UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended September 30, 1999
Commission File Number: 0-14549
United Security Bancshares, Inc.
(Exact name of registrant as specified in its charter)
Alabama 63-0843362
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
131 West Front Street
Post Office Box 249
Thomasville, AL. 36784
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (334) 636-5424
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
Yes X No
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Class Outstanding at September 30, 1999
Common Stock, $.01 par value 3,566,856 shares
<PAGE>
<TABLE>
UNITED SECURITY BANCSHARES, INC. AND SUBSIDIARIES
PART I. FINANCIAL INFORMATION
Page
ITEM 1. Financial Statements:
<S> <C>
Condensed Consolidated Statements of Financial Condition
at September 30, 1999 and December 31, 1998 3
Condensed Consolidated Statements of Income (Unaudited)
for the three and nine months ended September 30, 1999
and September 30, 1998 4
Condensed Consolidated Statements of Cash Flows for the
nine months ended September 30, 1999 and 1998 5
Notes to Condensed Consolidated Financial Statements 6
The Condensed Consolidated Financial Statements furnished
have not been audited by independent public accountants,
but reflect, in the opinion of management, all adjustments
necessary for a fair presentation of financial condition
and the results of operations for the periods presented
ITEM 2. Management's discussion and analysis of Financial
Condition and results of operations 11
PART II. OTHER INFORMATION
ITEM 6. Exhibits and Reports on Form 8-K 14
Signature Page 15
Signatures
</TABLE>
<PAGE>
<TABLE>
UNITED SECURITY BANCSHARES, INC AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(Dollars in thousands, except per share data)
ASSETS
Sept. 30, Dec. 31,
1999 1998
(Unaudited)
<S> <C> <C>
Cash and due from banks $10,405 $12,103
Interest-bearing deposits in banks 1,544 14,728
Trading securities 2,063 0
Investment securities available for
sale, at fair value 163,267 164,019
Loans, net of allowances for loan
losses of $5,099 and $4,989,
respectively 264,514 235,060
Premises and equipment 9,735 8,225
Other assets 20,135 15,938
Total Assets $471,663 $450,073
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits $324,710 $326,645
Borrowings 78,345 55,859
Other Liabilities 7,471 7,001
Total Liabilities 410,526 389,505
Shareholders' Equity:
Common stock, par value $.01 per
share; 10,000,000 shares authorized;
3,630,856 and 3,610,945 shares issued
respectively 36 36
Surplus 8,567 8,219
Accumulated other comprehensive
income (1,101) 2,822
Retained earnings 53,887 49,743
Less treasury stock-64,000 shares,
at cost (252) (252)
Total Shareholders' Equity 61,137 60,568
Total Liabilities and
Shareholders' Equity $471,663 $450,073
The accompanying notes are an integral part of these statements.
</TABLE>
<PAGE>
<TABLE>
UNITED SECURITY BANCSHARES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Dollars in thousands, except per share data)
Three Months Ended Nine Months Ended
September 30, September 30,
1999 1998 1999 1998
(Unaudited) (Unaudited)
Interest Income:
<S> <C> <C> <C> <C>
Interest and fees on loans $8,664 $7,687 $24,803 $21,449
Interest on securities 2,804 3,567 8,315 10,530
Total interest income 11,468 11,254 33,118 31,979
Interest Expense:
Interest on deposits 3,079 3,191 9,145 9,387
Interest on borrowings 879 865 2,198 2,295
Total interest expense 3,958 4,056 11,343 11,682
Net Interest Income 7,510 7,198 21,775 20,297
Provision for Loan Losses: 918 719 2,769 1,969
Net interest income after
provision for loan losses 6,592 6,479 19,006 18,328
Noninterest Income:
Service and other charges
on deposit accounts 538 514 1,495 1,546
Other income 507 496 1,743 1,393
Securities gains 5 55 524 520
Total noninterest income 1,050 1,065 3,762 3,459
Noninterest Expenses:
Salaries and employee
benefits 2,753 2,480 8,026 7,083
Occupancy expense 348 290 882 803
Furniture and equipment
expense 382 378 1089 1105
Other Expenses 1,209 1,113 3,690 3,334
Total noninterest
expense 4,692 4,261 13,687 12,325
Income before income taxes 2,950 3,283 9,081 9,462
Provision for Income Taxes 848 972 2,695 2,732
Net Income $2,102 $2,311 $6,386 $6,730
Basic Net Income Per Share $.59 $.65 $1.79 $1.90
Diluted Net Income Per Share $.58 $.65 $1.78 $1.89
Dividends Per Share $.21 $.19 $.63 $0.57
The accompanying notes are an integral part of these statements.
</TABLE>
<PAGE>
<TABLE>
UNITED SECURITY BANCSHARES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands, except per share data)
Nine Months Ended
September 30,
1999 1998
(Unaudited)
Cash Flows from Operating Activities
<S> <C> <C>
Net Income $6,386 $6,730
Adjustments:
Depreciation 735 730
Amortization of premiums and discounts, net 913 167
Amortization of intangibles 536 424
Provision for losses on loan 2,769 1,969
Gain on sale of securities, net (524) (254)
(Gain) loss on sale of fixed assets 0 (7)
Changes in assets and liabilities:
Decrease (increase) in other assets (4,733) (3,378)
(Decrease) increase in other liabilities 2,614 1,203
Total Adjustments 2,310 854
Net cash provided by operating activities 8,696 7,584
Cash Flows from Investing Activities:
Proceeds from maturities/call and paydowns of
securities available for sale 45,642 35,832
Proceeds from sales of securities 52,501 28,455
Purchase of property and equipment, net (2,245) (1,671)
Purchase of securities available for sale (105,910) (64,918)
Loan(originations) and principal repayments, (32,223) (17,403)
Net
Net cash used by investing activities (42,235) (19,705)
Cash Flows from Financing Activities:
Decrease in customer deposits, net (1,935) (1,091)
Sale of treasury stock 0 3
Exercise of stock options 348 133
Dividends paid (2,242) (2,021)
(Decrease) increase in borrowings 22,486 13,231
Net cash provided by financing activities 18,657 10,255
Net decrease in cash and cash equivalents (14,882) (1,866)
Cash and Cash Equivalents, beginning of period 26,831 14,539
Cash and Cash Equivalents, end of period $11,949 $12,673
The accompanying notes are an integral part of these statements.
</TABLE>
<PAGE>
UNITED SECURITY BANCSHARES, INC AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. General
The accompanying unaudited condensed consolidated financial statements as of
September 30, 1999, and 1998 include the accounts of United Security
Bancshares, Inc. and its subsidiaries (the "Company"). All significant
intercompany transactions and accounts have been eliminated.
The interim financial statements are unaudited but, in the opinion of
management, reflect all adjustments necessary for a fair presentation of
financial position and results of operations for such periods presented. Such
adjustments are of a normal, recurring nature. The results of operations for
any interim period are not necessarily indicative of results expected for the
fiscal year ending December 31, 1999. While certain information and footnote
disclosures normally included in financial statements prepared in accordance
with generally accepted accounting principals have been condensed or omitted
pursuant to the rules and regulations of the Securities and Exchange
Commission, management believes that the disclosures herein are adequate to
make the information presented not misleading. These financial statements
should be read in conjunction with the consolidated financial statements and
notes thereto contained in the Annual Report on Form 10-K for the year ended
December 31, 1998, of United Security Bancshares, Inc. and Subsidiaries. The
accounting policies followed by United Security Bancshares, Inc. ("USB") are
set forth in the summary of significant accounting policies in USB's December
31, 1998 consolidated financial statements.
2. Net income per share.
Basic net income per share was computed by dividing net income by the weighted
average number of shares of common stock outstanding during the three and nine
month periods ended September 31, 1999 and 1998. Common stock outstanding
consists of issued shares less treasury stock. Diluted net income per share
for the three and nine month periods ended September 30, 1999 and 1998, were
computed by dividing net income by the weighted average number of shares of
common stock and the dilutive effects of the shares awarded under the Stock
Option plan, based on the treasury stock method using an average fair market
value of the stock during the respective periods.
The following table represents the net income per share calculations for the
three and nine months period ended September 30, 1999 and 1998:
<TABLE>
Net Income
For the Three Months Ended Income Shares Per Share
September 30, 1999:
<S> <C> <C> <C>
Net income $2,102
Basic net income per share:
Income available to
common shareholders 2,102 3,566,667 $.59
Dilutive securities:
Stock option 0 28,814
Dilutive net income per share:
Income available to common
shareholders plus assumed
conversions $2,102 3,595,481 $.58
September 30, 1998 ($ in thousands):
Net income $2,311
Basic net income per share:
Income available to common
shareholders 2,311 3,544,683 $.65
Dilutive securities:
Stock option 0 24,796
Dilutive net income per share:
Income available to common
shareholders plus assumed
conversions $2,311 3,569,479 $.65
Net Income
For the Nine Months Ended Income Shares Per Share
September 30, 1999:
Net Income $6,386
Basic net income per share:
Income available to common
shareholders 6,386 3,559,133 $1.79
Dilutive securities:
Stock option 0 28,843
Dilutive net income per share:
Income available to common
shareholders plus assumed
conversions $6,386 3,587,976 $1.78
September 30,1998 ($ in thousands):
Net income $6,730
Basic net income per share:
Income available to common
shareholders 6,730 3,555,367 $1.90
Dilutive securities:
Stock option 0 27,256
Dilutive net income per share:
Income available to common
shareholders plus assumed
conversions $6,730 3,582,623 $1.89
</TABLE>
3. COMPREHENSIVE INCOME
The Company adopted Statement of Financial Accounting Standards ("SFAS") No.
130 effective January 1, 1998. SFAS No. 130 established standards for
reporting and display of comprehensive income and its components.
The Company has classified its securities as available for sale in accordance
with SFAS No. 115. For the three month period ended September 30, 1998, the
net unrealized loss on these securities increased by $1.9 million. Pursuant
to SFAS No. 115, any unrealized gain or loss activity of available for sale
securities is to be recorded as an adjustment to a separate component of
shareholders' equity, net of income tax effect. Accordingly, for the three
month period ended September 30, 1999 and 1998, the Company recognized a
corresponding adjustment in the net unrealized gain (loss) component of
equity.
Since comprehensive income is a measure of all changes in equity of an
enterprise that result from transactions and other economic events of the
period, this change in unrealized gain serves to increase or decrease
comprehensive income. The following table represents comprehensive income for
the three and nine month periods ended September 30, 1999 and 1998:
<TABLE>
Three Months Nine Months
Ended Ended
September 30, September 30,
1999 1998 1999 1998
<S> <C> <C> <C> <C>
Net income $2,102 $2,311 $6,386 $6,730
Other comprehensive income,
net of tax:
Unrealized gain (loss)
on securities (1,939) (1,174) (3,923) 1,932
Comprehensive income $163 $3,485 $2,463 $8,662
</TABLE>
4. MARKET RISK
There have been no material changes in reported market risks since year-end.
5. PENDING ACCOUNTING PRONOUNCEMENTS
In September 1999, the Financial Accounting Standards Board ("FASB") issued
SFAS No. 137, Accounting for Derivative Instruments and Hedging Activities-
Deferral of the Effective Date of FASB Statement No. 133. This statement
encourages earlier application, but delays the effective date of SFAS No. 133
from fiscal quarters of all fiscal years beginning after September 15, 1999 to
fiscal quarters of all fiscal years beginning after September 15, 2000. In
accordance with the new standard, management will continue to evaluate the
impact and defer implementation as the standard allows.
6. SEGMENT REPORTING
Under SFAS No. 131, Disclosures About Segments of an Enterprise and Related
Information, certain information is disclosed for the two reportable operating
segments of the Company, First United Security Bank ("FUSB") and Acceptance
Loan Company, Inc. ("ALC"). The reportable segments were determined using the
internal management reporting system. They are composed of the Company's
significant subsidiaries. The accounting policies for each segment are the
same as those used by the Company as described in Note 2 of the Company's
annual consolidated financial statements, Summary of Significant Accounting
Policies. The segment results include certain overhead allocations and
intercompany transactions that were recorded at current market prices. All
intercompany transactions have been eliminated to determine the consolidated
balances. The results for the two reportable segments of the Company are
included in the following tables:
<TABLE>
Elimina-
FUSB ALC All Other tions Consolidated
For the three
months ended
September 30,
1999:
Net interest
<S> <C> <C> <C> <C> <C>
income $4,854 $2,634 $827 $(805) $7,510
Provision for
loan losses 0 918 0 0 918
Total noninterest
income 796 248 1379 (1,373) 1,050
Total noninterest
expense 2,903 1,747 47 (5) 4,692
Income before
income taxes 2,747 217 2,159 (2,173) 2,950
Provision for
income taxes 760 86 2 0 848
Net income $1,987 $131 $2,157 $(2,173) $2,102
For the nine
months ended
September 30,
1999:
Net Interest
Income $13,779 $7,879 $2,359 $(2,242) $21,775
Provision for
loan losses 110 2,659 0 0 2,769
Total noninterest
income 2,924 828 4,249 (4,239) 3,762
Total noninterest
expense 8,786 4,692 222 (13) 13,687
Income before
income taxes 7,807 1,356 6,386 (6,468) 9,081
Provision for
income taxes 2,165 530 0 0 2,695
Net income $1,987 $826 $6,386 $(6,468) $6,386
Other significant
items:
Total assets,
September 30,
1999 $464,777 $76,919 $61,371 $(131,404) $471,663
Total interest
income from
external cus-
tomers, nine
months ended
September 30,
1999 $18,608 $12,151 $2,359 0 $33,118
Total interest
income from
affiliates,
nine months
ended Septem-
ber 30, 1999 $4,272 $0 $0 $(4,272) $0
</TABLE>
<TABLE>
Elimina-
FUSB ALC All Other tions Consolidated
For the three
months ended
September 30,
1998:
Net interest
<S> <C> <C> <C> <C> <C>
income $4,995 $2,159 $815 $(771) $7,198
Provision for
loan losses 230 489 0 0 719
Total noninterest
income 847 219 1,318 (1,319) 1,065
Total noninterest
expense 2,957 1,254 (180) (230) 4,261
Income before
income taxes 2,655 635 2,313 (2,320) 3,283
Provision for
income taxes 721 249 2 0 972
Net income $1,934 $386 $2,311 $(2,320) $2,311
For the nine
months ended
September 30,
1998:
Net Interest
Income $14,946 $5,241 $5,617 $(5,507) $20,297
Provision for
loan losses 580 1,389 0 0 1,969
Total noninterest
income 2,775 660 1,358 (1,334) 3,459
Total noninterest
expense 8,818 3,285 245 (23) 12,325
Income before
income taxes 8,323 1,227 6,730 (6,864) 6,730
Provision for
income taxes 2,253 479 0 0 2,732
Net income $6,070 $748 $6,730 $(6,864) $6,730
Other significant
items:
Total assets,
September 30,
1998 $440,066 $63,669 $60,366 $(118,040) $446,061
Total interest
income from
external cus-
tomers, nine
months ended
September 30,
1998 $23,381 $8,491 $108 0 $31,980
Total interest
income from
affiliates,
nine months
ended Septem-
ber 30, 1998 $3,248 $0 $0 $(3,248) $0
</TABLE>
Item 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
The following discussion and analysis are presented to aid in an understanding
of the current financial position and results of operations of United Security
Bancshares, Inc. ("United Security"). United Security is the parent holding
company of First United Security Bank (the "Bank"), and it has no operations
of any consequence other than the ownership of its subsidiaries.
The emphasis of this discussion is a comparison of Assets, Liabilities, and
Capital for the nine months ended September 30, 1999, to year-end 1998; while
comparing income for the three and nine months period ended September 30,
1999, to income for the three and nine months period ended September 30, 1998.
All yields and ratios presented and discussed herein are based on the cash
basis and not on the tax-equivalent basis.
COMPARING THE THREE MONTHS ENDED SEPTEMBER 30, 1999, TO THE THREE MONTHS ENDED
SEPTEMBER 30, 1998
The increase in interest income was due to increases in interest on loans.
This increase is due to both an increase in the average loans outstanding and
an increase in the average yield.
The $431,000, or 10.11%, increase in noninterest expense was primarily
attributed to increases in salaries and employee benefits expenses of $273,000
and an increase in other noninterest expenses of $96,000, or 8.63%. A
significant portion of the increase in salaries and employee benefits expenses
is associated with the costs of adding offices to Acceptance Loan Company, a
wholly owned subsidiary of First United Security Bank.
Net income decreased $209,000, or 9.04%, resulting in a decrease of basic net
income per share to $.59. This was due to the factors discussed above and an
increase in the provision for loan losses of $199,000, as described below.
COMPARING THE NINE MONTHS ENDED SEPTEMBER 30, 1999, TO THE NINE MONTHS ENDED
SEPTEMBER 30, 1998
Net income decreased $344,000, or 5.11%, thus decreasing net income per share
to $1.79 from $1.90. The decrease is primarily attributable to an $800,000,
or 40.63% increase in the provision for loan losses and a $1,362,000, or
11.05% increase in noninterest expense. The net interest margin and loan loss
provision both increased over the company's comparable periods of the prior
year. The increases are due to significant loan volume increases at
Acceptance Loan Company, the finance company subsidiary. This increased
provision has been necessary to cover charge-offs which resulted from the
company's growth strategy in place in 1998 and the first nine months of 1999.
This strategy involved the opening of thirteen new offices and loan growth of
approximately $38.8 million. The allowance for loan losses reflects
management's estimates, which take into account historical experience, the
amount of nonperforming assets and general economic conditions. The increase
in interest income was due to increases in interest on loans. This increase
is due both to an increase in the average loans outstanding and an increase in
the average yield. The $1,362,000 increase in noninterest expense was
primarily attributed to increases in salaries and employee benefits expenses
of $943,000 and other expenses of $356,000. A significant portion of this
increase is associated with the cost of adding offices to ALC.
COMPARING THE SEPTEMBER 30, 1999, STATEMENT OF FINANCIAL CONDITION TO DECEMBER
31, 1998
In comparing financial condition at December 31, 1998, to September 30, 1999,
liquidity and capital resources did not materially change during the period.
Total assets, increased $21.6 million to $472 million, while liabilities
increased $21.0 million to $411 million. Retained earnings increased $4.1
million, or 8.33%, due to earnings in excess of dividends paid during the
period. This change and a decrease of $3.9 million in accumulated other
comprehensive income increased shareholders' equity by $569,000 to $61.1
million.
CAPITAL RESOURCES
The Bank's primary sources of funds are customer deposits, repayments of loan
principal, and interest from loans and investments. While scheduled principal
repayments on loans and mortgage-backed securities are a relatively
predictable source of funds, deposit flows and loan prepayments are greatly
influenced by general interest rates, economic conditions, and competition.
The Bank manages the pricing of its deposits to maintain a desired deposit
balance. In addition, the Bank invests in short-term interest-earning assets,
which provide liquidity to meet lending requirements.
The Bank is required to maintain certain levels of regulatory capital. At
September 30, 1999 and December 31, 1998, United Security and the Bank were in
compliance with all regulatory capital requirements.
Management is not aware of any condition that currently exists that would have
any adverse effects on the liquidity, capital resources, or operation of
United Security Bancshares, Inc. However, the Company is a defendant in
certain claims and legal actions arising in the ordinary course of business.
In the opinion of management, after consultation with legal counsel, the
ultimate disposition of these matters is not expected to have a material
adverse effect on the financial position of the Company.
YEAR 2000 PROBLEM
The Year 2000 ("Y2K") problem is the programming problem caused by some
computer software programs and hardware systems using only two digits to
indicate a year and assuming that the first two digits of any year are "19".
Risks to the Company if its computer systems are not Y2K compliant include the
inability to process customer deposits or checks drawn on the Bank, inaccurate
interest accruals and maturity dates of loans and time deposits, and the
inability to update accounts for daily transactions. Other risks to the
Company exist if certain of its vendors', suppliers', and customers' computer
systems are not Y2K compliant. These risks include the inability of the Bank
to communicate with the centralized data processing center if phone systems
are not working,, the interruption of business in the event of power outages,
the inability of loan customers to comply with repayment terms if their
businesses are interrupted, and the inability to make payment for checks drawn
on the Bank, receive payment for checks deposited by the Bank's customers, or
invest excess funds if the Federal Reserve Bank's or correspondent bank's are
not Y2K compliant. The Company's most important mission critical system is
the software and hardware responsible for maintaining and processing general
ledger, deposits, and loan accounts. The Bank has satisfactorily completed
testing of all in-house systems. The Company continues to contact its key
vendors, suppliers, and customers to determine their Y2K compliance. This
phase of preparedness should be completed prior to December 31, 1999. The
Company has completed a contingency plan with testings and training
continuing. Total expenditures for Y2K compliance have been approximately
$200,000 with an additional $10,000 expected by year-end.
<PAGE>
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a.) Exhibit 3.(i) is filed with this report.
(b.) Exhibit 3.(ii) is filed with this report.
(c.) Exhibit 27 is filed with this report.
<PAGE
SIGNATURE PAGE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto authorized.
UNITED SECURITY BANCSHARES, INC.
DATE: November 12, 1999
BY: /s/Larry M. Sellers
Its Vice-President, Secretary, and Treasurer
(Duly Authorized Officer and Principal Financial Officer)
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
This schedule contains summary financial information extracted from the
financial statements of United Security Bancshares, Inc. for the nine months
ended September 30, 1999, and is qualified in its entirety by reference to such
financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> SEP-30-1999
<CASH> 10,405
<INT-BEARING-DEPOSITS> 1,544
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 2,063
<INVESTMENTS-HELD-FOR-SALE> 0
<INVESTMENTS-CARRYING> 0
<INVESTMENTS-MARKET> 163,267
<LOANS> 264,514
<ALLOWANCE> 5,099
<TOTAL-ASSETS> 471,663
<DEPOSITS> 324,710
<SHORT-TERM> 0
<LIABILITIES-OTHER> 7,471
<LONG-TERM> 78,345
0
0
<COMMON> 36
<OTHER-SE> 61,101
<TOTAL-LIABILITIES-AND-EQUITY> 471,663
<INTEREST-LOAN> 24,803
<INTEREST-INVEST> 8,315
<INTEREST-OTHER> 0
<INTEREST-TOTAL> 33,118
<INTEREST-DEPOSIT> 9,145
<INTEREST-EXPENSE> 2,198
<INTEREST-INCOME-NET> 21,775
<LOAN-LOSSES> 2,769
<SECURITIES-GAINS> 524
<EXPENSE-OTHER> 3,690
<INCOME-PRETAX> 9,081
<INCOME-PRE-EXTRAORDINARY> 9,081
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 6,386
<EPS-BASIC> 1.79
<EPS-DILUTED> 1.78
<YIELD-ACTUAL> 6.92
<LOANS-NON> 1,652
<LOANS-PAST> 1,267
<LOANS-TROUBLED> 761
<LOANS-PROBLEM> 6,417
<ALLOWANCE-OPEN> 4,989
<CHARGE-OFFS> 3,280
<RECOVERIES> 381
<ALLOWANCE-CLOSE> 5,099
<ALLOWANCE-DOMESTIC> 5,099
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
CERTIFICATE OF INCORPORATION OF
UNITED SECURITY BANCSHARES, INC.
ARTICLE 1
NAME
1.1 The name of the Corporation is United Security Bancshares, Inc.
ARTICLE 2
REGISTERED OFFICE AND REGISTERED AGENT
2.1 The address of the registered office of the Corporation in the State
of Delaware is 1209 Orange Street, in the city of Wilmington, county of New
Castle. The name of its registered agent at such address is The Corporation
Trust Company.
ARTICLE 3
PURPOSES, OBJECTS AND POWERS
3.1 The nature of the business and the objects and purposes proposed to
be transacted, promoted and carried on are to do any or all the things herein
mentioned, as fully and to the same extent as natural persons might or could do,
and in any part of the world, and to engage in any lawful act or activity for
which Corporations may be organized under the General Corporation Law of the
State of Delaware, as amended.
ARTICLE 4
STOCK
4.1 The total number of shares of capital stock that the Corporation
shall have authority to issue is ten million (10,000,000) shares of one class of
common stock, par value $0.01 per share.
ARTICLE 5
INCORPORATOR
5.1 The incorporator is Larry M. Sellers whose mailing address is 131
West Front Street, Thomasville, Alabama 36784.
ARTICLE 6
BOARD OF DIRECTORS
6.1 The number of Directors which shall constitute the whole Board of
Directors shall be as determined from time to time by resolution and adopted by
the affirmative vote of a majority of the Board of Directors, but the number
shall not be less than three (3) or more than twenty-five (25) Directors;
provided that the number of Directors shall not be decreased if such decrease
would have the effect of shortening the term of an incumbent Director.
6.2 Unless and except to the extent that the Bylaws of the Corporation
shall so require, the election of Directors of the Corporation need not be by
written ballot.
6.3 The vote of a majority of the Directors present at a meeting at which
a quorum is in attendance shall be the act of the Board of Directors, unless the
vote of a different number is required by this Certificate of Incorporation or
the Bylaws. Notwithstanding anything to the contrary in this Certificate of
Incorporation or Bylaws, the affirmative vote of two-thirds (2/3) of the total
number of Directors is required to approve the following: (1) any tender offer
or exchange offer or any proposal for a merger made to the Corporation; (2) the
sale of all of the stock or assets of, or a business combination involving the
Corporation or any of its subsidiaries; (3) the sale of a substantial equity
interest in, or a substantial portion of the assets of the Corporation or any of
its subsidiaries, including a plan of liquidation of the Corporation or any of
its subsidiaries; or (4) the addition or removal of any person with significant
influence over major policymaking decisions of the Corporation, including, but
not limited to, those persons who, without regard to title, exercise the
authority of one or more of the following positions: chief executive officer,
president, chief operating officer, chief financial officer, chief lending
officer, or chief investment officer.
ARTICLE 7
VOTING RIGHTS
7.1 Any action required to be taken at any annual or special meeting of
the stockholders, or any action which may be taken at any such meeting, may be
taken without a meeting, without prior notice and without a vote, if a consent
or consents in writing, setting forth the action to be taken, shall be signed by
all of the stockholders entitled to vote with respect to the subject matter
thereof. Any such written consent or consents shall be delivered to the
Corporation by delivery to its registered office in Delaware, its principal
place of business or an officer or agent of the Corporation having custody of
the book in which proceedings of meetings of stockholders are recorded.
Delivery made to the Corporation's registered office shall be by hand or by
certified or registered mail, return receipt requested.
7.2 The Board of Directors shall have concurrent power with the
stockholders as set forth in this Certificate of Incorporation to adopt, amend,
or repeal (collectively "Amend") the Bylaws of the Corporation. The Board of
Directors may Amend the Bylaws of the Corporation upon the affirmative vote of
the number of Directors which shall constitute, under the terms of the Bylaws,
the action of the Board of Directors. The stockholders may amend the Bylaws of
the Corporation upon the affirmative vote of the holders of not less than a
majority of the votes entitled to be cast by the holders of all of the
outstanding shares of the voting stock, voting together as a class.
ARTICLE 8
COMPROMISE OR ARRANGEMENT
8.1 Whenever a compromise or arrangement is proposed between the
Corporation and its creditors or any class of them and/or between the
Corporation and its stockholders or any class of them, any court of equitable
jurisdiction within the State of Delaware may, on the application in a summary
way of the Corporation or of any creditor or stockholder thereof, or on
application of any receiver or receivers appointed for the Corporation under
the provisions of Section 291 of Title 8 of the Delaware Code or on the
application of trustees in dissolution or of any receiver or receivers
appointed for the Corporation under the provisions of Section 279 of Title 8
of the Delaware Code, order a meeting of the creditors or class of creditors,
and/or of the stockholders or class of stockholders of the Corporation, as the
case may be, to be summoned in such manner as the said court directs. If all
majority in number representing three-fourths in value of the creditors or
class of creditors, and/or of the stockholders or class of stockholders of the
Corporation, as the case may be, agree to any compromise or arrangement and to
any reorganization of the Corporation as consequence of such compromise or
arrangement, the said compromise or arrangement and the said reorganization
shall, if sanctioned by the court to which the said application has been made,
be binding on all the creditors or class of creditors, and/or on all the
stockholders or class of stockholders, of the Corporation, as the case may be,
and also on the Corporation.
ARTICLE 9
DIRECTOR LIABILITY
9.1 No Director of the Corporation shall be personally liable to the
Corporation or its stockholders for monetary damages for a breach of a fiduciary
duty as a Director, except to the extent such exemption from liability or
limitation thereof is not permitted under the General Corporation Law of the
State of Delaware as the same exists or may hereafter be amended. Neither the
repeal nor the modification of this Article Nine nor the adoption of any
provisions of the Certificate of Incorporation of the Corporation inconsistent
with this Article NINTH shall adversely affect the rights of any Director of the
Corporation with respect to any matter occurring, or any cause of action, suit
or claim that, but for this Article NINTH, would accrue or arise, prior to such
repeal, modification or adoption of any inconsistent provision.
ARTICLE 10
MERGER
10.1 When considering a merger, consolidation, business combination (as
defined in Section 203 of the General Corporation Law of the State of Delaware)
or similar transaction, the Board of Directors, committees of the Board of
Directors, individual Directors and individual Officers may, in considering the
best interests of the Corporation and its stockholders, consider the effects of
any such transaction upon the employees, customers and suppliers of the
Corporation, and upon communities in which offices of the Corporation are
located, to the extent permitted by Delaware law.
ARTICLE 11
INDEMNIFICATION
11.1 Right to Indemnification. Each person who was or is made a party or
is threatened to be made a party to or is otherwise involved in any action, suit
or proceeding, whether civil, criminal, administrative or investigative
(hereinafter, a "proceeding"), by reason of the fact that he or she is or was a
director or an officer of the Corporation or is or was serving at the request of
the Corporation as a director, officer, employee or agent of another corporation
or of a partnership, joint venture, trust or other enterprise, including service
with respect to an employee benefit plan (hereinafter an "indemnitee"), whether
the basis of such proceeding is alleged action in an official capacity as a
director, officer, employee or agent or in any other capacity while serving as
a director, officer, employee or agent, shall be indemnified and held harmless
by the Corporation to the fullest extent authorized by the Delaware General
Corporation Law, as the same exists or may hereafter be amended (but, in the
case of any such amendment, only to the extent that such amendment permits the
Corporation to provide broader indemnification rights than such law permitted
the Corporation to provide prior to such amendment), against all expense,
liability and loss (including attorneys' fees, judgments, fines, ERISA excise
tax or penalties and amounts paid in settlement) reasonably incurred or
suffered by such indemnitee in connection therewith; provided, however, that,
except as provided in Section 11.3 hereof with respect to proceedings to
enforce rights to indemnification, the Corporation shall indemnify any such
indemnitee in connection with a proceeding (or part thereof) initiated by
such indemnitee only if such proceeding (or part thereof) was authorized by
the Board of Directors of the Corporation.
11.2 Right to Advancement of Expenses. The right to indemnification
conferred in Section 11.1 of this Article 11 shall include the right to be paid
by the Corporation the expenses (including attorneys' fees) incurred in
defending any such proceeding in advance of its final disposition (hereinafter,
an "advancement of expenses"); provided, however, that, if the Delaware General
Corporation Law requires, an advancement of expenses incurred by an indemnitee
in his or her capacity as a director or officer (and not in any other capacity
in which service was or is rendered by such indemnitee, including, without
limitation, service to an employee benefit plan) shall be made only upon
delivery to the Corporation of an undertaking (hereinafter, an
"undertaking"), by or on behalf of such indemnitee, to repay all amounts so
advanced if it shall ultimately be determined by final judicial decision from
which there is not further right to appeal (hereinafter, a "final
adjudication") that such indemnitee is not entitled to be indemnified for
such expenses under this Section 11.2 or otherwise. The rights to
indemnification and to the advancement of expenses conferred in Section 11.1
and 11.2 of this Article 11 shall be contract rights and such rights shall
continue as to an indemnitee who has ceased to be a director, officer,
employee or agent and shall inure to the benefit of the indemnitee's heirs,
executors and administrators.
11.3 Right of Indemnitee to Bring Suit. If a claim under Section
11.1 or 11.2 of this Article 11 is not paid in full by the Corporation within
sixty (60) days after a written claim therefor has been received by the
Corporation (except in the case of a claim for an advancement of expenses, in
which case the applicable period shall be twenty (20) days) the indemnitee
may at any time thereafter bring suit against the Corporation to recover the
unpaid amount of the claim. If successful in whole or in part in any such
suit, or in a suit brought by the Corporation to recover an advancement of
expenses pursuant to the terms of an undertaking, the indemnitee shall be
entitled to be paid also to the expense of prosecuting or defending such suit.
In (a) any suit brought by the indemnitee to enforce a right to indemnification
hereunder (but not in a suit brought by the indemnitee to enforce a right to an
advancement of expenses) it shall be a defense that and (b) in any suit brought
by the Corporation to recover an advancement of expenses pursuant to the terms
of an undertaking, the Corporation shall be entitled to recover such expenses
upon a final adjudication that, the indemnitee has not met any applicable
standard for indemnification set forth in the Delaware General Corporation
Law. Neither the failure of the Corporation (including its Board of Directors,
independent legal counsel or its stockholders) to have made a determination
prior to the commencement of such suit that indemnification of the indemnitee
is proper in the circumstances because the indemnitee has met the applicable
standard of conduct set forth in the Delaware General Corporation Law, nor an
actual determination by the Corporation (including its Board of Directors,
independent legal counsel or its stockholders) that the indemnitee has not met
such applicable standard of conduct shall create a presumption that the
indemnitee has not met the applicable standard of conduct or, in the case of
such a suit brought by the indemnitee, be a defense to such suit. In any suit
brought by the indemnitee to enforce a right to indemnification or to an
advancement of expenses hereunder, or brought by the Corporation to recover an
advancement of expenses pursuant to the terms of an undertaking, the burden of
proving that the indemnitee is not entitled to be indemnified, or to such
advancement of expenses, under this Article 11 or otherwise, shall be on the
Corporation.
11.4 Non-Exclusivity of Rights. The right to indemnification and to
the advancement of expenses conferred in this Article 11 shall not be exclusive
of any other right which any person may have or hereafter acquire under any
statute, this Certificate of Incorporation of the Corporation, these Bylaws,
any agreement or vote of stockholder or disinterested directors or otherwise.
11.5 Insurance. The Corporation may maintain insurance, at its
expense, to protect itself and any director, officer, employee or agent of the
Corporation or another corporation, partnership, joint venture, trust or other
enterprise against any expense, liability or loss, whether or not the
Corporation would have the power to indemnify such person against such expense,
liability or loss under the Delaware General Corporation Law.
11.6 Indemnification of Employees and Agents. The Corporation may,
to the extent authorized from time to time by the Board of Directors, grant
rights to indemnification and to the advancement of expenses to any employee or
agent of the Corporation to the fullest extent of the provisions of this
Article 11 with respect to the indemnification and advancement of expenses of
directors and officers of the Corporation.
THE UNDERSIGNED, being the incorporator hereinabove named, for the purpose
of forming a Corporation pursuant to the General Corporation Law of the State of
Delaware, as amended, makes the certificate as of June 8, 1999, declaring and
certifying that this is his act and deed and that the facts herein stated are
true.
Larry M. Sellers
BYLAWS
OF
UNITED SECURITY BANCSHARES, INC.
ARTICLE 1
Offices
SECTION 1.1 Registered Office. The registered office of United Security
Bancshares, Inc. (herein called the "Corporation"), in the State of Delaware
shall be in the City of Wilmington, County of New Castle, State of Delaware.
SECTION 1.2 Other Offices. The Corporation may also have offices at such
other places both within and without the State of Delaware as the Board of
Directors may from time to time determine or the business of the Corporation may
require.
ARTICLE 2
Stockholders
SECTION 2.1 Place of Meetings. Annual and special meetings of the
stockholders shall be held at such place, either within or without of the State
of Delaware, as may be designated by the Board of Directors. In the absence of
such designation, such meeting shall be held at the principal office of the
Corporation located within the State of Alabama.
SECTION 2.2 Annual Meeting. The annual meeting of the stockholders for
the election of directors and the transaction of such other business as may
properly come before the meeting shall be held on such date as may be determined
by resolution of the Board of Directors.
SECTION 2.3 Special Meeting. A special meeting of the stockholders may
be called at any time by the Board of Directors or the holders of not less than
ten percent of all shares entitled to vote at such meeting. No business other
than that specified in the notice of special meeting shall be transacted at any
such special meeting.
SECTION 2.4 Notice of Meetings. Written or printed notice stating the
place, day and hour of the meeting and, in the case of a special meeting, the
purpose or purposes for which the meeting is called, shall be delivered not less
than ten (10) nor more than sixty (60) days before the date of the meeting,
either personally or by mail, by or at the direction of the President, the
Secretary or the Board of Directors or officer calling the meeting, to each
stockholder of record in the manner above provided. The notice of special
meeting may be waived by submitting a signed waiver or by attendance at the
meeting.
SECTION 2.5 Closing of Transfer Books and Fixing Record Date. For the
purposes of determining stockholders entitled to notice of or to vote at any
meeting of stockholders or any adjournment thereof, or stockholders entitled to
receive payment of any dividend, or in order to make a determination of
stockholders for any other proper purpose, the Board of Directors may provide
that the stock transfer books shall be closed for a stated period not to exceed
in any case sixty (60) days immediately preceding such meeting. In lieu of
closing the stock transfer books, the Board of Directors may fix in advance a
date as the record date for any such determination of stockholders, such date in
any case to be not more than sixty (60) days, and in case of a meeting of
stockholders, not less than ten (10) days, prior to the date on which the
particular action requiring such determination of stockholders is to be taken,
and in no event may the record date precede the date upon which the Directors
adopt a resolution fixing the record date. If the stock transfer books are not
closed and no record date is fixed for the determination of stockholders
entitled to notice of or to vote at a meeting of stockholders, or stockholders
entitled to receive payment of a dividend, or a determination of stockholders
for any other proper purpose, the date on which notice of the meeting is given
(as defined in Article 9 hereof) or the date on which the resolution of the
Board of Directors declaring such dividend is adopted, as the case may be,
shall be the record date for such determination of the stockholders. When a
determination of stockholders entitled to vote at any meeting of stockholders
has been made as provided in this Section 2.5, such determination shall apply
to any adjournment thereof, unless the Board of Directors fixes a new record
date for the adjournment.
SECTION 2.6 Voting List. The officer or agent having charge of the stock
transfer books for shares of the Corporation shall make, at least ten (10) days
before each meeting of stockholders, a complete list of the stockholders
entitled to vote at such meeting or any adjournment thereof, arranged in
alphabetical order, with the address of and the number of shares held by each,
which list, for a period of ten (10) days prior to such meeting, shall be kept
on file at the principal office of the Corporation and shall be subject to
inspection by any stockholder at any time during usual business hours. Such
list shall also be produced and kept open at the time and place of the meeting
and shall be subject to the inspection of any stockholder during the whole time
of the meeting. The original stock transfer books shall be prima facie
evidence as to who are the stockholders entitled to examine such list or
transfer books or to vote at any meeting of stockholders.
SECTION 2.7 Quorum. A majority of the outstanding shares of the of the
Corporation entitled to vote, represented in person or by proxy, shall
constitute a quorum for the transaction of business at such meeting. If a
quorum is present, the affirmative vote of the majority of the shares
represented at the meeting entitled to vote on the subject matter shall be the
act of the stockholders, unless the vote of a greater number of shares on the
matter being voted on is required by the Certificate of Incorporation of the
Corporation, these Bylaws or applicable law. Directors shall be elected by a
plurality of the shares represented at the meeting and entitled to vote in the
election of Directors.
SECTION 2.8 Adjournment of Stockholder Meeting. Any meeting of
stockholders may be adjourned at any time, whether or not there is a quorum, by
the chairman of such meeting or the vote of the majority of shares represented
at such meeting. When a meeting is adjourned to another time or place, notice
need not be given of the adjourned meeting if the time and place thereof are
announced at the meeting at which the adjournment is taken. At the adjourned
meeting, the Corporation may transact any business which might have been
transacted at the original meeting. If the adjournment is for more than thirty
(30) days, or if after the adjournment a new record date is fixed for the
adjourned meeting, a notice of the adjourned meeting shall be given to each
stockholder of record entitled to vote at the meeting.
SECTION 2.9 Proxies. At all meetings of stockholders, a stockholder may
vote by proxy, executed in writing by the stockholder or by his duly authorized
attorney in fact. Such proxy shall be filed with the Secretary of the
Corporation before or at the time of the meeting. No proxy shall be valid after
three (3) years from the date of its execution, unless otherwise provided in the
proxy.
SECTION 2.10 Voting of Shares. Each outstanding share shall be entitled
to one vote and each fractional share shall be entitled to a corresponding
fractional vote on each matter submitted to vote at a meeting of stockholders.
SECTION 2.11 Voting by Voice, Hand or Ballot. All voting at meetings of
the stockholders, including voting for the election of directors but excepting
where otherwise required by law, shall be by a voice or hand vote; provided,
however, that upon demand therefor by a stockholder entitled to vote or by his
or her proxy, a vote by written ballot shall be taken. Every written ballot
shall state the name of the stockholder or proxy voting and such other
information as may be required under the procedure established for the meeting.
SECTION 2.12 Voting of Shares by Certain Holders. The rights of persons
in whose names shares stand on the stock records of the Corporation to vote is
subject to the following provisions:
(a) Neither treasury shares, nor shares of its own stock held by the
Corporation in a fiduciary capacity, nor shares held by another Corporation if
the majority of the shares entitled to vote for the election of directors of
such other Corporation is held by the Corporation, shall be voted at any
meeting or counted in determining the total number of outstanding shares at
any given time.
(b) Shares standing in the name of another corporation, domestic or
foreign, may be voted by such officer, agent, or proxy as the bylaws of such
corporation may prescribe, or, in the absence of such provision, as the board of
directors of such Corporation may determine.
(c) Shares held by an administrator, executor, personal representative,
guardian, or conservator may be voted by him, either in person or by proxy,
without a transfer of such shares into his name.
(d) Shares standing in the name of a trustee may be voted by him, either
in person or by proxy, but no trustee shall be entitled to vote shares held by
him without a transfer of such shares into his name.
(e) Shares standing in the name of a receiver may be voted by such
receiver, and shares held by or under the control of a receiver may be voted by
such receiver without the transfer thereof into his name if authority to do so
be contained in an appropriate order of the court by which such receiver was
appointed.
(f) A stockholder whose shares are pledged shall be entitled to vote such
shares until the shares have been transferred into the name of the pledgee, and
thereafter the pledgee shall be entitled to vote the shares so transferred.
SECTION 2.13 Informal Action by Stockholders. Any action required or
permitted to be taken by the stockholders must be effected at a duly called
annual or special meeting of the stockholders of the Corporation. Stockholders
may take any action by unanimous written consent in lieu of a meeting of the
stockholders.
SECTION 2.14 Conduct of Stockholder Meetings. Meetings of the
stockholders shall be presided over by the Chairman of the Board or, in his
absence, the President of the Corporation, or, if no such person is present, a
person designated by the Chairman of the Board or, in his absence, the President
of the Corporation. The Secretary of the Corporation or, in his absence, an
Assistant Secretary, or, if no such person is present, a person designated by
the chairman of the meeting, shall act as secretary of the meeting. The
precedence of and procedure on motions and other procedural matters at a
meeting shall be as determined by the chairman of such meeting, in his sole
discretion, provided that such chairman acts in a manner which is not
inconsistent with the Certificate of Incorporation of the Corporation, these
Bylaws and applicable law.
ARTICLE 3
Board of Directors
SECTION 3.1 General Powers. The business and affairs of the Corporation
shall be managed by its Board of Directors, except as otherwise provided in the
Certificate of Incorporation or by applicable law.
SECTION 3.2 Number; Qualifications. The Corporation's Board of Directors
shall consist of not less than three (3) and not more than twenty-five (25)
Directors, as such number may be designated from time to time by the Board of
Directors. If such number is not so fixed, the Corporation shall have sixteen
(16) Directors. Directors need not be stockholders of the Corporation or
residents of the State of Delaware or the State of Alabama.
SECTION 3.3 Election; Term of Office. Directors shall be elected at each
annual meeting of the stockholders. Directors shall be elected by plurality
vote of the stockholders. Each Director shall hold office until the next annual
meeting of the stockholders and thereafter until such time as his successor
shall have been elected and qualified. No reduction in the number of Directors
shall have the effect of removing any director before such Director's term of
office shall expire. If a Director attains the age of seventy (70) years
during his or her term as a Director, he or she may complete his or her then
current term but may not stand for election or re-election as a Director of the
Corporation thereafter.
SECTION 3.4 Removal of Directors. Any Director may be removed only in the
manner provided in the Corporation's Certificate of Incorporation, as amended.
If no such provision appears therein, any Director may be removed either with
or without cause, at any time, by vote of the stockholders holding a majority of
the shares then entitled to vote for the election of Directors, present at any
special meeting called for that purpose. In case any vacancy so created shall
not be filled by the stockholders at such meeting, such vacancy may be filled by
the Board of Directors as provided in Section 3.6 hereof.
SECTION 3.5 Resignation. Any Director may resign at any time by giving
written notice to the President or to the Secretary of the Corporation. Such
resignation shall take effect at the time specified therein; and unless
otherwise specified therein, the acceptance of such resignation by the
Corporation shall not be necessary to make it effective.
SECTION 3.6 Vacancies. Any vacancy occurring in the Board of Directors,
whether by resignation of a Director or an increase in the number of Directors,
may be filled by the affirmative vote of a majority of the remaining Directors,
though less than a quorum, or by a sole remaining Director. A Director elected
by the remaining Directors or the stockholders to fill a vacancy shall be
elected for the unexpired term of his predecessor in office. Any directorship
to be filled by reason of an increase in the number of Directors shall be
filled by the affirmative vote of a majority of the Directors then in office
or by election at an annual meeting or a special meeting of stockholders
called for that purpose, and a Director so chosen shall hold office for the
term specified in Section 3.3 of this Article.
SECTION 3.7 Regular Meetings. A regular meeting of the Board of Directors
may be held without other notice than this Bylaw immediately after and at the
same place as the annual meeting of the stockholders. The Board of Directors may
provide by resolution the time and place, either within or without the State of
Delaware, for the holding of additional regular meetings without other notice
than such resolution.
SECTION 3.8 Special Meetings. Special meetings of the Board of Directors
may be called by or at the request of the President, the Chairman of the Board
or a majority of the Directors. The person or persons authorized to call
special meetings of the Board of Directors may fix any place, either within or
without the State of Delaware, as the place for holding any special meeting of
the Board of Directors called by them.
SECTION 3.9 Telephonic Meetings. Members of the Board of Directors or any
committee designated by the Board of Directors may participate in a meeting of
the Board of Directors or committee by means of conference telephone or similar
communications equipment by which all persons participating in the meeting can
hear one another at the same time. Such participation shall constitute presence
in person at the meeting. All participants in any meeting of Directors, by
virtue of their participation and without further action on their part, shall be
deemed to have consented to the recording of such meeting by electronic device
or otherwise, and to the making of a written transcript thereof, in order that
minutes thereof shall be available for the Corporation's records.
SECTION 3.10 Notice. Notice of any special meeting shall be given at
least four (4) days previous thereto by written notice mailed to each Director
at his business address, or by notice given at least two (2) days prior to the
meeting, in person or by any means specified in Section 9.1(b) or (c). Any
Director may waive notice of any meeting. The attendance of a Director at a
meeting shall constitute a waiver of notice of such meeting, except where a
Director attends a meeting for the express purpose of objecting to the
transaction of any business because the meeting is not lawfully called or
convened. Neither the business to be transacted at, nor the purpose of, any
regular or special meeting of the Board of Directors need be specified in the
notice or waiver of notice of such meeting.
SECTION 3.11 Quorum. A majority of the number of Directors fixed in
accordance with these Bylaws shall constitute a quorum for the transaction of
business. The vote of a majority of the Directors present at a meeting at which
a quorum is in attendance shall be the act of the Board of Directors, unless the
vote of a different number is required by the Certificate of Incorporation or
the Bylaws. Notwithstanding anything to the contrary in the Certificate of
Incorporation or Bylaws, the affirmative vote of two-thirds (2/3) of the total
number of Directors is required to approve the following: (1) any tender offer
or exchange offer or any proposal for a merger made to the corporation; (2) the
sale of all of the stock or assets of, or a business combination involving the
Corporation or any of its subsidiaries; (3) the sale of a substantial equity
interest in, or a substantial portion of assets of the Corporation or any of its
subsidiaries, including a plan of liquidation of the Corporation or any of its
subsidiaries; or (4) the addition or removal of any person with significant
influence over major policymaking decisions of the Corporation, including, but
not limited to, those persons who, without regard to title, exercise the
authority of one or more of the following positions: chief executive officer,
president, chief operating officer, chief financial officer, chief lending
officer, or chief investment officer.
SECTION 3.12 Compensation. The amount, if any, which each Director shall
be entitled to receive as compensation for his services as a Director shall be
fixed from time to time by resolution of the Board of Directors. If any director
shall serve as a member of any committee of the Board of Directors or perform
special services at the instance of the Board of Directors, such may be paid
additional compensation as the Board of Directors may determine. Each Director
shall be entitled to reimbursement for traveling expenses incurred by him in
attending any meeting of the Board of Directors or of a committee. Such
compensation shall be payable even though a meeting may be adjourned because of
a lack of a quorum.
SECTION 3.13 Action by Directors Without Meeting. Any action required to
be taken at a meeting of the Directors of the Corporation or any action which
may be taken at such a meeting, may be taken without a meeting if a consent in
writing, setting forth the action so taken, shall be signed by all of the
Directors entitled to vote with respect to the subject matter thereof. A
consent shall be sufficient for this Section 3.13 if it is executed in
counterparts, in which event all of such counterparts, when taken together,
shall constitute one and the same consent.
SECTION 3.14 Designation of Committees. The Board of Directors may by
resolution or resolutions passed by a majority of the whole Board of Directors
designate one or more committees, each committee to consist of two or more of
the directors of the Corporation, which to the extent provided in the
resolution or resolutions shall have and may exercise the powers of the Board
of Directors in the management of the business and affairs of the Corporation,
and may have power to authorize the seal of the Corporation to be affixed to
all papers which may require it; provided, however, that no such committee
shall have any power or authority in reference to those matters prohibited by
Section 141(c) of the Delaware General Corporation Law. Such committee or
committees shall have such name or names as may be determined from time to
time by resolution or resolutions adopted by the Board of Directors. If
provisions be made for any such committee or committees, the members thereof
shall be appointed by the Board of Directors and shall serve during the
pleasure of the Board of Directors. A majority of the members of a committee
shall constitute a quorum for the transaction of business. The Board of
Directors may designate one or more directors of the Corporation as alternate
members of any committee, who may replace any absent or disqualified member
at any meeting of the committee and who, in such event, shall be counted
in determining the presence of a quorum. Vacancies in such committees shall be
filled by the Board of Directors; provided, however, that in the absence or
disqualification of any member of such committee or committees, the member or
members thereof present at any meeting and not disqualified from voting, whether
or not he or they constitute a quorum, may unanimously appoint another member of
the Board of Directors to act at the meeting in the place of any such absent or
disqualified member. The Board of Directors may at its pleasure discontinue any
such committee or committees.
ARTICLE 4
Officers
SECTION 4.1 Generally. The Board of Directors at its first meeting and
at each annual meeting thereafter shall elect, at a minimum, the following
officers: a President, a Secretary and a Treasurer. The Board of Directors at
any time and from time to time may elect or appoint such other officers as it
shall deem necessary, including, but not limited to, a Chairman of the Board of
Directors, one or more Vice Presidents, one or more Assistant Vice Presidents,
one or more Assistant Treasurers, and one or more Assistant Secretaries, who
shall hold their offices for such terms as shall be determined by the Board of
Directors and shall exercise such powers and perform such duties as are
specified by these Bylaws, or as shall be determined from time to time by the
Board of Directors. Any person may hold two or more offices, except that no
person may hold the office of President and Secretary. No officer need be a
shareholder of the Corporation.
SECTION 4.2 Compensation. The salaries of the officers of the corporation
shall be fixed by the Board of Directors, except that the Board of Directors
may delegate to any committee or officer or officers the power to fix the
compensation of any other officer.
SECTION 4.3 Tenure. Each officer of the corporation shall hold office for
the term for which he is elected or appointed, and until his successor has been
duly elected or appointed and has qualified, or until his earlier resignation,
removal from office or death. Any officer may be removed by the Board of
Directors whenever in its judgment the best interest of the corporation will be
served thereby.
SECTION 4.4 Vacancies. A vacancy in any office, because of resignation,
removal or death may be filled by the Board of Directors for the unexpired
portion of the term.
SECTION 4.5 Chairman of the Board. The Chairman of the Board shall
preside at all meetings of stockholders and of the Board of Directors. In
general, he shall perform all duties incident to the office of the Chairman of
the Board and such other duties as may from time to time be assigned to him by
the Board.
SECTION 4.6 President. The President shall be the chief executive officer
and the head of the corporation and, subject to the Board of Directors, shall
have the general control and management of the business and affairs of the
corporation. The President shall also be the chief operating officer of the
corporation and, subject to the control of the Board of Directors, shall in
general manage, supervise and control the day to day business and affairs of the
corporation. He shall, when present, preside at meetings of all of the
stockholders in the absence of the Chairman of the Board or if no Chairman of
the Board has been elected. In general, the President shall perform all duties
incident to the office of the President and such other duties as may be
prescribed by the Board of Directors from time to time. He shall vote any
shares of stock or other voting securities owned by the corporation and may
sign, with the Secretary or any other proper officer of the corporation
thereunto authorized by the Board of Directors, certificates for shares of the
corporation, any deeds, mortgages, bonds, policies of insurance, contracts,
investment certificates or other instruments which the Board of Directors has
authorized to be executed, except in cases where signing the execution thereof
shall be expressly delegated by the Board of Directors or by these Bylaws to
some other officer or agent of the corporation, or shall be required by law to
be otherwise signed or executed.
SECTION 4.7 Vice Presidents. In the absence of the President or in the
event of his death or inability or refusal to act, the Vice President (or in the
event there may be more than one Vice President, the Vice Presidents in the
order designated at the time of their election, or in the absence of any
designation, then in order of election) shall perform the duties of the
President and, when so acting, shall have all the powers of and be subject to
all the restrictions upon the President. Any Vice President may sign, with
the Secretary or an Assistant Secretary, certificates for shares of the
corporation and shall perform such other duties as shall from time to time be
assigned to him by the President or by the Board of Directors. All Vice
Presidents shall have such other duties as prescribed by the Board of
Directors from time to time.
SECTION 4.8 Secretary. The Secretary shall: (a) attend and keep the
minutes of the stockholders' meetings and of the Board of Directors' meetings in
one or more books provided by that purpose; (b) see that all notices are duly
given in accordance with the provisions of these Bylaws as required by law;
(c) be custodian of the corporate records and of the seal of the corporation and
see that the seal of the corporation is affixed to all documents, the execution
of which on behalf of the corporation under its seal is duly authorized; (d)
keep a register of the post office address of each stockholder which shall be
furnished to the Secretary by such stockholder; (e) sign with the President or
a Vice President certificates for shares of the corporation, the issuance of
which shall have been authorized by resolution of the Board of Directors;
(f) have general charge of the stock transfer books of the corporation; (g) in
general perform all duties incident to the office of the Secretary and such
other duties as from time to time may be assigned to him by the President or
the Board of Directors.
SECTION 4.9 Treasurer. The Treasurer, unless otherwise determined by the
Board of Directors, shall: (a) have charge and custody of and be responsible for
all funds and securities of the corporation; (b) receive and give receipts for
monies due and payable to the corporation from any source whatsoever, and
deposit all such monies in the name of the corporation in such banks, trust
companies or other depositories as shall be selected by the Board of
Directors; and (c) in general perform all the duties incident to the office
of Treasurer and such other duties as from time to time may be assigned by the
Board of Directors.
SECTION 4.10 Assistant Officers. The Assistant Secretaries, when
authorized by the Board of Directors, may sign with the President or a Vice
President certificates for shares of the corporation the issuance of which shall
have been authorized by a resolution of the Board of Directors. The Assistant
Vice Presidents, Secretaries and Treasurers, in general, shall perform such
duties as shall be assigned by the Vice President(s), Secretary or Treasurer,
respectively, or by the President or by the Board of Directors.
ARTICLE 5
Execution of Instruments and Deposit of Funds
SECTION 5.1 Contracts and Other Documents. Contracts and other
instruments or documents may be signed in the name of the Corporation by the
President or by any other officer authorized to sign such contract, instrument,
or document by the Board of Directors, and such authority may be general or
confined to specific instances.
SECTION 5.2 Interested Directors; Quorum. No contract or transaction
between the Corporation and one (1) or more of its directors or officers, or
between the Corporation and any other corporation, partnership, association, or
other organization in which one (1) or more of its directors or officers are
directors or officers, or have a financial interest, shall be void or voidable
solely for this reason, or solely because the director or officer is present at
or participates in the meeting of the Board of Directors or committee thereof
which authorizes the contract or transaction, or solely because his or their
votes are counted for such purpose, if (i) the material facts as to his
relationship or interest and as to the contract or transaction are disclosed or
are known to the Board of Directors or the committee, and the Board of Directors
or committee in good faith authorizes the contract or transaction by the
affirmative votes of a majority of the disinterested directors, even though the
disinterested directors be less than a quorum; or (ii) the material facts as to
his relationship or interest and as to the contract or transaction are disclosed
or are known to the stockholders entitled to vote thereon, and the contract or
transaction is specifically approved in good faith by vote of the stockholders;
or (iii) the contract or transaction is fair as to the Corporation as of the
time it is authorized, approved or ratified, by the Board of Directors, a
committee thereof, or the stockholders. Common or interested directors may be
counted in determining the presence of a quorum at a meeting of the Board of
Directors or of a committee which authorizes the contract or transaction.
SECTION 5.3 Dividends. Subject to the laws of the State of Delaware, the
Board of Directors may, from time to time, declare and the Corporation may pay
dividends on its outstanding shares in cash, property, or its own shares, except
when the Corporation is insolvent or when the declaration or payment thereof
would be contrary to any restrictions contained in the Certificate of
Incorporation.
SECTION 5.4 Bank Accounts and Deposits. All funds of the Corporation
shall be deposited from time to time to the credit of the Corporation with such
banks, bankers, trust companies or other depositories as the Board of Directors
may select or as may be selected by any officer or officers, agent or agents of
the Corporation to whom such power may be delegated from time to time by the
Board of Directors.
SECTION 5.5 Signing of Checks and Drafts. Except as otherwise provided
in these Bylaws, all checks, drafts, or other order or payment of money, notes,
or other evidences of indebtedness, issued in the name of or payable to the
Corporation, shall be signed or endorsed by such person or persons and in such
manner as shall be determined from time to time by resolution of the Board of
Directors.
SECTION 5.6 Loans. No loans and no renewals of any loans shall be
contracted on behalf of the Corporation except as authorized by the Board of
Directors. When authorized so to do by the Board of Directors, any officer or
agent of the Corporation may effect loans and advances for the Corporation from
any bank, trust company or other institution or from any firm, corporation or
individual, and for such loans and advances may make, execute and deliver
promissory notes, bonds or other evidences of indebtedness of the Corporation.
When authorized so to do by the Board of Directors, any officer or agent of the
Corporation may pledge, hypothecate or transfer, as security for the payment of
any and all loans, advances, indebtedness and liabilities of the Corporation,
any and all stocks, securities and other personal property at any time held by
the Corporation, and, to that end, may endorse, assign and deliver the same.
Such authority may be general or confined to specific instances.
ARTICLE 6
Issuance and Transfer of Shares
SECTION 6.1 Issuance of Certificates. Each stockholder of the Corporation
shall be entitled to a certificate or certificates, in such form as shall be
approved by the Board of Directors and required by law, certifying the number of
shares of the Corporation owned by such stockholder.
SECTION 6.2 Signature on Stock Certificates. The shares of the
Corporation shall be represented by certificates signed by the President or a
Vice President and the Secretary, and may be sealed with the seal of the
Corporation or a facsimile thereof. The signature of any of these officers upon
a certificate may be a facsimile. In case any officer, transfer agent, or
registrar who has signed or whose facsimile signature has been placed upon such
certificate shall have ceased to be such officer, transfer agent or registrar
before such certificate is issued, it may be issued by the Corporation with the
same effect as if he were such officer at the date of its issue.
SECTION 6.3 Stock Transfer Books. A record of all certificates for shares
issued by the Corporation shall be held by the Secretary or by any transfer
agent or registrar appointed pursuant to Section 6.4 below at the principal
office of the Corporation or at the office of such transfer agent or
registrar. Such record shall show the name and address of the person, firm or
corporation in which certificates for shares are registered, the number and
classes of shares represented by each such certificate, the date of each such
certificate, and in case of certificates which have been canceled, the dates of
cancellation thereof.
SECTION 6.4 Transfer Agents and Registrars. The Board of Directors may
appoint one (1) or more transfer agents, registrars of other agents for the
purpose of registering transfer of shares of the Corporation, issuing new
certificates of shares of the Corporation and canceling certificates surrendered
to the Corporation. Such agents and registrars shall be appointed at such times
and places as the requirements of the Corporation may necessitate and the Board
of Directors may designate. Any such transfer agent, registrar or other agent
shall be under a duty to the Corporation to exercise good faith and due
diligence in performing his functions. Such transfer agent, registrar or
other agent shall have, with regard to the particular functions he performs,
the same obligation to the holder or owner of shares of the Corporation and
shall have the same rights and privileges as the Corporation has in regard to
those functions. Notice to such agent, registrar or other such agent is notice
to the Corporation with respect to the functions performed by the agent.
SECTION 6.5 Replacement of Lost, Destroyed and Stolen Certificates. Where
a certificate for shares of the Corporation has been lost, destroyed or stolen,
the Corporation shall issue a new certificate in place of the original
certificate if the owner (a) files with the Corporation a sufficient indemnity
bond, and (b) satisfies any other reasonable requirements imposed by the Board
of Directors of the Corporation.
SECTION 6.6 Transfer of Shares. Shares of the capital stock of the
Corporation shall be transferred on the books of the Corporation by the holder
thereof in person or by his attorney duly authorized in writing, upon surrender
and cancellation of certificates for the number of shares to be transferred,
except as provided in the preceding section. Books for the transfer of shares
of the capital stock shall be kept by the Corporation or by one or more transfer
agents appointed by it.
SECTION 6.7 Regulations. The Board of Directors shall have power and
authority to make such rules and regulations as it may deem expedient concerning
the issue, transfer and registration of certificates for shares of the capital
stock of the Corporation.
ARTICLE 7
Corporate Records, Reports, and Seal
SECTION 7.1 Minutes of Corporate Meetings. The Corporation shall keep at
its principal place of business, or at such other place as may be directed by
the Board of Directors, a book of minutes of all proceedings of its stock-
holders and Board of Directors, with the time and place of holding of all
meetings, whether regular or special, and, if special, how authorized, the
notice thereof given, the names of those present at directors meetings, the
number of shares or members present or represented at stockholders meetings,
and the proceedings thereof.
SECTION 7.2 Inspection of Records and Properties by Directors. Every
Director shall have the absolute right at any reasonable time to inspect all
books, records, documents of every kind, and the physical properties of the
Corporation, and also of its subsidiary corporations. Such inspection by a
Director may be made in person or by agent or attorney, and the right of
inspection includes the right to make extracts.
SECTION 7.3 Fiscal Year. The fiscal year of the Corporation shall begin
on the first day of January and terminate on the last day of December of each
succeeding year; unless the Board of Directors shall adopt a different fiscal
year.
SECTION 7.4 Corporate Seal. The seal of the Corporation shall be circular
in form and shall have engraved upon it the words, "United Security Bancshares,
Inc." The seal shall be used by causing it to be affixed or impressed or a
facsimile thereof may be reproduced or otherwise used in such manner as the
Board of Directors shall determine.
ARTICLE 8
Adoption, Amendment, and Repeal of Bylaws
SECTION 8.1 Power of Directors to Amend. The Board of Directors shall
have the power to alter, amend or repeal the Bylaws of the Corporation or adopt
new Bylaws for the Corporation as provided in the Certificate of Incorporation
of the Corporation.
SECTION 8.2 Power of Stockholders to Amend. The stockholders shall have
the power to alter, amend or repeal the Bylaws of the Corporation or adopt new
Bylaws of the Corporation as provided in the Certificate of Incorporation of the
Corporation.
ARTICLE 9
Notices
SECTION 9.1 Giving of Notice. Except as otherwise provided by the General
Corporation Law of Delaware, these Bylaws, the Corporation's Certificate of
Incorporation, or resolution of the Board of Directors, every meeting notice or
other notice, demand, bill, statement or other communication (collectively,
"Notice") to or from the Corporation from or to a Director, Officer or
stockholder shall be duly given if it is written or printed and is (a) sent by
first class mail or by overnight service of the U.S. Postal Service, postage
prepaid, (b) sent by any established overnight air courier service, such as
Federal Express, Emery, Airborne or UPS, (c) sent by telegraph, tested telex or
other tested facsimile transmission, (d) delivered by any commercial messenger
service which regularly retains its receipts, or (e) personally delivered,
provided a receipt is obtained reflecting the date of delivery. Notice shall not
be duly given unless all delivery or postage charges are pre-paid. Notice shall
be given to an addressee's most recent address as it appears on the
Corporation's records. A Notice shall be deemed "given" when dispatched for
delivery, or if mailed, on the date postmarked. This Section shall not have
the effect of shortening any notice period provided for in these Bylaws.
SECTION 9.2 Waiver of Notice. Any Notice required by the General
Corporation Law of Delaware, the Certificate of Incorporation or these Bylaws
may be waived in writing at any time by the person entitled to the Notice,
and such waiver shall be equivalent to the giving of notice. Notice of any
meeting shall be waived by attendance (if a stockholders' meeting, in person
or by proxy) at the meeting. A waiver of Notice of a special meeting of
stockholders shall state the purpose for which the meeting was called or the
business to be transacted thereat.
The foregoing are hereby certified by the undersigned officer of the
Corporation to be a true and accurate copy of the Bylaws of the Corporation and
to be in full force and effect this date.
Given under my hand and the seal of the Corporation this 11th day of June,
1999.
Signature
Print Name:
Title:
[CORPORATE SEAL]
