EX-99.1 2 ubfo033124earningsrelease.htm EX-99.1 03312024 ER Document

United Security Bancshares Reports 1st Quarter Financial Results

FRESNO, CA - April 18, 2024. United Security Bancshares (Nasdaq: UBFO) today announced its unaudited financial results for the quarter ended March 31, 2024. The Company reported net income of $4.2 million, or $0.24 per basic and diluted share, for the quarter ended March 31, 2024, compared to $6.1 million, or $0.36 per basic and diluted share, for the quarter ended March 31, 2023.

First Quarter 2024 Highlights (as of, or for, the quarter ended March 31, 2024, except where noted):
▪Net interest margin decreased to 4.35% for the quarter ended March 31, 2024, compared to 4.51% for the quarter ended March 31, 2023.
▪Annualized average cost of funds, including short-term borrowings, was 1.73% for the quarter ended March 31, 2024, compared to 0.83% for the quarter ended March 31, 2023.
▪Net income for the quarter decreased 32.07% to $4.2 million, compared to $6.1 million for the quarter ended March 31, 2023.
▪Interest and fees on loans increased 3.70% to $13.5 million, as a result of increases in interest rates, compared to $13.0 million for the first quarter of 2023.
▪The total fair value of the junior subordinated debentures (TRUPs) changed by $139,000 during the quarter ended March 31, 2024. A loss of $294,000 was recorded through the income statement and a gain of $155,000 was recorded through accumulated other comprehensive income. For the quarter ended March 31, 2023, the net $107,000 fair value loss adjustment was separately presented as a $333,000 gain recorded through the income statement, and a $440,000 loss recorded through accumulated other comprehensive income.
▪The Company recorded a provision for credit losses of $173,000 for the quarter ended March 31, 2024, compared to a reversal of provision of $493,000 for the quarter ended March 31, 2023.
▪Net interest income before the provision for credit losses decreased 9.51% to $11.7 million, compared to $12.9 million for the quarter ended March 31, 2023.
▪Annualized return on average assets (ROAA) decreased to 1.40%, compared to 1.95% for the quarter ended March 31, 2023.
▪Annualized return on average equity (ROAE) decreased to 13.51%, compared to 22.05% for the quarter ended March 31, 2023.
▪The Company had remaining available secured lines of credit of $548.3 million, available unsecured lines of credit of $62.0 million, unpledged investment securities of $81.6 million, and cash and cash equivalents of $43.0 million as of March 31, 2024. Short-term borrowings totaled $103.0 million at March 31, 2024, compared to $62.0 million at December 31, 2023.
▪Total loans, net of unearned fees, increased 1.02% to $929.4 million, compared to $920.0 million at December 31, 2023.
▪Total investments decreased 8.70% to $168.6 million, compared to $184.6 million at December 31, 2023.
▪Total deposits decreased 4.8% to $955.9 million, compared to $1.0 billion at December 31, 2023.
▪Net charge-offs totaled $289,000 for the quarter ended March 31, 2024, compared to $434,000 for the quarter ended March 31, 2023.
▪The allowance for credit losses as a percentage of gross loans decreased to 1.66%, compared to 1.70% at December 31, 2023.
▪Book value per share increased to $7.17, compared to $7.14 at December 31, 2023.
▪Capital position remains well-capitalized with a 12.47% Tier 1 Leverage Ratio compared to 11.82% as of December 31, 2023.

Dennis Woods, President and Chief Executive Officer, stated, “Our first quarter 2024 earnings were negatively impacted by our increased deposit and borrowing costs. We continue to experience modest deposit balance outflows, but we have not lost deposit customer accounts. Our management team is pleased with our ability to maintain our net interest margin above four percent in this highly competitive deposit market.”

Provided at the end of this press release is a reconciliation of Core Net Income, as a non-GAAP measure, to Net Income. This reconciliation excludes Non-Core items such as the Fair Value Adjustment for TRUPs. Management believes that financial results are more comparative excluding the impact of such non-core items.

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Results of Operations

For the quarter ended March 31, 2024, the Company reported net income of $4.2 million and earnings per basic and diluted share of $0.24, compared to net income of $6.1 million and $0.36 per basic and diluted share for the quarter ended March 31, 2023. Net income for the quarter ended March 31, 2024 decreased 32.1% to $4.2 million, compared to the quarter ended March 31, 2023. The decrease is primarily the result of a $1.2 million increase in interest expense on short-term borrowings and a $380,000 increase in interest expense on deposits, partially offset by an increase of $481,000 in loan interest income and fees and a $826,000 decrease in the provision for income taxes. ROAE for the quarter ended March 31, 2024 was 13.51%, compared to 22.05% for the quarter ended March 31, 2023. ROAA was 1.40% for the quarter ended March 31, 2024, compared to 1.95% for the quarter ended March 31, 2023.

The annualized average cost of deposits was 0.72% for the quarter ended March 31, 2024, compared to 0.48% for the quarter ended March 31, 2023. Average interest-bearing deposits decreased 12.9% between the periods ended March 31, 2023 and 2024, from $689.7 million to $601.0 million, respectively.

Net interest income before the provision for credit losses for the quarter ended March 31, 2024, totaled $11.7 million, a decrease of $1.2 million, or 9.51%, from the $12.9 million reported for the same period ended March 31, 2023. The Company’s net interest margin decreased from 4.51% for the quarter ended March 31, 2023 to 4.35% for the quarter ended March 31, 2024. The decrease in the net interest margin is due to increases in average deposit costs and short-term borrowing costs, partially offset by increases in yields on investment securities, loans, and interest-bearing deposits at the Federal Reserve Bank. Loan yields increased from 5.56% to 6.00% between the two periods while the cost of interest-bearing liabilities increased from 0.92% to 1.82% between the two periods.

Noninterest income for the quarter ended March 31, 2024 totaled $1.1 million, a decrease of $395,000 when compared to the $1.4 million reported for the quarter ended March 31, 2023. This decrease resulted primarily from a $627,000 change in the fair value of TRUPs. For the quarter ended March 31, 2024, a loss on the fair value of TRUPs of $294,000 was recorded, compared to a gain of $333,000 for the same period in 2023. The change in the fair value of TRUPs reflected in noninterest income was caused by fluctuations in the Secured Overnight Financing Rate (SOFR) yield curve. Other noninterest income increased $244,000 between the two periods.

For the quarter ended March 31, 2024, noninterest expense totaled $6.7 million, an increase of $498,000 compared to $6.2 million for the quarter ended March 31, 2023. On a year-over-year comparative basis, noninterest expense increased due to increases of $343,000 in professional fees and $238,000 in salaries and employee benefits. Professional fees increased primarily due to increases in service contract expense related to information technology services. Salaries and employee benefits expense increased due to increases in salaries, group insurance costs, and bonus expense.

The efficiency ratio for the quarter ended March 31, 2024 increased to 52.96%, compared to 43.48% for the quarter ended March 31, 2023. This deterioration was due to a combination of decreases in interest and non-interest income income and an increase in noninterest expense.

The Company recorded an income tax provision of $1.7 million for the quarter ended March 31, 2024, compared to $2.5 million for the same period in 2023. The effective tax rate for the quarter ended March 31, 2024 was 28.9%, compared to 29.2% for the quarter ended March 31, 2023.

Balance Sheet Review

Total assets decreased $4.6 million, or 0.4%, between December 31, 2023 and March 31, 2024. Gross loan balances increased $9.6 million, investment securities decreased $16.1 million, and overnight balances held at the Federal Reserve Bank increased $1.7 million. Increases in gross loans included increases of $7.8 million in real estate mortgage loans and $3.1 million in commercial and industrial loans, offset by decreases of $781,000 in installment loans, $745,000 in agricultural loans, and $31,000 in real estate construction and development loans. Declines in the investment portfolio were the result of the maturity of $12.5 million in treasury securities and $2.8 million in paydowns. Total cash and cash equivalents increased $2.2 million between December 31, 2023 and March 31, 2024. Unfunded loan commitments increased from $183.5 million at December 31, 2023 to $190.3 million at March 31, 2024. OREO balances totaled $4.6 million at December 31, 2023 and March 31, 2024.

Total deposits decreased $48.5 million, or 4.8%, to $955.9 million during the quarter ended March 31, 2024. This was due to decreases of $50.1 million in noninterest-bearing deposits, partially offset by increases of $1.5 million in interest bearing deposits. NOW and money market accounts increased $4.1 million, time deposits increased $1.0 million, and savings accounts decreased $3.5 million. In total, NOW, money market and savings accounts increased 0.1% to $530.0 million at March 31,
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2024, compared to $529.4 million at December 31, 2023. Noninterest bearing deposits decreased 12.4% to $353.2 million at March 31, 2024, compared to $403.2 million at December 31, 2023. Core deposits, which are comprised of noninterest bearing deposits, NOW, money market, savings accounts, and time deposits less than $250,000, decreased $52.3 million.

Shareholders’ equity at March 31, 2024 totaled $124.2 million, an increase of $1.6 million from the $122.5 million reported at December 31, 2023. The increase in equity was the result of $4.2 million in net income, partially offset by an increase of $637,000 in accumulated other comprehensive loss and $2.1 million in dividend payments. At March 31, 2024, accumulated other comprehensive loss totaled $15.7 million, compared to $15.0 million at December 31, 2023. The increase in accumulated other comprehensive loss was primarily the result of increases in net unrealized losses on investment securities of $753,000 and was offset by an increase of $109,000 in the fair value of TRUPs, net of tax, recorded through other comprehensive income caused by a change in market credit spreads during the quarter ended March 31, 2024. Changes in unrealized losses on the investment portfolio are attributed to changes in interest rates, not credit quality. The Company does not intend to sell, and it is more likely than not that it will not be required to sell, any securities held at an unrealized loss.

The Board of Directors of United Security Bancshares declared a cash dividend on common stock of 0.12 per share on March 26, 2024. The dividend is payable on April 22, 2024, to shareholders of record as of April 8, 2024, and is included in other liabilities as of March 31, 2024. No assurances can be provided as to the amount and/or declaration and payment of future dividends, if any. The Company continues to be well-capitalized and expects to maintain adequate capital levels.

Credit Quality

The Company recorded a provision for credit losses of $173,000 for the quarter ended March 31, 2024, compared to $493,000 reversal of provision for the quarter ended March 31, 2023. The provision recorded during the first quarter 2024 was primarily driven by charge-offs within the student loan portfolio. Net loan charge-offs totaled $289,000 for the quarter ended March 31, 2024, compared to $434,000 for the quarter ended March 31, 2023, and related primarily to student loans for both periods.

The Company’s allowance for credit losses totaled 1.66% of the loan portfolio at March 31, 2024, compared to 1.70% at December 31, 2023. Management considers the allowance for credit losses at March 31, 2024 to be adequate.

Non-performing assets, comprised of nonaccrual loans, loan modifications, other real estate owned through foreclosure (OREO), and loans more than 90 days past due and still accruing interest, decreased $110,000 between December 31, 2023 and March 31, 2024 to $16.3 million. As a percentage of total assets, non-performing assets decreased from 1.36% at December 31, 2023 to 1.35% at March 31, 2024. The decrease in non-performing assets is primarily attributed to a decrease of $252,000 in loans past due more than 90 days and still accruing, offset by an increase of $142,000 in nonaccrual loans. OREO balances remained at $4.6 million at March 31, 2024 and December 31, 2023.

About United Security Bancshares

United Security Bancshares (NASDAQ: UBFO) is the holding company for United Security Bank, which was founded in 1987. United Security Bank is headquartered in Fresno and operates 12 full-service branch offices in Fresno, Bakersfield, Campbell, Caruthers, Coalinga, Firebaugh, Mendota, Oakhurst, San Joaquin, and Taft, California. Additionally, United Security Bank operates Commercial Real Estate Construction, Commercial Lending, and Consumer Lending departments. For more information, please visit www.unitedsecuritybank.com.

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Non-GAAP Financial Measures

This press release and the accompanying financial tables contain a non-GAAP financial measure (net income before non-Core) within the meaning of the Securities and Exchange Commission’s Regulation G. In the accompanying financial table, the Company has provided a reconciliation of this non-GAAP financial measure to the most directly comparable GAAP financial measure. The Company’s management believes that this non-GAAP financial measure provides useful information about the Company’s results of operations and/or financial position to both investors and management. The Company provides this non-GAAP financial measure to investors to assist them in performing their analysis of its historical operating results. The non-GAAP financial measure shows the Company’s operating results before consideration of certain adjustments and, consequently, this non-GAAP financial measure should not be construed as an alternative to net income as an indicator of the Company’s operating performance, as determined in accordance with GAAP. The Company may calculate this non-GAAP financial measure differently than other companies.

Forward-Looking Statements

This press release may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and the Company intends such statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts and often include the words “believe,” “expect,” “anticipate,” “intend,” “plan,” “estimate,” or words of similar meaning, or future or conditional verbs such as “will,” “would,” “should,” “could,” or “may.” Forward-looking statements are based on management’s knowledge and belief as of today and are not guarantees of future performance, nor should they be relied upon as representing management’s views as of any subsequent date. Forward-looking statements are subject to risks and uncertainties and actual results may differ materially from those presented. Factors that might cause such differences, some of which are beyond the Company’s ability to control or predict, include, but are not limited to: (1) adverse developments with respect to U.S. or global economic conditions and other uncertainties, including the impact of supply chain disruptions, inflationary pressures, labor shortages, and global conflict and unrest; (2) changes in general economic and financial market conditions, either nationally or locally; (3) fiscal policies of the U.S. government, including interest rate policies of the Board of Governors of the Federal Reserve System; (4) changes in banking laws or regulations including the implementation of increased capital requirements for financial institutions; (5) increased competition in the Company’s markets, impacting the ability to execute its business plans; (6) loss of or inability to attract key personnel; (7) unanticipated deterioration in our loan portfolio, credit losses, and the sufficiency of our allowance for credit losses; (8) drought, earthquakes, floods or other natural disasters impacting the local economy and/or the condition of real estate collateral; (9) the impact of technological changes and the ability to develop and maintain secure and reliable electronic systems including failures in or breaches of the Company’s operational and/or security systems or infrastructure; (10) the failure to maintain effective controls over our financial reporting; (11) the quality and quantity of our deposits; (12) adverse developments in the financial services industry generally such as the bank failures in 2023 and any related impact on depositor behavior or investor sentiment; (13) risks related to the sufficiency of liquidity; (14) the possibility that our recorded goodwill could become impaired which may have an adverse impact on our earnings and capital, and (15) changes in accounting policies or procedures.

The Company does not undertake (and expressly disclaims) any obligation to publicly revise or update these forward-looking statements to reflect subsequent events or circumstances except as may be required by law. For a more complete discussion of these risks and uncertainties, see the Company’s Annual Report on Form 10-K, for the year ended December 31, 2023, and particularly the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Readers should carefully review all disclosures the Company files from time to time with the Securities and Exchange Commission.
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United Security Bancshares
Consolidated Balance Sheets (unaudited)
(In thousands, except share data)March 31, 2024December 31, 2023
Assets
Cash and non-interest-bearing deposits in other banks$41,146 $40,577 
Deposits in Federal Reserve Bank (FRB)1,858 207 
Cash and cash equivalents43,004 40,784 
Investment securities (at fair value)
Taxable available-for-sale (AFS) debt securities, at fair value, net of allowance for credit losses of $0 (amortized cost of $186,820 and $201,845, respectively)
162,941 179,016 
Tax-exempt available-for-sale (AFS) debt securities, at fair value, net of allowance for credit losses of $0 (amortized cost of $2,539 and $2,544, respectively)
2,225 2,250 
Marketable equity securities3,397 3,354 
Total investment securities168,563 184,620 
Loans 930,927 921,341 
Unearned fees and unamortized loan origination costs - net(1,514)(1,299)
Allowance for credit losses(15,451)(15,658)
Net loans913,962 904,384 
Premises and equipment - net9,204 9,098 
Accrued interest receivable8,434 7,928 
Other real estate owned (OREO)4,582 4,582 
Goodwill4,488 4,488 
Deferred tax assets - net14,409 14,055 
Cash surrender value of life insurance - net22,091 21,954 
Investment in limited partnerships3,400 3,200 
Operating lease right-of-use assets1,177 1,338 
Other assets13,090 14,614 
Total assets$1,206,404 $1,211,045 
Liabilities and Shareholders’ Equity
Deposits  
Noninterest-bearing$353,151 $403,225 
Interest-bearing602,783 601,252 
Total deposits955,934 1,004,477 
Short-term borrowings103,000 62,000 
Operating lease liabilities1,272 1,437 
Other liabilities10,666 9,376 
Junior subordinated debentures (at fair value)11,348 11,213 
Total liabilities1,082,220 1,088,503 
Shareholders’ Equity
Common stock, no par value; 20,000,000 shares authorized; issued and outstanding: 17,315,195 at March 31, 2024 and 17,167,895 at December 31, 2023
60,792 60,585 
Retained earnings79,067 76,995 
Accumulated other comprehensive loss, net of tax(15,675)(15,038)
Total shareholders’ equity124,184122,542
Total liabilities and shareholders’ equity$1,206,404 $1,211,045 

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United Security Bancshares
Consolidated Statements of Income (unaudited)Three Months Ended
(In thousands, except share and per-share data)March 31, 2024March 31, 2023
Interest Income:
Interest and fees on loans$13,481 $13,000 
Interest on investment securities1,3541,501
Interest on deposits in FRB4458
Total interest income14,879 14,559 
Interest Expense:
Interest on deposits1,7231,343
Interest on other borrowed funds1,442271
Total interest expense3,1651,614
Net Interest Income 11,71412,945
Provision (Reversal of Provision) for Credit Losses173(493)
Net Interest Income after Provision (Reversal) for Credit Losses11,54113,438
Noninterest Income:
Customer service fees706734
Increase in cash surrender value of bank-owned life insurance137 132 
Unrealized gain on fair value of marketable equity securities4343
(Loss) gain on fair value of junior subordinated debentures(294)333
Gain on sale of assets11 — 
Other450206
Total noninterest income1,0531,448
Noninterest Expense:
Salaries and employee benefits3,4983,260
Occupancy expense858963
Data processing111174
Professional fees1,225882
Regulatory assessments173192
Director fees128109
Correspondent bank service charges1219
Net (gain) cost on operation of OREO(12)37
Other745604
Total noninterest expense6,7386,240
Income Before Provision for Taxes5,8568,646
Provision for Taxes on Income1,6952,521
Net Income$4,161$6,125
Net income per common share
Basic$0.24 $0.36 
Diluted$0.24 $0.36 
Weighted average common shares outstanding
Basic17,170,90717,076,510
Diluted17,171,64217,092,460
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United Security Bancshares
Average Balances and Rates (unaudited)Three Months Ended
(In thousands)March 31, 2024March 31, 2023
Average Balances:
Loans (1)$904,392 $947,453 
Securities:
Taxable securities 175,051 209,231 
Tax-exempt securities2,225 2,292 
Total investment securities177,276 211,523 
Interest-bearing deposits in FRB3,218 5,493 
Total interest-earning assets1,084,886 1,164,469 
Allowance for credit losses(15,671)(16,323)
Nonaccrual loans12,083 13,195 
Cash and non-interest-bearing deposits in other banks31,564 36,008 
Other real estate owned4,582 4,582 
Other non-earning assets75,864 78,550 
Total average assets$1,193,308 $1,280,481 
Interest-bearing deposits$601,036 $689,706 
Junior subordinated debentures12,464 12,464 
Short-term borrowings85,436 7,492 
Total interest-bearing liabilities698,936 709,662 
Noninterest-bearing deposits361,671 445,502 
Other liabilities8,773 12,351 
Total liabilities1,069,380 1,167,515 
Total equity123,928 112,966 
Total liabilities and equity$1,193,308 $1,280,481 
Average Rates:
Loans (1)6.00 %5.56 %
Taxable securities3.08 %2.88 %
Tax-exempt securities2.35 %2.30 %
Interest-bearing deposits in FRB5.50 %4.28 %
Earning assets5.52 %5.07 %
Interest bearing deposits1.15 %0.78 %
Total deposits0.72 %0.48 %
Short-term borrowings5.80 %4.87 %
Junior subordinated debentures6.74 %5.89 %
Total interest-bearing liabilities1.82 %0.92 %
Net interest margin (2)4.35 %4.51 %
(1) Average loans do not include nonaccrual loans but do include interest income recovered from previously charged-off loans, unearned fees, and unamortized loan origination costs.
(2) Net interest margin is computed by dividing annualized net interest income by average interest-earning assets.

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United Security Bancshares
Condensed - Consolidated Balance Sheets (unaudited)
(In thousands)March 31, 2024December 31, 2023September 30, 2023June 30, 2023March 31, 2023
Cash and cash equivalents$43,004 $40,784 $35,297 $58,403 $45,153 
Investment securities168,563 184,620 187,857 205,521 208,914 
Loans, net of unearned fees and unamortized loan origination costs929,413 920,042 972,871 960,121 942,727 
Allowance for credit losses(15,451)(10,063)(15,658)(15,649)(16,110)(15,622)
Net loans913,962 904,384 957,222 944,011 927,105 
Other assets80,875 81,257 92,716 80,884 80,022 
Total assets$1,206,404 $1,211,045 $1,273,092 $1,288,819 $1,261,194 
Non-interest-bearing deposits$353,151 $403,225 $386,258 $476,387 $394,745 
Interest-bearing deposits602,783 601,252 601,373 570,167 716,387 
Total deposits955,934 1,004,477 987,631 1,046,554 1,111,132 
Other liabilities126,286 84,026 170,433 126,585 37,154 
Total liabilities1,082,220 1,088,503 1,158,064 1,173,139 1,148,286 
Total shareholders’ equity124,184 122,542 115,028 115,680 112,908 
Total liabilities and shareholder’s equity$1,206,404 $1,211,045 $1,273,092 $1,288,819 $1,261,194 

United Security Bancshares
Condensed - Consolidated Statements of Income (unaudited)
For the Quarters Ended:
(In thousands)March 31, 2024December 31, 2023September 30, 2023June 30, 2023March 31, 2023
Total interest income$14,879 $15,405 $15,328 $15,086 $14,559 
Total interest expense3,165 3,454 3,407 2,582 1,614 
Net interest income11,714 11,951 11,921 12,504 12,945 
Provision (reversal) for credit losses173 873 — 1,091 (493)
Net interest income after provision (reversal) for credit losses11,541 11,078 11,921 11,413 13,438 
Total non-interest income1,053 2,997 114 1,011 1,448 
Total non-interest expense6,738 6,872 6,625 6,207 6,240 
Income before provision for taxes5,856 7,203 5,410 6,217 8,646 
Provision for taxes on income1,695 1,803 1,557 1,800 2,521 
Net income$4,161 $5,400 $3,853 $4,417 $6,125 

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United Security Bancshares
Nonperforming Assets (unaudited)
(Dollars in thousands)March 31, 2024December 31, 2023
Real estate - construction and development$11,553 $11,403 
Agricultural37 45 
Total nonaccrual loans11,590 11,448 
Loans past due 90 days and still accruing174 426 
Total nonperforming loans11,764 11,874 
Other real estate owned4,582 4,582 
Total nonperforming assets$16,346 $16,456 
Nonperforming loans to total gross loans1.26 %1.29 %
Nonperforming assets to total assets1.35 %1.36 %
Allowance for credit losses to nonperforming loans131.34 %131.87 %


United Security Bancshares
Selected Financial Data (unaudited)
Three months ended March 31,
(Dollars in thousands, except per share amounts)20242023
Return on average assets1.40 %1.95 %
Return on average equity13.51 %22.05 %
Efficiency ratio (1)52.96 %43.48 %
Annualized net charge-offs to average loans0.13 %0.18 %
March 31, 2024December 31, 2023
Shares outstanding - period end17,315,195 17,167,895 
Book value per share$7.17 $7.14 
Tangible book value per share$6.91 $6.88 
Individually evaluated loans$11,967 $11,828 
Net loan-to-deposit ratio95.61 %90.04 %
Allowance for credit losses to total loans1.66 %1.70 %
Tier 1 capital to adjusted average assets (leverage ratio):
Company12.47 %11.82 %
Bank12.50 %11.83 %
(1) Efficiency ratio is total noninterest expense divided by net interest income before provision for credit losses plus total noninterest income.
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United Security Bancshares
Net Income before Non-Core Reconciliation
Non-GAAP Information (unaudited)
Three months ended March 31,
(Dollars in thousands)20242023Change $Change %
Net income$4,161 $6,125 $(1,964)(32.1)%
Junior subordinated debenture (TRUPs) fair value adjustment (1)
(294)333 
Income tax effect87 (97)
Non-core items net of taxes(207)236 
Non-GAAP core net income$4,368 $5,889 $(1,521)(25.8)%

(1)Junior subordinated debenture fair value adjustment is not part of core income and depending upon market rates, can add to or subtract from core income and mask non-GAAP core income change.



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