United Security Bancshares Annual Report: A Simple Guide

This guide breaks down how United Security Bancshares performed this year. Use this as a cheat sheet to decide if this company fits your investment goals.

1. What does this company do?

United Security Bancshares is a community bank based in Fresno, California, operating as the parent company for United Security Bank. With 13 branches and two loan offices across four California counties, the bank serves as a financial partner for the Central Valley’s agricultural and real estate sectors. It generates revenue primarily through the interest spread between the deposits it holds and the loans it provides to local businesses and individuals.

2. Financial performance: The "Dollars and Cents"

It was a year of transition. While the bank maintained a healthy interest margin of 3.42%, increased operating costs and higher reserves for potential loan losses impacted net income.

• Profit: The bank earned $12.3 million in 2025, compared to $14.8 million in 2024. Earnings per share for the year were $0.98.
• Efficiency: Operating costs rose 11.7% to $31.6 million, driven by investments in digital technology and staffing.
• Loan and Deposit Trends: Total loans were $915.4 million, reflecting a disciplined approach to lending. Total deposits grew 2.9% to $1.09 billion, providing a stable foundation for the bank’s cash position.
• Dividends: The bank returned value to shareholders by paying $0.48 per share in dividends, representing approximately 49% of its annual profit.

3. Major wins and challenges

The defining event for the company is the proposed merger with Community West Bancshares. Announced in December 2025, this all-stock deal is valued at approximately $215 million. The goal is to create a larger institution with over $2.5 billion in assets, which management expects will improve operational efficiency and expand the bank's geographic footprint. The deal is slated for completion by mid-2026.

4. Financial health

The bank remains "well-capitalized," with a Tier 1 Leverage Ratio of 10.8%—more than double the 5% regulatory requirement. This provides a significant cushion against potential financial volatility. Additionally, the bank owns its headquarters and several branch locations, which helps control occupancy costs and strengthens its balance sheet.

5. Key risks

• Merger Execution: The transition involves complex integration processes. Delays or cultural friction could impact the realization of projected cost savings.
• Regional Concentration: Because the bank is heavily tied to the Central Valley, it is sensitive to local economic factors, including agricultural cycles, water availability, and commodity price fluctuations.
• Loan Quality: The bank increased its provision for loan losses to $5.6 million, up from $3.0 million the previous year, reflecting a cautious outlook on borrower repayment capacity.
• Digital Security: As the bank expands its online services, it faces ongoing cybersecurity risks. The bank currently allocates $1.2 million annually to security infrastructure, a figure that is expected to grow.

6. Future outlook

The bank’s trajectory is currently centered on the Community West merger. If the integration proceeds as planned, management anticipates a 15% reduction in operating expenses by the end of 2027.

Investor Checklist:

• Monitor Merger Milestones: Watch for regulatory approvals and integration updates leading up to the mid-2026 target date.
• Track Interest Rates: Observe how broader interest rate trends impact the bank's interest margin.
• Watch Loan Performance: Keep an eye on the provision for loan losses in quarterly reports to see if borrower stress in the Central Valley stabilizes or intensifies.