<SEC-DOCUMENT>0001140361-11-054778.txt : 20111123
<SEC-HEADER>0001140361-11-054778.hdr.sgml : 20111123
<ACCEPTANCE-DATETIME>20111122193141
ACCESSION NUMBER:		0001140361-11-054778
CONFORMED SUBMISSION TYPE:	8-K/A
PUBLIC DOCUMENT COUNT:		1
CONFORMED PERIOD OF REPORT:	20111122
ITEM INFORMATION:		Non-Reliance on Previously Issued Financial Statements or a Related Audit Report or Completed Interim Review
FILED AS OF DATE:		20111123
DATE AS OF CHANGE:		20111122

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			UNITED SECURITY BANCSHARES
		CENTRAL INDEX KEY:			0001137547
		STANDARD INDUSTRIAL CLASSIFICATION:	NATIONAL COMMERCIAL BANKS [6021]
		IRS NUMBER:				912112732
		STATE OF INCORPORATION:			CA
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		8-K/A
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-32897
		FILM NUMBER:		111223168

	BUSINESS ADDRESS:	
		STREET 1:		1525 E SHAW AVENUE
		CITY:			FRESO
		STATE:			CA
		ZIP:			93710

	MAIL ADDRESS:	
		STREET 1:		1525 E SHAW AVENUE
		CITY:			FRESNO
		STATE:			CA
		ZIP:			93710
</SEC-HEADER>
<DOCUMENT>
<TYPE>8-K/A
<SEQUENCE>1
<FILENAME>form8ka.htm
<DESCRIPTION>UNITED SECURITY BANCSHARES 8-K A 11-22-2011
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<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">CURRENT REPORT PURSUANT</font></div>

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<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">2126 Inyo Street, Fresno, CA</font></div>
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<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:</font></div>

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<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt"><font style="DISPLAY: inline;" face="Wingdings">o</font>&#160;&#160;Written communications pursuant to Rule 425 under the Securities </font><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Act (17 CFR 230.425)</font></div>

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<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Item 4.02. Non-Reliance on Previously Issued Financial Statements or a Related Audit Report or Completed Interim Review.</font></div>

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<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">On November 21, 2011, United Security Bancshares (&#8220;Bancshares&#8221;) filed a Current Report on Form 8-K&#160;&#160;(&#8220;Original Form 8-K&#8221;) under Item 4.02 to report that its financial statements for the quarter ended June 30, 2011, as included in Bancshares&#8217;s Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2011, should no longer be relied upon.&#160;&#160;Bancshares is filing this Current Report on Form 8-K/A to amend the Original Form 8-K to report the matter under Item 4.02(a) only.</font></div>

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<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">On November 14, 2011, management of Bancshares, and subsequently, its Audit Committee , determined that its financial statements for the quarter ended June 30, 2011, as included in Bancshares&#8217;s Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2011, should no longer be relied upon due to an expected approximate $5.6 million increase in the provision for loan losses and related changes to the allowance for loan losses to correct an error in accounting for our allowance for loan losses discovered&#160;&#160;as a result of an interim joint examination of United Security Bank (the &#8220;Bank&#8221;), a wholly-owned subsidiary of Bancshares, by the Federal Reserve Bank of San Francisco (the &#8220;FRB&#8221;) and the California Department of Financial Institutions (the &#8220;CDFI&#8221;).&#160;&#160;Consequently, Bancshares intends to file an amendment to its Form 10-Q for the period ended June 30, 2011, as soon as reasonably practicable, to give effect to the expected increase in the provision and allowance for loan losses.</font></div>

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<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">As of the date of this filing and based on Bancshares&#8217;s initial estimates, the following changes to the previously reported financial results are anticipated:</font></div>

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<div align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Bancshares&#8217; net loss for the three months ended June 30, 2011, is expected to increase from $3.0 million to approximately $6.3 million.&#160;&#160;Fully-diluted earnings per share (&#8220;EPS&#8221;) for the three months ended June 30, 2011, originally reported to be a loss of $0.23, are expected to change to a loss of approximately $0.48.&#160;&#160;Due to the adjustments in the second quarter of 2011 financial results, Bancshares&#8217;s net loss for the six months ended June 30, 2011, is expected to increase from $2.7 million to $6.0 million, and EPS for the six months ended June 30, 2011, originally reported at a loss of $0.20, is now projected to be a loss of approximately $0.45;</font></div>
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<div align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">The provision for loan losses for the six months ended June 30, 2011 is expected to increase from $4.4 million to approximately $10.1 million.&#160;&#160;As a result of the increased provision for loan losses net of charge-offs, the allowance for loan losses as of June 30, 2011 is expected to decrease slightly to approximately $13.9 million, or 3.28% of loans, compared to the originally reported amount of $14.3 million, or 3.33% of gross loans;</font></div>
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<div align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Impaired loans, net of specific reserves, will decrease from $36.6 million to approximately $34.6 million, as of June 30, 2011.&#160;&#160;The reduction is due to charge-offs of $6.06 million against specific reserves for loss of $4.1 million;</font></div>
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<div align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Net charge-offs for the second quarter of 2011, will increase from $6.6 million to approximately $12.7&#160;&#160;million;</font></div>
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<div align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Loans, net of unearned income and the allowance for loan losses, will decline to approximately $409.5 million from the previously reported level of $415.2 million and total assets will decline to $655 million from the previously reported level of $659 million.</font></div>
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<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">The adjustments described above are expected to result in a decrease in total shareholders&#8217; equity at June 30, 2011 of approximately $3.3 million to approximately $66.8million from the previously reported amount of $70.1 million.&#160;&#160;On a preliminary basis, Bancshares estimates that the Bank&#8217;s leverage ratio, tier 1 risk-based capital ratio and total risk-based capital ratio will not be lower than 9.32%, 11.89% and 13.15%, respectively, at June 30, 2011 and remain in compliance with the consent order</font></div>

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<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">In addition, the consent orders (Written Agreement and Final Order), issued to the Bank by the FRB and CDFI, dated March 23, 2010 and May 20, 2010 respectively, (the &#8220;Consent Orders&#8221;), requires the Bank to maintain an adequate allowance for loan and lease losses that is consistent with generally accepted accounting principles and supervisory guidance. Pursuant to the changes to the allowance for loan losses summarized above, the Bank is in compliance with the consent orders.</font></div>

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<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">The consolidated financial statements of the Corporation as of and for the three months and six months ended June 30, 2011 were, and as restated will be, prepared on a going concern basis, which contemplates the realization of assets and the discharge of liabilities in the normal course of business for the foreseeable future.</font></div>

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<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">As previously reported in Bancshares&#8217; Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2011, management has concluded that the Corporation&#8217;s disclosure controls and procedures and internal control over financial reporting were not effective as of June 30, 2011, as a result of a material weakness in the Corporation&#8217;s internal controls.</font></div>

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<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Form 10-Q for the period ended June 30, 2011 and Form 10-Q for the period ended September 30, 2011 will contain a discussion of such material weakness and steps that will be taken to address them.</font></div>

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<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="FONT-STYLE: italic; DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Caution About Forward-Looking Statements</font></div>

<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Certain statements made in this Current Report on Form 8-K/A may constitute &#8220;forward-looking statements&#8221; within the meaning of the Private Securities Litigation Reform Act of 1995.&#160;&#160;Forward-looking statements are statements that include projections, predictions, expectations, or beliefs about events or results or otherwise are not statements of historical facts, such as statements about the anticipated affects of the restatement on our financial results, regaining compliance with NASDAQ requirements and statements about evaluating strategic alternatives.&#160;&#160;Although Bancshares believes that its expectations with respect to such forward-looking statements are based upon reasonable assumptions within the bounds of its existing knowledge of its business and operations, there can be no assurance Bancshares will be able to regain compliance with the NASDAQ requirements, implement strategic alternatives in a timely manner or that the expected affects of the restatement will be as anticipated, or that actual results, performance or achievements of Bancshares will not differ materially from any future results, performance or achievements expressed or implied by such forward-looking statements.&#160;&#160;Factors that could cause actual events or results to differ significantly from those described in the forward-looking statements include, but are not limited to those described in the cautionary language included under the headings &#8220;Risk Factors&#8221; and &#8220;Management&#8217;s Discussion and Analysis of Financial Condition and Results of Operations&#8221; in the Corporation&#8217;s Annual Report on Form 10-K for the fiscal year ended December 31, 2010 and Quarterly Reports on Form 10-Q for the quarter ended March 31, 2011 and other filings made with the Securities and Exchange Commission.</font></div>

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