United Security Bancshares reported its operating results for the second quarter and six months ended June 30, 2025. Net income for the first half of 2025 decreased by 42.66% to $4.85 million, down from $8.46 million in the comparable 2024 period.
The decline in profitability was primarily driven by a substantial increase in the provision for credit losses, which surged to $3.92 million for the first half of 2025, compared to $306,000 in the prior year. This increase was largely attributed to $4.15 million in student loan charge-offs.
Despite these challenges, the company's net interest margin expanded to 4.46% for the first half of 2025, an increase of 15 basis points from 4.31% in the prior year. This improvement was a result of rising loan yields and decreased short-term borrowing costs.
Total loans, net of unearned fees, grew by 2.03% to $947.3 million at June 30, 2025, from $928.5 million at December 31, 2024. This growth was primarily in agricultural, real estate construction, and real estate mortgage loans.
Noninterest income decreased by 17.46% to $2.12 million, mainly due to the absence of a $573,000 gain on life insurance proceeds realized in the prior year. Noninterest expenses increased by 11.93% to $15.34 million, driven by higher salaries and employee benefits.
The company maintained robust capital and liquidity, with a Tier 1 Leverage Ratio of 12.56% for the Bank and 12.83% for the Company, both well above regulatory minimums. Nonperforming assets decreased to $13.82 million from $17.20 million at December 31, 2024, primarily due to a nonaccrual loan payoff.
The content on BeyondSPX is for informational purposes only and should not be construed as financial or investment advice. We are not financial advisors. Consult with a qualified professional before making any investment decisions. Any actions you take based on information from this site are solely at your own risk.