UBFO - Tough Operating Environment Poses A Threat To United Security Bancshares
United Security Bancshares' (UBFO) loans have declined by 3% in the first nine months of 2019 due to economic slowdown in the company's operating region. Further loan decline is expected in the remainder of 2019 and in 2020, which will pressurize earnings next year. Margin compression is also expected to drag earnings in 2020.
Economic Slowdown in California to Lead to Further Loan Book Reduction
UBFO operates in California's Central Valley, and so is largely affected by the agricultural sector. The outlook on agriculture is murky because of uncertainty in U.S.-China trade relations