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United Security Bancshares Provides Value for Investors

- By Kyle Ferguson

United Security Bancshares (UBFO) is a state-chartered bank that has been gaining momentum over the last year. Its market value has gained an estimated 64%.

United Security Bancshares provides banking services to commercial establishments and individuals primarily in the San Joaquin Valley of California.

It offers online banking, mobile banking, safe deposit boxes and automated teller machine (ATM) services as well as payroll direct deposit, cashier's checks, traveler's checks, money orders and foreign drafts.


United Security Bancshares has a market cap of $143.14 million, a price-earnings (P/E) ratio of 19.42, a market value of $38.19 million and a price-book (P/B) ratio of 1.43.

The company announced a cash dividend and a stock repurchase program on April 25.

The board of directors of United Security Bancshares, the parent company of United Security Bank, declared a cash dividend of 5 cents per share on the company's common stock.

The dividend is payable on May 17 to shareholders of record as of May 8.

United Security Bancshares offered cash dividends for 23 years. It decided to stop offering cash dividends when the economy declined. Quarterly stock dividends have been replaced with a quarterly cash dividend.

The company has an extremely large core deposit of about $650 million with a very low cost of about .22 basis points.

Total risk based capital is now 18% vs. well-capitalized regular ratings of 10%. Strong banks must have at least 10% regular ratings. United Security Bancshares has nearly double that.

Director Benjamin Mackovak purchased 389,958 shares for $8.52 per share on May 8. He now owns 916,289 shares.

The company has additional good signs

  • United Security Bancshares has earnings power of $15.21.
  • United Security Bancshares has an interest coverage ratio of 8.30.
  • The company has an EV-to-EBIT of 3.12 ranking it above 94% of the 1,668 companies in the global banks industry.
  • Jim Simons (Trades, Portfolio) added to his position during the fourth quarter.

Disclosure: Author does not own any shares of this company.

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This article first appeared on GuruFocus.