United States
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
(Mark One)
( X ) Quarterly report under Section 13 or 15 (d) of the
Securities
Exchange Act of 1934
For the quarterly period ended September 30, 1998 or
------------------
( ) Transition report under Section 13 or 15 (d) of the
Exchange
Act
For the transition period from to
Commission file number 000 - 18561
UNITED SECURITY BANCORPORATION
(Exact Name of Registrant as Specified in Its Charter)
Washington 91-1259511
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
9506 North Newport Highway, Spokane, WA 99218-1200
(Address of Principal Executive Offices)
(509) 467-6949
(Registrant's Telephone Number, Including Area Code)
Check whether the issuer: (1) 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
The issuer has one class of capital stock, that being common stock.
On October 30, 1998 there were 4,546,722 shares of such stock
outstanding.
1
<PAGE> 2
UNITED SECURITY BANCORPORATION
INDEX TO QUARTERLY REPORT ON FORM 10-Q
September 30, 1998
Table of Contents
<TABLE>
<CAPTION>
Page
<S>
<C>
Part I Financial Information
Item 1. Financial Statements
Consolidated Statements of Condition - September 30,
1998
and December 31, 1997 . . . . . . . . . . . . . . .
3
Consolidated Statements of Income - Three Months and
Nine Months Ended September 30, 1998 and 1997 . . .
4
Consolidated Condensed Statements of Cash Flows -
Nine Months Ended September 30, 1998 and 1997 . . .
5
Notes to Consolidated Financial Statements . . . .
6-8
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations . . . . . . . .
9-12
Item 3. Quantitative and Qualitative Disclosures About
Market Risk . . . . . . . . . . . . . . . . . . . .
13
Part II Other Information
Item 6. Exhibits and Reports on Form 8-K . . . . . . . . .
13
Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . .
13
</TABLE>
2
<PAGE> 3 UNITED SECURITY BANCORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CONDITION
<TABLE>
<CAPTION>
September 30,
December 31,
($ in thousands) 1998
1997
<S> <C> <C>
ASSETS
Cash and due from banks $ 16,541 $
21,090
Overnight interest bearing deposits with
other banks 14,860
12,556
Federal funds sold 15,410
5,210
--------- -------
- --
Cash and cash equivalents 46,811
38,856
Securities (Note 2) 50,056
73,583
Loans, net of allowance for loan losses of $2,805
in 1998 and $2,865 in 1997 (Notes 3 and 4) 282,239
247,715
Accrued interest receivable 3,860
3,189
Premises and equipment, net 10,063
9,903
Foreclosed real estate and other foreclosed
assets 794
967
Life insurance and salary continuation assets 3,317
2,512
Intangible assets 6,617
6,910
Other assets 910
634
--------- -------
- --
TOTAL ASSETS $ 404,667 $
384,269
=========
=========
LIABILITIES
Noninterest bearing - demand deposits $ 60,068 $
62,453
Interest bearing:
NOW and savings accounts 166,602
156,968
Time, $100,000 and over 36,576
31,341
Other time 91,583
87,042
--------- -------
- --
TOTAL DEPOSITS 354,829
337,804
Notes payable 4,456
6,257
Capital lease obligations 718
732
Accrued interest payable 1,146
928
Other liabilities 2,669
2,063
--------- -------
- --
TOTAL LIABILITIES 363,818
347,784
STOCKHOLDERS' EQUITY
Common stock, no par, shares authorized
15,000,000; issued and outstanding 4,533,284
in 1998 and 4,520,882 in 1997 30,479
30,379
Retained earnings 10,352
6,174
Accumulated other comprehensive income, net of
tax (Note 1) 113
(68)
Guaranteed bank loan to Employee Stock
Ownership Plan (95)
--------- -------
- --
TOTAL STOCKHOLDERS' EQUITY 40,849
36,485
--------- -------
- --
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 404,667 $
384,269
=========
=========
</TABLE>
The accompanying notes are an integral part of these statements.
3
<PAGE> 4
UNITED SECURITY BANCORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
($ in thousands, except per share)
<TABLE>
<CAPTION>
Three Months Ended
September 30, Year-
To-Date
1998 1997
1998 1997
<S> <C> <C> <C>
<C>
INTEREST INCOME
Interest and fees on loans and leases $ 7,812 $ 5,942
$22,174 $16,667
Interest on securities 831 587
2,975 1,338
Other interest income 253 352
510 914
------- ------- ----
- --- -------
TOTAL INTEREST INCOME 8,896 6,881
25,659 18,919
------- ------- ----
- --- -------
INTEREST EXPENSE
Interest on deposits 3,379 2,538
9,693 7,039
Interest on borrowings 205 92
613 231
------- ------- ----
- --- -------
TOTAL INTEREST EXPENSE 3,584 2,630
10,306 7,270
------- ------- ----
- --- -------
NET INTEREST INCOME 5,312 4,251
15,353 11,649
Provision for loan losses (Note 4) 197 227
324 548
------- ------- ----
- --- -------
NET INTEREST INCOME AFTER PROVISION FOR
LOAN LOSSES 5,115 4,024
15,029 11,101
------- ------- ----
- --- -------
NONINTEREST INCOME
Fees and service charges 450 401
1,282 1,088
Insurance commissions 272 310
817 893
Insurance proceeds 796
796
Securities gains/(losses) 11
91 (25)
Other 246 164
1,113 420
------- ------- ----
- --- -------
TOTAL NONINTEREST INCOME 979 1,671
3,303 3,172
------- ------- ----
- --- -------
NONINTEREST EXPENSE
Salaries and employee benefits 2,464 1,734
6,990 4,946
Occupancy expense, net 297 200
896 556
Equipment expense 302 222
940 593
Other operating expense 1,154 852
3,255 2,216
------- ------- ----
- --- -------
TOTAL NONINTEREST EXPENSE 4,217 3,008
12,081 8,311
------- ------- ----
- --- -------
INCOME BEFORE TAXES 1,877 2,687
6,251 5,962
INCOME TAX EXPENSE 612 852
2,015 1,966
------- ------- ----
- --- -------
NET INCOME $ 1,265 $ 1,835 $
4,236 $ 3,996
======= =======
======= =======
Basic earnings per common share $ .28 $ .41 $
.94 $ .88
Diluted earnings per common share $ .28 $ .40 $
.92 $ .88
Basic weighted average shares outstanding 4,529,705 4,520,882
4,524,262 4,519,794
Weighted average shares outstanding 4,587,650 4,566,059
4,597,325 4,557,133
</TABLE>
The accompanying notes are an integral part of these statements.
4
<PAGE> 5
UNITED SECURITY BANCORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
YEAR-TO-DATE September 30, 1998 AND 1997
($ in thousands)
<TABLE>
<CAPTION>
1998 1997
<S> <C> <C>
Cash flows from operating activities:
Net income $ 4,236 $ 3,996
Provision for loan losses 324 548
Depreciation and amortization 572 393
(Increase)/decrease in assets and liabilities
Accrued interest receivable (671) (617)
Life insurance and salary continuation
assets (805) (172)
Other assets 17 (41)
Accrued interest payable 218 101
Other liabilities 606 415
------- -------
Net cash provided by operating activities 4,497 4,623
------- -------
Cash flows from investing activities:
Securities:
Maturities 28,178 250
Sales 18,925 4,595
Purchases (23,395) (34,152)
Net increase in loans (34,848) (19,504)
Cash received from Wells Fargo acquisition 30,356
Sales of premises and equipment 720
Purchases of premises and equipment (1,452) (2,337)
Foreclosed real estate activity 173 (229)
------- -------
Net cash change in investing activities (11,699) (21,021)
------- -------
Cash flows from financing activities:
Net increase in deposits 17,025 16,081
Proceeds from notes payable 1,043
Principal payments on notes payable (1,896) (27)
Principal payments on capital lease
obligations (14) (14)
Cash received from stock sales 118 20
Cash paid for redemption of fractional
shares (76) (58)
------- -------
Net cash provided by financing activities 15,157 17,045
------- -------
Net change in cash and cash equivalents 7,955 647
Cash and cash equivalents, beginning of year 38,856 32,808
------- -------
Cash and cash equivalents, end of quarter $46,811 $33,455
======= =======
</TABLE>
The accompanying notes are an integral part of these statements.
5
<PAGE> 6
UNITED SECURITY BANCORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1. Management Statement
The consolidated financial statements include the accounts of
United Security Bancorporation and its wholly-owned subsidiaries
(USBN), United Security Bank, Home Security Bank, Bank of Pullman,
Grant National Bank, USB Insurance Agencies, Inc., USB Mortgage
Company, and USB Leasing, Inc. after eliminating all significant
intercompany balances and transactions. In the opinion USBN, the
accompanying Consolidated Financial Statements present fairly the
financial position of USBN as of September 30, 1998 and December
31, 1997, and the related statements of income and cash flows for
the nine month period ended September 30, 1998 and 1997.
Certain reclassifications of 1997 balances have been made to
conform with the June 30, 1998 presentation; there was no impact on
net income, earnings per share or stockholders' equity. Also per
share amounts and weighted average shares outstanding have been
retroactively adjusted to reflect previously disclosed stock
dividends and split-ups. Prior reported amounts have been restated
to reflect pooling of interests accounting for the Grant National
Bank (GNB) acquisition. See Note 5 for further information.
Effective January 1, 1998, the Company adopted two recently issued
Statement of Financial Accounting Standards (SFAS) as follows:
SFAS No. 130, Reporting Comprehensive Income establishes standards
for reporting and display of comprehensive, or all inclusive
income. In USBN's case, based on current operations, it includes
as an addition or deduction to reported net income, the net change
in unrealized gains or losses on securities. This statement has no
effect on net income of the Company. All prior periods shown on
the financial statements have been restated to conform with the
statement.
SFAS No. 131, Disclosure about Segments of an Enterprise and
Related Information establishes standards for the way that public
business enterprises report information about operating segments in
annual financial statements. Management believes that the
provisions of the statement will not have a material effect on its
financial condition or reported results of operations.
6
<PAGE> 7
UNITED SECURITY BANCORPORATION
NOTE 2. Securities
Most of the securities are classified as available-for-sale and are
stated at fair value, and unrealized holding gains and losses, net
of related deferred taxes, are reported as a separate component of
stockholders' equity. Gains or losses on available-for-sale
securities sales are reported as part of noninterest income based
on the net proceeds and the adjusted carrying amount of the
securities sold, using the specific identification method.
Carrying amount and fair values at September 30, 1998 and December
31, 1997 were as follows:
<TABLE>
<CAPTION>
September 30, 1998 December
31, 1997
Amortized Fair Financial Amortized
Fair Financial
($ in thousands) Cost Value Statements Cost
Value Statements
<S> <C> <C> <C> <C>
<C> <C>
Securities available-for-sale:
U.S. Treasury securities $ 2,004 $ 2,018 $ 2,018 $ 6,775 $
6,787 $ 6,787 Obligations of federal government
agencies 20,635 20,760 20,760 40,507
40,516 40,516
Mortgage backed securities 13,796 13,863 13,863 13,693
13,696 13,696
Obligations of states, municipalities
and political subdivisions 2,541 2,591 2,591 5,818
5,876 5,876
Other securities 10,117 10,032 10,032 5,580
5,396 5,396
------- ------- ------- ------- --
- ---- ------
49,093 49,264 49,264 72,373
72,271 72,271
Securities held-to-maturity:
Obligations of states, municipalities
and political subdivisions 792 820 792 1,312
1,332 1,312
------- ------- ------- ------- ---
- ---- -------
Total $49,885 $50,084 $50,056 $73,685
$73,603 $73,583
======= ======= ======= =======
======= =======
</TABLE>
NOTE 3. LOANS
Loan detail by category as of September 30, 1998 and December 31,
1997 were as follows:
<TABLE>
<CAPTION>
($ in thousands) September 30,
December 31,
1998
1997
<S> <C> <C>
Commercial and industrial $161,053
$126,835
Agricultural 41,188
37,356
Real estate mortgage 47,453
53,795
Real estate construction 12,304
8,440
Installment 15,237
14,926
Lease financing 4,174
5,209
Bank cards and other 4,451
4,762
-------- ------
- --
Total loans 285,860
251,323
Allowance for loan losses (2,805)
(2,865)
Deferred loan fees, net of deferred costs (816)
(743)
-------- ------
- --
Net loans $282,239
$247,715
========
========
</TABLE>
7
<PAGE> 8
UNITED SECURITY BANCORPORATION
NOTE 4. ALLOWANCE FOR LOAN LOSSES
The allowance for loan loss is maintained at levels considered
adequate by management to provide for possible loan losses. The
allowance is based on management's assessment of various factors
affecting the loan portfolio, including problem loans, business
conditions and loss experience, and an overall evaluation of the
quality of the underlying collateral. Changes in the allowance for
loan losses during the three and nine months ended September 30,
1998 and 1997 were as follows:
<TABLE>
<CAPTION>
Three Months Ended
September 30, Year-To-Date
($ in thousands) 1998 1997 1998 1997
<S> <C> <C> <C> <C>
Balance, beginning of period $2,783 $2,221 $2,865
$2,295
Provision for loan losses 197 227 324
548
Loan charge-offs (217) (318) (541)
(767)
Loan recoveries 42 3 157
57
------ ------ ------ ----
- --
Balance, end of period $2,805 $2,133 $2,805
$2,133
====== ====== ======
======
</TABLE>
NOTE 5. Grant National Bank Acquisition
On July 20, 1998, USBN completed its acquisition of GNB for a total
consideration of approximately $10 million in USBN stock, following
approval by GNB shareholders and regulatory agencies. As of July
20, 1998 GNB had approximately $32 million in total assets, $29
million in deposits, $22 million in loans, and $3.4 million in
total equity. 468,270 USBN common shares were issued to GNB
shareholders for the acquisition. The pooling of interests
accounting method is being used for the transaction, which includes
restating prior reported amounts to reflect the acquisition of GNB.
The effects of the restatement on revenue, net income and
stockholders' equity are shown below:
<TABLE>
<CAPTION>
Three Months Ended Year-
To-Date
($ in thousands) September 30, 1997
1997
<S> <C> <C>
Net interest income and noninterest income:
Original USBN amounts reported $ 5,405
$13,325
GNB 517
1,496
------- ------
- -
As Restated $ 5,922
$14,821
=======
=======
Net income:
Original USBN amounts reported $ 1,710 $3,680
GNB 125 316
------- ------
As Restated $ 1,835 $3,996
======= ======
December 31, 1997
Stockholders' equity:
Original USBN amounts reported $33,089
GNB 3,396
-------
As Restated $36,485
=======
</TABLE>
8
<PAGE> 9
UNITED SECURITY BANCORPORATION
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS
OF OPERATIONS
The following discussion contains a review of the results of
operations and financial condition for third quarter and year-to-
date results in 1998 and 1997.
This information should be read in conjunction with the financial
statements and related notes appearing in this report. The reader
is assumed to have access to USBN's Form 10-K for the year ended
December 31, 1997, which contains additional information.
This discussion may contain certain forward looking statements,
which are made pursuant to the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995. Such statements
are subject to certain risks and uncertainties that could cause
actual results to differ materially from those stated. Readers are
cautioned not to place undue reliance on those forward-looking
statements.
Overview
A performance summary and detailed discussion regarding the third
quarter and year-to-date results in 1998 and 1997 follow this
table.
UNITED SECURITY BANCORPORATION AND SUBSIDIARIES
PERFORMANCE SUMMARY
<TABLE>
<CAPTION>
Three Months Ended September 30, Year-
To-Date
%
%
($ in thousands) 1998 1997 Change 1998
1997 Change
<S> <C> <C> <C> <C>
<C> <C>
Interest income $ 8,896 $ 6,881 29.3% $25,659
$18,919 35.6%
Interest expense 3,584 2,630 36.3% 10,306
7,270 41.8%
------- ------- ----- -------
- ------- ----
Net interest income 5,312 4,251 25.0% 15,353
11,649 31.8%
Provision for loan losses 197 227 -13.2% 324
548-40.9%
------- ------- ----- -------
- ------- ----
Net interest income after
provision for loan losses 5,115 4,024 27.1% 15,029
11,101 35.4%
Noninterest income 979 1,671 -41.4% 3,303
3,172 4.1%
Noninterest expense 4,217 3,008 40.2% 12,081
8,311 45.4%
------- ------- ----- -------
- ------- ----
Income before income taxes 1,877 2,687 -30.1% 6,251
5,962 4.8%
Income taxes 612 852 -28.2% 2,015
1,966 2.5%
------- ------- ----- -------
- ------- ----
Net income $ 1,265 $ 1,835 -31.1% $ 4,236
$ 3,996 6.0%
======= ======= ===== =======
======= ====
Basic earnings per common share $ .28 $ .41 -31.7% $ .94
$ .88 6.8%
Diluted earnings per common share$ .28 $ .20 -30.0% $ .92
$ .88 4.5%
</TABLE>
9
<PAGE> 10
UNITED SECURITY BANCORPORATION
Net Income
USBN reported a 6% increase in net income to $4,236,000 for the
first nine months of 1998 compared to $3,996,000 for the same
period in 1997. Basic earnings per share increased by 6% to $.94
compared to $.88 for 1997. For third quarter 1998, earnings
decreased 31% to $1,265,000 compared to $1,835,000 for the same
period in 1997. Basic earnings per share in third quarter was $.28
in 1998 and $.41 in 1997. 1997 net income for the year and third
quarter included $525,000 or $.12 per share from nonrecurring
insurance proceeds from a former employee theft. Net nonrecurring
items increased income before taxes by $81,000 or about $.02 per
share for the first nine months of 1998, which included a gain on
the sale of commercial property of $366,000, a gain on the sale of
merchant bank credit card relationships for $209,000, which was
offset by GNB acquisition expenses of $453,000. Third quarter
earnings per share were decreased by $.03 for the nonrecurring
items, which included $236,000 of GNB acquisition expenses offset
by $46,000 of gain on the merchant bank card relationships sale.
Net Interest Income
For the first nine months of 1998 net interest income grew 32% to
$15,353,000 in 1998 compared to $11,649,000 in 1997. The increase
is due to an increase in the volume of earning assets, which grew
30% or $84 million from September 30, 1997 to September 30, 1998.
Loans grew 33% to $285 million as of September 30, 1998 compared to
$215 million as of September 30, 1997. The 1997 acquisition of
Bank of Pullman contributed a significant portion of the growth in
loans and deposits. USBN also had loan growth of approximately $30
million during the 12 months ended September 30, 1998 without the
loans from the Bank of Pullman acquisition. Deposits grew
approximately $24 million without the deposits of the Bank of
Pullman.
The net interest margin to average earning assets was 5.91% and
6.21% for September 30, 1998 and 1997, respectively.
Provision for Loan Losses
The allowance for loan losses grew 32% from September 30, 1997 to
September 30, 1998, which represents .98% and .99% of total loans,
respectively. During third quarter 1998, USBN completed its normal
quarterly review of the adequacy of its allowance for loan losses.
The review considers factors affecting the loan portfolio, which
include problem loans, economic conditions, loss experience, and
the quality of the underlying collateral value.
Noninterest Income
Noninterest income increased 4% to $3,303,000 during the first nine
months of 1998 compared to $3,172,000 for the same period in 1997.
Fees and service charges increased 18% to $1,282,000 in 1998 from
$1,088,000 in 1997 due primarily to deposit growth patterns. 1997
third quarter and year-to-date noninterest income was improved by
$796,000 from the receipt of insurance proceeds as described above.
Insurance commissions declined $76,000.
10
<PAGE> 11
UNITED SECURITY BANCORPORATION
Other income included nonrecurring gains of $366,000 in first
quarter 1998 for the sale of commercial property and $209,000 for
the sale of merchant bank card relationships in second and third
quarters 1998. 1997 results included losses on the sale of
securities as USBN improved the yield on its securities portfolio.
1998 results included gains on the sale of securities as USBN
obtained liquidity for its loan portfolio growth. Securities
outstanding were lower by $24 million since the end of the year.
Noninterest Expense
Noninterest expense increased by 45% in 1998 compared to 1997 due
primarily to the increased costs from the 1997 and 1998
acquisitions. USBN has increased its number of locations from 15
to 27. Nonrecurring expenses of $453,000 were incurred during
second and third quarters of 1998 related to the acquisition of
GNB.
Year 2000 Issues
The Year 2000 Problem. The century date change creates a problem
because some computer programs and systems were designed to store
calendar years with only two numbers, rather than four numbers.
Computer programs and systems may recognize a date using "00" as
1900 rather than the Year 2000. The extent of the impact of this
Year 2000 problem is not yet known and could affect the global
economy and every organization. USBN is addressing these issues.
The Challenges faced by USBN. The Year 2000 problem is of concern
to USBN and other financial institutions because most financial
transactions including interest accruals and payments are date
sensitive. The Year 2000 problem could impact all automated
systems including automated teller machines, alarm systems, and
vaults. Some systems are more difficult to assess and repair.
USBN's State of Readiness. USBN is reviewing its automated systems
and business processes to identify and correct any date-related
problems that may arise with the change of the century at December
31, 1999. In September, 1998, USBN and the provider of USBN's
mainframe computer applications completed an installation and
upgrade of the mainframe operating systems to comply with changes
for the Year 2000. Testing of the new software will continue
through December 31, 1998. USBN also continues to review its PC
hardware and software and its major automated systems suppliers for
Year 2000 compliance. A small number of PCs and PC systems
required upgrades, which has been completed.
Third Party Concerns. USBN has numerous customers, vendors, and
third party service providers whose failure to address the Year
2000 problem may create significant business disruption and costs
to USBN. It is impossible for any one party to eliminate the risks
related to the Year 2000 problem. It is possible that USBN's
service could be disrupted through the loss of electric power,
phone service, or other reasons outside of USBN's control. USBN is
in contact with its outside providers of services on an ongoing
basis to evaluate their progress in addressing the Year 2000
problem.
11
<PAGE> 12
UNITED SECURITY BANCORPORATION
The Banks are incorporating Year 2000 issues into their standards
of creditworthiness for new and renewed loans and are reviewing
significant existing borrowers for Year 2000 risk. Review in this
area will continue through 1999.
Estimated Costs. The cost of complying with the Year 2000 issues
is estimated to be $175,000 including staff time expenses. About
$100,000 of this amount has already been incurred.
USBN's Contingency Plans. USBN is in the process of developing and
implementing contingency plans to handle the most reasonably likely
worst case scenarios. Since these worst case scenarios are
difficult or even impossible to predict at this time, these
contingency plans are particularly challenging. USBN intends to
develop contingency plans that are reasonably necessary to address
the Year 2000 problem and to revise them as necessary on an ongoing
basis until the problem is confronted and resolved.
12
<PAGE> 13
UNITED SECURITY BANCORPORATION
Item 3. Quantitative and Qualitative Disclosures About Market Risk
There have been no material changes in reported market risks faced
by USBN since the end of the most recent fiscal year end.
Part II
Other Information
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
None in third quarter 1998.
(b) Reports on Form 8-K during third quarter 1998
<TABLE>
<CAPTION>
<S> <C> <C>
Date Item # Subject
July 20, 1998 Item 2 United Security Bancorporation Completes
Acquisition
of Grant National Bank
</TABLE>
Signatures
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 duly authorized on October
30, 1998.
UNITED SECURITY BANCORPORATION
/s/ Richard C. Emery
-------------------------------
- ----
Richard C. Emery, President and
Chief Executive Officer
/s/ Chad Galloway
-------------------------------
- ---
Chad Galloway, Vice President
and
Chief Financial Officer
13
<TABLE> <S> <C>
<ARTICLE> 9
<CIK> 0000726990
<NAME> UNITED SECURITY BANCORP
<MULTIPLIER> 1000
<CURRENCY> US DOLLARS
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> SEP-30-1998
<EXCHANGE-RATE> 1.000
<CASH> 16541
<INT-BEARING-DEPOSITS> 14860
<FED-FUNDS-SOLD> 15410
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 49264
<INVESTMENTS-CARRYING> 792
<INVESTMENTS-MARKET> 820
<LOANS> 285044
<ALLOWANCE> 2805
<TOTAL-ASSETS> 404667
<DEPOSITS> 354829
<SHORT-TERM> 0
<LIABILITIES-OTHER> 3815
<LONG-TERM> 4456
0
0
<COMMON> 30479
<OTHER-SE> 10370
<TOTAL-LIABILITIES-AND-EQUITY> 404667
<INTEREST-LOAN> 22174
<INTEREST-INVEST> 2975
<INTEREST-OTHER> 510
<INTEREST-TOTAL> 25659
<INTEREST-DEPOSIT> 9693
<INTEREST-EXPENSE> 10306
<INTEREST-INCOME-NET> 15353
<LOAN-LOSSES> 324
<SECURITIES-GAINS> 91
<EXPENSE-OTHER> 12081
<INCOME-PRETAX> 6251
<INCOME-PRE-EXTRAORDINARY> 6251
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 4236
<EPS-PRIMARY> .94
<EPS-DILUTED> .92
<YIELD-ACTUAL> 5.91
<LOANS-NON> 2147
<LOANS-PAST> 331
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 2865
<CHARGE-OFFS> 541
<RECOVERIES> 157
<ALLOWANCE-CLOSE> 2805
<ALLOWANCE-DOMESTIC> 2805
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
