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UNITED SECURITY BANCSHARES (UBFO)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 2025 EPS of $0.23 and net income of $4.0M rose 5% YoY, driven by lower provision for credit losses and sharply lower short‑term borrowing costs; net interest margin held at 4.35% while efficiency ratio improved sequentially to 52.80% .
  • Noninterest income declined YoY on smaller TruPS fair value gains, partially offset by a $0.241M realized gain on a $3.0M TruPS partial redemption; management also executed another $3.0M redemption on Oct 1 with an expected $0.240M gain in Q4 .
  • Credit costs moderated: provision fell to $0.95M vs $1.56M YoY, with student loan charge‑off intensity easing; NPA ratio improved to 1.14%, allowance remained robust at 1.69% of loans .
  • Board declared a $0.12 dividend payable Oct 21; stock reacted positively post‑print, up ~4.5% since earnings per Zacks/Yahoo coverage .
  • No S&P Global Wall Street consensus for EPS or revenue was available for UBFO this quarter; estimate comparison not applicable (Values retrieved from S&P Global).

What Went Well and What Went Wrong

What Went Well

  • Net interest income increased 5.1% YoY to $12.4M as funding costs fell; NIM improved to 4.35% with cost of funds down to 1.13% .
  • Credit costs moderated: provision dropped to $0.95M (vs $1.56M YoY), reflecting fewer student loan charge‑offs; ROAA/ROAE improved to 1.29%/11.68% .
  • Strategic capital actions: realized $0.241M gain on $3.0M TruPS redemption and recorded a small fair‑value gain; additional $3.0M redemption on Oct 1 to add ~$0.240M gain in Q4 .
  • CEO quote: “We are pleased with our loan growth of $30.0 million this quarter compared to the end of 2024… the magnitude [of student loan charge‑offs] decreased this quarter… which is encouraging.” .

What Went Wrong

  • Noninterest income fell 20% YoY to $1.6M due to lower TruPS fair‑value gains; noninterest expense increased 4% on technology and salary/benefit inflation, nudging efficiency ratio higher YoY .
  • Loan interest and fees decreased slightly YoY to $14.27M; investment securities income also declined; overall total interest income slipped 0.8% YoY .
  • OREO rose to $7.9M YTD on foreclosure of nonaccrual loans; though NPLs declined, OREO balances and student loan portfolio dynamics remain watch points .

Financial Results

MetricQ3 2024Q1 2025Q2 2025Q3 2025
Net Income ($USD Millions)$3.829 $2.682 $2.169 $4.023
Diluted EPS ($USD)$0.22 $0.16 $0.13 $0.23
Net Interest Income ($USD Millions)$11.812 $12.296 $11.863 $12.419
Total Noninterest Income ($USD Millions)$2.023 $1.360 $0.758 $1.618
Provision for Credit Losses ($USD Millions)$1.558 $2.300 $1.858 $0.948
Net Interest Margin %4.20% 4.58% 4.35% 4.35%
Efficiency Ratio %52.47% 55.90% 61.34% 52.80%
ROAA %1.24% 0.91% 0.73% 1.29%
ROAE %11.63% 8.19% 6.46% 11.68%

Revenue composition (non‑GAAP “operating revenue” construct not disclosed; shown by components):

ComponentQ3 2024Q1 2025Q2 2025Q3 2025
Total Interest Income ($USD Millions)$15.755 $15.283 $15.004 $15.626
Interest Expense ($USD Millions)$3.943 $2.987 $3.141 $3.207
Net Interest Income ($USD Millions)$11.812 $12.296 $11.863 $12.419
Total Noninterest Income ($USD Millions)$2.023 $1.360 $0.758 $1.618

2025 operating KPIs:

KPIQ1 2025Q2 2025Q3 2025
Annualized Avg Cost of Deposits %1.09% 1.11% 1.12%
Annualized Avg Cost of Funds %1.10% 1.14% 1.13%
Loans, Net ($USD Millions)$905.297 $931.364 $942.113
Total Deposits ($USD Millions)$1,026.213 $1,055.669 $1,075.900
Loan‑to‑Deposit Ratio %89.71% 89.74% 89.07%
Nonperforming Assets / Total Assets %1.19% 1.14% 1.14%
Allowance for Credit Losses / Total Loans %1.66% 1.68% 1.69%
Nonperforming Loans / Total Gross Loans %0.69% 0.63% 0.65%

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Dividend per Share ($)Q4 2025 Pay (Oct 21, 2025)$0.12 declared Jun 24, 2025 $0.12 declared Sep 23, 2025 Maintained
TruPS Redemption (Contract)Q3 2025Partial $3.0M redemption accrued Jul 1 Executed $3.0M redemption with $0.241M gain; additional $3.0M on Oct 1 with ~$0.240M gain to be recorded Q4 Continued execution
Revenue GuidanceFY/QuarterNot provided Not provided Maintained (no guidance)
Margin Guidance (NIM)FY/QuarterNot provided Not provided Maintained (no guidance)
OpEx GuidanceFY/QuarterNot provided Not provided Maintained (no guidance)
Tax RateFY/QuarterNot provided Effective rate 28.86% in Q3 (actual) Informational (no guidance)

Earnings Call Themes & Trends

Note: No Q3 2025 earnings call transcript was available on the company’s IR site or via our document tools; MarketBeat lists a call time but no transcript link found . Themes below synthesize management disclosures across Q1–Q3 press releases.

TopicPrevious Mentions (Q1 2025)Previous Mentions (Q2 2025)Current Period (Q3 2025)Trend
Student loan portfolio and credit costsElevated charge‑offs following forbearance expirations; allowance deemed adequate Provision spiked to $1.9M; continued elevated student loan charge‑offs Provision fell to $0.95M; “magnitude decreased this quarter” Improving
Funding costs and brokered depositsIntroduced $100M brokered deposits at ~4.55% to optimize funding Avg brokered deposits $100M at 4.55%; cost of funds 1.14% Avg brokered deposits $100M at 4.53%; cost of funds 1.13% Improving (modestly)
Net interest margin (NIM)4.58% on loan yield improvements and lower TruPS/borrowings 4.35% sustained despite higher deposit rates 4.35% stable; liability costs down to 1.81% Stable
Noninterest income (TruPS fair value)$0.270M gain (SOFR curve effect) $(0.317)M loss; noninterest income compressed $0.247M gain + $0.241M redemption gain Mixed to improving
Branch investmentsNew Fresno branch opening targeted Aug 2025; renovations in Firebaugh/Caruthers Same as prior Not reiterated in Q3 release Neutral
Asset quality/NPANPA/Assets 1.19%; OREO increased on foreclosure NPA/Assets 1.14%; OREO elevated NPA/Assets 1.14%; NPLs down; OREO remains higher Stable with better NPLs

Management Commentary

  • Dennis Woods (CEO): “We are pleased with our loan growth of $30.0 million this quarter compared to the end of 2024… While we continue to experience charge‑offs in our student loan portfolio, the magnitude decreased this quarter… which is encouraging.” .
  • Q2 context (CEO): “Elevated student loan charge‑offs continue to be incurred… This was the main cause of the $1.9 million provision… The net interest margin for the quarter was 4.35%, and the equity position remains strong…” .
  • Q1 context (CEO): Macro headwinds (inflation, persistent rates, tariff tensions) and student loan portfolio overview; allowance considered adequate, NIM improved to 4.58% .

Q&A Highlights

  • No Q3 2025 call transcript available; we found no posted transcript on UBFO IR or via filings aggregators. MarketBeat lists a call time, but no transcript link; therefore, Q&A detail is unavailable .

Estimates Context

MetricQ3 2025
EPS Actual ($)$0.23
EPS Consensus ($)N/A*
Revenue Actual ($USD Millions)$14.04
Revenue Consensus ($USD Millions)N/A*

Values retrieved from S&P Global. No consensus EPS or revenue was available for UBFO for Q3 2025; number of estimates not published by SPGI in our query.

Key Takeaways for Investors

  • Positive EPS/NI inflection: sequential EPS rose from $0.13 to $0.23 as credit provision normalized and borrowing costs fell; watch for sustainability if student loan charge‑offs continue to abate .
  • Funding discipline: cost of funds improved to 1.13% and brokered deposit rates declined to 4.53%, supporting NIM resilience at 4.35% despite softer asset yields .
  • Noninterest income variability remains a swing factor due to TruPS fair‑value marks; however, realized gains from ongoing TruPS redemptions provide a near‑term tailwind (another ~$0.240M gain slated for Q4) .
  • Asset quality: NPLs declined and allowance coverage vs NPLs improved materially, but OREO elevated after foreclosure—monitor resolution timelines and any incremental expenses .
  • Operating leverage improved versus Q2: efficiency ratio fell from 61.34% to 52.80% as noninterest income recovered and credit costs moderated; continued cost control in technology and personnel will be key .
  • Capital and shareholder returns: equity grew to $137.4M with tangible book rising; dividend maintained at $0.12—yield support likely remains a stock driver in absence of Street coverage .
  • With no SPGI consensus, price reaction hinges on internal momentum (credit normalization, NIM stability) and dividends; near‑term trading bias is constructive if Q4 TruPS gains and moderated provisions persist .

Appendix: Additional Data Points

  • Dividend declaration: $0.12 per share, payable Oct 21, 2025; ex/record Oct 3, 2025 .
  • Balance sheet: Loans (net) $942.1M; deposits $1.0759B; shareholders’ equity $137.4M at Sep 30, 2025 .
  • Tax rate: Q3 effective tax rate 28.86% .

Notes on prior quarters (for trend analysis):

  • Q2 2025: EPS $0.13; provision $1.86M; efficiency 61.34%; noninterest income $0.76M with $(0.317)M TruPS fair‑value loss .
  • Q1 2025: EPS $0.16; provision $2.30M; NIM 4.58%; $0.270M TruPS fair‑value gain; dividend declared Mar 25 .

Sources: Q3 2025 Form 8‑K Item 2.02 and Exhibit 99.1 press release and financial tables ; Q2 2025 8‑K press release and tables –; Q1 2025 8‑K press release and tables –; UBFO IR newsroom and Business Wire dividend release ; MarketBeat actual revenue display .