UNITED SECURITY BANCSHARES (: UBFO)

United Security Bancshares is a bank holding company that owns and oversees United Security Bank, a California state chartered commercial bank, and its subsidiaries York Monterey Properties and USB Capital Trust II. The company’s primary business is to provide capital, oversight, and strategic support to enable the bank to deliver a full range of banking services to individuals and businesses in central California. United Security Bank operates through a network of branches, lending offices, and interactive teller machines across Fresno, Madera, Kern, and Santa Clara Counties. The holding company does not engage in separate commercial activities; its earnings are derived from the performance of its banking subsidiary.

Revenue is generated mainly through interest income on the bank’s loan portfolio, service charges on deposit accounts, and fees for ancillary services such as wire transfers, online banking, and cash management. The loan portfolio includes real estate mortgages, commercial and industrial loans, agricultural loans, and construction loans, with a focus on secured lending backed by real estate, accounts receivable, inventory, or equipment. Deposit products consist of personal and business checking and savings accounts, money market accounts, and certificates of deposit, which provide a stable source of low cost funding. Fee income arises from account maintenance, transaction processing, and wealth management referrals to correspondent banks. These revenue streams are consolidated at the holding company level and distributed to shareholders as dividends after regulatory capital requirements are met.

United Security Bancshares operates in a highly competitive banking environment in California’s Central Valley and Silicon Valley regions, where it faces competition from large national banks, regional banks, credit unions, and financial technology firms. The bank’s market share reflects its niche position: as of June 30, 2025, it ranked 9th in deposit share in Fresno County at 4.75%, 10th in Madera County at 3.31%, and held smaller shares in Kern and Santa Clara Counties, resulting in a combined regional rank of 17th among 53 FDIC insured institutions. Its competitive advantages include a deep understanding of local agricultural and small business cycles, personalized relationship management, and a community oriented approach that emphasizes local decision making. The bank maintains strong capital ratios, exceeding regulatory minimums for tier 1 leverage and total risk based capital, which supports its ability to extend credit and absorb losses. Additionally, the announced merger with Community West Bancshares, expected to close in the second quarter of 2026, will expand its footprint and increase its scale while preserving its focus on relationship banking.

The bank serves a diverse customer base that includes individuals seeking personal banking, small and medium sized enterprises requiring working capital and equipment financing, agricultural producers needing land and equipment loans, and professionals such as doctors, attorneys, and accountants who utilize business checking and cash management services. Its lending activities are concentrated in the Central Valley, with particular emphasis on farms, vineyards, and related agribusinesses in Fresno and Madera Counties, as well as oil and gas support services in Kern County. While the filing does not disclose individual customer names, it indicates that the bank’s relationships are primarily with privately held businesses and local residents rather than large corporate clients. This focus allows the bank to tailor its products and services to the specific needs of its community.