UNITED BANCORP INC OH

Current report

United Bancorp, Inc. (NASDAQ: UBCP) reported diluted earnings per share of $0.32 and net income of $1,872,000 for the three months ended March 31, 2025.

Current report

We are pleased to report on the earnings performance of United Bancorp, Inc. (UBCP) for the first quarter ended March 31, 2025. For the quarter, our Company achieved solid net income and diluted earnings per share results of $1,872,000 and $0.32. Although these earning metrics are respective decreases of $121,000, or 6.1%, and $0.03, or 8.6%, over the results achieved during the first quarter of last year, they are each respectively higher on a linked-quarter basis by $23,000 and $0.01. As we have previously disclosed, last year’s first quarter financial performance results included non-recurring items that added approximately $271,000 to net income and $0.05 to diluted earnings per share. In this year’s first quarter, our Company did have a net realized gain on the sale of available for sale securities, which added approximately $113,000 to net income and $0.02 to our diluted earnings per share. Netting these one-time, nonrecurring items out of our reported diluted earnings per share for both years results in “core” diluted earnings per share for each of these periods of $0.30. Considering, over the course of the past twelve months, we have undertaken several transformative projects that that have added to our noninterest expense levels, such as: the construction of our new Wheeling Banking Center, the development and scaling out of both Unified Mortgage and our Treasury Management Programs, the investment in new technology and digital transformation and the acquisition of a property in St. Clairsville, Ohio that will become our Unified Center which will house our Accounting, Information Technology and Customer Sales and Service Functions we are very happy with the present performance of our Company. With our unwavering focus on growing our Company through our investment in infrastructure, product development and delivery, we strongly believe that these current undertakings which are dilutive to current financial performance will provide a pathway to future growth and lead to increasingly higher performance over the course of the next twelve to twenty-four months, and help us to maintain our overall relevance for many years to come.

Current report

As we all know, the economic environment in which we are operating is posing challenges for all businesses with the present high degree of uncertainty that permeates our national and world economies as a result of the tariffs that were announced under the new administration and which are in the process of being enacted. This new trade policy coupled with a potentially slowing economic output and lingering inflation has led many of us to question the future direction of our economy and what impact it will have on the businesses that operate therein, including our Company. Even though we have dealt with changing fiscal and monetary policy over the course of the past couple of years, this new economic reality relating to trade policy has only recently been cast upon us. Thus far, our Company has responded in a positive fashion to this new economic uncertainty with which we have been confronted on both a year-over-year and linked-quarter basis. Year-over-year, as of the most recently ended quarter, the net interest income that our Company realized increased by $131,000, or 2.2%, and our net interest margin improved by fourteen (14) basis points to 3.60% from 3.46% the previous year. Even though our Company’s total assets declined during this same time period by $3.3 million, or 0.40%, to a level of $830.7 million as of March 31, 2025, we were able to improve the level of net interest income earned by both increasing our gross loans outstanding by $16.6 million, or 3.5%, and having our loan portfolio continuing to reprice in a higher-rate environment. Accordingly, our total interest income increased year-over-year during the first quarter by $221,000 or 2.3%. Even though we continue to operate in a higher than previously anticipated interest rate environment on which we benefitted on the asset-side of the balance sheet, we were able to manage the liability-side of our balance sheet by selectively pricing our retail deposit offerings to manage our liquidity needs and control our overall interest expense levels. As of March 31, 2025, our total deposits decreased by ($1.7 million), or (0.27%), and our interest expense to average assets marginally increased by four (4) basis points, to 1.75%, year-over-year. In addition, on a linked quarter basis as of March 31, 2025, our Company experienced a decline in its interest expense to average assets of three (3) basis points from 1.78% the previous quarter and an increase in its net interest margin of nine (9) basis points, increasing from its previous quarter level of 3.51%. We are optimistic that this trend will continue into the coming quarters of the current year; especially, if the Federal Open Market Committee (FOMC) of the Federal Reserve gains more clarity on the direction of our economy and reduces their target for the Federal Funds Rate (FFR) in the coming months as the markets presently forecast.

Current report

Although we have encountered many economic and policy-related challenges in recent years that commenced with the world-wide pandemic (ie: zero interest rate policy, excessive stimulus funding, extreme inflation and historically aggressive tightening of monetary policy), in a lot of ways the current economic challenges relating to the newly implemented trade policy of our country has created a level of uncertainty that, arguably, exceeds any other that occurred in recent years. Our Company, like most others, is keenly focused on what is presently occurring and will be ready to respond in an appropriate fashion as things develop more fully and we gain more clarity on the evolving situation. Even though we continue to operate in an environment emanating a heightened level of uncertainty, United Bancorp, Inc. (UBCP) is performing in an admirable fashion at present. In recent months, our Company has benefitted from the new direction of our country’s monetary policy as the Federal Open Market Committee of the Federal Reserve (FOMC) has loosened this policy, somewhat, by lowering the target for the Federal Funds Rate (FFR) by one hundred (100) basis points since their September 18, 2024 meeting. This most recent moderating action taken by the FOMC has taken some of the pressure off of our net interest margin and has enabled our Company to generate higher levels of net interest income and experience an increase in its net interest margin for the first time in many quarters. These are positive trends that we anticipate continuing in the coming quarters of the current year for our Company. Even with all of the present uncertainty within both the national and global economies, we are happy to see the growth trends that we have seen over the course of the past two quarters in our gross loans and the current quality of the credit metrics of our loan portfolio that remain relatively stable and low by historic standards. With the stronger demand for our loan products that we are currently experiencing especially, in the relationship-driven, small-business oriented commercial portfolio, which accounts for approximately eighty percent (80%) of our total loans we can begin to focus on attracting more deposits to fund this increased loan demand and, once again, begin growing our Company and working toward achieving our goal of growing our total assets to a level of $1.0 billion or greater!

Current report

Under it’s guiding principles and vision, United Bancorp, Inc. (UBCP) has had a growth-centric goal to grow its asset-base to a level of $1.0 billion (and, beyond) for the past several years. With all of the economic uncertainty and challenges within the past few years with which we have been confronted, our Company adopted a more defensive posture which sacrificed growth for the sake of maintaining sound performance with a more conservative balance sheet management approach. Beginning in 2024, we began to adopt a more offensive-oriented posture with a focus, once again, on driving the growth of the balance sheet of our Company, which we believe will lead to higher levels of earnings and profitability and ensure our long-term relevance. Several new initiatives (some of which we have previously announced and have already undertaken or begun) are key to driving this envisioned growth. A major initiative that our Company has undertaken as we put our proverbial “foot on the accelerator” to achieve our envisioned growth objective is the development and construction of a new regional banking center in the desirable market of Wheeling, West Virginia. We are excited with the progress that has been made on this highly-promising banking center, which is tentatively scheduled to open in the late third quarter of this year. Even though this banking center has not yet opened, some of the recent growth within our loan portfolio is directly attributed to this office through the efforts of our business development team that we already have in place. We firmly believe that within five years, this new banking center will be a top performer for UBCP! Another exciting initiative that we have undertaken and more fully developed over the course of the past year is our new Unified Mortgage Division. Last year, this new division helped our Company

Current report

produce higher levels of fee income and we believe that as we scale this function more fully, it will only become more lucrative for us. We have also become more focused on developing our Treasury Management function, which focusses on helping our small business customers with cash management, merchant services and payments. Not only does this developing department within our Company help generate higher levels of fee income, it also is key to helping us grow our no or low-cost deposit base both of which lead to increased profitability. Also, over the course of the past year, UBCP has made a tremendous investment in the area of technology as we focus on digital transformation and omni-channel delivery, which will ensure that we meet the changing needs of our customer base and attract new customers to our Company. We are also in the process of implementing artificial intelligence (AI), which will help us better serve our customers by more effectively and efficiently answering customer inquiries on their terms and guide them to the best financial solutions to meet their current and changing needs. Lastly, we acquired a property in St. Clairsville, Ohio that will house the Accounting, Technology and Customer Support functions for our Company, which will be known as the Unified Center. As UBCP has grown and evolved over the course of the past several years (and, as we continue to do so), we have had a need for a facility such as this. We are most excited about the Customer Support function that we are developing at the Unified Center, which will centralize the service function of our Company with team members that are highly skilled and more capable of providing a more “Unified Experience” to our valued customers. In addition, it will have a sales-oriented function, which is anticipated to lead to additional business for our Company (with the help of our AI-solution) by routing inbound inquiries from any banking channel to a skilled sales professional. This process will focus on the development and expansion of relationships through more effective on-boarding practices and the cross-selling of additional products and services to our existing and newly prospected customers through this much more efficient and effective channel.

Current report

Certificates of deposit greater than $250,000 are not considered part of core deposits, and as such, are used to balance rate sensitivity as a tool of funds management. At March 31, 2025, certificates of deposit greater than $250,000 increased $5.3 million or 14.8%, from December 31, 2024 totals.

Current report

The reported diluted earnings per share was $0.32 for the quarter ended March 31, 2025 compared to $0.35 for the quarter ended March 31, 2024, a decrease of 8.6%.

Current report

Net interest income increased $132,000 or 2.2% for the three months ended March 31, 2025 compared to the same period in 2024.

Current report

Provision for Credit Losses

Current report

The Company had a provision for credit losses of $96,000 for the three months ended March 31, 2025. The Company did not record a provision for credit losses during the three months ended 2024.

Current report

To be updated with Press Release

Current report

The provision for federal income taxes (benefits) was ($26,000) for the three months ended March 31, 2025. The Company had an income tax expense of $150,000 for the three months ended March 31, 2024.

Current report

Inflation and Economic Environment

Previous report

Condition and Results of Operations

Previous report

Our Company reported diluted earnings per share of $0.31 and net income of $1,820,000 for the three months ended September 30, 2024. For the first nine months of the current year, UBCP reported diluted earnings per share of $0.95 and net income of $5,553,000.

Previous report

We are happy to report on the solid earnings and, overall, stable performance of United Bancorp, Inc. (UBCP) for the third quarter ended September 30, 2024 and year to date. For the quarter, our Company produced net income and diluted earnings per share results of $1,820,000 and $0.31, which were respective decreases of $573,000 and $0.11 from the results achieved for the third quarter of the previous year. But, on a linked-quarter basis, net income and diluted earnings per share respectively increased by $81,000, or 4.6%, and $0.01, or 3.3%, over the same levels achieved the prior quarter. For the first nine months of 2024, UBCP produced net income and diluted earnings per share of $5,553,000 and $0.95, which were respective decreases of $1,007,000 and $0.20 compared to the results achieved for the same period in 2023. As we navigated the first nine months of 2024, our Company, like most companies operating in the financial services industry, are fighting the battle of both net interest margin compression and limited or decreasing growth as interest rates remained elevated and economic activity was sluggish. As we started the current year, the interest rate forecast by most economists and the financial markets indicated that we could expect up to seven rate cuts throughout the year, which, overall, was projected to be favorable for our industry as it would help control funding costs. As we progressed through the first nine months of the current year and ended the third quarter, interest rates have been higher for longer than anticipated, with the potential of fewer rate cuts this year. Although the Federal Open Market Committee of the Federal Reserve (FOMC) did finally cut the target for the Federal Funds Rate (FFR) by fifty-basis points toward the end of the most recently ended quarter, monetary policy is still more restrictive than forecast at the beginning of the year as of September 30, 2024 and is creating challenges for our industry by putting pressure on the net interest margins and bottom-line performances of many financial institutions. In addition, it has also been challenging for many financial institutions to grow their balance sheets and optimally leverage their capital as economic activity has been relatively weak overall; thus, having a negative impact on loan demand and growth in loans outstanding, which has been in the low to mid-single digits for many financial institutions in the current year. Our Company is not immune from these challenges influenced by current monetary policy and macroeconomic trends as seen in our performance for the current quarter and year-to-date in 2024 in comparison to the same periods in the previous year, which were some of the highest performing periods in our Company’s history. Regardless of these challenges and all things considered at present, we are generally satisfied with the current performance of our Company. We believe that these challenges will be short-lived and will be overcome as we exe…

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Previous report

At September 30, 2024 and as previously mentioned, in the presently uncertain economic environment in which we are operating, it has been a challenge to profitably leverage our balance sheet and, accordingly, UBCP has only achieved marginal growth in assets in the current year. As of September 30, 2024, our Company’s total average assets were $826.2 million, an increase of $19.0 million, or 2.4%, year-over-year. For this same period, our Company’s average loans increased by $20.4 million, or 4.4%, to a level of $480.8 million. Also, as of the most recently ended quarter, our Company saw an increase in its average investment securities of $13.4 million, or 5.5%, over the previous year to a level of $259.3 million. With this marginally higher level of earning assets and our loans outstanding continuing to reprice in a higher interest rate environment, we were able to increase the total level of total interest income that our Company generated by $2.3 million, or 8.5%, for the first nine months of the current year relative to last year. But, this year-over-year increase in total interest income was more than offset by the increase in total interest expense experienced by UBCP. At September 30, 2024, our Company’s total interest expense increased year-over-year by $3.2 million, or 40.7%, even though average total deposits decreased by ($19.6) million, or (3.1%), as of the most recently ended quarter. The increase in our Company’s total interest expense can be attributed to both the change in the mix of our retail depository funding from lower cost demand and savings balances to higher cost term funding, along with having a previously disclosed $75.0 million Federal Home Loan Bank (FHLB) Advance which we originated in mid-March 2023 for the entirety of this year. Relating to the change in the mix of our retail funding, lower cost demand and savings balances decreased by ($40.6) million, or (8.3%), while higher cost time balances increased by $28.4 million or 20.4%. Accordingly, year-over-year, the level of net interest income that we achieved declined by ($880,000), or (4.6%), to a level of $18.5 million and our net interest margin declined by 13 basis points from 3.63% to 3.50%. During the third quarter of 2024, our Company was able to better control the level of decline of its net interest margin experiencing a decrease on a linked quarter basis of four basis points. We are optimistic that we will be able to overcome this trend in the coming quarters as the monetary policy of the Federal Open Market Committee (FOMC) becomes less restrictive and, hopefully, helps us lower our overall funding costs. Lastly relating to our retail deposit base and of significance our Company does not have any brokered deposits and total uninsured deposits as of September 30, 2024 totaled 18.4% of total deposits, which are both very low compared to industry standards and strongly indicative of our Company’s focus on building strong relationships with long-term, core depo…

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Previous report

United Bancorp, Inc. (UBCP), like most banking organizations, has felt the pressure of operating in an environment wherein monetary policy has driven interest rates higher for a longer duration than many of us anticipated which has created different challenges for us and most banks. Fortunately, we are hopeful that the unwinding of the restrictive monetary policy that began toward the end of this most recent quarter by the Federal Open Market Committee (FOMC) will help alleviate some of this pressure in the coming quarters; especially, relating to our cost of deposit pricing and the impact that it has had on our net interest margin, among other things. Overall, we are very happy with the solid financial performance that our Company achieved during the third quarter and first nine months of 2024. As previously mentioned, even though UBCP experienced solid year-over-year growth in the level of total interest income that it generated for the first nine months ended September 30, 2024, our Company experienced a greater increase in the total interest expense that it incurred, which caused the aforementioned decline in our net interest income. Fortunately for our Company, taking the $75.0 million advance from the Federal Home Loan Bank (FHLB) toward the end of the first quarter of last year, to this point, has helped us to somewhat mitigate this decline in our net interest income by affording us the ability to be more selective in the pricing of our offering rates on our interest-bearing depository products while maintaining adequate levels of liquidity. With a present net interest margin of 3.50% as of September 30, 2024, we believe that this performance metric compares favorably to that of our peer group and industry at present.

Previous report

With the current pressure on our net interest margin and net interest income, United Bancorp, Inc. (UBCP) is focused on controlling its net noninterest margin while continuing with a focus of prudently growing our Company and remaining relevant in a very challenging and competitive environment. Regarding the noninterest income-side of the noninterest margin, some fee generating services and lines of business continue to be under attack by both regulatory and political authorities, which has ultimately put pressure on the level of noninterest income that our Company is able to realize. Accordingly (and, instead of dwelling on this negative reality), UBCP is looking to find new alternatives to generate additional levels of both noninterest income and other sources of revenue. One of these new alternatives is our focus on enhancing our mortgage origination function with the development of Unified Mortgage, which is beginning to help our Company generate higher levels of fee income with the heightened production and sale of secondary market mortgage products, along with the enhancement of our interest income levels through the origination of higher levels of portfolio-type mortgage products. In this area, year-over-year, our Company has experienced an increase of $355,000 on the net realized gain on the sale of loans and we anticipate the level of income to grow in this business-line as we further scale this revenue generating function, which has a tremendous level of positive operating leverage at present. Another alternative is our stronger commitment to developing our Treasury Management function, which offers fee-based services to our commercial customers in the areas of cash management and payments that produce noninterest income in addition to helping to control interest expense by generating a higher level of low or no-cost depository balances for our Company. Lastly, another alternative to enhancing the overall performance of UBCP (and, one that should strongly contribute to our Company attaining its goal of growing its total assets to a level of $1.0 billion or greater) is the development of our newest banking center, which is currently under construction in the highly favorable market of Wheeling, West Virginia and should be completed for opening in the third quarter of 2025. Our Company already has many solid customer relationships in this coveted marketplace and we firmly believe that by finally having a “brick-and-mortar” location therein, we will be able to more fully leverage these already existing relationships, while having the opportunity to build many new relationships within this prime market. Obviously, these new alternatives that can lead to additional noninterest income and revenue enhancement opportunities for UBCP do have a cost, which already has and will continue to lead to additional expense or overhead for our Company. But, sometimes you have to take one-step back in order to take several-steps forward and that is what we…

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Results of Operations for the Nine Months Ended September 30, 2024 and 2023

Previous report

For the nine months ended September 30, 2024 the Company reported net earnings of $5,553,000, compared to $6,560,000 for the nine months ended September 30, 2023. On a per share basis, the Company’s diluted earnings were $0.95 for the nine months ended September 30, 2024 and $1.15 for the nine months ended September 30, 2023.

Previous report

Net interest income, by definition, is the difference between interest income generated on interest-earning assets and the interest expense incurred on interest-bearing liabilities. Various factors contribute to changes in net interest income, including volumes, interest rates and the composition or mix of interest-earning assets in relation to interest-bearing liabilities. Net interest income before the provision for credit losses decreased 4.5%, or $878,000 for the nine months ended September 30, 2024 compared to the same period in 2023. The increase is mainly attributable to an increase in the overall fuding costs for the Company.

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Provision for (Reversal of ) Credit Loss Expense – Loans and Off Balance Sheet Commitments

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Net loans charged-off for the nine months ended September 30, 2024, excluding overdrafts, was $141,000. Considering the level of charge-offs and a slight increase in the projection of unemployment in our loan credit loss reserve modeling system, the Company recorded a provision for credit losses of $304,000 for the nine months ended September 30, 2024. During the nine months ended September 30, 2024, the Company recorded a reversal of credit loss expense – off balance sheet commitments of $130,000 due to reduction in outstanding commitments. Giving strong consideration to our overall solid credit related metrics at September 30, 2023, our Company had a reversal of credit loss expense of $300,000 during the nine months ended September 30, 2023. The overall improvement in the economy post COVID also contributed to the reversal of credit loss expense during the nine months ended September 30, 2023.

Previous report

Total noninterest income is made up of bank related fees and service charges, as well as other income producing services provided, sales of loans in the secondary market, ATM income, early redemption penalties for certificates of deposit, safe deposit rental income, internet bank service fees, earnings on bank-owned life insurance and other miscellaneous items.

Previous report

The (credit) provision for federal income taxes was ($41,000) for the nine months ended September 30, 2024, compared to a provision of $339,000 for the same period in 2023. The credit for federal income taxes is a result of the increased level of non taxable income year period over period.

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Net Income

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For the three months ended September 30, 2024 the Company reported net earnings of $1,820,000, compared to $2,392,000 for the three months ended September 30, 2023. On a per share basis, the Company’s diluted earnings were $0.31 for the three months ended September 30, 2024 and $0.42 for 2023.

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Net Interest Income

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Net interest income decreased 6.5%, or $427,000, for the three months ended September 30, 2024 compared to the same period in 2023. This decrease was mainly driven by an increase in the Company’s cost of funds for the three months ended September 30, 2024.

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Provision for (Reversal of ) Credit Loss Expense – Loans and Off Balance Sheet Commitments

Previous report

Net loans charged-off for the three months ended September 30, 2024, excluding overdrafts, was $141,000. Considering the level of charge-offs and a slight increase in the projection of unemployment in our loan loss reserve modeling system, the Company recorded a provision for credit loss expense - loans of $69,000 for the three months ended September 30, 2024. Giving strong consideration to our overall solid credit related metrics as of September 30, 2023 and the forecast for unemployment improving, our Company had a reversal of credit loss expense of $154,000 during the three months ended September 30, 2023.

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Noninterest Income

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Total noninterest income is made up of bank related fees and service charges, as well as other income producing services provided, sales of loans in the secondary market, ATM income, early redemption penalties for certificates of deposit, safe deposit rental income, internet bank service fees, earnings on bank-owned life insurance and other miscellaneous items.

Previous report

Noninterest income for the three months ended September 30, 2024 as compared to the same period in 2023 increased $253,000 or 26.2%. The net realized gain on sale of loans increased $167,000 for the three months ended September 30, 2024.

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Noninterest Expense

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The Company saw its noninterest expense increase by $296,000 or 5.7% year-over-year. Salaries increased $277,000 for the three months ended compared to the same period in 2023. This increase was mainly driven by inflationary pressure in the work force during 2023 and 2024.

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Federal Income Taxes

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The (credit) provision for federal income taxes was ($64,000) for the three months ended September 30, 2024, compared to a provision of $58,000 for the same period in 2023. The credit for federal income taxes is a result of the increased level of non taxable income period year period.

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Inflation

Previous report

While the stock market has continued to remain robust through the third quarter of 2024, certain indicators suggest that there could be looming trouble in the national and global economies related to increased fiscal deficits and the need for additional borrowing by the U.S. government to fund both its operations and to service its existing debt. In addition, data supplied by the Federal Reserve continues to show a systematic decline in consumer confidence in the U.S. since the beginning of 2024. Some of the basis for the current consumer sentiment is related to pressure on home values, primarily in the sunbelt states, as well as increasing concern over job security. While personal consumption has remained relatively strong on a national basis through August of 2024, many economists warn that a significant reduction in consumer spending may become a factor going into fiscal year 2025.

Previous report

With respect specifically to the third quarter of 2024, the Federal Reserve has indicated that economic activity was little changed in nearly all Federal Reserve Districts. Most Districts reported declining manufacturing activity, with activity in the banking sector remaining generally steady to up slightly, and loan demand was mixed, with some Districts noting an improvement in the outlook due to the decline in interest rates. Reports on consumer spending were mixed. While housing market activity has generally held up, with home values largely holding steady, inventory continued to expand in much of the nation. Nationally, commercial real estate markets were generally flat.

Previous report

According to the Federal Reserve, inflation has continued to moderate during the third quarter of 2024. However, the prices of some food staples, such as eggs and dairy, have increased more sharply in some regions, and acute pressures from rising insurance and healthcare costs are being felt by some consumers. The principal mechanism used by the Federal Reserve to combat rising inflation involves increasing interest rates, and it is management’s opinion is that movements in interest rates affect the Company’s financial condition and results of operations more acutely in the short term than changes in the rate of inflation. The Company’s ability to match the interest sensitivity of its financial assets to the interest sensitivity of its liabilities in its asset/liability management may tend to minimize the effect of changes in interest rates on the Company’s performance.

Previous report — wording carried elsewhere

Internal capital growth, through the retention of earnings, is the primary means of maintaining capital adequacy for the Company. Stockholders’ equity totaled $65.5 million at September 30, 2024, compared to $63.6 million at December 31, 2023, a $1.9 million increase.