United Security Bancshares (UBFO) Margin Decline Tests Bullish Narratives After FY 2025 Results

United Security Bancshares (UBFO) has just wrapped up FY 2025 with fourth quarter revenue of US$13.1 million and basic EPS of US$0.20, alongside full year trailing revenue of US$48.3 million and EPS of US$0.71. Over the past few reported periods, revenue has ranged from US$10.7 million in Q4 2024 to US$13.1 million in Q4 2025, while quarterly EPS has moved between US$0.13 and US$0.23. This sets a clear backdrop for how the FY 2025 results line up against FY 2024. With a trailing net profit margin of 25.5% compared with 30.4% a year earlier, investors are likely to view these results in terms of how sustainably the bank can defend its profitability.

See our full analysis for United Security Bancshares.

With the numbers on the table, the next step is to see how this latest set of results lines up with the prevailing stories around UBFO, and where those narratives might need an update.

Curious how numbers become stories that shape markets? Explore Community Narratives

25.5% net margin and earnings trend in focus

• Over the last 12 months, UBFO converted its US$48.3 million in trailing revenue into US$12.3 million of net income, which ties directly to the 25.5% net profit margin that compares with 30.4% a year earlier.
• What stands out for the bullish view is that five year earnings growth of 8.5% per year sits beside a most recent year where earnings declined, so:
  • Supporters can point to the US$12.3 million of trailing net income and US$0.71 of trailing EPS as evidence that the business is still producing solid absolute profits.
  • At the same time, the drop in net margin from 30.4% to 25.5% directly challenges any bullish claim that profitability is holding steady, because the latest reported year is weaker than the earlier period in the dataset.

To see how this mixed earnings picture lines up with the broader story the market is telling about UBFO, have a look at the full narrative and how others are weighing growth against margin pressure. 📊 Read the full United Security Bancshares Consensus Narrative.

Loan book and credit quality shift

• On the credit side, non performing loans in the quarterly data moved from US$12.6 million in Q4 2024 to between US$6.0 million and US$6.4 million across the FY 2025 quarters that report this figure, while total loans over those same points ranged from US$920.7 million to US$975.2 million.
• Bears often worry about credit risk at regional banks, and this data gives them and bulls something concrete to work with, because:
  • The shift from US$12.6 million of non performing loans in Q4 2024 down to around US$6.0 million in the FY 2025 quarters that disclose it means current reported problem loans are lower in absolute dollar terms within a loan book that is close to US$1.0 billion.
  • However, critics who focus on broader profitability can still point to the net margin moving from 30.4% to 25.5% over the trailing period as a reminder that credit metrics and earnings can tell different parts of the story at the same time.

P/E premium and DCF gap

• UBFO trades on a trailing P/E of 15.2x compared with peer and US Banks industry averages of 12.2x and 12.1x, while the provided DCF fair value of US$21.14 sits well above the current share price of US$10.65, a difference of about 49.6%.
• Skeptics highlight the P/E premium as a concern, yet the valuation data also gives bulls a clear counterpoint, because:
  • The higher P/E multiple of 15.2x versus roughly 12x for peers aligns with the bearish argument that the stock is priced more richly than many regional banks on trailing earnings.
  • At the same time, the DCF fair value of US$21.14 compared with the US$10.65 share price supports a bullish stance that the market price is well below that cash flow based estimate, even after factoring in the weaker 25.5% trailing net margin.

Next Steps

Don't just look at this quarter; the real story is in the long-term trend. We've done an in-depth analysis on United Security Bancshares's growth and its valuation to see if today's price is a bargain. Add the company to your watchlist or portfolio now so you don't miss the next big move.

See What Else Is Out There

UBFO’s softer 25.5% net margin versus 30.4% a year earlier and richer 15.2x P/E suggest investors are paying up for less efficient earnings.

If that trade off does not sit well with you, use our screener containing 1035 highly profitable stocks with low debt to focus on companies pairing stronger profitability with more conservative balance sheets right now.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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