a
provision of $1.7 million for the nine months ended September 30,
2021. Net loan charge-offs totaled $488,000 for the nine months
ended September 30, 2022, as compared to net loan charge-offs of
$1,032,000 for the nine months ended September 30, 2021. The
reduced provision recorded during the year is attributed to lower
net charge-offs on the student loan portfolio, decreases in
nonperforming assets and change in portfolio mix, partially offset
by a qualitative adjustment for economic uncertainty resulting in
an increase in reserves. The qualitative adjustment is attributed
to higher inflation, anticipated magnitude and impact of interest
rate hikes in 2022 and uncertain business conditions. For the nine
months ended September 30, 2021, the provision recorded was
attributed to growth of the loan portfolio, agricultural loan
downgrades, and net charge-offs recognized in the student loan
portfolio.
The Company's allowance for loan loss totaled 1.05% of the loan
portfolio at September 30, 2022, compared to 1.07% at December 31,
2021. The decrease in the allowance for credit losses as a
percentage of gross loans is primarily the result of a change in
loan mix resulting from purchases of residential mortgage loans
during the first quarter. The reserve required on the residential
mortgage loan segment is lower than reserves required for other
loan segments due to lower historical loss rates. Management
considers the allowance for credit losses at September 30, 2022 to
be adequate.
Non-performing assets, comprised of nonaccrual loans, troubled
debt restructures (TDRs), other real estate owned through
foreclosure, and loans more than 90 days past due and still
accruing interest, decreased $780,000 between December 31, 2021 and
September 30, 2022 to $15.9 million. Nonperforming assets as a
percentage of total assets decreased from 1.25% at December 31,
2021 to 1.16% at September 30, 2022. The decrease in nonperforming
assets is attributed to decreases of $453,000 in loans past due
more than 90 days and $293,000 in nonaccrual loans between December
31, 2021 and September 30, 2022. OREO balances remained at $4.6
million at December 31, 2021 and September 30, 2022.
About United Security Bancshares
United Security Bancshares (NASDAQ: UBFO) is the holding company
for United Security Bank, which was founded in 1987. United
Security Bank is headquartered in Fresno and operates 12
full-service branch offices in Fresno, Bakersfield, Campbell,
Caruthers, Coalinga, Firebaugh, Mendota, Oakhurst, San Joaquin, and
Taft, California. Additionally, United Security Bank operates
Commercial Real Estate Construction, Commercial Lending, and
Consumer Lending departments. For more information, please visit
www.unitedsecuritybank.com.
Non-GAAP Financial Measures
This press release and the accompanying financial tables contain
a non-GAAP financial measure (net income before non-Core) within
the meaning of the Securities and Exchange Commission’s Regulation
G. In the accompanying financial table, the Company has provided a
reconciliation of this non-GAAP financial measure to the most
directly comparable GAAP financial measure. The Company’s
management believes that this non-GAAP financial measure provides
useful information about the Company’s results of operations and/or
financial position to both investors and management. The Company
provides this non-GAAP financial measure to investors to assist
them in performing their analysis of its historical operating
results. The non-GAAP financial measure shows the Company's
operating results before consideration of certain adjustments and,
consequently, this non-GAAP financial measure should not be
construed as an alternative to net income as an indicator of the
Company's operating performance, as determined in accordance with
GAAP. The Company may calculate this non-GAAP financial measure
differently than other companies.
Forward-Looking Statements
This press release may contain 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 can be identified by the fact that they
do not relate strictly to historical or current facts and often
include the words "believe," "expect," "anticipate," "intend,"
"plan," "estimate," or words of similar meaning, or future or
conditional verbs such as "will," "would," "should," "could," or
"may." Forward-looking statements are based on management’s
knowledge and belief as of today and are not guarantees of future
performance, nor should they be relied upon as representing
management's views as of any subsequent date. Forward-looking
statements are subject to risks and uncertainties and actual
results may differ materially from those presented. Factors that
might cause such differences, some of which are beyond the
Company’s ability to control or predict, include, but are not
limited to: (1) adverse developments with respect to U.S. or global
economic conditions and other uncertainties, including the impact
of supply chain disruptions, inflationary pressures and labor
shortages, global conflict and unrest, (2) the COVID-19 global
pandemic, including the effects of the steps being taken to address
the pandemic and its impact on the Company’s markets, customers and
employees, (3) changes in general economic and financial market
conditions, either nationally or locally, (4) interest rate
policies of the Board of Governors of the Federal Reserve System,
(5) changes in banking laws or regulations, (6) increased
competition in the Company's markets, impacting the ability to
execute its business plans, (7) loss of key personnel, (8)
unanticipated credit losses, (9) drought, earthquakes or other
natural disasters impacting the local economy and/or the condition
of real estate collateral, (10) the impact of technological changes
and the ability to develop and maintain secure and reliable
electronic systems, (11) uncertainty regarding the replacement of
LIBOR, and (12) changes in accounting policies or procedures.
The Company undertakes no obligation to publicly revise these
forward-looking statements to reflect subsequent events or
circumstances. 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, 2021, and particularly the section
entitled "Management’s Discussion and Analysis of Financial
Condition and Results of Operations." Readers should carefully
review all disclosures the Company files from time to time with the
Securities and Exchange Commission.
United Security Bancshares
Consolidated Balance Sheets
(unaudited)
(in thousands- except share data)
September 30, 2022
December 31, 2021
September 30, 2021
Assets
Cash and non-interest-bearing deposits in
other banks
$
37,972
$
31,057
$
42,172
Due from Federal Reserve Bank ("FRB")
88,060
188,162
217,256
Cash and cash equivalents
126,032
219,219
259,428
Investment securities (at fair value)
Available-for-sale ("AFS") securities
208,560
178,902
161,732
Marketable equity securities
3,287
3,744
3,776
Total investment securities
211,847
182,646
165,508
Loans
960,549
869,314
807,937
Unearned fees and unamortized loan
origination costs - net
1,617
2,219
1,177
Allowance for credit losses
(10,063
)
(9,333
)
(9,144
)
Net loans
952,103
862,200
799,970
Premises and equipment - net
8,466
8,950
9,113
Accrued interest receivable
9,485
7,530
8,246
Other real estate owned ("OREO")
4,582
4,582
4,582
Goodwill
4,488
4,488
4,488
Deferred tax assets - net
11,956
3,615
3,086
Cash surrender value of life insurance
22,680
22,338
22,043
Operating lease right-of-use assets
2,135
2,594
2,743
Other assets
15,478
12,782
13,574
Total assets
$
1,369,252
$
1,330,944
$
1,292,781
Liabilities and Shareholders'
Equity
Deposits
Noninterest-bearing
$
517,230
$
476,749
$
455,584
Interest-bearing
723,588
711,357
695,131
Total deposits
1,240,818
1,188,106
1,150,715
Operating lease liabilities
2,245
2,705
2,852
Other liabilities
8,805
8,737
8,791
Junior subordinated debentures (at fair
value)
10,305
11,189
11,295
Total liabilities
1,262,173
1,210,737
1,173,653
Shareholders' Equity
Common stock, no par value; 20,000,000
shares authorized; issued and outstanding: 17,046,676 at September
30, 2022, 17,028,239 at December 31, 2021, and 17,010,288 at
September 30, 2021.
59,924
59,636
59,549
Retained earnings
66,465
61,745
60,247
Accumulated other comprehensive loss
(19,310
)
(1,174
)
(668
)
Total shareholders' equity
107,079
120,207
119,128
Total liabilities and shareholders'
equity
$
1,369,252
$
1,330,944
$
1,292,781
United Security Bancshares
Consolidated Statements of Income
(unaudited)
(in thousands - except share data)
Three Months Ended
Nine Months Ended
September 30, 2022
June 30, 2022
September 30, 2021
September 30, 2022
September 30, 2021
Interest Income:
Interest and fees on loans
$
11,514
$
9,731
$
9,163
$
30,363
$
25,942
Interest on investment securities
1,322
1,004
650
3,117
1,691
Interest on deposits in FRB
683
258
64
1,023
168
Total interest income
13,519
10,993
9,877
34,503
27,801
Interest Expense:
Interest on deposits
679
515
496
1,702
1,391
Interest on other borrowed funds
110
69
44
224
136
Total interest expense
789
584
540
1,926
1,527
Net Interest Income
12,730
10,409
9,337
32,577
26,274
Provision for Credit Losses
607
606
453
1,217
1,654
Net Interest Income after Provision for
Credit Losses
12,123
9,803
8,884
31,360
24,620
Noninterest Income:
Customer service fees
899
776
745
2,328
2,094
Increase in cash surrender value of
bank-owned life insurance
89
114
139
343
408
Unrealized loss on fair value of
marketable equity securities
(149
)
(127
)
(14
)
(458
)
(75
)
Loss on fair value of junior subordinated
debentures
(600
)
(869
)
(35
)
(2,469
)
(691
)
Gain on sale of investment securities
—
—
—
30
—
(Loss) gain on sale of assets
—
—
(5
)
—
8
Other
153
708
100
1,015
349
Total noninterest income
392
602
930
789
2,093
Noninterest Expense:
Salaries and employee benefits
2,965
2,777
2,888
8,791
8,804
Occupancy expense
923
849
1,013
2,551
2,705
Data processing
215
145
147
475
382
Professional fees
1,089
919
833
2,957
2,524
Regulatory assessments
212
187
258
630
547
Director fees
110
116
91
345
275
Correspondent bank service charges
23
24
22
74
65
Net cost on operation and sale of OREO
33
2
24
27
67
Other
641
557
888
1,755
1,964
Total noninterest expense
6,211
5,576
6,164
17,605
17,333
Income Before Provision for
Taxes
6,304
4,829
3,650
14,544
9,380
Provision for Taxes on Income
1,837
1,394
1,039
4,199
2,653
Net Income
4,467
3,435
2,611
$
10,345
$
6,727
Basic earnings per common share
$
0.26
$
0.20
$
0.15
$
0.61
$
0.40
Diluted earnings per common share
$
0.26
$
0.20
$
0.15
$
0.61
$
0.40
Weighted average basic shares for EPS
17,042,479
17,036,364
17,010,288
17,036,460
17,010,236
Weighted average diluted shares for
EPS
17,063,947
17,057,755
17,035,533
17,057,638
17,027,671
United Security Bancshares
Average Balances and Rates
(unaudited)
(in thousands)
Three Months Ended
Nine Months Ended
September 30, 2022
June 30, 2022
September 30, 2021
September 30, 2022
September 30, 2021
Average Balances:
Loans (1)
$
952,518
$
906,396
$
826,754
$
910,221
$
753,424
Investment securities
215,416
192,494
170,408
198,658
146,434
Interest-bearing deposits in FRB
111,704
136,898
172,073
141,708
203,366
Total interest-earning assets
1,279,638
1,235,788
1,169,235
1,250,587
1,103,224
Allowance for credit losses
(9,902
)
(9,302
)
(9,203
)
(9,577
)
(8,762
)
Cash and due from banks
37,547
34,904
44,804
36,581
44,968
Other real estate owned
4,583
4,579
4,716
4,582
4,917
Other non-earning assets
71,291
71,529
60,771
69,506
64,235
Total average assets
$
1,383,157
$
1,337,498
$
1,270,323
$
1,351,679
$
1,208,582
Interest-bearing deposits
$
720,783
$
737,149
$
675,419
$
728,331
$
630,823
Junior subordinated debentures
10,459
10,863
11,225
10,824
11,029
Total interest-bearing liabilities
731,242
748,012
686,644
739,155
641,852
Noninterest-bearing deposits
528,033
465,926
453,159
486,983
437,482
Other liabilities
10,054
9,583
9,968
9,868
9,789
Total liabilities
1,269,329
1,223,521
1,149,771
1,236,006
1,089,123
Total equity
113,828
113,977
120,552
115,673
119,459
Total liabilities and equity
$
1,383,157
$
1,337,498
$
1,270,323
$
1,351,679
$
1,208,582
Average Rates:
Loans (1)
4.80
%
4.31
%
4.40
%
4.46
%
4.60
%
Investment securities
2.43
%
2.09
%
1.51
%
2.10
%
1.54
%
Interest-bearing deposits in FRB
2.43
%
0.76
%
0.15
%
0.97
%
0.11
%
Earning assets
4.19
%
3.57
%
3.35
%
3.69
%
3.37
%
Interest bearing deposits
0.37
%
0.28
%
0.29
%
0.31
%
0.29
%
Total deposits
0.22
%
0.17
%
0.17
%
0.19
%
0.17
%
Junior subordinated debentures
4.17
%
2.55
%
1.56
%
2.77
%
1.65
%
Total interest-bearing liabilities
0.43
%
0.31
%
0.31
%
0.35
%
0.32
%
Net interest margin (2)
3.95
%
3.38
%
3.17
%
3.48
%
3.18
%
(1)
Loan amounts include nonaccrual loans, but
the related interest income has been included only if collected for
the period prior to the loan being placed on a nonaccrual
basis.
(2)
Net interest margin is computed by
dividing annualized net interest income by average interest-earning
assets.
United Security Bancshares
Condensed - Consolidated Balance Sheets
(unaudited)
(in thousands)
September 30, 2022
June 30, 2022
March 31, 2022
December 31, 2021
September 30, 2021
Cash and cash equivalents
$
126,032
$
107,246
$
224,934
$
219,219
$
259,428
Investment securities
211,847
215,774
183,527
182,646
165,508
Loans
962,166
949,991
879,379
871,533
809,114
Allowance for credit losses
(10,063
)
(9,907
)
(9,276
)
(9,333
)
(9,144
)
Net loans
952,103
940,084
870,103
862,200
799,970
Other assets
79,270
76,413
71,238
66,879
67,875
Total assets
$
1,369,252
$
1,339,517
$
1,349,802
$
1,330,944
$
1,292,781
Non-interest-bearing
$
517,230
$
473,013
$
465,043
$
476,749
$
455,584
Interest-bearing
723,588
735,181
749,289
711,357
695,131
Total deposits
1,240,818
1,208,194
1,214,332
1,188,106
1,150,715
Other liabilities
21,355
21,322
21,896
22,631
22,938
Total liabilities
1,262,173
1,229,516
1,236,228
1,210,737
1,173,653
Total shareholders' equity
107,079
110,001
113,574
120,207
119,128
Total liabilities and shareholder's
equity
$
1,369,252
$
1,339,517
$
1,349,802
$
1,330,944
$
1,292,781
United Security Bancshares
Condensed - Consolidated Statements of
Income (unaudited)
(in thousands)
For the Quarters
Ended:
September 30, 2022
June 30, 2022
March 31, 2022
December 31, 2021
September 30, 2021
Total interest income
$
13,519
$
10,993
$
9,991
$
9,930
$
9,877
Total interest expense
789
584
553
552
540
Net interest income
12,730
10,409
9,438
9,378
9,337
Provision for credit losses
607
606
5
453
453
Net interest income after provision for
credit losses
12,123
9,803
9,433
8,925
8,884
Total non-interest income (loss)
392
602
(206
)
1,291
930
Total non-interest expense
6,211
5,576
5,816
6,282
6,164
Income before provision for taxes
6,304
4,829
3,411
3,934
3,650
Provision for taxes on income
1,837
1,394
968
564
1,039
Net income
$
4,467
$
3,435
$
2,443
$
3,370
$
2,611
United Security Bancshares
Nonperforming Assets
(unaudited)
(dollars in thousands)
September 30, 2022
December 31, 2021
September 30, 2021
Real estate - construction &
development
$
11,015
$
11,226
11,273
Agricultural
130
212
278
Total nonaccrual loans
$
11,145
$
11,438
$
11,551
Loans past due 90 days and still
accruing
—
453
318
Restructured loans
142
176
198
Total nonperforming loans
$
11,287
$
12,067
$
12,067
Other real estate owned
4,582
4,582
4,582
Total nonperforming assets
$
15,869
$
16,649
$
16,649
Nonperforming loans to total gross
loans
1.18
%
1.39
%
1.49
%
Nonperforming assets to total assets
1.16
%
1.25
%
1.29
%
Allowance for credit losses to
nonperforming loans
89.16
%
77.34
%
75.78
%
United Security Bancshares
Selected Financial Data
(unaudited)
(dollars in thousands, except per share
amounts)
Three Months Ended September
30,
Nine months ended September
30,
2022
2021
2022
2021
Return on average assets
1.28
%
0.82
%
1.03
%
0.75
%
Return on average equity
15.61
%
8.62
%
11.99
%
7.55
%
Annualized net charge-off (recoveries) to
average loans
0.19
%
0.24
%
0.07
%
0.18
%
September 30, 2022
December 31, 2021
Shares outstanding - period end
17,046,676
17,028,239
Book value per share
$
6.28
$
7.06
Efficiency ratio (1)
52.10
%
58.89
%
Total impaired loans
$
11,829
$
12,034
Net loan to deposit ratio
76.73
%
72.57
%
Allowance for credit losses to total
loans
1.05
%
1.07
%
Tier 1 capital to adjusted average assets
(leverage)
Company
9.56
%
9.79
%
Bank
9.60
%
9.64
%
(1) Efficiency ratio is defined as total noninterest expense
divided by net interest income before provision for credit losses
plus total noninterest income.
United Security Bancshares
Net Income before Non-Core
Reconciliation
Non-GAAP Information (dollars in
thousands)
(unaudited)
Nine Months Ended September
30,
2022
2021
Change $
Change %
Net income
$
10,345
$
6,727
$
3,618
53.8
%
Junior subordinated debenture (1) fair
value adjustment
(2,469
)
(691
)
Loss on sale of OREO (2)
—
(1
)
Total non-core items
(2,469
)
(692
)
Income tax effect
716
201
Non-core items net of taxes
(1,753
)
(491
)
Non-GAAP core net income
$
12,098
$
7,218
$
4,880
67.6
%
(1)
Junior subordinated debenture fair value
adjustment is not part of core income and depending upon market
rates, can “add to” or “subtract from” core income and mask
non-GAAP core income change.
(2)
Write down or loss on sale of OREO is
considered a one-time event and therefore is not part of core
income.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20221019006117/en/
Dennis Woods, President and CEO 559-248-4928
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