United Security Bancshares(UBFO) - 2024 Q2 - Quarterly Report

Financial Performance - Net income for Q2 2024 decreased by 2.72% to $4.3 million, compared to $4.4 million in Q2 2023[126] - Annualized return on average assets (ROAA) increased to 1.45% for Q2 2024, compared to 1.40% in Q2 2023[126] - Annualized return on average equity (ROAE) decreased to 13.79% for Q2 2024, down from 16.49% in Q2 2023[126] - Total interest income decreased by $114,000, or 0.8%, for the three months ended June 30, 2024, compared to the same period in 2023[137] - For the six months ended June 30, 2024, total interest income increased by $205,000, or 0.69%, compared to the same period in 2023[139] - Noninterest income for the quarter ended June 30, 2024, increased by $506,000 to $1.5 million compared to the same quarter in 2023[144] - Total noninterest income for the six months ended June 30, 2024, increased by $111,000 to $2.6 million compared to the same period in 2023[146] Interest and Loans - Net interest margin decreased to 4.28% for Q2 2024, down from 4.35% in Q2 2023[126] - Interest expense increased by 33.6% to $3.5 million in Q2 2024, up from $2.6 million in Q2 2023[126] - Total loans increased by 3.19% to $949.4 million as of June 30, 2024, compared to $920.0 million at December 31, 2023[126] - Loans increased to $910,404 with an interest income of $13,576, yielding a rate of 6.00%, compared to $941,470 and $13,529 at 5.76% the previous year[134] - The overall average yield on the loan portfolio increased to 5.99% for the six months ended June 30, 2024, compared to 5.67% for the same period in 2023[140] - The total loans outstanding at the end of the period before deducting allowances for credit losses was $949,413,000 as of June 30, 2024, compared to $960,121,000 at the same time last year[188] Assets and Deposits - Total deposits increased by 0.2% to $1.01 billion as of June 30, 2024, compared to $1.00 billion at December 31, 2023[126] - Total average assets were reported at $1,194,911, a decrease from $1,270,149, indicating a reduction of about 5.93%[134] - Total assets were $1.22 billion as of June 30, 2024, a decrease of $68.997 million compared to the previous year[154] - Total deposits reached $1.01 billion at June 30, 2024, reflecting a $2.1 million increase from $1.00 billion at December 31, 2023, but a $39.9 million decrease from $1.05 billion at June 30, 2023[167] Credit Quality - The allowance for credit losses as a percentage of gross loans decreased to 1.61% from 1.70% at December 31, 2023[126] - The Company recorded a provision for credit losses of $19,000 for Q2 2024, compared to $1.1 million for Q2 2023[126] - Nonaccrual loans decreased to $11,938 from $13,164, showing an improvement in asset quality[134] - The allowance for credit losses improved slightly to $(15,454) from $(15,644), indicating a stable credit environment[134] - The allowance for credit losses at the end of the period was $15,323,000 as of June 30, 2024, down from $16,110,000 at the same time last year[188] - The net loan charged-off to total average loans (annualized) was 0.14% for the six months ended June 30, 2024, down from 0.19% for the same period in 2023[188] Expenses - Noninterest expense for the quarter ended June 30, 2024, increased by $766,000 to $7.0 million, a 12.3% increase compared to the same quarter in 2023[147] - Total noninterest expense for the six months ended June 30, 2024, increased by $1.3 million to $13.7 million, a 10.1% increase compared to the same period in 2023[149] - Professional fees rose by $601,000, or 66.0%, to $1.5 million for the quarter ended June 30, 2024, primarily due to outsourced IT services[147] - Salaries and employee benefits increased by $89,000, or 2.7%, to $3.4 million for the quarter ended June 30, 2024[147] Capital and Dividends - The Bank's Tier 1 Capital Ratio was 12.67% at June 30, 2024, compared to 11.18% at June 30, 2023, indicating improved capital adequacy[200] - The Company declared a cash dividend of $0.12 per share on June 25, 2024, with approximately $2.1 million transferred from retained earnings to dividends payable[205] Liquidity - The Company's liquid asset base included $38.8 million in cash and cash equivalents as of June 30, 2024, representing 3.2% of total assets[196] - Unused lines of credit with the Federal Reserve Bank and FHLB totaled $659.6 million, providing additional liquidity support[197]