Page 1

United Security Bancshares reports 2nd quarter net income of $ 2.7 million FRESNO , CA - July 21 , 2021. United Security Bancshares ( Nasdaq : UBFO ) today announced its unaudited financial results for the three and six months ended June 30 , 2021. The Company recognized net income of $ 4.1 million , or $ 0.24 per basic and diluted share for the six months ended June 30 , 2021 , compared to net income of $ 4.8 million , or $ 0.28 per basic and diluted share for the six months ended June 30 , 2020 . Second Quarter 2021 Highlights ( at or for the quarter ended June 30 , 2021 , except where noted ) • Net income for the quarter increased 34.44 % to $ 2.7 million , compared to $ 2.0 million for the quarter ended June 30 , 2020. The increase is primarily the result of an increase of $ 859,000 in loan interest income and fees , and decrease in OREO expense of $ 890,000 . Total assets increased 12.67 % to $ 1.23 billion , compared to $ 1.09 billion at December 31 , 2020 . Total loans , net of unearned fees , increased 28.69 % to $ 842.0 million , compared to $ 654.3 million at December 31 , 2020 . Total investments increased 98.12 % , or $ 84.6 million , to $ 170.8 million , compared to $ 86.2 million at December 31 , 2020 . Total deposits increased 14.46 % to $ 1.09 billion , compared to $ 952.7 million at December 31 , 2020 . The allowance for credit losses as a percentage of gross loans decreased to 1.09 % , compared to 1.30 % at December 31 , 2020. The decrease in the allowance for credit losses as a percentage of gross loans is from improved credit quality resulting from an increase in residential mortgage loans purchased during the quarter . Net interest income after the provision for credit losses was $ 8.1 million for the quarter ended June 30 , 2021 , compared to $ 7.3 million for the quarter ended June 30 , 2020 . " Book value per share increased to $ 6.96 , compared to $ 6.93 at December 31 , 2020 . • Net interest margin decreased to 3.22 % from 3.39 % for the quarter ended June 30 , 2020 . " " Annualized average cost of deposits decreased to 0.17 % from 0.21 % for the quarter ended June 30 , 2020 . Net charge - offs totaled $ 174,000 , compared to net charge - offs of $ 686,000 for the quarter ended June 30 , 2020 . Capital position remains well - capitalized with a 10.28 % Tier 1 Leverage Ratio compared to 11.37 % as of December 31 , 2020 . Annualized return on average assets ( " ROAA " ) was 0.89 % , compared to 0.80 % for the quarter ended June 30 , 2020 . Annualized return on average equity ( " ROAE " ) was 9.15 % , compared to 6.80 % for the quarter ended June 30 , 2020 . Dennis Woods , President and Chief Executive Officer , stated : " We successfully executed the first phase of our 2021 Strategy to deploy excess cash during the second quarter , and although this improved our results for the second quarter , we will see the full impact reflected in our earnings during the third quarter and beyond . We grew our loan and investment portfolios by $ 189 million during the second quarter and also grew deposits by $ 43 million . Our outlook on growth and profitability for the second half of 2021 remains upbeat . " Results of Operations Six Months Ended June 30 , 2021 : Net income for the six months ended June 30 , 2021 decreased $ 653,000 when compared to the six months ended June 30 , 2020. The decrease is the result of the change in the fair value of junior subordinated debentures , partially offset by lower provision for credit losses . The change in fair value of junior subordinated debentures , which is caused by changes in LIBOR rates , reflected as a $ 1.5 million gain for the six months ended June 30 , 2020 , compared to a $ 656,000 loss for the six months ended June 30 , 2021. The provision for credit losses was $ 1.2 million for the six months ended June 30 , 2021 , compared to $ 2.1 million for the six months ended June 30 , 2020. ROAE for the six months ended June 30 , 2021 was 7.00 % , compared to 8.09 % for the six months ended June 30 , 2020. ROAA was 0.71 % for the six months ended June 30 , 2021 , compared to 0.98 % for the six months ended June 30 , 2020 . The annualized average cost of deposits was 0.17 % for the six months ended June 30 , 2021 , a decrease from 0.27 % for the six months ended June 30 , 2020. The decrease in the cost of deposits is primarily attributed to decreases in deposit rates made during 2020 and being fully reflected in 2021. Average interest - bearing deposits increased 19.56 % between the periods ended June 30 , 2020 and 2021 from $ 508.6 million to $ 608.1 million , respectively . 1