| Valuation method | Value, $ | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | 33.01 | 207 |
| Intrinsic value (DCF) | 19.61 | 83 |
| Graham-Dodd Method | 4.37 | -59 |
| Graham Formula | 6.34 | -41 |
United Security Bancshares (NASDAQ: UBFO) is a regional bank holding company that operates through its subsidiary, United Security Bank, providing a comprehensive suite of commercial banking services in California. Founded in 1987 and headquartered in Fresno, the company serves businesses, professionals, and individuals with deposit products, lending solutions, and digital banking services. Its offerings include personal and business checking accounts, savings accounts, commercial and industrial loans, real estate mortgages, and agricultural loans. With 12 full-service branches across key California markets like Fresno, Bakersfield, and Oakhurst, UBFO emphasizes community-focused banking while leveraging modern conveniences such as online/mobile banking and interactive teller machines. As a niche player in the competitive regional banking sector, UBFO maintains a strong local presence with $152M in market capitalization and a conservative risk profile (beta: 0.35). The bank’s diversified loan portfolio and stable deposit base position it as a resilient financial services provider in California’s Central Valley region.
United Security Bancshares presents a conservative investment opportunity with stable fundamentals, evidenced by $14.8M net income and $0.86 diluted EPS in its latest fiscal year. The company’s low beta (0.35) suggests lower volatility compared to broader financial markets, appealing to risk-averse investors. Strengths include a solid liquidity position ($56.2M cash) and consistent profitability (30.4% net margin), supported by a diversified loan portfolio. However, its small market cap ($152M) and regional concentration in California expose it to localized economic risks, including agricultural sector volatility. The 2.8% dividend yield (based on $0.48/share) adds income appeal, but investors should monitor rising debt levels ($14.7M) and competitive pressures from larger regional banks. UBFO’s investment thesis hinges on its ability to maintain niche market share and loan quality in a rising-rate environment.
United Security Bancshares competes as a community-focused regional bank, differentiating itself through hyper-localized service and relationship banking in California’s Central Valley. Its competitive advantage lies in deep regional expertise, particularly in agricultural and small business lending—a niche where larger banks may lack specialization. The bank’s 12-branch footprint allows cost-efficient operations compared to national peers, while its interactive teller machines and digital services mitigate scale disadvantages. However, UBFO faces intense competition from both larger regional banks (e.g., Bank of the Sierra) with greater resources and fintech disruptors eroding traditional banking margins. Its loan portfolio’s concentration in real estate (56% of total loans) and agriculture exposes it to sector-specific risks, though this specialization also creates sticky client relationships. Capital adequacy remains sound (Tier 1 leverage ratio ~9%), but its limited geographic diversification and smaller balance sheet constrain growth opportunities compared to multi-state competitors. UBFO’s conservative underwriting (non-performing loans at 0.5% of total loans) supports asset quality but may limit yield expansion in competitive lending markets.