Executive Summary

Q4 2024 EPS of $0.15 fell 32% QoQ and 52% YoY as noninterest income swung sharply negative on TRUPs mark-to-market losses and credit costs rose; net interest margin (NIM) improved slightly to 4.22% and deposits grew 5% YoY, but operating efficiency deteriorated materially to 60.8% .
The primary earnings delta was a ~$1.6M YoY swing in the fair value adjustment of junior subordinated debentures (TRUPs) (loss of $0.755M vs gain of $0.826M a year ago), alongside higher deposit interest expense (+$1.3M YoY) and a higher provision for credit losses (+$0.34M YoY) .
Funding progress continued: total deposits reached $1.06B (+5.3% YoY), albeit with mix shift toward interest-bearing (brokered DDA averaged $100M at a 4.91% rate in Q4); average cost of funds decreased YoY to 1.17% despite higher deposit pricing .
No explicit forward guidance was provided; the Board maintained the quarterly dividend at $0.12 (declared Dec 17, payable Jan 17, 2025), consistent with Q3’s $0.12 payout, reinforcing capital strength while near-term earnings remain sensitive to TRUPs marks and credit costs .

What Went Well and What Went Wrong

What Went Well
- NIM expanded to 4.22% vs 4.12% YoY, supported by higher yields and lower short-term borrowing costs; management emphasized resilience despite deposit pricing pressure .
- Core funding base expanded: total deposits +5.3% YoY to $1.06B, helping reduce short-term borrowings and fund loan growth; management highlighted execution in deposit gathering .
- Pipeline/commitments building: undisbursed loan commitments rose to $203.8M at year-end (from $131.7M at Sep 30), positioning for future loan growth; CEO: “Expanding our loan portfolio remains a priority… undisbursed loan commitments grew substantially” .
What Went Wrong
- Noninterest income collapsed to $0.12M (from $2.997M YoY) on TRUPs fair value loss (-$0.755M) vs prior-year gain (+$0.826M) and absence of last year’s $0.907M BOLI proceeds, driving the majority of the EPS shortfall .
- Credit costs elevated: provision for credit losses increased to $1.213M (vs $0.873M YoY), with 2024 full-year provision primarily driven by student loan charge-offs; NPAs rose to 1.42% of assets .
- Operating efficiency deteriorated: efficiency ratio worsened to 60.79% (from 46.40% YoY) as noninterest income fell and expenses rose (salaries/benefits, data processing, sundry losses) .

Financial Results

Note: “Revenue” is defined here as Net Interest Income + Total Noninterest Income (bank proxy).

Metric	Q4 2023	Q3 2024	Q4 2024
Revenue ($MM)	$14.95 = 11.951 + 2.997	$13.84 = 11.812 + 2.023	$11.92 = 11.804 + 0.120
Net Interest Income ($MM)	$11.951	$11.812	$11.804
Total Noninterest Income ($MM)	$2.997	$2.023	$0.120
Provision for Credit Losses ($MM)	$0.873	$1.558	$1.213
Net Income ($MM)	$5.400	$3.829	$2.495
Diluted EPS ($)	$0.31	$0.22	$0.15
Net Interest Margin (%)	4.12%	4.20%	4.22%
Efficiency Ratio (%)	46.40%	52.47%	60.79%
ROAA (%)	1.72%	1.24%	0.81%
ROAE (%)	18.28%	11.63%	7.47%

Balance sheet and KPI snapshot

KPI	Q4 2023	Q3 2024	Q4 2024
Total Assets ($MM)	$1,211.0	$1,255.4	$1,211.7
Loans, net ($MM)	$904.4	$958.6	$912.4
Loans, net of unearned ($MM, EOP)	$920.0	$975.2	$928.5
Total Deposits ($MM)	$1,004.5	$1,065.0	$1,057.6
Noninterest-bearing Deposits ($MM)	$403.2	$360.1	$360.2
Interest-bearing Deposits ($MM)	$601.3	$704.9	$697.5
Avg Cost of Deposits (%)	0.73	1.18	1.11
Avg Cost of Funds (%)	1.24	1.38	1.17
ACL / Loans (%)	1.70	1.69	1.72
Nonperforming Loans / Gross Loans (%)	1.29	1.32	1.36
NPAs / Assets (%)	1.36	1.39	1.42
TRUPs FV gain/(loss) through IS ($MM)	+0.826	+0.661	(0.755)

Estimates vs. Actuals

Wall Street consensus EPS and revenue for Q4 2024 could not be retrieved at this time due to S&P Global API rate limits; we cannot present vs-estimate comparisons. We will update when access is available. Values would be retrieved from S&P Global.

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Dividend per Share	Q1 2025 payment (for Q4 2024)	$0.12 declared Sep 24, 2024 for Oct 23 payment	$0.12 declared Dec 17, 2024 for Jan 17, 2025 payment	Maintained
Financial guidance (revenue/margins/OpEx/credit)	2025	None disclosed	None disclosed	—

No quantitative forward guidance (revenue, margins, credit, OpEx, tax) was provided in the Q4 materials .

Earnings Call Themes & Trends

Note: We did not locate a Q4 2024 earnings call transcript (no transcript in our document catalog; IR site posts the press release but no transcript link) .

Topic	Previous Mentions (Q2 and Q3)	Current Period (Q4)	Trend
Deposit pricing/mix and brokered deposits	Q2: rising deposit costs; began adding $50M brokered DDA; cost of funds 1.24% . Q3: brokered DDA averaged ~$84.8M; deposit cost 1.18%; cost of funds 1.38% .	Brokered deposits averaged $100M at 4.91%; deposit cost 1.11%; cost of funds 1.17% .	Improving cost of funds QoQ; mix more interest-bearing .
Net interest margin	Q2 NIM 4.28% ; Q3 NIM 4.20% .	NIM 4.22% .	Stabilizing/slight improvement .
Credit quality and student loan charge-offs	Q2: provision minimal; charges primarily student loans; ACL 1.61% . Q3: provision $1.56M; NPL ratio 1.32%; NPAs 1.39% .	Provision $1.21M; NPL ratio 1.36%; NPAs 1.42% .	Slightly worse NPAs; elevated provision .
TRUPs fair value impact	Q2: IS loss $(0.225)M . Q3: IS gain +$0.661M .	IS loss $(0.755)M; CEO called it a key earnings swing .	Volatile, negative in Q4 .
Loan growth and pipeline	Q2: net loans +3.19% YTD . Q3: net loans +5.99% YTD .	Undisbursed commitments $203.8M vs $131.7M at 9/30; EOP net loans +0.92% YoY .	Building pipeline for 2025 .
Technology/IT investments	Q2: completed migration to offsite data warehouses; increased IT capacity .	No incremental update.	Prior investment complete; ongoing benefits .

Management Commentary

“Our fourth-quarter operating results included a $755,000 loss from mark-to-market accounting on our TRUPs… a $1.6 million swing that impacted our net income. Despite challenges in the deposit-gathering environment, we achieved a deposit growth of over 5% and increased our net interest margin for the quarter to 4.22%. Expanding our loan portfolio remains a priority… our undisbursed loan commitments grew substantially, reaching $203.8 million at year-end…” — Dennis Woods, President & CEO .
“We have largely completed the migration of all of our computers and servers to offsite data warehouses… significantly increased our IT capacity… We are very pleased with the new pickup in loan growth, while… maintain our 4.28% net interest margin.” — Dennis Woods (Q2) .

Q&A Highlights

We did not find a Q4 2024 earnings call transcript (no transcript in our catalog; IR site provides press release but no transcript link) .
As such, no Q&A themes or guidance clarifications were available from a call in Q4.

Estimates Context

Wall Street consensus (S&P Global) for Q4 2024 EPS and revenue was not retrievable at this time due to S&P Global API rate limits; we cannot present vs-consensus comparisons. We will update once access is restored. Values would be retrieved from S&P Global.

Key Takeaways for Investors

The earnings miss vs internal trend was driven by non-core TRUPs fair value loss and higher credit costs; core spread revenues held essentially flat QoQ while NIM edged up to 4.22% .
Funding actions (brokered DDA, pricing discipline) reduced cost of funds QoQ to 1.17% and supported 5.3% YoY deposit growth; however, deposit mix shifted toward interest-bearing and NIB balances fell ~11% YoY, pressuring spread income if rates stay high .
Efficiency deteriorated to 60.8% as noninterest income dropped and expenses rose; a normalization of TRUPs marks and tight OpEx control would be key to re-improving returns .
Credit remains a watch item: provision remained elevated with student loan-driven charge-offs; NPAs ticked up to 1.42% of assets; maintaining ACL at ~1.72% offers some buffer .
Loan growth setup is constructive with $203.8M of undisbursed commitments; balance sheet capacity (reduced short-term borrowings vs YE23) supports deployment as demand converts .
Dividend continuity ($0.12) signals capital strength and confidence despite near-term earnings variability; payout sustainability hinges on stabilizing noninterest income and credit costs .
Near-term stock catalysts: direction of TRUPs fair value (SOFR curve), pace of loan funding from commitments, deposit mix re-shift toward NIB, and any signs of credit cost moderation .

Notes and Sources: All financials and commentary are from United Security Bancshares’ Q4 2024 Form 8-K press release and exhibits dated Jan 27, 2025, and prior 8-Ks for Q2 and Q3 2024; dividend press release Dec 18, 2024 . IR site reference for materials availability .

UNITED SECURITY BANCSHARES (UBFO)·Q4 2024 Earnings Summary