UNITED BANCORP INC /OH/

Earning Assets - Loans

The Company’s gross loans totaled $491.6 million at December 31, 2025, as compared to $491.0 million at December 31, 2024. Average loans totaled $497.9 million for 2025, representing a 3.54% increase compared to average loans of $480.8 million for 2024.

The Company’s commercial and commercial real estate loan portfolio represents 80.4% of the total portfolio at December 31, 2025 compared to 79.5% at December 31, 2024. The Company’s commercial and commercial real estate loans increased approximately $4.6 million from December 31, 2024 to December 31, 2025. We utilize all the SBA, Ohio Department of Development and State of Ohio loan programs as well as local revolving loan funds to best fit the needs of our customers.

The Company’s installment lending portfolio represented 1.4% of the total portfolio at December 31, 2025, compared to 1.8% at December 31, 2024. Competition for installment loans principally comes from the captive finance companies offering low to zero percent financing for extended terms. The Company’s residential real estate portfolio represents 18.2% of the total portfolio at December 31, 2025, compared to 18.7% at December 31, 2024. Residential real estate loans are comprised of 1-, 3-, and 5-year adjustable-rate mortgages and 15-year fixed rate loans used to finance 1-4 family units.

The Company also offers fixed-rate real estate loans through our Secondary Market Real Estate Mortgage Program. Once these fixed-rate loans are originated and immediately sold without recourse in what is referred to as the secondary market, the Company does not assume credit risk or interest rate risk in this portfolio. This arrangement is quite common in banks and saves our customers from looking elsewhere for their home financing needs.

The Company did recognize a gain on the sale of secondary market loans of $501,000 in 2025 and a gain of $482,000 in 2024.

The allowance for credit losses totaled $4.3 million at December 31, 2025, which represented 0.87% of total loans. The allowance for credit losses at December 31, 2024, was $4.0 million or 0.82% of total loans. The allowance represents the amount which management and the Board of Directors estimates is adequate to provide for probable losses inherent in the loan portfolio. The allowance balance and the provision charged to expense are reviewed by management and the Board of Directors monthly using a risk evaluation model that considers borrowers’ past due experience, economic conditions and various other circumstances that are subject to change over time. Management believes the current balance of the allowance for credit losses is adequate to absorb estimated credit losses associated with the loan portfolio. Net loan charge offs (exclusive of overdrafts net charge-offs of $107,000) for the year ended December 31, 2025 were approximately $282,000. Net loans charged off (exclusive of overdrafts net charge-offs $116,000) was 204,000 for the year ended December 31, 2024.

The Company generally recognizes interest income on the accrual basis, except for certain loans which are placed on non-accrual status, when in the opinion of management; doubt exists as to collection on the loan. The Company’s policy is to generally place loans greater than 90 days past due on non-accrual status unless the loan is both well secured and in the process of collection. When a loan is placed on non-accrual status, interest income may be recognized on a cash basis as payment is received if the loan is well secured. If the loan is not deemed well secured, payments are credited to principal.

Management and the Board of Directors believe the current balance of the allowance for credit losses is sufficient to cover probable incurred losses. Refer to the Provision for Credit Losses section for further discussion on the Company’s credit quality.