United Security Bancshares -16.8% ROE for 2004 FRESNO, Calif., Jan.
18 /PRNewswire-FirstCall/ -- Dennis R. Woods, President and Chief
Executive Officer of United Security Bancshares --
http://www.unitedsecuritybank.com/ , (NASDAQ:UBFO) -- reported
today the results of operations for the 4th quarter and for the
full year of 2004. Net Income for the 4th quarter was $2,253,000,
up 87.5% or $1,051,000 over the 4th quarter for 2003 due primarily
to adjustments made in the 4th quarter of 2003 where state tax
benefits recorded in the first three quarters of 2003 were reversed
in the 4th quarter of 2003. Year to date net income for the twelve
months ended December 31, 2004 was $8,405,000, up $699,000 or 9.1%
over the same period in 2003. Basic earnings per share for the
quarter were $0.40 compared with $0.22 for 2003, an increase of
81.8%. Diluted earnings per share for the quarter were the same as
the basic earnings per share. Basic earnings per share for the
twelve months were $1.49 compared with $1.41 for 2003, an increase
of 5.7%. Diluted earnings per share for the twelve months were
$1.48 compared with $1.40 a year ago for an increase of 5.7%. Woods
added, "Like almost all accelerated-filer-public-companies in
America, we too were surprised at the very high costs of compliance
with the Sarbanes-Oxley lesgislation. We spent $699,000 on auditing
matters in 2004, $463,000 more than the year before. Nearly all of
that increase is attributable to Sarbanes-Oxley compliance. As a
result, earnings were adversely impacted. However, I am very
pleased that we were still able to show a record year for
earnings." The return on average equity for 2004 was 16.8% and the
return on average assets was 1.52% compared with an ROE of 17.8%
and ROA of 1.51% for the same period in 2003. The 65th consecutive
quarterly cash dividend of $0.16 per share, up from $0.145 a year
ago, was declared on December 28, 2004 to be paid on January 19,
2005, to shareholders of record on January 7, 2005. Shareholders'
equity ended the quarter at $53,236,000, an increase of 18.2% over
December 31, 2003. Dividends of $3.51 million were paid out of
shareholders' equity to shareholders during the past 12 months, and
$2.1 million was utilized to purchase and retire shares of stock.
In addition, $6,250,000 was added to shareholders' equity as a
result of the Taft National Bank acquisition. 4th quarter 2004 net
interest income increased by $1,503,000 over the same period in
2003, from $5,238,000 to $6,741,000, an increase of 28.7%. The net
interest margin increased from 4.50% for the 4th quarter in 2003 to
5.03% for 2004, primarily attributable to rate and volume increases
on earning assets. Noninterest income for the 4th quarter of 2004
was $1,195,000, down from $1,388,000 in 2003 for a decrease of
$193,000 or 13.9%. The decrease is primarily the result shared
appreciation income of $375,000 earned in 2003 while only $8,000
was earned in 2004. This discrepancy was partically offset by
increases in other noninterest income items. Year to date
noninterest income for 2004 was $4,868,000, down $1,403,000, for a
decrease of 22.4%. Once again, shared appreciation of $1,813,000 in
2003 compared with $8,000 in 2004 is the primary reason for the
decline. 4th quarter operating expenses were $4,191,000 for 2004
and $2,832,000 for 2003, an increase of $1,359,000 or 48%. Year to
date, noninterest expense was $14,666,000 for 2004 compared with
$11,855,000 in 2003, an increase of $2,811,000 or 23.7%. The
primary factor contributing to the rise was the merger with Taft
National Bank The provision for loan loss was $1,145,000 year to
date for 2004, down $568,000 over 2003. The Allowance for Loan Loss
was 1.84% of total loans at year end 2004, up from 1.76% at the end
of 2003. The level of allowance for loan and lease losses is
adjusted by formula that keeps pace with loan growth and the level
of Nonperforming loans. Nonperforming assets were 2.99% of total
assets on December 31, 2004, down from 4.23% at December 31, 2003.
Other Real Estate Owned was down significantly from .54% of total
assets on December 31, 2003 to .26% on December 31, 2004.
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 RICs; 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-Q for the quarter ended September 30,
2004, and particularly the section of Management's Discussion and
Analysis. United Security Bancshares Consolidated Balance Sheets
(unaudited) (Dollars in thousands) December 31, December 31, 2004
2003 Cash & noninterest-bearing deposits in other banks $30,366
$22,480 Interest-bearing deposits in other banks 7,429 7,212
Federal funds sold 26,040 26,110 Investment securities 112,250
83,735 Loans, net of unearned fees 397,584 344,797 Less: allowance
for loan losses (7,251) (6,081) Loans, net 390,334 338,716 Premises
and equipment, net 8,102 4,567 Intangible assets 4,088 1,947 Other
assets 33,086 21,821 TOTAL ASSETS $611,696 $506,588 Deposits:
Noninterest-bearing demand & NOW $179,148 $126,942 Savings
32,775 23,693 Time 324,749 289,809 Total deposits 536,672 440,444
Borrowed funds 75 345 Other liabilities 6,249 5,763 Trust Preferred
Securities 0 15,000 Junior subordinated debentures 15,464 0 TOTAL
LIABILITIES $558,460 $461,552 Shareholders' equity: Common shares
outstanding: 5,683,794 5,512,538 5,683,794 at Dec. 31, 2004
5,512,538 at Dec. 31, 2003 $22,322 $18,227 Retained earnings 31,879
27,093 Unallocated ESOP shares (67) (313) Other comprehensive
income (loss) ($898) $29 Total shareholders' equity $53,236 $45,036
TOTAL LIABILITIES & SHAREHOLDERS' EQUITY $611,696 $506,588
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 2004 2003
2004 2003 Interest income $8,549 $6,817 $30,748 $26,927 Interest
expense 1,808 1,579 6,434 7,260 Net interest income 6,741 5,238
24,315 19,667 Provision for loan losses 255 841 1,145 1,713 Other
income 1,195 1,388 4,868 6,271 Other expenses 4,191 2,832 14,666
11,855 Income before income taxes 3,490 2,953 13,372 12,370
Provision for income taxes 1,237 1,752 4,968 4,664 NET INCOME
$2,253 $1,202 $8,405 $7,706 United Security Bancshares Selected
Financial Data Three Three Twelve Twelve Months Months Months
Months Ended Ended Ended Ended 12/31/2004 12/31/2003 12/31/2004
12/31/2003 Basic Earnings Per Share $0.40 $0.22 $1.49 $1.41 Diluted
earning per share $0.40 $0.22 $1.48 $1.40 Annualized Return on:
Average Assets 1.49% 0.93% 1.52% 1.51% Average Equity 16.84% 10.45%
16.81% 17.80% Net Interest Margin 5.03% 4.50% 4.87% 4.19% Net
Charge-offs to Average Loans 0.02% 0.21% 0.11% 0.34% 12/31/2004
12/31/2003 Book Value Per Share $9.37 $8.17 Tangible Book Value Per
Share $8.65 $7.82 Efficiency Ratio 50.26% 45.70% Non Performing
Assets to Total Assets 2.99% 4.23% Allowance for Loan Losses to
Total Loans 1.82% 1.49% Shares Outstanding - period end 5,683,794
5,512,538 DATASOURCE: United Security Bancshares CONTACT: Dennis R.
Woods, President and Chief Executive Officer of United Security
Bank, +1-559-248-4928 Web site: http://www.unitedsecuritybank.com/
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