Exhibit

FRESNO, CA - October 16, 2019. United Security Bancshares (Nasdaq: UBFO) today announced its unaudited financial results for the three and nine months ended September 30, 2019. The Company reported consolidated net income of $4,173,000, or $0.25 per basic and diluted common share, for the quarter ended September 30, 2019, as compared to $3,518,000, or $0.21 per basic and diluted common share, for the quarter ended September 30, 2018. The Company recognized net income of $12,276,000 for the nine months ended September 30, 2019, an increase of 22% compared to the net income of $10,068,000 recognized for the nine months ended September 30, 2018. Basic and diluted earnings per share increased to $0.72 for the nine months ended September 30, 2019, as compared to basic earnings per share of $0.60 and diluted earnings per share of $0.59 for the nine months ended September 30, 2018.

Annualized ROE for the nine months ended September 30, 2019 was 14.50%, compared to 12.81% for the nine months ended September 30, 2018. Annualized ROA was 1.70% for the nine months ended September 30, 2019, compared to 1.58% for the nine months ended September 30, 2018. Annualized ROE for the quarter ended September 30, 2019 was 14.36% compared to 13.04% for the same period in 2018. Annualized ROA was 1.69% for the quarter ended September 30, 2019, compared to 1.59% for the same period in 2018.

Net interest income after the provision for credit losses for the nine months ended September 30, 2019 totaled $28,103,000, an increase of $1,439,000, or 5.40%, from $26,664,000 for the same period ended September 30, 2018. Included within the balance of net interest income after the provision for credit losses for the nine months ended September 30, 2018 was a $1,710,000 recovery of provision. The recovery of provision was due to one-time recoveries on previously charged-off loans.

There were no such recoveries recognized during the nine months ended September 30, 2019. The Company's net interest margin decreased from 4.31% for the nine months ended September 30, 2018 to 4.30% for the nine months ended September 30, 2019. The decrease was the result of increases in the cost of deposits, partially offset by increases in loan yields, and investment yields. The yield on loans increased from 5.52% for the nine months ended September 30, 2018 to 5.98% for the nine months ended September 30, 2019. The yield on loans for the nine months ended September 30, 2018 includes $550,000 in write-downs of unamortized insurance premiums on the student loan portfolio, which was a result of the dissolution of the insurance carrier. The increase in net interest income on a year-over-year comparison is the result of higher interest rates on loans and investment securities, partially offset by increasing costs of deposits and a decline in loan balances. Net interest income after the provision for credit losses for the quarter ended September 30, 2019 totaled $9,351,000, an increase of $115,000, or 1.25%, from the net interest income of $9,236,000 for the same period ended September 30, 2018.

Non-interest income for the nine months ended September 30, 2019 totaled $5,105,000, reflecting an increase of $2,165,000 from the $2,940,000 in non-interest income reported for the nine months ended September 30, 2018. Customer service fees, which represent the largest portion of the Company's non-interest income, totaled $2,479,000 and $2,787,000 for the nine months ended September 30, 2019 and 2018, respectively. On a year-over-year comparative basis, non-interest income increased primarily due to a $1,571,000 gain on the fair value of junior subordinated debentures (TRUPs) for the nine months ended September 30, 2019, compared to a $923,000 loss for the same period ended September 30, 2018. The change in the fair value of TRUPs reflected in non-interest income was caused by fluctuations in the LIBOR yield curve. Non-interest income for the nine months ended September 30, 2019 also includes a $115,000 loss resulting from the dissolution of the USB Real Estate Investment Trust (REIT) which was completed in February 2019. Non-interest income for the nine months ended September 30, 2018 includes a $171,000 gain recorded on the death benefit proceeds of bank-owned life insurance.

Non-interest income for the quarter ended September 30, 2019 totaled $1,853,000, reflecting an increase of $1,004,000 from the $849,000 in non-interest income reported for the quarter ended September 30, 2018. The increase during the period was primarily due to the recording of a $660,000 gain on the fair value of TRUPs for the quarter ended September 30, 2019, as compared to a $262,000 loss for the quarter ended September 30, 2018. The change in the fair value of TRUPs reflected in non-interest income was primarily caused by fluctuations in the LIBOR yield curve. Customer service fees totaled $839,000 for the quarter ended September 30, 2019, as compared to $815,000 for the quarter ended September 30, 2018.

For the nine months ended September 30, 2019, non-interest expense totaled $15,943,000, an increase of $484,000 compared to $15,459,000 for the nine months ended September 30, 2018. On a year-over-year comparative basis, non-interest expense increased primarily due to increases of $663,000 in professional fees, $188,000 in other expenses, and $116,000 in data processing, partially offset by a decreases of $491,000 in salaries and employee benefits and $110,000 in regulatory assessments. The increase in professional fees is mainly attributed to an increase in legal fees. The increase in data processing is primarily due to additional service fees, and the increase in other expenses is attributed to workman's compensation insurance expense. The decrease in salary and employee benefits is attributed to lower equity award expense. Non-interest expense for the nine months ended September 30, 2018 includes a $121,000 recovery of workman's compensation insurance expense.

Non-interest expense totaled $5,335,000 for the quarter ended September 30, 2019, an increase of $192,000 as compared to $5,143,000 reported for the quarter ended September 30, 2018. On a quarter-over-quarter comparative basis, non-interest expense increased primarily due to increases in data processing expenses and professional fees, partially offset by decreases in regulatory assessments as well as salary and employee benefits as a result of lower equity award expenses. The decrease in regulatory assessments is attributed to the utilization of FDIC assessment credits.

Total assets increased $24,340,000, or 2.61%, for the nine months ended September 30, 2019, due primarily to increases of $23,482,000 in overnight funds held at the Federal Reserve. Loan balances decreased by $17,805,000 for the nine months ended September 30, 2019 and investment securities increased by $11,566,000. Unfunded loan commitments increased $35,231,000 to $211,584,000 during the first nine months of 2019. With the adoption of ASU 2016-02, effective January 1, 2019, the Company began to recognize an operating lease right-of-use asset and operating lease liability. At September 30, 2019, the operating lease right-of-use asset was $3,610,000 and the operating lease liability was $3,714,000.

Total deposits increased $14,580,000, or 1.81%, to $820,223,000 during the nine months ended September 30, 2019. This increase was due to an increase of $40,436,000 in noninterest bearing deposits, partially offset by a decrease of $14,279,000 in time deposits and a decrease of $11,577,000 in NOW, money market, and savings accounts. Total money market and savings accounts decreased 2.69% to $418,914,000 at September 30, 2019, compared to $430,491,000 at December 31, 2018. Noninterest bearing deposits increased 13.81% to $333,156,000 at September 30, 2019, compared to $292,720,000 at December 31, 2018. As a result of the net increase, core deposits, which is made up of the balance of noninterest bearing deposits, NOW, money market, savings, and time deposits accounts less than $250,000, increased $28,859,000.

The Board of Directors of United Security Bancshares declared a cash dividend on common stock of $0.11 per share on September 24, 2019. The dividend will be payable on October 18, 2019, to shareholders of record as of October 8, 2019. The Board of Directors of United Security Bancshares declared a cash dividend on common stock of $0.11 per share on June 25, 2019. The dividend was payable on July 18, 2019, to shareholders of record as of July 8, 2019. The Board of Directors of United Security Bancshares declared a cash dividend on common stock of $0.11 per share on March 26, 2019. The dividend was payable on April 17, 2019, to shareholders of record as of April 8, 2019. No assurances can be provided that future dividends will be declared and/or as to the timing of such future dividends, if any.

The Company has recorded a provision for credit losses of $15,000 for the nine months ended September 30, 2019, compared to a recovery of provision of $1,699,000 for the nine months ended September 30, 2018. Net loan charge-offs totaled $180,000 for the nine months ended September 30, 2019, as compared to net recoveries of $1,230,000 for the nine months ended September 30, 2018. The Company recorded a provision for credit loss of $5,000 for the quarter ended September 30, 2019, compared to a recovery of provision for credit losses of $373,000 for the quarter ended September 30, 2018. Net loan charge-offs totaled $226,000 for the quarter ended September 30, 2019, as compared to net loan recoveries of $746,000 for the quarter ended September 30, 2018.

Non-performing assets, comprised of nonaccrual loans, troubled debt restructures (TDRs), other real estate owned through foreclosure (OREO), and loans more than 90 days past due and still accruing interest, decreased approximately $354,000 between December 31, 2018 and September 30, 2019 to $21,275,000. Nonperforming assets as a percentage of total assets decreased from 2.32% at December 31, 2018 to 2.22% at September 30, 2019. The decrease in nonperforming assets is mainly attributed to decreases in restructured loans. Nonaccrual loans increased $704,000 between December 31, 2018 and September 30, 2019 to $12,756,000. Restructured loans decreased $1,763,000 between December 31, 2018 and September 30, 2019. OREO totaled $5,745,000 at September 30, 2019 and December 31, 2018.

United Security Bancshares (NASDAQ: UBFO) is the holding company for United Security Bank, which was founded in 1987. United Security Bank is headquartered in Fresno and operates 11 full-service branch offices in Fresno, Bakersfield, Campbell, Caruthers, Coalinga, Firebaugh, Oakhurst, San Joaquin, and Taft. Additionally, United Security Bank operates Commercial Real Estate Construction, Commercial Lending, and Consumer Lending departments. For more information, please visit www.unitedsecuritybank.com.

This press release and the accompanying financial tables contain a non-GAAP financial measure (Net Income before Non-Core) within the meaning of the Securities and Exchange Commission’s Regulation G. In the accompanying financial tables, the Company has provided a reconciliation of this non-GAAP financial measure to the most directly comparable GAAP financial measure. The Company’s management believes that this non-GAAP financial measure provides useful information about the Company’s results of operations and/or financial position to both investors and management. The Company provides this non-GAAP financial measure to investors to assist them in performing their analysis of its historical operating results. The non-GAAP financial measure shows the Company's operating results before consideration of certain adjustments and, consequently, this non-GAAP financial measure should not be construed as an alternative to net income (loss) as an indicator of the Company's operating performance, as determined in accordance with GAAP. The Company may calculate this non-GAAP financial measure differently than other companies.

This news release may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and the Company intends such statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts and often include the words "believe," "expect," "anticipate," "intend," "plan," "estimate," or words of similar meaning, or future or conditional verbs such as "will," "would," "should," "could," or "may." Forward-looking statements are based on management’s knowledge and belief as of today and are not guarantees of future performance, nor should they be relied upon as representing management's views as of any subsequent date. Forward-looking statements are subject to risks and uncertainties and actual results may differ materially from those presented. Factors that might cause such differences, some of which are beyond the Company’s ability to control or predict, include, but are not limited to: (1) changes in general economic and financial market conditions, either nationally or locally, (2) changes in interest rates, (3) changes in banking laws or regulations, (4) increased competition in the Company’s market, impacting the ability to execute its business plans, (5) loss of key personnel, (6) unanticipated credit losses, (7) earthquakes or other natural disasters impacting the local economy and/or the condition of real estate collateral, (8) the impact of technological changes and the ability to develop and maintain secure and reliable electronic systems, and (9) changes in accounting policies or procedures.

The Company undertakes no obligation to publicly revise these forward-looking statements to reflect subsequent events or circumstances. For a more complete discussion of these risks and uncertainties, see the Company’s Annual Report on Form 10-K, for the year ended December 31, 2018, and particularly the section entitled "Management’s Discussion and Analysis of Financial Condition and Results of Operations." Readers should carefully review all disclosures the Company files from time to time with the Securities and Exchange Commission.



United Security Bancshares
Consolidated Balance Sheets (unaudited)
(in thousands)
	September 30, 2019			December 31, 2018
Assets
Cash and non-interest-bearing deposits in other banks	$	31,073		$	28,949
Due from Federal Reserve Bank ("FRB")	214,870			191,388
Cash and cash equivalents	245,943			220,337
Investment securities (at fair value)
Available for sale ("AFS") securities	77,864			66,426
Marketable equity securities	3,787			3,659
Total investment securities	81,651			70,085
Loans	570,128			587,933
Unearned fees and unamortized loan origination costs - net	(628		)	(119		)
Allowance for credit losses	(8,230		)	(8,395		)
Net loans	561,270			579,419
Premises and equipment - net	9,455			9,837
Accrued interest receivable	10,522			8,341
Other real estate owned	5,745			5,745
Goodwill	4,488			4,488
Deferred tax assets - net	3,121			3,174
Cash surrender value of life insurance	20,682			20,244
Operating lease right-of-use assets	3,610			—
Other assets	10,911			11,388
Total assets	$	957,398		$	933,058

Liabilities and Shareholders' Equity
Deposits
Non-interest-bearing	$	333,156		$	292,720
Interest-bearing	487,067			512,923
Total deposits	820,223			805,643

Accrued interest payable	72			57
Operating lease liabilities	3,714			—
Other liabilities	7,849			7,963
Junior subordinated debentures (at fair value)	10,330			10,155
Total liabilities	842,188			823,818

Shareholders' Equity
Common stock, no par value; 20,000,000 shares authorized; issued and outstanding: 16,953,744 at September 30, 2019 and 16,946,622 at December 31, 2018	58,896			58,624
Retained earnings	56,619			49,942
Accumulated other comprehensive (loss) income	(305)			674
Total shareholders' equity	115,210			109,240
Total liabilities and shareholders' equity	$	957,398		$	933,058



United Security Bancshares
Consolidated Statements of Income (unaudited)
(in thousands)
	Three Months Ended September 30,				Nine Months Ended September 30,
	2019		2018		2019		2018
Interest Income:
Interest and fees on loans	$	8,648	$	8,397	$	25,733	$	24,114
Interest on investment securities	439		351		1,360		809
Interest on deposits in FRB	1,330		806		4,052		1,870
Total interest income	10,417		9,554		31,145		26,793

Interest Expense:
Interest on deposits	950		579		2,675		1,517
Interest on other borrowed funds	111		112		352		311
Total interest expense	1,061		691		3,027		1,828
Net Interest Income	9,356		8,863		28,118		24,965
Provision (Recovery of Provision) for Credit Losses	5		(373)		15		(1,699)
Net Interest Income after Provision (Recovery of Provision) for Credit Losses	9,351		9,236		28,103		26,664

Noninterest Income:
Customer service fees	839		815		2,479		2,787
Increase in cash surrender value of bank-owned life insurance	147		132		438		389
Gain (loss) on fair value of marketable equity securities	18		(35)		128		(114)
Gain on proceeds from bank-owned life insurance	—		—		—		171
Gain (loss) on fair value of junior subordinated debentures	660		(262)		1,571		(923)
Loss on dissolution of real estate investment trust	(1)		—		(115)		—
(Loss) gain on sale of assets	(5)		—		1		29
Other	195		199		603		601
Total noninterest income	1,853		849		5,105		2,940

Noninterest Expense:
Salaries and employee benefits	2,775		2,826		8,307		8,798
Occupancy expense	829		848		2,450		2,448
Data processing	151		74		402		286
Professional fees	864		620		2,423		1,760
Regulatory assessments	(37)		87		138		248
Director fees	95		78		281		239
Correspondent bank service charges	14		15		42		48
Loss on California tax credit partnership	—		5		—		14
Net cost on operation and sale of OREO	71		30		223		129
Other	573		560		1,677		1,489
Total noninterest expense	5,335		5,143		15,943		15,459

Income Before Provision for Taxes	5,869		4,942		17,265		14,145
Provision for Taxes on Income	1,696		1,424		4,989		4,077
Net Income	$	4,173	$	3,518	$	12,276	$	10,068

Basic earnings per common share	$	0.25	$	0.21	$	0.72	$	0.60
Diluted earnings per common share	$	0.25	$	0.21	$	0.72	$	0.59
Weighted average basic shares for EPS	16,950,564		16,902,218		16,948,810		16,897,524
Weighted average diluted shares for EPS	16,981,705		16,954,053		16,977,224		16,933,477



United Security Bancshares
Average Balances and Rates (unaudited)
(in thousands)	Three Months Ended September 30,						Nine Months Ended September 30,
	2019			2018			2019			2018
Average Balances:
Loans (1)	$	579,035		$	571,673		$	575,323		$	584,424
Investment securities – taxable	71,168			59,571			68,254			51,489
Interest-bearing deposits in FRB	240,605			163,572			231,807			137,478
Total interest-earning assets	890,808			794,816			875,384			773,391
Allowance for credit losses	(8,448		)	(8,934		)	(8,449		)	(9,219		)
Cash and due from banks	29,105			27,514			28,898			27,111
Other real estate owned	5,745			5,745			5,745			5,745
Other non-earning assets	62,752			56,225			61,112			54,653
Total average assets	$	979,962		$	875,366		$	962,690		$	851,681

Interest-bearing deposits	$	524,437		$	449,041		$	523,104		$	431,118
Junior subordinated debentures	10,416			10,062			10,296			9,783
Total interest-bearing liabilities	534,853			459,103			533,400			440,901
Non-interest-bearing deposits	319,547			303,614			306,590			299,701
Other liabilities	10,319			5,645			9,506			6,012
Total liabilities	864,719			768,362			849,496			746,614
Total equity	115,243			107,004			113,194			105,067
Total liabilities and equity	$	979,962		$	875,366		$	962,690		$	851,681

Average Rates:
Loans (1)	5.93		%	5.83		%	5.98		%	5.52		%
Investment securities- taxable	2.45		%	2.34		%	2.66		%	2.10		%
Interest-bearing deposits in FRB	2.19		%	1.95		%	2.34		%	1.82		%
Earning assets	4.64		%	4.77		%	4.76		%	4.63		%
Interest bearing deposits	0.72		%	0.51		%	0.68		%	0.47		%
Total deposits	0.45		%	0.31		%	0.43		%	0.28		%
Junior subordinated debentures	4.23		%	4.42		%	4.57		%	4.25		%
Total interest-bearing liabilities	0.79		%	0.60		%	0.76		%	0.55		%
Net interest margin (2)	4.17		%	4.43		%	4.30		%	4.31		%



United Security Bancshares
Condensed - Consolidated Balance Sheets (unaudited)
(in thousands)
	September 30, 2019			June 30, 2019			March 31, 2019			December 31, 2018			September 30, 2018
Cash and cash equivalents	$	245,943		$	309,460		$	260,701		$	220,337		$	207,300
Investment securities	81,651			63,632			66,604			70,085			65,727
Loans	569,500			572,810			579,617			587,814			577,598
Allowance for credit losses	(8,230		)	(8,452		)	(8,417		)	(8,395		)	(8,798		)
Net loans	561,270			564,358			571,200			579,419			568,800
Other assets	68,534			69,043			65,535			63,217			62,201
Total assets	$	957,398		$	1,006,493		$	964,040		$	933,058		$	904,028

Non-interest-bearing	$	333,156		$	304,172		$	300,476		$	292,720		$	315,213
Interest-bearing	487,067			566,743			531,101			512,923			463,670
Total deposits	820,223			870,915			831,577			805,643			778,883
Other liabilities	21,965			22,240			21,270			18,175			18,099
Total liabilities	842,188			893,155			852,847			823,818			796,982
Total shareholders' equity	115,210			113,338			111,193			109,240			107,046
Total liabilities and shareholder's equity	$	957,398		$	1,006,493		$	964,040		$	933,058		$	904,028



United Security Bancshares
Condensed - Consolidated Statements of Income (unaudited)
(in thousands)	For the Quarters Ended:
	September 30, 2019		June 30, 2019		March 31, 2019		December 31, 2018			September 30, 2018
Total interest income	$	10,417	$	10,311	$	10,417	$	9,821		$	9,554
Total interest expense	1,061		1,008		957		876			691
Net interest income	9,356		9,303		9,460		8,945			8,863
Provision (recovery of provision) for credit losses	5		4		6		(65		)	(373		)
Net interest income after provision (recovery of provision) for credit losses	9,351		9,299		9,454		9,010			9,236

Total non-interest income	1,853		1,729		1,523		1,665			849
Total non-interest expense	5,335		5,262		5,347		5,473			5,143
Income before provision for taxes	5,869		5,766		5,630		5,202			4,942
Provision for taxes on income	1,696		1,669		1,623		1,254			1,424
Net income	$	4,173	$	4,097	$	4,007	$	3,948		$	3,518



United Security Bancshares
Nonperforming Assets (unaudited)
(dollars in thousands)
	September 30, 2019			December 31, 2018
Commercial and industrial	$	75		$	—
Real estate - mortgage	1,008			389
RE construction & development	11,529			11,663
Agricultural	144			—
Total nonaccrual loans	$	12,756		$	12,052

Loans past due 90 days and still accruing	326			—
Restructured loans	2,448			3,832
Total nonperforming loans	$	15,530		$	15,884
Other real estate owned	5,745			5,745
Total nonperforming assets	$	21,275		$	21,629

Nonperforming assets to total gross loans	2.72		%	2.70		%
Nonperforming assets to total assets	2.22		%	2.32		%
Allowance for credit losses to nonperforming loans	52.99		%	52.85		%



United Security Bancshares
Selected Financial Data (unaudited)
(dollars in thousands, except per share amounts)
	Three Months Ended September 30,						Nine Months Ended September 30,
	2019			2018			2019	2018

Return on average assets	1.69		%	1.59		%	1.70%	1.58%
Return on average equity	14.36		%	13.04		%	14.50%	12.81%
Net charge-off (recoveries) to average loans	0.15		%	(0.52		)%	0.04%	(0.28)%

	September 30, 2019			December 31, 2018
Shares outstanding - period end	16,953,744			16,946,622
Book value per share		$6.80			$6.45
Efficiency ratio (1)	47.99		%	53.66		%
Total impaired loans		$18,362			$18,683
Net loan to deposit ratio	68.43		%	71.92		%
Allowance for credit losses to total loans	1.45		%	1.43		%
Total capital to risk weighted assets
Company	18.38		%	17.80		%
Bank	18.18		%	17.70		%
Tier 1 capital to risk-weighted assets
Company	17.13		%	16.55		%
Bank	16.93		%	16.45		%
Common equity tier 1 capital to risk-weighted assets
Company	15.67		%	15.15		%
Bank	16.93		%	16.45		%
Tier 1 capital to adjusted average assets (leverage)
Company	12.47		%	12.15		%
Bank	12.29		%	12.16		%



United Security Bancshares
Net Income before Non-Core Reconciliation
Non-GAAP Information (dollars in thousands)
(unaudited)
	Nine Months Ended September 30,
	2019		2018			Change $		Change %
Net income	$	12,276	$	10,068		$	2,208	21.93	%

TRUPs (1) fair value adjustment gain (loss)	1,571		(923		)
Reversal of provision for credit losses (2)	—		1,710
	1,571		787

Income tax effect	456		228
Non-core items net of taxes	1,115		559

Non-GAAP core net income	$	11,161	$	9,509		$	1,652	17.37	%


▪	Net interest income after provision for credit losses increased to $9,351,000, compared to $9,236,000 for the quarter ended September 30, 2018, and increased from $9,299,000 in the preceding quarter.


▪	Net interest margin decreased to 4.17% from 4.43% for the quarter ended September 30, 2018, and decreased from 4.28% in the preceding quarter.


▪	Net charge-offs totaled $226,000, compared to net recoveries of $746,000 for the quarter ended September 30, 2018, and net recoveries of $31,000 in the preceding quarter.


▪	Capital positions remain strong with a 12.47% Tier 1 Leverage Ratio, a 15.67% Common Equity Tier 1 Ratio; a 17.13% Tier 1 Risk-Based Capital Ratio; and a 18.38% Total Risk-Based Capital Ratio.


▪	Annualized return on average assets ("ROAA") was 1.69%, compared to 1.59% for the quarter ended September 30, 2018, and 1.71% in the preceding quarter.


▪	Annualized return on average equity ("ROAE") was 14.36%, compared to 13.04% for the quarter ended September 30, 2018, and 14.53% in the preceding quarter.


▪	Total loans, net of unearned fees, decreased to $569,500,000, compared to $587,814,000 at December 31, 2018.


▪	Other real estate owned balances remained at $5,745,000 at September 30, 2019 when compared to $5,745,000 at December 31, 2018.


▪	The allowance for credit losses as a percentage of gross loans increased to 1.45%, compared to 1.43% at December 31, 2018.


▪	Total deposits increased to $820,223,000, compared to $805,643,000 at December 31, 2018.


(1)	TRUPs Fair Value Adjustment is not part of Core Income and depending upon market rates, can “add to” or “subtract from” Core Income and mask Non-GAAP Core Income change.


▪	Book value per share increased to $6.80, compared to $6.45 at December 31, 2018.