United Security Bancshares reported a net income of $12.3 million for the fiscal year ending December 31, 2025, a decrease from $14.8 million in the previous year. This decline is attributed to increased interest expenses on deposits and a higher provision for credit losses, which rose to $5.6 million from $3.0 million in 2024. The company's net interest margin improved to 4.41%, up from 4.26% in 2024, while total interest income slightly increased to $60.8 million, compared to $60.7 million in the prior year. Noninterest income also saw a rise, reaching $5.1 million, up from $4.7 million in 2024.
In terms of operational changes, United Security Bancshares announced a definitive merger agreement with Community West Bancshares on December 16, 2025. This all-stock merger is expected to close in the second quarter of 2026, pending shareholder approvals. The merger aims to enhance the combined entity's market presence and operational efficiencies. As of December 31, 2025, the company operated 13 branches across California, with total deposits increasing by 2.9% to $1.09 billion, while total loans decreased by 1.4% to $915.4 million.
The company’s customer base and engagement metrics reflect a stable operational environment, with noninterest-bearing deposits increasing by 17.14% year-over-year. However, the loan portfolio showed a decline, particularly in commercial and industrial loans, which decreased by 27.51%. The company’s allowance for credit losses as a percentage of total loans was 1.62% at year-end, down from 1.72% in 2024, indicating a slight improvement in asset quality despite the increase in charge-offs, particularly in the student loan segment.
Looking ahead, United Security Bancshares is focused on maintaining a balanced asset mix to generate reasonable returns while managing risks associated with economic conditions, particularly in California's Central Valley, where agricultural performance can significantly impact the bank's operations. The company is also monitoring inflationary pressures and potential changes in monetary policy, which could affect interest rates and overall financial performance. The management remains optimistic about the merger's potential benefits and is committed to enhancing shareholder value through strategic growth initiatives.
About UNITED SECURITY BANCSHARES
United Security Bancshares is a California bank holding company that owns United Security Bank, which provides a full range of commercial banking services, including deposit accounts, real estate, industrial, agricultural, and construction loans. Serving primarily California communities, it emphasizes personalized service, competitive interest rates, and digital banking solutions. The company operates within a highly regulated environment, focusing on safety, soundness, and compliance with banking laws and capital standards.
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