Head-To-Head Review: United Security Bancshares (NASDAQ:UBFO) and Alerus Financial (NASDAQ:ALRS)

United Security Bancshares (NASDAQ:UBFO – Get Rating) and Alerus Financial (NASDAQ:ALRS – Get Rating) are both small-cap finance companies, but which is the better investment? We will compare the two companies based on the strength of their earnings, valuation, institutional ownership, risk, profitability, analyst recommendations and dividends.


This table compares United Security Bancshares and Alerus Financial’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
United Security Bancshares 27.32% 10.08% 0.90%
Alerus Financial 20.86% 13.52% 1.47%

Insider & Institutional Ownership

37.0% of United Security Bancshares shares are owned by institutional investors. Comparatively, 39.5% of Alerus Financial shares are owned by institutional investors. 20.4% of United Security Bancshares shares are owned by insiders. Comparatively, 6.9% of Alerus Financial shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.


United Security Bancshares pays an annual dividend of $0.44 per share and has a dividend yield of 6.0%. Alerus Financial pays an annual dividend of $0.72 per share and has a dividend yield of 2.9%. United Security Bancshares pays out 63.8% of its earnings in the form of a dividend. Alerus Financial pays out 26.8% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years.

Risk & Volatility

United Security Bancshares has a beta of 0.7, meaning that its share price is 30% less volatile than the S&P 500. Comparatively, Alerus Financial has a beta of 0.74, meaning that its share price is 26% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of current ratings and target prices for United Security Bancshares and Alerus Financial, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
United Security Bancshares 0 0 0 0 N/A
Alerus Financial 0 0 1 0 3.00

Alerus Financial has a consensus target price of $28.00, suggesting a potential upside of 13.64%. Given Alerus Financial’s higher possible upside, analysts clearly believe Alerus Financial is more favorable than United Security Bancshares.

Valuation & Earnings

This table compares United Security Bancshares and Alerus Financial’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
United Security Bancshares $41.12 million 3.02 $10.10 million $0.69 10.57
Alerus Financial $240.04 million 1.77 $52.68 million $2.69 9.16

Alerus Financial has higher revenue and earnings than United Security Bancshares. Alerus Financial is trading at a lower price-to-earnings ratio than United Security Bancshares, indicating that it is currently the more affordable of the two stocks.


Alerus Financial beats United Security Bancshares on 10 of the 15 factors compared between the two stocks.

About United Security Bancshares

(Get Rating)

United Security Bancshares operates as the bank holding company for United Security Bank, a state-chartered bank that provides a range of commercial banking services to the business and professional community, and individuals in California. The company accepts various deposit products, including personal and business checking accounts, savings accounts, interest-bearing negotiable order of withdrawal accounts, money market accounts, and time certificates of deposit. It also provides real estate mortgage, commercial and industrial, real estate construction, and consumer loans, as well as agricultural, installment, and student loans. In addition, the company offers online and mobile banking, safe deposit boxes, wire transfers, payroll direct deposit, cashier’s check, cash management, traveler’s check, money order, and foreign draft services, as well as interactive teller machines and ATM services. As of January 26, 2022, it operated 12 full-service branch offices in Fresno, Bakersfield, Campbell, Caruthers, Coalinga, Firebaugh, Mendota, Oakhurst, San Joaquin, and Taft. The company was founded in 1987 and is headquartered in Fresno, California.

About Alerus Financial

(Get Rating)

Alerus Financial Corporation, through its subsidiary, Alerus Financial, National Association, provides various financial services to businesses and consumers. The company operates in four segments: Banking, Retirement and Benefit Services, Wealth Management, and Mortgage. It offers various deposit products, including demand deposits, interest-bearing transaction accounts, money market accounts, time and savings deposits, checking accounts, and certificates of deposit; and treasury management products, including electronic receivables management, remote deposit capture, cash vault services, merchant services, and other cash management services. The company also provides commercial loans, business term loans, lines of credit, and commercial real estate loans, as well as construction and land development loans; consumer lending products, including residential first mortgage loans; installment loans and lines of credit; and second mortgage loans. In addition, it offers retirement plan administration and investment advisory services, employee stock ownership plan, fiduciary services, payroll, health savings accounts, and other benefit services, as well as individual retirement accounts; and financial planning, investment management, personal and corporate trust, estate administration, and custody services. Further, the company provides debit and credit cards, online banking, mobile banking/wallet, payment, private banking, payroll accounts, flex spending accounts, administration, and government health insurance program services. It offers banking services through fourteen offices in North Dakota, Minnesota, and Arizona; and retirement and benefit plans in 50 states through offices located in Michigan, Minnesota, and Colorado. The company was formerly known as First National Bank North Dakota and changed its name to Alerus Financial Corporation in 2000. Alerus Financial Corporation was founded in 1879 and is headquartered in Grand Forks, North Dakota.

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