published on July 21, 2020 - 1:51 PM
Written by The Business Journal Staff

United Security Bank notes ‘negative industry-wide effects’ in Q2 earnings

Fresno’s United Security Bancshares, parent company of United Security Bank, reported net second quarter income of $2.01 million, down by nearly 51% compared to the same quarter last year.

The decrease – attributed to the “negative industry-wide effects of the COVID-19 pandemic” – is the result of a reduction in interest income due to lower interest rates, a provision for loan losses and a write-down on OREO, or real property owned by the bank.

Dennis Woods, president and CEO, stated: “Although our institution continues to be impacted by negative industry-wide effects of the COVID-19 pandemic, we continue to see strong growth as we have reached record highs in loan and deposit balances. We funded over 200 SBA PPP loans for our borrowers over the last quarter, resulting in $26,035,000 in balances and $1,028,000 in unearned fees to be recognized over the life of the loans. We believe our strong credit quality, ample liquidity, and capital level provide a solid foundation as we continue to navigate through these challenging times.”

United Security Bank recognized net income of $4.76 million for the six months ended June 30, a decrease of 41.2% compared to the net income for the same period last year. Basic and diluted earnings per share decreased to $0.28 for the period, compared to basic and diluted earnings per share of $0.48 last year.

On a quarter-over-quarter comparative basis, non-interest expense increased due to a $727,000 write-down on OREO, partially offset by a $346,000 decrease in salaries and employee benefits expense and a $191,000 decrease in professional fees.

The Company’s allowance for loan loss totaled 1.37% of the loan portfolio at June 30, compared to 1.33% at Dec. 31, 2019. Excluding the SBA PPP loans, which are fully government guaranteed, the allowance for loan loss totaled 1.42% of the loan portfolio at June 30. In determining the adequacy of the allowance for loan losses, according to an earnings report, the judgment of the Company’s management is a significant factor. Management considers the allowance for credit losses at June 30 to be adequate.

Total assets eclipsed the $1 billion mark this year, reaching $1.03 billion on June 30, compared to $956.91 million on Dec. 31, 2019.


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