The following are the condensed financial statements of United Security Bancshares and should be read in conjunction with the consolidated financial statements:

United Security Bancshares – (parent only)
Balance Sheets - December 31, 2012 and 2011
(In thousands)	2012		2011
Assets
Cash and equivalents	$	296	$	16
Investment in bank subsidiary		79,969		72,383
Investment in bank stock		0		24
Other assets		562		515
Total assets	$	80,827	$	72,938

Liabilities & Shareholders' Equity
Liabilities:
Junior subordinated debt securities (at fair value) 12/31/07)	$	10,068	$	9,027
Accrued interest payable		-		8
Deferred taxes		1,239		1,594
Other liabilities		79		136
Total liabilities		11,386		10,765

Shareholders' Equity:
Common stock, no par value
20,000,000 shares authorized, 14,217,303 and 13,531,832
issued and outstanding, in 2012 and 2011		43,173		41,435
Retained earnings		26,179		21,447
Accumulated other comprehensive loss		89		(709	)
Total shareholders' equity		69,441		62,173
Total liabilities and shareholders' equity	$	80,827	$	72,938

United Security Bancshares – (parent only)	Years ended December 31,
Income Statements
(In thousands)	2012			2011
Income
(Loss) Gain on fair value option of financial assets		(774	)		1,863
Total (loss) income		( 774	)		1,863
Expense
Interest expense		270			248
Other expense		201			136
Total expense		471			384
(Loss) Income before taxes and equity in
undistributed income of subsidiary		(1,245	)		1,479
Income tax (benefit) expense		(512	)		(127	)
Deficit in undistributed income of subsidiary		6,802			(12,418	)
Net Income (loss)	$	6,069		$	(10,812	)

United Security Bancshares – (parent only)	Years ended December 31,
Statement of Cash Flows
(In thousands)	2012			2011
Cash Flows From Operating Activities
Net income (loss)	$	6,069		$	(10,812	)
Adjustments to reconcile net income (loss) to cash
provided by operating activities:
(Equity) deficit in undistributed income of subsidiary		(6,802	)		12,418
Deferred taxes		(376	)		(572	)
Write-down of other investments		68			0
Loss on sale of investment in bank stock		0			2
Gain on fair value option of financial liability		774			(1,863	)
Net change in other assets/liabilities		243			790
Net cash (used in) operating activities		(24	)		(37	)

Cash Flows From Investing Activities
Investment in bank stock		9			12
Proceeds from sale of investment in title company		0			0
Net cash provided by investing activities		9			12

Cash Flows From Financing Activities
Proceeds from sale investment in bank stock		295			0
Proceeds from note payable		0			0
Net cash provided by financing activities		295			0

Net increase (decrease) in cash and cash equivalents		280			(25	)
Cash and cash equivalents at beginning of year		16			41
Cash and cash equivalents at end of year	$	296		$	16

Supplemental cash flow disclosures
Noncash financing activities:
Dividends declared not paid	$	0		$	0