United Security Bancshares(US:UBFO)2022-11-04 22:20Financial Performance - Total assets increased 2.9% to $1.37 billion compared to $1.33 billion at December 31, 2021[166] - Total loans, net of unearned fees, increased 10.4% to $962.2 million compared to $871.5 million at December 31, 2021[166] - Net interest income before the provision for credit losses increased 24.0% to $32.6 million for the nine months ended September 30, 2022, compared to $26.3 million for the same period in 2021[166] - Return on average assets ("ROAA") was 1.03% for the nine months ended September 30, 2022, compared to 0.75% for the same period in 2021[166] - Return on average equity ("ROAE") was 11.99% for the nine months ended September 30, 2022, compared to 7.55% for the same period in 2021[166] - Total interest income increased by $6.7 million, or 24.1%, for the nine months ended September 30, 2022, compared to the same period in 2021[192] - The company reported an increase in net interest income of $3,393 thousand for the three months ended September 30, 2022, compared to the same period in 2021[190] Asset and Liability Management - Total average assets reached $1,383,157 thousand in 2022, up from $1,270,323 thousand in 2021, reflecting a growth of approximately 8.9%[183] - Total liabilities increased to $1,269,329 thousand in 2022 from $1,149,771 thousand in 2021, marking a growth of about 10.4%[183] - Total shareholders' equity decreased to $113,828 thousand in 2022 from $120,552 thousand in 2021, indicating a decline of approximately 5.6%[183] - Cash and cash equivalents decreased by $93.2 million, or 42.5%, between December 31, 2021, and September 30, 2022[207] - Total deposits reached $1.24 billion, reflecting an increase of $52.7 million, or 4.4%, from $1.19 billion at December 31, 2021[221] - Average interest-bearing liabilities increased to $739.2 million for the nine months ended September 30, 2022, from $641.9 million for the same period in 2021[208] Loan Portfolio and Credit Quality - The loan portfolio totaled $960.5 million at September 30, 2022, an increase of $91.2 million, or 10.5%, from $869.3 million at December 31, 2021[209] - Real estate mortgage loans increased by $74.7 million, or 13.4%, during the first nine months of 2022[210] - Commercial and industrial loans increased by $16.9 million between December 31, 2021, and September 30, 2022[215] - Total loans outstanding increased from $809.1 million at September 30, 2021 to $962.2 million at September 30, 2022, representing a growth of 18.9%[270] - Impaired and classified loans totaled $11.8 million, or 1.2% of gross loans, as of September 30, 2022, down from $13.7 million, or 1.6%, at December 31, 2021[232] - The allowance for loan losses increased to $10.063 million as of September 30, 2022, from $9.333 million at December 31, 2021[241] Interest Income and Expense - Total interest income increased by $3.6 million, or 36.9%, for the three months ended September 30, 2022, compared to the same period in 2021[190] - The average yield on total interest-earning assets increased by 84 basis points, driven by higher yields on investment securities and loans due to market rate increases[190] - Net interest margin improved to 3.95% for the three months ended September 30, 2022, compared to 3.17% in the same period of 2021[190] - Total interest expense increased by approximately $399,000, or 26.1%, for the nine months ended September 30, 2022, compared to the same period in 2021[195] - Interest expense as a percentage of average earning assets rose to 0.24% in 2022 from 0.18% in 2021[190] Economic and Market Conditions - The Federal Open Market Committee increased the overnight benchmark rate by 300bps during 2022 to combat rising inflation[169] - The prime rate increased from 3.25% at September 30, 2021, to 6.25% at September 30, 2022, impacting both interest income and expense[188] - The effective tax rate for the nine months ended September 30, 2022, was 28.87%, compared to 28.28% for the same period in 2021[206] - The company continues to monitor economic conditions in the real estate market to adjust the allowance for loan losses as necessary[264] Dividends and Capital Management - The Company declared a cash dividend of $0.11 per share on common stock on September 27, 2022, totaling approximately $1.9 million[286] - The Bank's Tier 1 Capital Ratio was 9.60% at September 30, 2022, compared to 9.80% at September 30, 2021[280] - The Company's capital position remains well-capitalized with a 9.56% Tier 1 Leverage Ratio compared to 9.79% as of December 31, 2021[166] Noninterest Income and Expenses - Noninterest income decreased by $1.3 million to $789,000 for the nine months ended September 30, 2022, compared to $2.1 million in the same period in 2021[199] - Professional fees increased by $433,000, or 17.2%, for the nine months ended September 30, 2022, compared to the same period in 2021[202] - Salaries and employee benefits remained relatively stable, decreasing slightly by $13,000 to $8.8 million for the nine months ended September 30, 2022[202]