Press Release

United Security Bancshares reports 2nd quarter profits of $3.4 million

Company Release - 7/18/2018 4:44 PM ET

FRESNO, Calif., July 18, 2018 /PRNewswire/ -- United Security Bancshares (Nasdaq: UBFO), today announced its unaudited financial results for the quarter ended June 30, 2018. The Company reported consolidated net income of $3,392,000, or $0.20 per basic and diluted common share, for the quarter ended June 30, 2018, as compared to $2,492,000, or $0.15 per basic and diluted common share, for the quarter ended June 30, 2017.  The Company recognized net income of $6,549,000 for the six months ended June 30, 2018, an increase of 54% compared to the net income of $4,263,000 recognized for the six months ended June 30, 2017. Basic and diluted earnings per share increased to $0.39 for the six months ended June 30, 2018, as compared to $0.25 for the six months ended June 30, 2017.

Second Quarter 2018 Highlights (at or for the quarter ended June 30, 2018, except where noted)

  • Net interest income after provision for credit losses increased to $8,913,000 compared to $7,724,000 for the quarter ended June 30, 2017, and increased from $8,515,000 in the preceding quarter.
  • Net interest margin decreased to 4.03% from 4.25% for the quarter ended June 30, 2017.
  • Net recoveries totaled $445,000, compared to net recoveries of $110,000 for the quarter ended June 30, 2017.
  • Capital positions remain strong with a 13.06% Tier 1 Leverage Ratio, a 15.71% Common Equity Tier 1 Ratio; a 17.21% Tier 1 Risk-Based Capital Ratio; and a 18.45% Total Risk-Based Capital Ratio.
  • Annualized return on average assets ("ROAA") was 1.58%, compared to 1.26% for the quarter ended June 30, 2017.
  • Annualized return on average equity ("ROAE") was 12.95%, compared to 10.06% for the quarter ended June 30, 2017.
  • Total loans decreased to $574,351,000, compared to $602,390,000 at December 31, 2017.
  • Other real estate owned balances remained at $5,745,000 at June 30, 2018 when compared to $5,745,000, at December 31, 2017.
  • The allowance for credit losses as a percentage of gross loans decreased to 1.47%, compared to 1.54% at December 31, 2017.
  • Total deposits increased to $756,963,000, compared to $687,693,000 at December 31, 2017.
  • Book value per share increased to $6.23, compared to $6.00 at December 31, 2017.

Dennis Woods, President and Chief Executive Officer, stated: "We are once again pleased to report strong earnings this quarter. While there was a loss on fair value of our trust preferred securities, included in the Company's earnings is a recovery of provision for credit loss due to reductions in required reserves for impaired credits and recoveries of previously charged-off credits. We continue to expect growth in core earnings as we continue to see a benefit from the lower tax rate, and increases in interest income. The Company realized $1,031,000 in savings on tax expense for the six months ended June 30, 2018 as a result of the lower tax rate. We fully expect this success will continue to be reflected in our results throughout 2018."

In an attempt to remain consistent with prior periods, provided at the end of this Press Release is a reconciliation of Core Income, as a non-GAAP measure to Net Income. This reconciliation continues to exclude Non-Core items such as the Fair Value Adjustment for Trust Preferred Securities ("TRUPS"), recovery of provision for credit loss, and gain on sale of other real estate owned ("OREO"). As such net income would have been $6,085,000 for the six months ended June 30, 2018, an increase of approximately 37% compared to net income of $4,451,000 for the same period in 2017. Management believes that our financial results are more comparative excluding the impact of such non-core items.

Results of Operations

Annualized ROAE for the six months ended June 30, 2018 was 12.69%, compared to 8.72% for the six months ended June 30, 2017.  ROAA was 1.57% for the six months ended June 30, 2018, compared to 1.09% for the six months ended June 30, 2017. ROAE for the quarter ended June 30, 2018 was 12.95% compared to 10.06% for the same period in 2017. ROAA was 1.58% for the quarter ended June 30, 2018, compared to 1.26% for the same period in 2017. The average cost of deposits was 0.30% for the quarter ended June 30, 2018, and 0.22% for the quarter ended June 30, 2017. The increase in the cost of deposits is attributed to increases in rates paid on time deposits and money market accounts.

Net interest income after the provision for credit losses for the six months ended June 30, 2018 totaled $17,428,000, an increase of $2,497,000, or 16.72%, from $14,931,000 for the same period ended June 30, 2017. The Company's net interest margin increased from 4.17% for the six months ended June 30, 2017 to 4.26% for the six months ended June 30, 2018.  The 9 basis point increase in net interest margin in the period-to-period comparison was the result of higher yields on both the loan portfolio and overnight deposits, partially offset by increasing cost of deposits.  The yield on loans increased from 5.33% for the six months ended June 30, 2017 to 5.36% for the six months ended June 30, 2018. The increase in net interest income on a year-over-year comparison is the result of higher interest rates and growth of the loan portfolio. Net interest income after the provision for credit losses for the quarter ended June 30, 2018 totaled $8,913,000, an increase of $1,189,000 or 15.39% from the net interest income of $7,724,000 for the same period ended June 30, 2017.

Non-interest income for the six months ended June 30, 2018 totaled $2,092,000, reflecting an increase of $117,000 from $1,975,000 in non-interest income reported for the six months ended June 30, 2017.  Customer service fees, which represent the largest portion of the Company's non-interest income, totaled $1,971,000 and $1,938,000 for the years ended June 30, 2018 and 2017, respectively.  On a year-over-year comparative basis, non-interest income increased primarily due to gains on the death benefit proceeds of bank-owned life insurance of $171,000 which was offset by the change in the fair value of financial liability caused by fluctuations in the LIBOR yield curve.  The Company recorded a $661,000 loss on the fair value of financial liability for the six months ended June 30, 2018, compared to a $601,000 loss for the same period ended June 30, 2017.

On January 1, 2018, the Company adopted ASU 2016-01, requiring the Company to present separately in other comprehensive income the portion of change in fair value of the financial liability resulting from a change in the instrument-specific credit risk. As of June 30, 2018, the Company has recognized a change of $367,000 on the fair value of this financial liability, of which a $661,000 loss was attributed to fluctuations in the LIBOR yield curve, and recorded in earnings, and a $294,000 gain was attributed to changes in credit risk and presented in other comprehensive income.

Non-interest income for the quarter ended June 30, 2018 totaled $1,169,000, reflecting an increase of $103,000 from the $1,066,000 in non-interest income reported for the quarter ended June 30, 2017.  The additional income in the period was primarily due to recording only a $192,000 loss on the fair value option of financial liability for the quarter ended June 30, 2018, as compared to a $264,000 loss for the same period ended 2017. The change in the fair value of financial liability was primarily caused by fluctuations in the LIBOR yield curve. Customer service fees totaled $1,020,000 for the quarter ended June 30, 2018, as compared to $997,000 for the quarter ended June 30, 2017.

For the six months ended June 30, 2018, non-interest expense totaled $10,318,000, a increase of $520,000 compared to $9,798,000 for the six months ended June 30, 2017.  On a year-over-year comparative basis, non-interest expense increased primarily due to increases of $400,000 in salary and employee benefits, $377,000 in OREO expenses, and $127,000 in professional fees, partially offset by a decrease of $108,000 in regulatory fees and a decrease of $110,000 on tax credit partnership expense. The change in other non-interest expenses of $297,000 reflects a $121,000 decrease in the cost of workman's compensation insurance expense.

Non-interest expense totaled $5,317,000 for the quarter ended June 30, 2018, an increase of $710,000 as compared to $4,607,000 reported for the quarter ended June 30, 2017. On a quarter-over-quarter comparative basis, non-interest expense increased primarily due to increases in salary and employee benefits, occupancy expense, and net cost on operation of OREO, partially offset by decreases in regulatory assessments. Non-interest expense for the quarter ended June 30, 2017 includes a $336,000 gain on sale of OREO. The increase in salary and employee benefits was primarily due to the increased employee salary expense and compensation expense related to equity awards.

Balance Sheet Review

Total assets increased $73,632,000, or 9.14%, for the six months ended June 30, 2018 due primarily to increases of $88,492,000 in overnight funds held at the Federal Reserve. This increase is partially the reflection of an increase of $69,270,000 in deposits.  Loan balances decreased by $27,355,000 during 2018 and investment securities increased by $14,661,000. The reduction in loan balances is primarily attributed to the payoff of a large relationship. The Company continues to review multiple loan purchase opportunities, on a flow basis, and recently executed a $30,000,000 letter of intent to purchase SBA loans.

Total deposits increased $69,270,000, or 10.07%, to $756,963,000 during the six months ended June 30, 2018.  This increase was due to increases of $92,913,000 in NOW, money market, and savings accounts, and $1,970,000 in time deposits, offset by a decrease of $25,613,000 in noninterest bearing deposits.  Interest bearing deposits and savings accounts increased 29.44% to $408,475,000 at June 30, 2018, compared to $315,562,000 at December 31, 2017.  Noninterest bearing deposits decreased 8.33% to $281,686,000 at June 30, 2018, compared to $307,299,000 at December 31, 2017. As a result of the large increase in NOW, money market, and saving accounts, net core deposits increased $67,300,000.

Shareholders' equity at June 30, 2018 was $105,216,000, up $3,864,000 from shareholders' equity of $101,352,000 at December 31, 2017. The increase in equity was a result of net earnings for the period, partially offset by cash dividends.

The Board of Directors of United Security Bancshares declared a cash dividend on common stock of $0.09 per share on June 26, 2018.  The dividend is payable on July 19, 2018, to shareholders of record as of July 9, 2018.  The Board of Directors of United Security Bancshares declared a cash dividend on common stock of $0.09 per share on March 27, 2018.  The dividend was payable on April 19, 2018, to shareholders of record as of April 9, 2018  No assurances can be provided that future dividends will be declared and/or as to the timing of such future dividends, if any.

Credit Quality

The Company has recorded a recovery of provision for credit losses of $1,325,000 for the six months ended June 30, 2018, compared to a recovery of provision of $31,000 for the six months ended June 30, 2017.  Net loan recoveries totaled $483,000 for the six months ended June 30, 2018, as compared to net recoveries of $136,000 for the six months ended June 30, 2017. The Company recorded a recovery of provision for credit loss of $1,136,000 for the quarter ended June 30, 2018, compared to a recovery of provision for credit losses of $52,000 for the quarter ended June 30, 2017. The recovery of provision for the quarter ended June 30, 2018 is the result of loan recoveries, a decline in loan balances, and improvement in historical loss factors. Net loan recoveries totaled $445,000 for the quarter ended June 30, 2018, as compared to net loan recoveries of $110,000 for the quarter ended June 30, 2017.

The Company's allowance for loan loss totaled 1.47% of the loan portfolio at June 30, 2018, compared to 1.54% at December 31, 2017. In determining the adequacy of the allowance for loan losses, the judgment of the Company's management is a significant factor. Management considers the allowance for credit losses at June 30, 2018 to be adequate.

Non-performing assets, comprised of nonaccrual loans, troubled debt restructures (TDR), other real estate owned through foreclosure (OREO), and loans more than 90 days past due and still accruing interest, increased approximately $4,667,000 between December 31, 2017 and June 30, 2018 to $22,277,000.  Nonperforming assets as a percentage of total assets increased from 2.19% at December 31, 2017 to 2.53% at June 30, 2018.  The increase in nonperforming assets is mainly attributed to increases in nonaccrual loans.  Nonaccrual loans increased $6,906,000 between December 31, 2017 and June 30, 2018 to $12,202,000. The increase in nonaccrual loans is isolated to one borrower, which is well-secured by real estate collateral. OREO totaled $5,745,000 at June 30, 2018 and December 31, 2017. Additionally there has been an increase in impaired loans which totaled $19,696,000 at June 30, 2018 and $14,790,000 at December 31, 2017, an increase of $4,906,000.

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 11 full-service branch offices in Fresno, Bakersfield, Campbell, Caruthers, Coalinga, Firebaugh, Oakhurst, San Joaquin, and Taft.  Additionally, United Security Bank operates Commercial Real Estate Construction, Commercial Lending, Consumer Lending, and Financial Services 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 tables, 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 (loss) 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 news release contains 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 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 laws, and regulations on the Company and its business; (8) changing bank regulatory conditions, policies, whether arising as new legislation or regulatory initiatives or changes in our regulatory classifications, that could lead to restrictions on activities of banks generally or as to the Bank, including specifically the formal order between the Federal Reserve Bank of San Francisco and the Company and the Bank, (9) failure to comply with the written regulatory agreement under which the Company is subject and (10) unknown economic impacts caused by the State of California's budget issues, including the effect on Federal spending due to sequestration required by the Budget Control Act of 2011. Management cannot predict at this time the severity or duration of the effects of the recent business slowdown on the Company's specific business activities and profitability. Weaker or a further decline in capital and consumer spending, and related recessionary trends could adversely affect the Company's performance in a number of ways including decreased demand for our products and services and increased credit losses. Likewise, changes in interest rates, among other things, could slow the rate of growth or put pressure on current deposit levels and affect the ability of borrowers to repay loans. 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 Annual Report on Form 10-K for the year ended December 31, 2017, 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 ("SEC").

United Security Bancshares

Consolidated Balance Sheets (unaudited)

(in thousands)





June 30, 2018


December 31, 2017

Assets




Cash and non-interest-bearing deposits in other banks

$

29,939



$

35,237


Cash and due from Federal Reserve Bank

161,189



72,697


Cash and cash equivalents

191,128



107,934


Investment securities available for sale (at fair value)

56,724



41,985


Marketable equity

3,659



3,737


    Investment securities

60,383



45,722


Loans and leases, net of unearned fees

574,351



602,390


Less: Allowance for credit losses

(8,425)



(9,267)


Net loans

565,926



593,123


Premises and equipment - net

10,041



10,165


Other real estate owned

5,745



5,745


Goodwill and intangible assets

4,488



4,488


Cash surrender value of life insurance

19,803



19,752


Deferred income tax asset - net

2,616



2,389


Accrued interest receivable

8,392



6,526


Investment in limited partnerships

1,592



1,601


Other assets

9,354



8,391


Total assets

$

879,468



$

805,836






Liabilities and Shareholders' Equity




Deposits




Non-interest bearing demand deposits

$

281,686



$

307,299


Money market, NOW, and savings

408,475



315,562


Time

66,802



64,832


Total deposits

756,963



687,693


Accrued interest payable

43



44


Other liabilities

7,121



7,017


Junior subordinated debentures (at fair value)

10,125



9,730


Total liabilities

774,252



704,484






Shareholders' equity




Common stock, no par value 20,000,000 shares authorized, 16,901,618 issued and outstanding at June 30, 2018, and 16,885,615 at December 31, 2017

58,309



57,880


Retained earnings

46,025



44,182


Accumulated other comprehensive income (loss)

882



(710)


Total shareholders' equity

105,216



101,352


Total liabilities and shareholders' equity

$

879,468



$

805,836


 

United Security Bancshares

Consolidated Statements of Income (unaudited)

(in thousands)









Three Months Ended June 30,


Six Months Ended June 30,


2018


2017


2018


2017

Interest income:








Interest and fees on loans

$

7,491


$

7,579


$

15,717


$

14,804

Interest on investment securities

265


229


457


453

Interest on deposits in FRB

680


301


1,065


484

Interest on deposits in other banks



1




2

Total interest income

8,436


8,110


17,239


15,743









Interest expense:








Interest on deposits

550


364


937


700

Interest on other borrowed funds

109


74


199


143

Total interest expense

659


438


1,136


843

Net interest income

7,777


7,672


16,103


14,900

Recovery of provision for Credit Losses

(1,136)


(52)


(1,325)


(31)

Net interest income after recovery of provision for credit losses

8,913


7,724


17,428


14,931









Non-interest income:








Customer service fees

1,020


997


1,971


1,938

Increase in cash surrender value of bank-owned life insurance

132


134


257


266

Loss on marketable equity securities

(18)



(78)


Loss on fair value of financial liability

(192)


(264)


(661)


(601)

Gain on death benefit proceeds from bank-owned life insurance



171


Other non-interest income

198


199


403


372

Total non-interest income

1,169


1,066


2,092


1,975









Non-interest expense:








Salaries and employee benefits

3,010


2,586


5,971


5,571

Occupancy expense

1,117


1,043


2,135


2,058

Data processing

38


25


90


52

Professional fees

391


345


727


600

Regulatory assessments

78


133


161


269

Director fees

81


75


162


143

Correspondent bank service charges

17


19


34


37

Loss on California tax credit partnership

5


10


9


119

Net cost (gain) on operation and sale of OREO

49


(309)


100


(277)

Other non-interest expense

531


680


929


1,226

Total non-interest expense

5,317


4,607


10,318


9,798









Income before income tax provision

4,765


4,183


9,202


7,108

Provision for income taxes

1,373


1,691


2,653


2,845

Net income

$

3,392


$

2,492


$

6,549


$

4,263









Basic earnings per common share

$

0.20


$

0.15


$

0.39


$

0.25

Diluted earnings per common share

$

0.20


$

0.15


$

0.39


$

0.25

Weighted average basic shares for EPS

16,901,618


16,875,190


16,901,618


16,875,134

Weighted average diluted shares for EPS

16,958,932


16,894,227


16,942,394


16,891,784

 

United Security Bancshares

Average Balances and Rates (unaudited)

(in thousands)

Three Months Ended June 30,


Six Months Ended June 30,


2018


2017


2018


2017

Average Balances:








Loans (1)

$

576,670



$

554,553



$

590,905



$

560,282


Investment securities – taxable

49,752



54,505



47,381



55,541


Interest-bearing deposits in other banks



651





651


Interest-bearing deposits in FRB

148,441



113,981



124,215



102,898


Total interest-earning assets

774,863



723,690



762,501



719,372


Allowance for credit losses

(9,291)



(9,021)



(9,364)



(8,973)


Cash and due from banks

27,067



20,872



26,906



20,894


Other real estate owned

5,683



6,041



5,745



6,255


Other non-earning assets

53,944



51,925



53,855



51,093


Total average assets

852,266



793,507



839,643



788,641










Interest bearing deposits

442,797



400,245



422,008



402,831


Junior subordinated debentures

9,493



9,139



9,641



8,969


Total interest-bearing liabilities

452,290



409,384



431,649



411,800


Non-interest-bearing deposits

290,490



278,457



297,712



271,230


Other liabilities

5,485



6,317



6,199



7,035


Total liabilities

748,265



694,158



735,560



690,065


Total equity

104,001



99,349



104,083



98,576


Total liabilities and equity

$

852,266



$

793,507



$

839,643



$

788,641










Average Rates:








Loans (1)

5.21

%


5.48

%


5.36

%


5.33

%

Investment securities- taxable

2.14

%


1.69

%


1.95

%


1.64

%

Interest-bearing deposits in other banks

%


0.62

%


%


0.62

%

Interest-bearing deposits in FRB

1.84

%


1.06

%


1.73

%


0.95

%

Earning assets

4.37

%


4.49

%


4.56

%


4.41

%

Interest bearing deposits

0.50

%


0.36

%


0.45

%


0.35

%

Junior subordinated debentures

4.61

%


3.25

%


4.16

%


3.22

%

Total interest-bearing liabilities

0.58

%


0.43

%


0.53

%


0.41

%

Net interest margin

4.03

%


4.25

%


4.26

%


4.17

%



(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.

 

United Security Bancshares

Nonperforming Assets (unaudited)

(dollars in thousands)







June 30, 2018


December 31, 2017


June 30, 2017

Commercial and industrial

$



$

212



$

561


Real estate - mortgage

438



742



473


RE construction & development

11,764



4,342



4,474


Installment/other






Total nonaccrual loans

$

12,202



$

5,296



$

5,508








Loans past due 90 days and still accruing

67



485



87


Restructured loans

4,263



6,084



6,471


Total nonperforming loans

$

16,532



$

11,865



$

12,066


Other real estate owned

5,745



5,745



5,745


Total nonperforming assets

$

22,277



$

17,610



$

17,811








Nonperforming assets to total gross loans

3.88

%


2.92

%


3.13

%

Nonperforming assets to total assets

2.53

%


2.19

%


2.28

%

Allowance for loan losses to nonperforming loans

50.96

%


78.10

%


74.65

%

 

United Security Bancshares

Selected Financial Data (unaudited)

(dollars in thousands, except per share amounts)


Three Months Ended June 30,


Six Months Ended June 30,


2018


2017


2018


2017









Return on average assets

1.58

%


1.26

%


1.57

%


1.09

%

Return on average equity

12.95

%


10.06

%


12.69

%


8.72

%

Net recoveries to average loans

(0.31)

%


(0.08)

%


(0.16)

%


(0.05)

%


















June 30, 2018


December 31, 2017





Shares outstanding - period end

16,901,618



16,885,615






Book value per share

$6.23



$6.00






Efficiency ratio (1)

54.77

%


54.83

%





Total impaired loans

$19,696



$14,790






Net loan to deposit ratio

74.76

%


86.25

%





Allowance for credit losses to total loans

1.47

%


1.54

%





Total capital to risk weighted assets








Company

18.45

%


17.54

%





Bank

18.32

%


17.31

%





Tier 1 capital to risk-weighted assets








Company

17.21

%


16.29

%





Bank

17.07

%


16.06

%





Common equity tier 1 capital to risk-weighted assets








Company

15.71

%


14.81

%





Bank

17.07

%


16.06

%





Tier 1 capital to adjusted average assets (leverage)








Company

13.06

%


13.01

%





Bank

12.99

%


12.90

%







(1)

Efficiency ratio is defined as total noninterest expense minus net cost on operation of OREO divided by net interest income before provision for credit losses plus total noninterest income minus loss on fair value of financial liability.

 

United Security Bancshares









Net Income before Non-Core Reconciliation









Non-GAAP Information (dollars in thousands)









(unaudited)











Six Months Ended June 30,







2018


2017


Change $


Change %

Net income


$

6,549



$

4,263



$

2,286



53.62

%










TRUPs (1) fair value adjustment loss pretax


(661)



(601)






Reversal of provision for credit losses (2)


1,315








Gain on sale of Other Real Estate Owned (OREO) (3)




336








654



(265)















Income tax effect (29%)


190



(77)






Non-core items net of taxes


464



(188)















Non-GAAP core net income


$

6,085



$

4,451



$

1,634



36.71

%



(1)

Trust Preferred Securities ("TRUPs") 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)

A reversal of provision for credit losses is not part of Non-GAAP Core Income. This reversal from the allowance for credit losses was in excess of the required reserve. The recovery of provision for credit losses for $1,325,000 for the six months ended June 30, 2018, within the Consolidated Statements of Income, includes this reversal of provision for credit losses of $1,315,000 and a provision for overdrafts and unfunded loan commitments of $10,000.



(3)

Gain on sale of Other Real Estate Owned (OREO) is not part of Core Income.

 

Cision View original content:http://www.prnewswire.com/news-releases/united-security-bancshares-reports-2nd-quarter-profits-of-3-4-million-300683246.html

SOURCE United Security Bancshares