UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
For the quarterly period ended
OR
For the transition period from ___________ to___________
Commission File Number:
(Exact name of registrant as specified in its charter)
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incorporation or organization) |
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(Former name, former address and former fiscal year, if changed since last report) |
Securities registered pursuant to Section 12(b) of the Act:
Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
Capital Market |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer ☐ | Accelerated filer ☐ | |
Smaller Reporting Company | Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act)
Yes
Indicate the number of shares outstanding of the issuer’s classes of common stock as of the latest practicable date: As of May 10, 2024,
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Management’s Discussion and Analysis of Financial Condition and Results of Operations | 30 | |
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2
ITEM 1. Financial Statements
United Bancorp, Inc.
Condensed Consolidated Balance Sheets
(In thousands, except share data)
| March 31, |
| December 31, | |||
| 2024 |
| 2023 | |||
(Unaudited) | ||||||
Assets |
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Cash and due from banks | $ | | $ | | ||
Interest-bearing demand deposits |
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Cash and cash equivalents |
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Available-for-sale securities, amortized cost of $ |
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Loans, net of allowance for credit losses of $ |
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Premises and equipment |
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Federal Home Loan Bank stock |
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Foreclosed assets held for sale, net |
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Core deposit other intangible asset |
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Goodwill | | | ||||
Accrued interest receivable |
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Deferred federal income tax |
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Bank-owned life insurance |
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Other assets | | | ||||
Total assets | $ | $ | ||||
Liabilities and Stockholders’ Equity |
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Liabilities |
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Deposits |
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Demand | $ | | $ | | ||
Savings |
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Time |
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Total deposits |
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Securities sold under repurchase agreements |
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Subordinated debentures |
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Advances Federal Home Loan Bank | | | ||||
Lease liability – finance lease | | | ||||
Interest payable and other liabilities |
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Total liabilities |
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Stockholders’ Equity |
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Preferred stock, |
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Common stock, $ |
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Additional paid-in capital |
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Retained earnings |
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Stock held by deferred compensation plan; |
| ( |
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Accumulated other comprehensive loss |
| ( |
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Treasury stock, at cost |
| ( |
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Total stockholders’ equity |
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Total liabilities and stockholders’ equity | $ | | $ | | ||
See Notes to Condensed Consolidated Financial Statements
3
United Bancorp, Inc.
Condensed Consolidated Statements of Income
Three Months Ended March 31, 2024 and 2023
(In thousands, except per share data)
(Unaudited)
| 2024 |
| 2023 | |||
Interest and Dividend Income | ||||||
Loans, including fees | $ | | $ | | ||
Securities: | ||||||
Taxable | | | ||||
Non-taxable | | | ||||
Federal funds sold | | | ||||
Dividends on Federal Home Loan Bank and other stock | | | ||||
Total interest and dividend income | | | ||||
Interest Expense | ||||||
Deposits | | | ||||
Borrowings | | | ||||
Total interest expense | | | ||||
Net Interest Income | | | ||||
Credit Loss Expense | ||||||
Provision for credit loss expense - loans | — | — | ||||
Provision for credit loss expense - off balance sheet commitments | — | — | ||||
Provision for Credit Loss Expense | — | — | ||||
Net Interest Income After Provision for Credit Losses | | | ||||
Noninterest Income | — | |||||
Service charges on deposit accounts | | | ||||
Realized loss on sale of available-for-sale securities | ( | — | ||||
Realized gains on sales of loans | | — | ||||
Earnings on bank-owned life insurance | | | ||||
Other income | | | ||||
Total noninterest income | | | ||||
Noninterest Expense | ||||||
Salaries and employee benefits | | | ||||
Occupancy and equipment | | | ||||
Professional services | | | ||||
FDIC insurance | | | ||||
Insurance | | | ||||
Franchise and other taxes | | | ||||
Advertising | | | ||||
Stationery and office supplies | | | ||||
Amortization of intangibles | | | ||||
Other expenses | | | ||||
Total noninterest expense | | | ||||
Income Before Federal Income Taxes | | | ||||
Provision for Federal Income Taxes | | | ||||
Net Income | $ | | $ | | ||
Basic Earnings Per Share | $ | | $ | | ||
Diluted Earnings Per Share | $ | | $ | | ||
Dividends Per Share (including special dividend of $ | $ | | $ | | ||
See Notes to Condensed Consolidated Financial Statements
4
United Bancorp, Inc.
Condensed Consolidated Statements of Comprehensive Income
Three Months Ended March 31, 2024 and 2023
(In thousands, except per share data)
(Unaudited)
| 2024 |
| 2023 | |||
Net Income | $ | | $ | | ||
Other comprehensive income (loss), net of tax |
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Net realized loss included in net income, net of tax benefits of ($ |
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Unrealized holding gain (loss) on available-for-sale securities during the period, net of taxes (benefits) of ($ | ( | | ||||
Comprehensive Income | $ | | $ | | ||
See Notes to Condensed Consolidated Financial Statements
5
United Bancorp, Inc.
Consolidated Statements of Stockholders’ Equity
Three Months Ended March 31, 2024 and 2023
(In thousands except per share data)
(Unaudited)
Treasury | Accumulated | |||||||||||||||||
Additional | Stock and | Other | ||||||||||||||||
Common | Paid-in | Deferred | Retained | Comprehensive | ||||||||||||||
| Stock |
| Capital |
| Compensation |
| Earnings |
| Income (Loss) |
| Total | |||||||
Balance January 1, 2023 | $ | | $ | $ | ( | $ | | $ | ( | $ | | |||||||
Net income |
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Other comprehensive income |
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Cash dividends - $ |
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Repurchase of common stock | — | — | ( | — | — | ( | ||||||||||||
Shares purchased for deferred compensation plan | — | ( | |
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Cumulative effect of adoption of ASU 2016-13 |
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Expense related to share-based compensation plans | — | | — | — | — | | ||||||||||||
Balance, March 31, 2023 | $ | | $ | | $ | ( | $ | | $ | ( | $ | | ||||||
Balance January 1, 2024 |
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Net income |
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Restricted stock issued |
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Other comprehensive loss |
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Cash dividends - $ | — | — | — | ( | — | ( | ||||||||||||
Repurchase of common stock | — | — | ( | — | — | ( | ||||||||||||
Shares purchased for deferred compensation plan |
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Expense related to share-based compensation plans | — | | — | — | — | | ||||||||||||
Balance, March 31, 2024 | $ | | $ | | $ | ( | $ | | $ | ( | $ | | ||||||
See Notes to Condensed Consolidated Financial Statements
6
United Bancorp, Inc.
Condensed Consolidated Statements of Cash Flows
Three Months Ended March 31, 2024 and 2023
(In thousands except per share data)
(Unaudited)
| 2024 |
| 2023 | |||
Operating Activities | ||||||
Net income | $ | |
| $ | | |
Items not requiring (providing) cash |
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Depreciation and amortization |
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Amortization of intangible asset | |
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Premium amortization on securities |
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Provision for credit loss expense |
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Gain on sale of loans |
| ( |
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Loss on sale of available-for-sale securities | | — | ||||
Expense related to share based compensation programs |
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Increase in value of bank-owned life insurance | ( | ( | ||||
Originations of loans held for sale | ( | — | ||||
Proceeds from sale of loans held for sale | | — | ||||
Amortization of debt instrument costs |
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Net change in accrued interest receivable and other assets | | ( | ||||
Net change in accrued expenses and other liabilities |
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Net cash provided by operating activities |
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Investing Activities | ||||||
Purchase of available-for-sale securities | ( | ( | ||||
Proceeds from calls/redemptions of available-for-sale securities | | | ||||
Sale of available-for-sale securities | | — | ||||
Net change in loans | | ( | ||||
Purchase of FHLB Stock | — | ( | ||||
Redemption of FHLB Stock | — | | ||||
Purchases of premises and equipment | ( | ( | ||||
Net cash (used in) investing activities | ( | ( | ||||
Financing Activities | ||||||
Net change in deposits | | | ||||
Net change in securities sold under repurchase agreements |
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Net change in Federal Home Loan Bank advances | — | | ||||
Finance lease principal payment | ( | — | ||||
Repurchase of common stock | ( | ( | ||||
Cash dividends paid | ( | ( | ||||
Net cash provided by financing activities |
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Increase (Decrease) in Cash and Cash Equivalents |
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Cash and Cash Equivalents, Beginning of Period | | | ||||
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Cash and Cash Equivalents, End of Period | $ | $ | | |||
Supplemental Cash Flows Information | ||||||
Federal income taxes paid | $ | — | $ | — | ||
Adoption of ASC 326 | $ | — | $ | | ||
Interest paid on deposits and borrowings | $ | | $ | | ||
See Notes to Condensed Consolidated Financial Statements
7
United Bancorp, Inc.
Notes to Condensed Consolidated Financial Statements
Three Months Ended March 31, 2024 and 2023
(In thousands)
Note 1: Summary of Significant Accounting Policies
These interim financial statements are prepared without audit and reflect all adjustments which, in the opinion of management, are necessary to present fairly the financial position of United Bancorp, Inc. (“Company”) at March 31, 2024, and its results of operations and cash flows for the interim periods presented. All such adjustments are normal and recurring in nature. The accompanying condensed consolidated financial statements have been prepared in accordance with the instructions for Form 10-Q and, therefore, do not purport to contain all the necessary financial disclosures required by accounting principles generally accepted in the United States of America that might otherwise be necessary in the circumstances and should be read in conjunction with the Company’s consolidated financial statements and related notes for the year ended December 31, 2023 included in its Annual Report on Form 10-K. Reference is made to the accounting policies of the Company described in the Notes to the Consolidated Financial Statements contained in its Annual Report on Form 10-K. The results of operations for the three months ended March 31, 2024, are not necessarily indicative of the results to be expected for the full year. The condensed consolidated balance sheet of the Company as of December 31, 2023 has been derived from the audited consolidated balance sheet of the Company as of that date.
Principles of Consolidation
The consolidated financial statements include the accounts of United Bancorp, Inc. (“United” or “the Company”) and its wholly-owned subsidiary, Unified Bank of Martins Ferry, Ohio (“the Bank”). All intercompany transactions and balances have been eliminated in consolidation.
Nature of Operations
The Company’s revenues, operating income and assets are almost exclusively derived from banking. Accordingly, all of the Company’s banking operations are considered by management to be aggregated in one reportable operating segment. Customers are mainly located in Athens, Belmont, Carroll, Fairfield, Harrison, Jefferson and Tuscarawas Counties in Ohio and Marshall and Ohio Counties in West Virginia and the surrounding localities in northeastern, east-central and southeastern Ohio and include a wide range of individuals, businesses and other organizations. Unified Bank conducts its business through its main office in Martins Ferry, Ohio and branches in Bridgeport, Colerain, Dellroy, Dover, Glouster, Jewett, Lancaster Downtown, Lancaster East, Nelsonville, New Philadelphia, Powhatan Point, St. Clairsville East, St. Clairsville West, Sherrodsville, Strasburg, Tiltonsville, Ohio and Moundsville West Virginia.
The Company’s primary deposit products are checking, savings and term certificate accounts and its primary lending products are residential real estate, commercial and industrial, commercial real estate and installment loans. Substantially all loans are secured by specific items of collateral including business assets, consumer assets and real estate. Commercial and industrial loans are expected to be repaid from cash flow from operations of businesses. Real estate loans are secured by both residential and commercial real estate. Net interest income is affected by the relative amount of interest-earning assets and interest-bearing liabilities and the interest received or paid on these balances. The level of interest rates paid or received by the Company can be significantly influenced by a number of environmental factors, such as governmental monetary and fiscal policies, that are outside of management’s control.
Revenue Recognition
Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers (“ASC 606”), establishes principles for reporting information about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entity’s contracts to provide goods or services to customers. The core principle requires an entity to recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration that it expects to be entitled to receive in exchange for those goods or services recognized as performance obligations are satisfied.
The majority of the Company’s revenue-generating transactions are not subject to ASC 606, including revenue generated from financial instruments, such as loans, investment securities, as well as revenue related to mortgage banking activities, as these activities are subject to other GAAP discussed elsewhere within the Company’s disclosures.
8
United Bancorp, Inc.
Notes to Condensed Consolidated Financial Statements
Three Months Ended March 31, 2024 and 2023
(In thousands)
Descriptions of the Company’s revenue-generating activities that are within the scope of ASC 606, which are presented in the income statements as components of non-interest income are as follows:
Service charges on deposit accounts - these represent general service fees for monthly account maintenance and activity- or transaction-based fees and consist of transaction-based revenue, time-based revenue (service period), item-based revenue or some other individual attribute-based revenue. Revenue is recognized when the performance obligation is completed which is generally monthly for account maintenance services or when a transaction has been completed (such as a wire transfer). Payment for such performance obligations are generally received at the time the performance obligations are satisfied.
Use of Estimates
To prepare financial statements in conformity with accounting principles generally accepted in the United States of America, management makes estimates and assumptions based on available information. These estimates and assumptions affect the amounts reported in the financial statements and the disclosures provided and future results could differ. The allowance for credit losses and fair values of financial instruments are particularly subject to change.
Investment Securities
Management determines the appropriate classification of debt securities at the time of purchase and re-evaluates such designation as of each balance sheet date.
Investment securities classified as available for sale are those securities that the Company intends to hold for an indefinite period of time but not necessarily to maturity. Securities available for sale are carried at fair value. Any decision to sell a security classified as available for sale would be based on various factors, including significant movements in interest rates, changes in the maturity mix of the Company’s assets and liabilities, liquidity needs, regulatory capital considerations, and other similar factors. Unrealized gains or losses are reported as increases or decreases in other comprehensive income (loss), net of the deferred tax effect. Realized gains or losses, determined on the basis of the cost of the specific securities sold, are included in earnings. Premiums and discounts are recognized in interest income using the interest method over the terms of the securities.
Allowance for Credit Losses – Available for Sale Securities
The Company measures expected credit losses on available-for-sale debt securities when the Company does not intend to sell, or when it is not more likely than not that it will be required to sell, the security before recovery of its amortized cost basis. If either of the criteria regarding intent or requirement to sell is met, the security’s amortized cost basis is written down to fair value through income. For available-for-sale debt securities that do not meet the aforementioned criteria, the Company evaluates whether the decline in fair value has resulted from credit losses or other factors. In making this assessment, the Company considers the extent to which fair value is less than amortized cost, any changes to the rating of the security by a rating agency, and adverse conditions specifically related to the security, among other factors. If this evaluation indicates that a credit loss exists, the present value of cash flows expected to be collected from the security are compared to the amortized cost basis of the security. If the present value of cash flows expected to be collected is less than the amortized cost basis, a credit loss exists and an allowance for credit losses is recorded for the credit loss, equal to the amount that the fair value is less than the amortized cost basis. The Company utilizes independent firms to evaluate the Company’s State and Municipal Obligations and Subordinated Notes to measure any expected credit losses. Any impairment that has not been recorded through an allowance for credit losses is recognized in other comprehensive income.
The allowance for credit losses on available-for-sale debt securities is included within investment securities available-for-sale on the consolidated balance sheet. Changes in the allowance for credit losses are recorded within provision for credit losses on the consolidated statement of income. Losses are charged against the allowance when the Company believes the collectability of an available-for-sale security is in jeopardy or when either of the criteria regarding intent or requirement to sell is met.
9
United Bancorp, Inc.
Notes to Condensed Consolidated Financial Statements
Three Months Ended March 31, 2024 and 2023
(In thousands)
Accrued interest receivable on available-for-sale debt securities totaled $
Loans
Loans receivable that management has the intent and ability to hold for the foreseeable future or until maturity or payoff are stated at their outstanding unpaid principal balances, net of an allowance for credit losses and any deferred fees or costs. Accrued interest receivable totaled $
The loans receivable portfolio is segmented into commercial and industrial, which are typically utilized for general business purposes and commercial real estate, which are collaterized by real estate. Homogenouse loans consisting similar products that are smaller in amount and distributed over a large number of individual borrowers include residential real estate and consumer loans.
For all classes of loans receivable, the accrual of interest is discontinued when the contractual payment of principal or interest has become 90 days past due or management has serious doubts about further collectability of principal or interest, even though the loan is currently performing. A loan may remain on accrual status if it is in the process of collection and is either guaranteed or well secured. When a loan is placed on nonaccrual status, unpaid interest credited to income in the current year is reversed and unpaid interest accrued in prior years is charged against the allowance for credit losses. Interest generally is either applied against principal or reported as interest income on a cash basis, according to management’s judgment as to the collectability of principal. Generally, loans are restored to accrual status when the obligation is brought current, has performed in accordance with the contractual terms for a reasonable period of time (generally six months), and the ultimate collectability of the total contractual principal and interest is no longer in doubt. The past-due status of all classes of loans receivable is determined based on contractual due dates for loan payments.
Allowance for Credit Losses - Loans
The allowance for credit losses (“ACL”) is a valuation reserve established and maintained by charges against income and is deducted from the amortized cost basis of loans to present the net amount expected to be collected on the loans. Loans, or portions thereof, are charged off against the ACL when they are deemed uncollectible. Expected recoveries do not exceed the aggregate of amounts previously charged-off and expected to be charged-off.
The ACL is an estimate of expected credit losses, measured over the contractual life of a loan, that considers our historical loss experience, current conditions and forecasts of future economic conditions. Determination of an appropriate ACL is inherently subjective and may have significant changes from period to period.
The methodology for determining the ACL has two main components: evaluation of expected credit losses for certain groups of homogeneous loans that share similar risk characteristics and evaluation of loans that do not share risk characteristics with other loans.
The allowance for credit losses is measured on a collective (pool) basis when similar risk characteristics exist. The Company uses the call report classification as its segment breakout and measures the allowance for credit losses using the Weighted Average Remaining Maturity method for all loan segments.
10
United Bancorp, Inc.
Notes to Condensed Consolidated Financial Statements
Three Months Ended March 31, 2024 and 2023
(In thousands)
Historical credit loss experience is the basis for the estimation of expected credit losses. We apply historical loss rates to pools of loans with similar risk characteristics. After consideration of the historic loss calculation, management applies qualitative adjustments to reflect the current conditions and reasonable and supportable forecasts not already reflected in the historical loss information at the balance sheet date. Our reasonable and supportable forecast adjustment is based on a 2 year unemployment forecast provided by Bloomberg and management judgment. For periods beyond our reasonable and supportable forecast, we revert back to historical annual loss rates for the remainder of the life of each pool after the forecast period. The qualitative adjustments for current conditions are based upon current level of inflation, changes in lending policies and practices, experience and ability of lending staff, quality of the Company’s loan review system, value of underlying collateral, the existence of and changes in concentrations and other external factors. These modified historical loss rates are multiplied by the outstanding principal balance of each loan to calculate a required reserve.
The Company has elected to exclude accrued interest receivable from the measurement of its ACL. When a loan is placed on non-accrual status, any outstanding accrued interest is reversed against interest income.
The ACL for individual loans begins with the use of normal credit review procedures to identify whether a loan no longer shares similar risk characteristics with other pooled loans and therefore, should be individually assessed. We evaluate all commercial and industrial loans and residential and installment loans greater than $
Accounting Pronouncements Adopted in 2023
In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” and subsequent related updates. This ASU replaces the incurred loss methodology for recognizing credit losses and requires businesses and other organizations to measure the current expected credit losses (CECL) on financial assets measured at amortized cost, including loans and held-to-maturity securities, net investments in leases, off-balance sheet credit exposures such as unfunded commitments, and other financial instruments. In addition, ASC 326 requires credit losses on available-for-sale debt securities to be presented as an allowance rather than as a write-down when management does not intend to sell or believes that it is not more likely than not they will be required to sell. This guidance became effective on January 1, 2023 for the Company. The results reported for periods beginning after January 1, 2023 are presented under ASC 326 while prior period amounts continue to be reported in accordance with previously applicable accounting standards.
The Company adopted this guidance, and subsequent related updates, using the modified retrospective approach for all financial assets measured at amortized cost, including loans and available-for-sale debt securities and unfunded commitments. On January 1, 2023, the Company recorded a cumulative effect decrease to retained earnings of $
The Company adopted the provisions of ASC 326 related to presenting other-than-temporary impairment on available-for-sale debt securities prior to January 1, 2023 using the prospective transition approach, though no such charges had been recorded on the securities held by the Company as of the date of adoption. The Company did not change the segmentation from the incurred loss method upon adoption of ASC 326.
11
United Bancorp, Inc.
Notes to Condensed Consolidated Financial Statements
Three Months Ended March 31, 2024 and 2023
(In thousands)
The impact of the change from the incurred loss model to the current expected credit loss model is detailed below
January 1, 2024 | |||||||||
Loan Categories (in thousands) |
| Pre-adoption |
| Adoption Impact |
| As Reported | |||
Commercial and Industrial | $ | | $ | | $ | | |||
Commercial Real Estate |
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Residential Real Estate |
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Consumer |
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$ | | $ | | $ | | ||||
Allowance for Credit Losses on Off-Balance Sheet Credit Exposures
The Company estimates expected credit losses over the contractual period in which the Company is exposed to credit risk via a contractual obligation to extend credit, unless that obligation is unconditionally cancellable by the Company. The allowance for credit losses on off-balance sheet credit exposures is adjusted through credit loss expense. The estimate includes consideration of the likelihood that funding will occur and an estimate of expected credit losses on commitments expected to be funded over its estimated life.
Earnings Per Share
Earnings per share (EPS) were computed as follows:
| Three Months Ended March 31, 2024 | |||||||
| Weighted- |
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Net | Average | Share | ||||||
| Income |
| Shares |
| Amount | |||
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Net income | $ | |
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Less allocated earnings on non-vested restricted stock |
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Less allocated dividends on non-vested restricted stock | ( | |||||||
Net income allocated to common stockholders | | |||||||
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Basic and diluted earnings per share |
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Three Months Ended March 31, 2023 | ||||||||
Weighted- |
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Net | Average | Per Share | ||||||
| Income |
| Shares |
| Amount | |||
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Net income | $ | | ||||||
Less allocated earnings on non-vested restricted stock |
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Less allocated dividends on non-vested restricted stock | ( | |||||||
Net income allocated to common stockholders | | |||||||
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Basic and diluted earnings per share |
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Income Taxes
The Company is subject to income taxes in the U.S. federal jurisdiction, as well as various state jurisdictions. Tax regulations within each jurisdiction are subject to the interpretation of the related tax laws and regulations and require significant judgment to apply.
12
United Bancorp, Inc.
Notes to Condensed Consolidated Financial Statements
Three Months Ended March 31, 2024 and 2023
(In thousands)
With few exceptions, the Company is no longer subject to U.S. federal, state and local income tax examinations by tax authorities for the years before 2020.
Note 2: Securities
The amortized cost and fair values, together with gross unrealized gains and losses of securities are as follows:
| Gross |
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Unrealized | Unrealized | |||||||||||
| Amortized Cost |
| Gains |
| Losses |
| Fair Value | |||||
Available-for-sale Securities: | ||||||||||||
March 31, 2024: |
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U.S. government agencies | $ | | $ | | $ | ( | $ | | ||||
Subordinated notes | | | ( | | ||||||||
State and municipal obligations |
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Total debt securities | $ | | $ | | $ | ( | $ | | ||||
| Gross |
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Unrealized | Unrealized | |||||||||||
| Amortized Cost |
| Gains |
| Losses |
| Fair Value | |||||
(In thousands) | ||||||||||||
Available-for-sale Securities: |
|
|
|
|
|
|
|
| ||||
December 31, 2023: |
|
|
|
|
|
|
|
| ||||
U.S. government agencies | $ | | $ | — | $ | ( | $ | | ||||
Subordinated notes | | — | ( | | ||||||||
State and municipal obligations | | | ( | | ||||||||
Total debt securities | $ | | $ | | $ | ( | $ | | ||||
There was
The amortized cost and fair value of available-for-sale securities at March 31, 2024, by contractual maturity, are shown below. Expected maturities will differ from contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties.
Amortized | Fair | |||||
|
| Cost |
| Value | ||
(In thousands) | ||||||
Under 1 year | $ | | $ | | ||
One to five years |
| |
| | ||
Five to ten years |
| |
| | ||
Over ten years |
| |
| | ||
Totals | $ | | $ | | ||
The carrying value of securities pledged as collateral, to secure public deposits and for other purposes, was $
Certain investments in debt securities are reported in the consolidated financial statements at an amount less than their historical cost. The total fair value of these investments at March 31, 2024 was $
13
United Bancorp, Inc.
Notes to Condensed Consolidated Financial Statements
Three Months Ended March 31, 2024 and 2023
(In thousands)
Based on evaluation of available evidence, including recent changes in market interest rates, credit rating information and information obtained from regulatory filings, management believes the declines in fair value for these securities are temporary and are a result of an increase in longer term interest rates.
The following tables show the Company’s available for sale securities and the related gross unrealized losses and fair value,for which an allowance for credit losses has not been recorded, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position at March 31, 2024 and December 31. 2023:
March 31, 2024 | ||||||||||||||||||
Less than 12 Months | 12 Months or More | Total | ||||||||||||||||
Description of | Unrealized | Unrealized | Unrealized | |||||||||||||||
Securities |
| Fair Value |
| Losses |
| Fair Value |
| Losses |
| Fair Value |
| Losses | ||||||
| (In thousands) | |||||||||||||||||
U.S. Government agencies | $ | | $ | | $ | | $ | ( | $ | | $ | ( | ||||||
Subordinated notes | | ( | | ( | | ( | ||||||||||||
State and municipal obligations | | ( | | ( | | ( | ||||||||||||
Total temporarily impaired securities | $ | | $ | ( | $ | | $ | ( | $ | | $ | ( | ||||||
December 31, 2023 | ||||||||||||||||||
Less than 12 Months | 12 Months or More | Total | ||||||||||||||||
Description of | Unrealized | Unrealized | Unrealized | |||||||||||||||
Securities |
| Fair Value |
| Losses |
| Fair Value |
| Losses |
| Fair Value |
| Losses | ||||||
| (In thousands) | |||||||||||||||||
US government agencies | $ | | $ | | $ | | $ | ( | $ | | $ | ( | ||||||
Subordinated notes | | ( | | ( | | ( | ||||||||||||
State and municipal obligations | | ( | | ( | | ( | ||||||||||||
Total temporarily impaired securities | $ | | $ | ( | $ | | $ | ( | $ | | $ | ( | ||||||
The unrealized losses on the Company’s
The Company recorded a loss on the sale of available-for-sale securities of approximately $
14
United Bancorp, Inc.
Notes to Condensed Consolidated Financial Statements
Three Months Ended March 31, 2024 and 2023
(In thousands)
Note 3: Loans and Allowance for Credit Losses
Categories of loans include:
March 31, | December 31, | |||||
| 2024 |
| 2023 | |||
(In thousands) | ||||||
Commercial and Industrial | $ | | $ | | ||
Commercial real estate |
| |
| | ||
Residential real estate |
| |
| | ||
Consumer loans |
| |
| | ||
Total gross loans |
| |
| | ||
Less allowance for credit losses |
| ( |
| ( | ||
Total loans | $ | | $ | | ||
The risk characteristics of each loan portfolio segment are as follows:
Commercial and Industrial, and Commercial Real Estate
Commercial loans are primarily based on the identified cash flows of the borrower and secondarily on the underlying collateral provided by the borrower. The cash flows of borrowers, however, may not be as expected and the collateral securing these loans may fluctuate in value. Most commercial loans are secured by the assets being financed or other business assets, such as accounts receivable or inventory, and may include a personal guarantee. Short-term loans may be made on an unsecured basis. In the case of loans secured by accounts receivable, the availability of funds for the repayment of these loans may be substantially dependent on the ability of the borrower to collect amounts due from its customers. Commercial real estate loans are viewed primarily as cash flow loans and secondarily as loans secured by real estate. Commercial real estate lending typically involves higher loan principal amounts and the repayment of these loans is generally dependent on the successful operation of the property securing the loan or the business conducted on the property securing the loan. Commercial real estate loans may be more adversely affected by conditions in the real estate markets or in the general economy. The characteristics of properties securing the Company’s commercial real estate portfolio are diverse, but with geographic location almost entirely in the Company’s market area. Management monitors and evaluates commercial real estate loans based on collateral, geography and risk grade criteria. In general, the Company avoids financing single purpose projects unless other underwriting factors are present to help mitigate risk. In addition, management tracks the level of owner-occupied commercial real estate versus nonowner-occupied loans.
Residential Real Estate and Consumer
Residential real estate and consumer loans consist of two segments - residential mortgage loans and personal loans. For residential mortgage loans that are secured by 1-4 family residences and are generally owner-occupied, the Company generally establishes a maximum loan-to-value ratio and requires private mortgage insurance if that ratio is exceeded. Home equity loans are typically secured by a subordinate interest in 1-4 family residences, and consumer personal loans are secured by consumer personal assets, such as automobiles or recreational vehicles. Some consumer personal loans are unsecured, such as small installment loans and certain lines of credit. Repayment of these loans is primarily dependent on the personal income of the borrowers, which can be impacted by economic conditions in their market areas, such as unemployment levels. Repayment can also be impacted by changes in property values on residential properties. Risk is mitigated by the fact that the loans are of smaller individual amounts and spread over a large number of borrowers.
15
United Bancorp, Inc.
Notes to Condensed Consolidated Financial Statements
Three Months Ended March 31, 2024 and 2023
(In thousands)
The following tables present the balance in the allowance for credit losses and the recorded investment in loans based on portfolio segment and impairment method as of March 31, 2024 and December 31, 2023.
March 31, 2024 | |||||||||||||||
Commercial | |||||||||||||||
| Commercial and Industrial |
| Real Estate |
| Residential |
| Installment |
| Total | ||||||
(In thousands) | |||||||||||||||
Allowance for credit losses: | |||||||||||||||
Balance, beginning of period | $ | | $ | | $ | | $ | | $ | | |||||
Provision for credit loss expense | | ( | ( | | — | ||||||||||
Losses charged off | — | — | — | ( | ( | ||||||||||
Recoveries | | — | — | | | ||||||||||
Balance, end of period | $ | | $ | | $ | | $ | | $ | | |||||
Ending balance: individually evaluated for credit losses | $ | | $ | — | $ | — | $ | — | $ | | |||||
Ending balance: collectively evaluated for credit losses | $ | | $ | | $ | | $ | | $ | | |||||
Loans: | |||||||||||||||
Ending balance: individually evaluated for credit losses | $ | | $ | | $ | | $ | — | $ | | |||||
Ending balance: collectively evaluated for credit losses | $ | | $ | | $ | | $ | | $ | | |||||
March 31, 2023 | |||||||||||||||
Commercial | |||||||||||||||
| Commercial and Industrial |
| Real Estate |
| Residential |
| Installment |
| Total | ||||||
(In thousands) | |||||||||||||||
Allowance for credit losses: | |||||||||||||||
Balance, beginning of period | $ | | $ | | $ | | $ | | $ | | |||||
Impact of adopting ASC 326 | | | | ( | | ||||||||||
Provision for credit loss expense | | ( | ( | | — | ||||||||||
Losses charged off | — | — | — | ( | ( | ||||||||||
Recoveries | | — | — | | | ||||||||||
Balance, end of period | $ | | $ | | $ | | $ | | $ | | |||||
Ending balance: individually evaluated for credit losses | $ | — | $ | — | $ | — | $ | — | $ | — | |||||
Ending balance: collectively evaluated for credit losses | $ | | $ | | $ | | $ | | $ | | |||||
Loans: | |||||||||||||||
Ending balance: individually evaluated for credit losses | $ | | $ | | $ | — | $ | — | $ | | |||||
Ending balance: collectively evaluated for losses | $ | | $ | | $ | | $ | | $ | | |||||
16
United Bancorp, Inc.
Notes to Condensed Consolidated Financial Statements
Three Months Ended March 31, 2024 and 2023
(In thousands)
December 31, 2023 | |||||||||||||||
Commercial | |||||||||||||||
| Commercial and Industrial |
| Real Estate |
| Residential |
| Installment |
| Total | ||||||
(In thousands) | |||||||||||||||
Allowance for credit losses: | |||||||||||||||
Ending balance: individually evaluated for impairment | $ | — | $ | | $ | — | $ | — | $ | — | |||||
Ending balance: collectively evaluated for impairment | $ | | $ | | $ | | $ | | $ | | |||||
Loans: |
|
|
|
|
|
|
|
|
| ||||||
Ending balance: individually evaluated for impairment | $ | — | $ | | $ | | $ | — | $ | | |||||
Ending balance: collectively evaluated for impairment | $ | | $ | | $ | | $ | | $ | | |||||
The following tables show the portfolio quality indicators.
Based on the most recent analysis performed, the following table presents the recorded investment in non-homogeneous loans by internal risk rating system as of March 31, 2024 (in thousands):
|
|
|
|
|
|
|
|
|
|
| Revolving |
| Revolving |
|
| ||||||||||||
Loans | Loans | ||||||||||||||||||||||||||
|
| Amortized | Converted | ||||||||||||||||||||||||
March 31, 2024 |
| 2024 |
| 2023 |
| 2022 |
| 2021 |
| 2020 |
| Prior |
| Cost Basis |
| to Term |
| Total | |||||||||
Commercial and Industrial | |||||||||||||||||||||||||||
Risk Rating | |||||||||||||||||||||||||||
Pass | $ | | $ | | $ | | $ | | $ | | $ | | $ | | $ | — | $ | | |||||||||
Special Mention | — | — | | — | — | | | — | | ||||||||||||||||||
Substandard | — | | — | — | — | — | — | — | | ||||||||||||||||||
Doubtful | — | — | — | — | — | — | — | — | — | ||||||||||||||||||
Total | $ | | $ | | $ | | $ | | $ | | $ | | $ | | $ | — | $ | | |||||||||
Commercial and Industrial | |||||||||||||||||||||||||||
Current period gross charge-offs | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | |||||||||
Commercial real estate | |||||||||||||||||||||||||||
Risk Rating | |||||||||||||||||||||||||||
Pass | $ | |
| $ | |
| $ | |
| $ | |
| $ | |
| $ | |
| $ | |
| $ | — |
| $ | | |
Special Mention | — | — | — | | | | | — | | ||||||||||||||||||
Substandard | — |
|
| — |
|
| — |
|
| — |
|
| |
|
| — |
|
| — |
|
| — |
|
| | ||
Doubtful | — |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
| — | ||||||||||
Total | $ | | $ | | $ | | $ | | $ | | $ | | $ | | $ | — | $ | | |||||||||
Commercial real estate |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||
Current period gross charge-offs | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | |||||||||
Total |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
Pass | $ | | $ | | $ | | $ | | $ | | $ | | $ | | $ | — | $ | | |||||||||
Special Mention | — | — | | | | | | — | | ||||||||||||||||||
Substandard | — | | — | — | | — | — | — | | ||||||||||||||||||
Doubtful | — | — | — | — | — | — | — | — | — | ||||||||||||||||||
Total | $ | | $ | | $ | | $ | | $ | | $ | | $ | | $ | — | $ | | |||||||||
Current period gross charge-offs | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | |||||||||
17
United Bancorp, Inc.
Notes to Condensed Consolidated Financial Statements
Three Months Ended March 31, 2024 and 2023
(In thousands)
The Company monitors the credit risk profile by payment activity for residential and consumer loan classes. Loans past due 90 days or more and loans on nonaccrual status are considered nonperforming. Nonperforming loans are reviewed quarterly. The following table presents the amortized cost in residential and consumer loans based on payment activity:
|
|
|
|
|
|
|
|
|
|
| Revolving |
| Revolving |
|
| ||||||||||||
Loans | Loans | ||||||||||||||||||||||||||
|
| Amortized | Converted | ||||||||||||||||||||||||
March 31, 2024 |
| 2024 |
| 2023 |
| 2022 |
| 2021 |
| 2020 |
| Prior |
| Cost Basis |
| to Term |
| Total | |||||||||
Residential Real Estate | |||||||||||||||||||||||||||
Payment Performance | |||||||||||||||||||||||||||
Performing | $ | | $ | | $ | | $ | | $ | | $ | | $ | — | $ | — | $ | | |||||||||
Nonperforming | — | — | — | — | | | — | — | | ||||||||||||||||||
Total | $ | | $ | | $ | | $ | | $ | | $ | | $ | — | $ | — | $ | | |||||||||
Residential real estate | |||||||||||||||||||||||||||
Current period gross charge-offs | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | |||||||||
Consumer | |||||||||||||||||||||||||||
Payment Performance | |||||||||||||||||||||||||||
Performing | $ | | $ | | $ | | $ | | $ | | $ | | $ | | $ | — | $ | | |||||||||
Nonperforming | — | — | — | — | — | — | — | — | — | ||||||||||||||||||
Total | $ | | $ | | $ | | $ | | $ | | $ | | $ | | $ | — | $ | | |||||||||
Consumer |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
Current period gross charge-offs | $ | | $ | | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | | |||||||||
Total |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
Payment Performance |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
Performing | $ | | $ | | $ | | $ | | $ | | $ | | $ | | $ | — | $ | | |||||||||
Nonperforming | — | — | — | — | | | — | — | | ||||||||||||||||||
Total | $ | | $ | | $ | | $ | | $ | | $ | | $ | | $ | — | $ | | |||||||||
18
United Bancorp, Inc.
Notes to Condensed Consolidated Financial Statements
Three Months Ended March 31, 2024 and 2023
(In thousands)
|
|
|
|
|
|
|
|
|
| Revolving |
| Revolving |
| ||||||||||||||
Loans | Loans | ||||||||||||||||||||||||||
Amortized | Converted | ||||||||||||||||||||||||||
December 31, 2023 |
| 2023 |
| 2022 |
| 2021 |
| 2020 |
| 2019 |
| Prior |
| Cost Basis |
| to Term |
| Total | |||||||||
Commercial and industrial |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
Risk Rating |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
Pass | $ | | $ | | $ | | $ | | $ | | $ | | $ | | $ | — | $ | | |||||||||
Special Mention |
| — |
| |
| — |
| — |
| — |
| |
| |
| — |
| | |||||||||
Substandard |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
| — | |||||||||
Doubtful |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
| — | |||||||||
Total | $ | | $ | | $ | | $ | | $ | | $ | | $ | | $ | — | $ | | |||||||||
Commercial and industrial |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
Current period gross charge-offs | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | |||||||||
Commercial real estate |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
Risk Rating |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
Pass | $ | | $ | | $ | | $ | | $ | | $ | | $ | | $ | — | $ | | |||||||||
Special Mention |
| — |
| — |
| |
| |
| — |
| |
| — |
| — |
| | |||||||||
Substandard |
| — |
| — |
| — |
| — |
| — |
| |
| — |
| — |
| | |||||||||
Doubtful |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
| — | |||||||||
Total | $ | | $ | | $ | | $ | | $ | | $ | | $ | | $ | — | $ | | |||||||||
Commercial real estate |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
Current period gross charge-offs | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | |||||||||
Total |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
Pass | $ | | $ | | $ | | $ | | $ | | $ | | $ | | $ | — | $ | | |||||||||
Special Mention |
| — |
| |
| |
| |
| — |
| |
| |
| — |
| | |||||||||
Substandard |
| — |
| — |
| — |
| — |
| — |
| |
| — |
| — |
| | |||||||||
Doubtful |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
| — | |||||||||
Total | $ | | $ | | $ | | $ | | $ | | $ | | $ | | $ | — | $ | | |||||||||
Current period gross charge-offs | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | |||||||||
19
United Bancorp, Inc.
Notes to Condensed Consolidated Financial Statements
Three Months Ended March 31, 2024 and 2023
(In thousands)
The Company monitors the credit risk profile by payment activity for residential and consumer loan classes. Loans past due 90 days or more and loans on nonaccrual status are considered nonperforming. Nonperforming loans are reviewed quarterly. The following table presents the amortized cost in residential and consumer loans based on payment activity (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
| Revolving |
| Revolving | ||||||||||||
Loans | Loans | ||||||||||||||||||||||||||
Amortized | Converted | ||||||||||||||||||||||||||
December 31, 2023 | 2023 | 2022 | 2021 | 2020 | 2019 | Prior | Cost Basis | to Term | Total | ||||||||||||||||||
Residential Real Estate | |||||||||||||||||||||||||||
Payment Performance | |||||||||||||||||||||||||||
Performing | $ | | $ | | $ | | $ | | $ | | $ | | $ | — | $ | — | $ | | |||||||||
Nonperforming |
| — |
| — |
| — |
| |
| — |
| |
| — |
| — |
| | |||||||||
Total | $ | | $ | | $ | | $ | | $ | | $ | | $ | — | $ | — | $ | | |||||||||
Residential real estate |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
Current period gross charge-offs | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | |||||||||
Consumer |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
Payment Performance |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
Performing | $ | | $ | | $ | | $ | | $ | | $ | | $ | | $ | — | $ | | |||||||||
Nonperforming |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
| — | |||||||||
Total | $ | | $ | | $ | | $ | | $ | | $ | | $ | | $ | — | $ | | |||||||||
Consumer |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
Current period gross charge-offs | $ | | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | | |||||||||
Total |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
Payment Performance |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
Performing | $ | | $ | | $ | | $ | | $ | | $ | | $ | | $ | — | $ | | |||||||||
Nonperforming |
| — |
| — |
| — |
| |
| —- |
| |
| — |
| — |
| | |||||||||
Total | $ | | $ | | $ | | $ | | $ | | $ | | $ | | $ | — | $ | | |||||||||
Current period gross charge-offs | $ | | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | | |||||||||
To facilitate the monitoring of credit quality within the loan portfolio, and for purposes of analyzing historical loss rates used in the determination of the allowance for credit losses, the Company utilizes the following categories of credit grades: pass, special mention, substandard, and doubtful. The four categories, which are derived from standard regulatory rating definitions, are assigned upon initial approval of credit to borrowers and updated periodically thereafter. Pass ratings, which are assigned to those borrowers that do not have identified potential or well defined weaknesses and for which there is a high likelihood of orderly repayment, are updated periodically based on the size and credit characteristics of the borrower. All other categories are updated on at least a quarterly basis.
The Company assigns a special mention rating to loans that have potential weaknesses that deserve management’s close attention. If left uncorrected, these potential weaknesses may, at some future date, result in the deterioration of the repayment prospects for the loan or the Company’s credit position.
The Company assigns a substandard rating to loans that are inadequately protected by the current sound worth and paying capacity of the borrower or of the collateral pledged. Substandard loans have well defined weaknesses or weaknesses that could jeopardize
20
United Bancorp, Inc.
Notes to Condensed Consolidated Financial Statements
Three Months Ended March 31, 2024 and 2023
(In thousands)
the orderly repayment of the debt. Loans and leases in this grade also are characterized by the distinct possibility that the Company will sustain some loss if the deficiencies noted are not addressed and corrected.
The Company assigns a doubtful rating to loans that have all the attributes of a substandard rating with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable. The possibility of loss is extremely high, but because of certain important and reasonable specific pending factors that may work to the advantage of and strengthen the credit quality of the loan or lease, its classification as an estimated loss is deferred until its more exact status may be determined. Pending factors may include a proposed merger or acquisition, liquidation proceeding, capital injection, perfecting liens on additional collateral or refinancing plans.
The Company evaluates the loan risk grading system definitions and allowance for credit losses methodology on an ongoing basis. No significant changes were made to either during the past year to date period.
Loan Portfolio Aging Analysis
As of March 31, 2024
30-59 Days | 60‑89 Days | Greater | |||||||||||||||||||
Past Due | Past Due | Than 90 Days | Total Past | ||||||||||||||||||
and | and | and | Due and | Total Loans | |||||||||||||||||
| Accruing |
| Accruing |
| Accruing |
| Non Accrual |
| Non Accrual |
| Current |
| Receivable | ||||||||
(In thousands) | |||||||||||||||||||||
Commercial and Industrial | $ | | $ | | $ | | $ | | $ | | $ | | $ | | |||||||
Commercial real estate |
| |
| |
| |
| |
| |
| |
| | |||||||
Residential |
| |
| |
| |
| |
| |
| |
| | |||||||
Installment |
| |
| |
| |
| |
| |
| |
| | |||||||
Total | $ | | $ | | $ | | $ | | $ | | $ | | $ | | |||||||
Loan Portfolio Aging Analysis
As of December 31, 2023
30‑59 Days | 60‑89 Days | Greater | |||||||||||||||||||
Past Due | Past Due | Than 90 Days | Total Past | ||||||||||||||||||
and | and | and | Due and | Total Loans | |||||||||||||||||
| Accruing |
| Accruing |
| Accruing |
| Non Accrual |
| Non Accrual |
| Current |
| Receivable | ||||||||
(In thousands) | |||||||||||||||||||||
Commercial and Insustrial | $ | | $ | | $ | | $ | | $ | | $ | | $ | | |||||||
Commercial real estate |
| |
| |
| |
| |
| |
| |
| | |||||||
Residential |
| |
| |
| |
| |
| |
| |
| | |||||||
Installment |
| |
| |
| |
| |
| |
| |
| | |||||||
Total | $ | | $ | | $ | | $ | | $ | | $ | | $ | | |||||||
21
United Bancorp, Inc.
Notes to Condensed Consolidated Financial Statements
Three Months Ended March 31, 2024 and 2023
(In thousands)
Nonperforming Loans
The following table present the amortized cost basis of loans on nonaccrual status and loans past due over 90 days still accruing interest as of March 31, 2024:
| Loans Past | ||||||||||||||
Due Over 90 Days | Total | ||||||||||||||
Nonaccrual with no ACL |
| Nonaccrual with ACL |
| Total Nonaccrual |
| Still Accruing |
| Nonperforming | |||||||
| (In thousands) | ||||||||||||||
Commercial and Industrial | $ | — | $ | | $ | | $ | | $ | | |||||
Commercial real estate |
| |
| — |
| |
| |
| | |||||
Residential |
| |
| — |
| |
| — |
| | |||||
Installment |
| — |
| — |
| — |
| — |
| — | |||||
Total | $ | | $ | | $ | | $ | | $ | | |||||
The Company recognize $
The following table present the amortized cost basis of loans on nonaccrual status and loans past due over 90 days still accruing interest as of December 31, 2023:
|
|
|
|
| Loans Past |
| |||||||||
Due Over 90 Days | Total | ||||||||||||||
Nonaccrual with no ACL | Nonaccrual with ACL | Total Nonaccrual | Still Accruing | Nonperforming | |||||||||||
| (In thousands) | ||||||||||||||
Commercial and Industrial | $ | — | $ | — | $ | — | $ | | $ | | |||||
Commercial real estate |
| |
| — |
| |
| — |
| | |||||
Residential |
| |
| — |
| |
| — |
| | |||||
Consumer |
| — |
| — |
| — |
| — |
| — | |||||
Total | $ | | $ | — | $ | | $ | | $ | | |||||
The Company did recognized approximately $
Note 4: Benefit Plans
Pension expense includes the following:
Three months ended | ||||||
March 31, | ||||||
| 2024 |
| 2023 | |||
(In thousands) | ||||||
Service cost | $ | | $ | | ||
Interest cost |
| |
| | ||
Expected return on assets |
| ( |
| ( | ||
Amortization of prior service cost and net loss |
| ( |
| | ||
|
| |||||
Pension (contra expense) expense | $ | ( | $ | | ||
All components of pension expense are reflected within the salaries and employee benefits line of the consolidated income statement.
22
United Bancorp, Inc.
Notes to Condensed Consolidated Financial Statements
Three Months Ended March 31, 2024 and 2023
(In thousands)
Note 5: Off-balance-sheet Activities
Some financial instruments, such as loan commitments, credit lines, letters of credit and overdraft protection, are issued to meet customer financing needs. These are agreements to provide credit or to support the credit of others, as long as conditions established in the contracts are met, and usually have expiration dates. Commitments may expire without being used. Off-balance-sheet risk to credit loss exists up to the face amount of these instruments, although material losses are not anticipated. The same credit policies are used to make such commitments as are used for loans, including obtaining collateral at exercise of the commitment.
A summary of the notional or contractual amounts of financial instruments with off-balance-sheet risk at the indicated dates is as follows:
| March 31, |
| December 31, | |||
2024 | 2023 | |||||
(In thousands) | ||||||
Commercial loans unused lines of credit | $ | | $ | | ||
Commitment to originate loans |
| |
| | ||
Consumer open end lines of credit |
| |
| | ||
Standby lines of credit |
| |
| | ||
During the three months ended March 31, 2024, there was
Note 6: Accumulated Other Comprehensive Income (Loss)
The components of accumulated other comprehensive income (loss), included in stockholders’ equity, are as follows:
| March 31, |
| December 31, | |||
2024 | 2023 | |||||
(In thousands) | ||||||
Net unrealized loss on securities available-for-sale | $ | ( | $ | ( | ||
Net unrealized loss for unfunded status of defined benefit plan liability |
| ( |
| ( | ||
( | ( | |||||
Less: Tax effect |
| |
| | ||
Net-of-tax amount | $ | ( | $ | ( | ||
Note 7: Fair Value Measurements
The Company defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Company also utilizes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels of inputs that may be used to measure fair value:
Level 1 Quoted prices in active markets for identical assets or liabilities that the entity can access at the measurement date
Level 2 Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities
Level 3 Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities
23
United Bancorp, Inc.
Notes to Condensed Consolidated Financial Statements
Three Months Ended March 31, 2024 and 2023
(In thousands)
Following is a description of the valuation methodologies used for assets measured at fair value on a recurring basis and recognized in the accompanying consolidated balance sheets, as well as the general classification of such instruments pursuant to the valuation hierarchy.
Available-for-sale Securities
Where quoted market prices are available in an active market, securities are classified within Level 1 of the valuation hierarchy. The Company’s equity securities are classified within Level 1 of the hierarchy. If quoted market prices are not available, then fair values are estimated by using quoted prices of securities with similar characteristics or independent asset pricing services and pricing models, the inputs of which are market-based or independently sourced market parameters, including, but not limited to, yield curves, interest rates, volatilities, prepayments, defaults, cumulative loss projections and cash flows. Such securities are classified in Level 2 of the valuation hierarchy.
The following table presents the fair value measurements of assets recognized in the accompanying consolidated balance sheets measured at fair value on a recurring basis and the level within the fair value hierarchy in which the fair value measurements fall at March 31, 2024 and December 31, 2023:
Fair Value Measurements Using | ||||||||||||
|
| Quoted Prices |
|
| ||||||||
in Active | Significant | |||||||||||
Markets for | Other | Significant | ||||||||||
Identical | Observable | Unobservable | ||||||||||
Assets | Inputs | Inputs | ||||||||||
Fair Value | (Level 1) | (Level 2) | (Level 3) | |||||||||
(In thousands) | ||||||||||||
March 31, 2024 | ||||||||||||
U.S. government agencies | $ | | $ | | $ | | $ | | ||||
Subordinated Notes | | | | | ||||||||
State and municipal obligations | | | | | ||||||||
December 31, 2023 |
|
|
|
|
|
|
| |||||
U.S. government agencies | $ | | $ | | $ | | $ | | ||||
Subordinated Notes | | | | | ||||||||
State and municipal obligations | | | | | ||||||||
Following is a description of the valuation methodologies used for assets measured at fair value on a nonrecurring basis and recognized in the accompanying consolidated balance sheets, as well as the general classification of such assets pursuant to the valuation hierarchy. For assets classified within Level 3 of the fair value hierarchy, the process used to develop the reported fair value is described below.
Collateral Dependent
Collateral dependent loans consisted primarily of loans secured by nonresidential real estate. Management has determined fair value measurements on collateral dependent loans primarily through evaluations of appraisals performed. Due to the nature of the valuation inputs, impaired loans are classified within Level 3 of the hierarchy.
The Company considers the appraisal or evaluation as the starting point for determining fair value and then considers other factors and events in the environment that may affect the fair value. Appraisals of the collateral underlying collateral-dependent loans are obtained when the loan is determined to be collateral-dependent and subsequently as deemed necessary by the Company’s Chief Lender. Appraisals are reviewed for accuracy and consistency by the Company’s Chief Lender. Appraisers are selected from the list of approved appraisers maintained by management. The appraised values are reduced by discounts to consider lack of marketability and estimated cost to sell if repayment or satisfaction of the loan is dependent on the sale of the collateral. These
24
United Bancorp, Inc.
Notes to Condensed Consolidated Financial Statements
Three Months Ended March 31, 2024 and 2023
(In thousands)
discounts and estimates are developed by the Company’s Chief Lender by comparison to historical results. At March 31, 2024, the Company has a $
Foreclosed Assets Held for Sale
Assets acquired through, or in lieu of, loan foreclosure are held for sale and are initially recorded at fair value (based on current appraised value) at the date of foreclosure, establishing a new cost basis. Subsequent to foreclosure, valuations are periodically performed by management and the assets are carried at the lower of carrying amount or fair value less cost to sell. Management has determined fair value measurements on other real estate owned primarily through evaluations of appraisals performed, and current and past offers for the other real estate under evaluation. Due to the nature of the valuation inputs, foreclosed assets held for sale are classified within Level 3 of the hierarchy.
Appraisals of OREO are obtained when the real estate is acquired and subsequently as deemed necessary by the Company’s Chief lender. Appraisals are reviewed for accuracy and consistency by the Company’s Chief Lender and are selected from the list of approved appraisers maintained by management.
The following table presents the fair value measurements of assets recognized in the accompanying consolidated balance sheets measured at fair value on a nonrecurring basis and the level within the fair value hierarchy in which the fair value measurements fall at March 31, 2024 and December 31, 2023.
Fair Value Measurements Using | ||||||||||||
|
|
| Quoted Prices |
|
| |||||||
in Active | Significant | |||||||||||
Markets for | Other | Significant | ||||||||||
Identical | Observable | Unobservable | ||||||||||
Fair | Assets | Inputs | Inputs | |||||||||
Value | (Level 1) | (Level 2) | (Level 3) | |||||||||
(In thousands) | ||||||||||||
March 31, 2024 |
|
|
|
|
|
|
|
| ||||
Collateral dependent loans | $ | | $ | | $ | | $ | | ||||
Foreclosed assets held for sale |
| |
| |
| |
| | ||||
|
|
|
|
|
|
| ||||||
December 31, 2023 |
|
|
|
|
|
|
|
| ||||
Collateral dependent loans | $ | | $ | | $ | | $ | | ||||
Foreclosed assets held for sale |
| |
| |
| |
| | ||||
Unobservable (Level 3) Inputs
The following table presents quantitative information about unobservable inputs used in recurring and nonrecurring Level 3 fair value measurements.
|
| Fair Value at |
| Valuation |
| Unobservable |
| ||
12/31/23 | Technique | Inputs | Range | ||||||
(In thousands) | |||||||||
Collateral-dependent loans | $ | |
|
|
| ||||
Foreclosed assets held for sale | |
|
|
| |||||
There were no significant changes in the valuation techniques used during 2024.
25
United Bancorp, Inc.
Notes to Condensed Consolidated Financial Statements
Three Months Ended March 31, 2024 and 2023
(In thousands)
The following table presents estimated fair values of the Company’s financial instruments. The fair values of certain of these instruments were calculated by discounting expected cash flows, which involves significant judgments by management and uncertainties. Because no market exists for certain of these financial instruments and because management does not intend to sell these financial instruments, the Company does not know whether the fair values shown below represent values at which the respective financial instruments could be sold individually or in the aggregate.
Fair Value Measurements Using | ||||||||||||
|
|
| Quoted Prices |
|
| |||||||
in Active | Significant | |||||||||||
Markets for | Other | Significant | ||||||||||
Identical | Observable | Unobservable | ||||||||||
Carrying | Assets | Inputs | Inputs | |||||||||
Amount | (Level 1) | (Level 2) | (Level 3) | |||||||||
(In thousands) | ||||||||||||
March 31, 2024: | ||||||||||||
| ||||||||||||
Financial assets |
|
|
|
|
|
|
|
| ||||
Cash and cash equivalents | $ | | $ | | $ | | $ | | ||||
Loans, net of allowance |
| |
| |
| |
| | ||||
Federal Home Loan Bank |
| |
| |
| |
| | ||||
Accrued interest receivable |
| |
| |
| |
| | ||||
|
|
|
|
| ||||||||
Financial liabilities |
|
|
|
|
| |||||||
Deposits | | | | | ||||||||
Securities sold under repurchase agreements | | | | | ||||||||
Subordinated debentures | | | | | ||||||||
Advance Federal Home Loan Bank | | | | | ||||||||
Interest payable |
| |
| |
| |
| | ||||
Fair Value Measurements Using | ||||||||||||
|
|
| Quoted Prices |
|
| |||||||
in Active | Significant | |||||||||||
Markets for | Other | Significant | ||||||||||
Identical | Observable | Unobservable | ||||||||||
Carrying | Assets | Inputs | Inputs | |||||||||
Amount | (Level 1) | (Level 2) | (Level 3) | |||||||||
(In thousands) | ||||||||||||
December 31, 2023: |
|
|
|
|
|
|
|
| ||||
|
|
|
|
|
|
|
| |||||
Financial assets |
|
|
|
|
|
|
|
| ||||
Cash and cash equivalents | $ | | $ | | $ | | $ | | ||||
Loans, net of allowance |
| |
| |
| |
| | ||||
Federal Home Loan Bank stock |
| |
| |
| |
| | ||||
Accrued interest receivable |
| |
| |
| |
| | ||||
Financial liabilities |
|
|
|
| ||||||||
Deposits | | | | | ||||||||
Short term borrowings |
| |
| |
| |
| | ||||
Subordinated debentures |
| |
| |
| |
| | ||||
Advance Federal Home Loan Bank | | | | | ||||||||
Interest payable |
| |
| |
| |
| | ||||
The following methods and assumptions were used to estimate the fair value of each class of financial instruments.
26
United Bancorp, Inc.
Notes to Condensed Consolidated Financial Statements
Three Months Ended March 31, 2024 and 2023
(In thousands)
Cash and Cash Equivalents, Accrued Interest Receivable and Federal Home Loan Bank Stock
The carrying amounts approximate fair value.
Loans
Fair values of loans are estimated on an exit price basis incorporating discounts for credit, liquidity and marketability factors.
Deposits
Deposits include demand deposits, savings accounts, NOW accounts and certain money market deposits. The carrying amount approximates fair value. The fair value of fixed-maturity time deposits is estimated using a discounted cash flow calculation that applies the rates currently offered for deposits of similar remaining maturities.
Interest Payable
The carrying amount approximates fair value.
Short-term Borrowings, Federal Home Loan Bank Advances and Subordinated Debentures
Rates currently available to the Company for debt with similar terms and remaining maturities are used to estimate the fair value of existing debt.
Commitments to Originate Loans, Letters of Credit and Lines of Credit
The fair value of commitments to originate loans is estimated using the fees currently charged to enter into similar agreements, taking into account the remaining terms of the agreements and the present creditworthiness of the counterparties. For fixed-rate loan commitments, fair value also considers the difference between current levels of interest rates and the committed rates. The fair values of letters of credit and lines of credit are based on fees currently charged for similar agreements or on the estimated cost to terminate or otherwise settle the obligations with the counterparties at the reporting date. Fair values of commitments were not material at March 31, 2024 and December 31, 2023.
Note 8: Repurchase Agreements
Securities sold under agreements to repurchase (“repurchase agreements”) with customers represent funds deposited by customers, generally on an overnight basis that are collateralized by investment securities owned by the Company.
The following table presents the Company’s repurchase agreements accounted for as secured borrowings:
Remaining Contractual Maturity of the Agreement
(In thousands)
| Overnight and |
|
|
| Greater than |
| |||||||||
March 31, 2024 | Continuous | Up to 30 Days | 30‑90 Days | 90 Days | Total | ||||||||||
Repurchase Agreements |
|
|
|
|
|
|
|
|
|
| |||||
State and municipal obligations | $ | | $ | | $ | | $ | | $ | | |||||
Total | $ | | $ | | $ | | $ | | $ | | |||||
27
United Bancorp, Inc.
Notes to Condensed Consolidated Financial Statements
Three Months Ended March 31, 2024 and 2023
(In thousands)
| Overnight and |
|
|
| Greater than |
| |||||||||
December 31, 2023 | Continuous | Up to 30 Days | 30‑90 Days | 90 Days | Total | ||||||||||
Repurchase Agreements |
|
|
|
|
|
|
|
|
|
| |||||
State and municipal obligations | $ | |
| $ | | $ | | $ | | $ | | ||||
Total | $ | |
| $ | | $ | | $ | | $ | | ||||
These borrowings were collateralized with State and municipal obligations with a carrying value of $
Note 9: Core Deposits and Intangible Assets
The following table shows the changes in the carrying amount of goodwill for March 31, 2024 and December 31, 2023 (in thousands):
| March 31, |
| December 31, | |||
2024 | 2023 | |||||
Balance beginning of year | $ | | $ | | ||
Additions from acquisition |
| |
| | ||
Balance, end of period | $ | | $ | | ||
Intangible assets in the consolidated balance sheets at March 31, 2024 and December 31, 2023 were as follows (in thousands):
Three Months Ended March 31, 2024 | Year Ended December 31, 2023 | ||||||||||||
Gross | Gross | ||||||||||||
Intangible | Accumulated | Net Intangible | Intangible | Accumulated | Net Intangible | ||||||||
| Assets |
| Amortization |
| Assets |
| Assets |
| Amortization |
| Assets | ||
Core deposit intangibles | $ | |
| |
| |
| | |
| | ||
The estimated aggregate future amortization expense for each of the next two years for intangible assets remaining as of March 31, 2024 is as follows (in thousands):
2024 |
| $ | |
2025 |
| |
At each reporting date between annual goodwill impairment tests, the Company considers potential indicators of impairment. At the conclusion of the assessment, the Company determined that as of March 31, 2024 it was more likely than not that the fair value exceeded its carrying values. The Company will continue to monitor the overall economic conditions and any other triggering events or circumstances that may indicate an impairment of goodwill in the future.
Note 10: Advances from the Federal Home Loan Bank
At March 31, 2024, advance from the Federal Home Loan Bank were $
At March 31, 2024, required repayments on Federal Home Loan Bank advances were for year ending December 31, 2026 are $
28
United Bancorp, Inc.
Notes to Condensed Consolidated Financial Statements
Three Months Ended March 31, 2024 and 2023
(In thousands)
Note 11: Restricted Stock Plan
A summary of the status of the Company’s nonvested restricted shares as of March 31, 2024, and changes during the three months ended March 31, 2024, is presented below:
| Weighted- |
|
| ||
Average | |||||
Grant-Date | |||||
| Shares |
| Fair Value | ||
Nonvested, beginning of year |
| | $ | | |
Granted |
| |
| | |
Vested |
| ( |
| | |
Forfeited |
| — |
| — | |
Nonvested, end of year |
| | $ | | |
Total compensation cost recognized in the income statement for share-based payment arrangements during the three months ended March 31, 2024 and 2023 was $
29
United Bancorp, Inc.
Management’s Discussion and Analysis of Financial
Condition and Results of Operations
ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operation
The following discusses the consolidated financial condition of the Company as of March 31, 2024, as compared to December 31, 2023, and the results of consolidated operations for the three months ended March 31, 2024, compared to the same period in 2022. This discussion should be read in conjunction with the interim condensed consolidated financial statements and related footnotes included herein.
Introduction
Our Company reported diluted earnings per share of $0.35 and net income of $1,993,000 for the three months ended March 31, 2024. This compares to diluted earnings per share of $0.33 and net income of $1,888,000 reported in the first quarter of the previous year.
We are pleased to report on the earnings performance of United Bancorp, Inc. (UBCP) for the first quarter ended March 31, 2024. For the quarter, our Company achieved solid net income and diluted earnings per share results of $1,993,000 and $0.35, which were respective increases of $105,000, or 5.6%, and $0.02, or 6.1%, over the results achieved during the first quarter of last year. As we started the current year, the interest rate forecast by most economists and the financial markets indicated that we could expect seven rate cuts this year, which, overall, was projected to be favorable for our industry. As we progressed through and ended the first quarter, it became apparent that interest rates will be higher for longer, with potentially only two rate cuts this year now forecast to occur much later in the year than originally anticipated. This higher for longer posturing of the Federal Open Market Committee of the Federal Reserve (FOMC) is creating different challenges for our industry and putting pressure on the net interest margins and bottom-line performances of most financial institutions. Unified Bank is not immune from these same challenges and, even though our performance improved in the first quarter of 2024 over the previous year, we are currently feeling this aforementioned pressure. Regardless of this challenge, we are very happy with the present performance of our Company. In addition, we continue to focus on growing and leveraging our foundation, which should be of benefit and lead to higher performance in future periods.
At March 31, 2024 and as previously mentioned, United Bancorp, Inc. (UBCP) did achieve a higher level of bottom-line earnings on a year-over-year basis. But, like most other financial institutions in the current “higher for longer” interest rate environment in which we are operating, our Company did also experience a decline in the level of net interest income that it achieved. Even though our total interest income realized on a year-over-year basis was higher by $1.4 million, or 17.2%, our total interest expense increased by $1.7 million, or 96.4%, during the same time period. Accordingly, the level of net interest income that we achieved declined by ($308,000), or (4.8%), to a level of $6.1 million. In addition, UBCP’s net interest margin declined by twenty-nine basis points (-29 bps) over the previous year, to a level of 3.46%, as of the most recently ended quarter. Even though our Company’s total assets declined from last year by $13.5 million, or 1.6%, to a level of $834.0 million due to a runoff in retail deposit funding and cash balances, we were able to generate a higher level of total interest income due to our loans outstanding continuing to reprice in a higher interest rate environment along with our gross loans increasing $16.6 million, or 3.6%, to a level of $480.3 million as of this year’s quarter-end. In addition, our investment securities balances increased by $17.8 million, or 7.5%, year-over-year to a level of $255.8 million. But, as mentioned, this increase in total interest income was more than offset by the increase in total interest expense experienced by UBCP. Our Company’s total interest expense increased even though total deposits decreased by $27.6 million year-over-year. 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 of 2023 for the entirety of this year’s first quarter. Relating to the change in the mix of our retail funding, lower cost demand and savings balances decreased by (-$66.8) million, or 12.6%, while higher cost time balances increased by $39.2 million or 31.6%. Of importance, our Company does not have any brokered deposits and total uninsured deposits as of March 31, 2024 totaled 18.2%, which is very low compared to industry standards.
Even with a compressing net interest margin and declining net interest income, United Bancorp, Inc. (UBCP) was able to achieve a higher level of earnings year-over-year as of March 31, 2024 due to a few strategies that started to gain traction in or were successfully implemented and carried out during the first quarter. As we have previously mentioned, our Company started Unified Mortgage in the fourth quarter of last year, a mortgage products and services division with a more dedicated focus on mortgage production for our Company. We are starting to see some positive results as a result of this effort, with a net realized gain on the sale of loans of $77,000
30
United Bancorp, Inc.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
during the quarter. We firmly believe that the revenue production from this enhanced new focus on mortgage production will continue to increase in future quarters as we further scale it out. In addition, we executed on a securities portfolio rebalancing initiative early in the first quarter of the current year by selling a portion of our lower-yielding investment securities and reinvesting those balances into higher yielding investment securities, which improved our Company’s overall portfolio yield and better positioned our portfolio for the projected downward change in rates. Specifically, we sold $25.0 million in municipal and agency securities and reinvested a like amount in new municipal security offerings that yielded an additional 1.23% on a taxable equivalent basis. Although this strategy did lead to a loss on sale of ($194,000) which negatively impacted our Company’s noninterest income during the most recently ended quarter it did add to our interest income stream and has a break-even of approximately eight months. Most importantly, this securities portfolio rebalance strategy will be accretive to our bottom-line earnings in the current year. In addition, if interest rates do drop as anticipated, it will give our Company valuable call protection in a falling rate environment. Relating to the noninterest expense of UBCP, even though Unified Bank has taken on some additional expenses relating to our revenue enhancement and growth initiatives such as our recently implemented Unified Mortgage focus and the announcement of our new Wheeling Banking Center (which is soon to begin construction), our Company was able to successfully apply and be approved for an Employee Retention Credit (ERC) in the first quarter. This tax credit helped offset the expenses associated with these new initiatives along with other expenses including the one-time expenses attributed to our securities portfolio rebalancing strategy and benefits payouts recognized during the first quarter and led to the year-over-year reduction in UBCP’s noninterest expense of ($600,000). In the quarter-ended March 31, 2024, the net result of the realization of these aforementioned nonrecurring expense items and the tax credit led to an increase in our Company’s net income of approximately $271,000 and diluted earnings per share of $0.05.
Even with our Company’s higher investment securities balances as of March 31, 2024 and the increase in market rates over the course of the first quarter of this year, our Company’s accumulated other comprehensive loss, net of taxes (AOCI) remained relatively stable at $7.8 million, an increase of $77,000 year-over-year. With this year-over-year stability in AOCI and an increase in our retained earnings, our shareholders equity improved to a level of $63.2 million, an increase of $4.2 million, or 7.1%, and our book value improved to $10.62, an increase of $0.56, or 5.6%. Overall, our Company continues to be considered well-capitalized from a regulatory perspective with equity to assets of 7.6%, which is up from 7.0% from the same period last year. With the overall quality of our investment portfolio, our well capitalized position, our solid liquidity position and our low level of uninsured deposits, we firmly believe that any issues which could potentially create a risk to our capital and capital position are very minimal.
Even with the continued heightened inflation levels and related increases in interest rates that may be impacting some of our borrowers with higher operating costs and rate resets to higher interest rate levels on their loans, we have successfully maintained credit-related strength and stability within our loan portfolio. As of March 31, 2024, our Company’s total nonaccrual loans and loans past due 30 plus days were $1.43 million, or 0.30% of gross loans, which is up from last year by $901,000. Also, as of the most recently ended quarter, United Bancorp, Inc.’s (UBCP) nonperforming assets to total assets was a very respectable 0.51%, a seven-basis point increase over the previous year. Further highlighting the overall strength of our loan portfolio, our Company had net loans charged off of (-$28,000), which is (-0.01%) of average loans. With the enhanced loan credit reserve build-up under CECL over the course of the past year and our Company’s stable and solid credit quality metrics, we did not have a provision for credit losses in the most recently ended quarter, which matched last year. We are very happy that we were able to forgo, once again, a credit provision in the current year due to our Company’s overall solid credit quality, while maintaining a total allowance for credit losses to total loans of 0.81% and having a total allowance for credit losses to nonperforming loans of 438%. Overall, we firmly believe that we are presently well reserved with very strong coverage.
United Bancorp, Inc. (UBCP), like most banking organizations, is currently feeling 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 is creating different challenges for us and all banks. But, overall, we are very happy with the solid financial performance that our Company achieved during the first quarter of 2024. As previously mentioned, both our net income and diluted earnings per share are higher than the levels that we produced in the first quarter of the previous year. But, as you might expect in this higher-for-longer interest rate environment in which we are presently operating, our Company did experience a decline in the level of net interest income that it realized and compression of its net interest margin in the most recently ended quarter for the first time in quite a while. Even though UBCP experienced year-over-year, double-digit percentage growth in the level of total interest income that it generated this past quarter, 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 (at terms which are now considered very competitive) 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. Although
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United Bancorp, Inc.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
the interest levels that we are paying on our depository products have increased in the current environment in which we are operating, this wholesale funding from the FHLB has helped us to somewhat control our interest expense levels while maintaining very adequate liquidity levels. With a present net interest margin of 3.46% as of March 31, 2024, we believe that this performance metric compares favorably to that of our peer group and industry at present.
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. 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 generating 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. 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 produces 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 growing its total assets to a level of $1.0 billion or greater) is the development of our newest banking center, which is soon to be constructed in the highly favorable market of Wheeling, West Virginia. 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 will 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 firmly believe that we are doing by undertaking these new initiatives. With the revenue challenges that both we and the players within our industry are currently facing, we firmly believe now is the time for our Company to focus on enhancing and expanding existing lines of business and growing new lines of business thus, achieving the organic growth that will lead to the continued and future relevance of UBCP.
Our primary focus is protecting the investment of our shareholders in our Company and rewarding them in a balanced fashion by growing their value and paying an attractive cash dividend. In these areas, our shareholders have been nicely rewarded. In the first quarter of this year, we, once again paid both our regular cash dividend, which increased by $0.0025 to a level of $0.1725, and a special cash dividend of $0.15 for a total payout of $0.3225 for the quarter. This is a 3.2% increase over the total cash dividend paid in the first quarter of the previous year and produces a near-industry leading total dividend yield of 5.81%. This total dividend yield is based on our first quarter cash dividend on a forward basis, plus the special dividend (which combined total $0.84) and our quarter-end fair market value of $14.47. On a year-over-year basis as of March 31, 2024, the fair market value of our Company’s stock remained relatively stable in comparison to the prior year and our Company’s market price to book value was 136%, which compares favorably to current industry standards.
Considering that we continue to operate in a challenging economic and concerning industry-related environment, we are very pleased with our current performance and future prospects. Even with the present threats with which our overall industry is exposed, we are very optimistic about the future growth and earnings potential for United Bancorp, Inc. (UBCP). We firmly believe that with the challenges that our industry has experienced over the course of the past few years, our Company has evolved into a more fundamentally sound organization with a focus on evolving and growing in order to achieve greater efficiencies and scales and generate higher levels of revenue while prudently managing expenses and controlling overall costs. We have and continue to invest in areas that will lead to our continued and future relevancy within our industry. Although such initiatives can stress the short-term performance of our Company, we firmly believe that the will help us fulfil our intermediate and longer-term goals and produce above industry earnings and overall performance. As previously mentioned, we still have a vision of growing UBCP to an asset threshold of $1.0 billion or greater in the near term in a prudent and profitable fashion. We are truly excited about our Company’s direction and the potential that it brings. With a keen focus on continual process improvement, product development and delivery, we firmly believe the future for our Company is very bright.
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United Bancorp, Inc.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
Forward-Looking Statements
When used in this document, the words or phrases “will likely result,” “are expected to,” “will continue,” “is anticipated,” “estimated,” “projected” or similar expressions are intended to identify “forward looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are subject to certain risks and uncertainties including changes in economic conditions in the Bank’s market areas, changes in policies by regulatory agencies, fluctuations in interest rates, demand for loans in the Bank’s market areas and competition, that could affect the Company’s financial performance and cause actual results to differ materially from historical earnings and those presently anticipated or projected with respect to future periods. These risks and uncertainties should be considered in evaluating forward looking statements, and undue reliance should not be placed on such statements. Additional information concerning the Company and its business, including other factors that could materially affect the Company’s financial results, is included in the Company’s filings with the Securities and Exchange Commission.
The Company is not aware of any trends, events or uncertainties that will have or are reasonably likely to have a material effect on its financial condition, results of operations, liquidity or capital resources except as discussed herein. The Company is not aware of any current recommendation by regulatory authorities that would have such effect if implemented except as discussed herein.
The Company does not undertake, and specifically disclaims any obligation, to publicly revise any forward-looking statements to reflect events or circumstances after the date such statements were made or to reflect the occurrence of anticipated or unanticipated events.
Critical Accounting Policies
The Company’s consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America. Management makes certain judgments that affect the amounts reported in the financial statements and footnotes. These estimates, assumptions and judgments are based on information available as of the date of the financial statements, and as this information changes, the financial statements could reflect different estimates, assumptions, and judgments.
See Note 1, “Summary of Significant Accounting Policies” for additional information on the adoption of ASC 326, which changes the methodology under which management calculates its reserve for loans, investment securities, and off balance sheet exposures, now referred to as the allowance for credit losses. Management considers the measurement of the allowance for credit losses on loans to be a critical accounting policy.
This discussion of the Company’s critical accounting policies should be read in conjunction with the Company’s consolidated financial statements and the accompanying notes presented elsewhere herein, as well as other relevant portions of Management’s Discussion and Analysis of Financial Condition and Results of Operations.
Analysis of Financial Condition
Earning Assets – Loans
The Company’s focus as a community bank is to meet the credit needs of the markets it serves. At March 31, 2024, gross loans were $480.3 million, compared to $483.2 million at December 31, 2023, a decrease of $2.9 million after offsetting repayments for the period. The overall decrease in the loan portfolio was comprised of a $4.0 million decrease in commercial and commercial real estate loans and a $652,000 decrease in real estate lending and a $1.8 million increase in installment loans since December 31, 2023.
Commercial and commercial real estate loans comprised 78.9% of total loans at March 31, 2024, compared to 79.4% at December 31, 2023. Commercial and commercial real estate loans have decreased $4.0 million, or approximately 1.0% since December 31, 2023. This segment of the loan portfolio includes originated loans in its market areas and purchased participations in loans from other banks for out-of-area commercial and commercial real estate loans to benefit from consistent economic growth outside the Company’s primary market area.
Installment loans represented 1.8% of total loans at March 31, 2024 and 1.4% at December 31, 2023. Some of the installment loans carry somewhat more risk than real estate lending; however, it also provides for higher yields. Installment loans have increased $1.8
33
United Bancorp, Inc.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
million, or 26.24%, since December 31, 2023. The targeted lending areas encompass four separate metropolitan areas, minimizing the risk to changes in economic conditions in the communities housing the Company’s banking locations.
Residential real estate loans were 19.3% of total loans at March 31, 2024 and 19.3% at December 31, 2023, representing a decrease of $652,000, less than 1% since December 31, 2023. At March 31, 2024, the Company did not hold any loans for sale.
The allowance for credit losses totaled $3.9 million at March 31, 2024, which represented 0.81% 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 credit losses over the life of the loan portfolio. Net loan (recoveries) charge-offs (exclusive of overdrafts net charge-offs of $19,000) for the three months ended March 31, 2024 were approximately $29,000 . Net loans charged off (exclusive of overdrafts net charge-offs $23,000) was ($4,000) for the three months ended March 31, 2023. The Company adopted ASU No. 2016-13 effective January 1, 2023. The impact of the adoption was a $2.4 million increase in the allowance for credit losses.
Earning Assets – Securities
The securities portfolio is comprised of U.S. Government agency-backed securities, tax-exempt obligations of state and political subdivisions and certain other investments. Securities available for sale at March 31, 2024 increased approximately $9.0 million from December 31, 2023 totals.
Sources of Funds – Deposits
The Company’s primary source of funds is core deposits from retail and business customers. These core deposits include all categories of interest-bearing and noninterest-bearing deposits, excluding certificates of deposit greater than $250,000. For the period ended March 31, 2024, total core deposits (interest and non interest bearing accounts and savings) increased approximately $4.3 million, or 0.7% from December 31, 2023 totals. The Company’s savings accounts decreased $2.0 million or 1.5% from December 31, 2023 totals. The Company’s interest-bearing and non-interest bearing demand deposits decreased $5.7 million while certificates of deposit under $250,000 increased by $12.0 million.
The Company has a strong deposit base from public agencies, including local school districts, city and township municipalities, public works facilities and others that may tend to be more seasonal in nature resulting from the receipt and disbursement of state and federal grants. These entities have maintained fairly static balances with the Company due to various funding and disbursement timeframes.
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, 2024, certificates of deposit greater than $250,000 increased $176,000 or less than 1.0%, from December 31, 2023 totals.
Sources of Funds – Securities Sold under Agreements to Repurchase and Other Borrowings
Other interest-bearing liabilities include securities sold under agreements to repurchase and Federal Home Loan Bank (“FHLB”) advances. The majority of the Company’s repurchase agreements are with local school districts and city and county governments. The Company’s repurchase agreements increased approximately $11.0 million from December 31, 2023 totals. At March 31, 2024, the Company has $75 million of fixed rate advances that mature over the next 2 to 4 years. Refer to footnote 10 for further information.
Results of Operations for the Three Months Ended March 31, 2024 and 2023
Net Income
The reported diluted earnings per share was $0.35 for the quarter ended March 31, 2024 compared to $0.33 for the quarter ended March 31, 2023, an increase of 6.1%.
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United Bancorp, Inc.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
Net Interest Income
Net interest income decreased $308,000 or 4.8% for the three months ended March 31, 2024 compared to the same period in 2023.
Provision for Credit Losses
The Company did not record a provision for credit losses during the three months ended March 31, 2024 and 2023.
Noninterest Income
Noninterest income of the Company decreased $150,000 year-over-year. This decrease was in part due to the loss on the sake of available-for-sale secutrites of $194,000 for the three months ended March 31, 2024.
Noninterest Expense
The Company saw its noninterest expense decreased by $600,000 or 11.1% year-over-year. The Company has taken on some additional expenses relating to our revenue enhancement and growth initiatives such as our recently implemented Unified Mortgage focus and the announcement of our new Wheeling Banking Center. Our Company was able to successfully apply and be approved for an Employee Retention Credit (ERC) in the first quarter. This tax credit helped offset the expenses associated with these new initiatives along with other expenses and the impact of inflation on salaries and employee benefit.
Federal Income Taxes
The provision for federal income taxes was $150,000 for the three months ended March 31, 2024, an increase of $37,000 compared to the same period in 2023. The effective tax rate was approximately 7.0% and 5.6% for the three months ended March 31, 2024 and 2023, respectively.
Capital Resources
Internal capital growth, through the retention of earnings, is the primary means of maintaining capital adequacy for the Company. Stockholders’ equity totaled $63.2 million at March 31, 2024, compared to $63.6 million at December 31, 2023, a $387,000 decrease. Total stockholders’ equity in relation to total assets was 7.58% at March 31, 2024 and 7.76% at December 31, 2023. The Company’s Articles of Incorporation allows for a class of preferred shares with 2,000,000 authorized shares. This enables the Company, at the option of the Board of Directors, to issue series of preferred shares in a manner calculated to take advantage of financing techniques which may provide a lower effective cost of capital to the Company. The amendment also provides greater flexibility to the Board of Directors in structuring the terms of equity securities that may be issued by the Company. Although this preferred stock is a financial tool, it has not been utilized to date.
The Company has offered for many years a Dividend Reinvestment Plan (“The Plan”) for shareholders under which the Company’s common stock will be purchased by the Plan for participants with automatically reinvested dividends. The Plan does not represent a change in the Company’s dividend policy or a guarantee of future dividends.
The Company is subject to the regulatory requirements of The Federal Reserve System as a bank holding company. The Bank is subject to regulations of the FDIC and the State of Ohio, Division of Financial Institutions. The most important of these various regulations address capital adequacy.
On January 1, 2015, the final rules of the Federal Reserve Board went into effect implementing in the United States the Basel III regulatory capital reforms from the Basel Committee on Banking Supervision and certain changes required by the Dodd-Frank Wall Street Reform and Consumer Protection Act.
Under the final rule, minimum requirements increased for both the quality and quantity of capital held by banking organizations. The rule requires a new minimum ratio of common equity tier 1 capital to risk-weighted assets of 4.5 percent and a common equity tier 1 capital conservation buffer of 2.5 percent of risk-weighted assets that will apply to all supervised financial institutions. The rule also raises the minimum ratio of tier 1 capital to risk-weighted assets from 4 percent to 6 percent and includes a minimum leverage ratio of 4 percent for all banking organizations.
35
United Bancorp, Inc.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
The Bank continues to be well-capitalized in accordance with Federal regulatory capital requirements as the capital ratios below show:
Common equity tier 1 capital ratio |
| 13.40 | % |
Tier 1 capital ratio |
| 13.40 | % |
Total capital ratio |
| 14.07 | % |
Leverage ratio |
| 9.50 | % |
Liquidity
Management’s objective in managing liquidity is maintaining the ability to continue meeting the cash flow needs of its customers, such as borrowings or deposit withdrawals, as well as its own financial commitments. The principal sources of liquidity are net income, loan payments, maturing securities and sales of securities available for sale, federal funds sold and cash and deposits with banks. Along with its liquid assets, the Company has additional sources of liquidity available to ensure that adequate funds are available as needed. These include, but are not limited to, the purchase of federal funds, the ability to borrow funds under line of credit agreements with correspondent banks, a borrowing agreement with the Federal Home Loan Bank of Cincinnati and the adjustment of interest rates to obtain depositors. Management feels that it has the capital adequacy and profitability to meet the current and projected liquidity needs of its customers.
Inflation and Economic Environment
Over the first quarter of 2024, incoming U.S. economic data continue to show consistent growth in the labor market, household consumption, and business investment, even as post-pandemic inflation remains stubbornly elevated. Although headline GDP growth slowed more than expected in the first quarter, underlying demand from households and businesses remained remarkably strong, with the national unemployment rate continuing to remain low. Inflation, however, has been slower to come down than expected after the rapid decline observed in 2023, and the cumulative effect of elevated prices compared with the pre-pandemic era may be weighing on consumer sentiment. 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 financial condition and results of operations to a greater degree 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.
Inflation, however, can directly impact the Company’s performance by potentially reducing the spending power of its borrowers. Higher costs continue to present a risk to the economy. Interest rate levels and energy prices, in combination with global economic conditions and fiscal and monetary policy, will likely continue to impact our results in 2024. The Company continues to closely monitor and analyze the higher risk segments within the loan portfolio, tracking past due accounts. Based on the Company’s capital levels, prudent underwriting policies, loan concentration diversification and our geographic footprint, senior management is cautiously optimistic that the Company is positioned to continue managing the impact of the varied set of risks and uncertainties currently impacting the economy and remain adequately capitalized. However, the Company may be required to make additional credit loss provisions as warranted by the extremely fluid economic condition.
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United Bancorp, Inc.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
ITEM 3 Quantitative and Qualitative Disclosures About Market Risk
Smaller Reporting Companies are not required to provide this disclosures.
ITEM 4.Controls and Procedures
The Company, under the supervision, and with the participation, of its management, including the Company’s Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the design and operation of the Company’s disclosure controls and procedures pursuant to the requirements of Exchange Act Rule 13a-15. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures were effective as of March 31, 2024, in timely alerting them to material information relating to the Company (including its consolidated subsidiary) required to be included in the Company’s periodic SEC filings. There were no changes in the Company’s internal controls over financial that occurred during the Company’s most recent completed fiscal quarterthat has materially or is reasonably likely to materially affect the Company’s internal controls over financial reporting.
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United Bancorp, Inc.
Part II – Other Information
ITEM 1. Legal Proceedings
None, other than ordinary routine litigation incidental to the Company’s business.
ITEM 1A. Risk Factors
Smaller reporting companies are not required to provide this information.
ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds
ISSUER PURCHASES OF EQUITY SECURITIES
|
|
| (c) |
| (d) | ||||
Total Number of | Maximum Number or | ||||||||
Shares (or Units) | Approximate Dollar | ||||||||
(a) | Purchased as Part | Value) of Shares (or | |||||||
Total Number of | (b) | Of Publicly | Units) that May Yet | ||||||
Shares (or Units) | Average Price Paid | Announced Plans | Be Purchased Under | ||||||
Period | Purchased | Per Share (or Unit) |
| Or Programs |
| the Plans or Programs | |||
Month #1 1/1/2024 to 1/31/2024 |
| –– |
| –– |
| –– |
| –– | |
Month #2 2/1/2024 to 2/29/2024 |
| — |
| — |
| –– |
| –– | |
Month #3 3/1/2024 to 3/31/2024 |
| –– | –– |
| –– |
| –– | ||
The Company adopted the United Bancorp, Inc. Affiliate Banks Directors and Officers Deferred Compensation Plan (the “Plan”), which is an unfunded deferred compensation plan. Amounts deferred pursuant to the Plan remain unrestricted assets of the Company, and the right to participate in the Plan is limited to members of the Board of Directors and Company officers. Under the Plan, directors or other eligible participants may defer fees and up to 50% of their annual incentive award payable to them by the Company, which are used to acquire common shares which are credited to a participant’s respective account. Except in the event of certain emergencies, no distributions are to be made from any account as long as the participant continues to be an employee or member of the Board of Directors. Upon termination of service, the aggregate number of shares credited to a participant’s account is distributed with any cash proceeds credited to the account which have not yet been invested in the Company’s stock. All purchases under this deferred compensation plan are funded with either earned director fees or officer incentive award payments. No underwriting fees, discounts, or commissions are paid in connection with the Plan. The shares allocated to participant accounts have not been registered under the Securities Act of 1933 in reliance upon the exemption provided by Section 4(2) thereof. No pucahses were made under the plan during the most recently completed fiscal quarter.
ITEM 3. Defaults Upon Senior Securities
Not applicable.
ITEM 4. Mine Safety Disclosures
Not applicable.
Item 5. Other Information
Not applicable
38
United Bancorp, Inc.
Part II – Other Information
ITEM 6. Exhibits
EX-3.1 |
| Amended Articles of Incorporation of United Bancorp, Inc. (1) |
EX-3.2 | Amended and Restated Code of Regulations of United Bancorp, Inc. (2) | |
EX-4.1 | ||
EX 4.2 | Forms of 6.00% Fixed to Floating Rate Subordinated Note due May 15, 2029 (4) | |
EX 31.1 | ||
EX 31.2 | ||
EX 32.1 | ||
EX 32.2 | ||
EX 101.INS | XBRL Instance Document | |
EX 101.SCH | XBRL Taxonomy Extension Schema Document | |
EX 101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document | |
EX 101.DEF | XBRL Taxonomy Extension Definition Linkbase Document | |
EX 101.LAB | XBRL Taxonomy Extension Label Linkbase Document | |
EX 101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document | |
104 | Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101) |
| (1) | Incorporated by reference to Appendix B to the registrant’s Definitive Proxy Statement filed with the Securities and Exchange Commission on March 14, 2001. |
| (2) | Incorporated by reference to Exhibit 3.2 to the registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on November 18, 2016. |
| (3) | Incorporated by reference to Exhibit 4 to the registrant’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 20, 2020. |
| (4) | Incorporated by reference to Exhibit 4.1 to the registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on May 14, 2019. |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| /s/ United Bancorp, Inc. | |
|
| |
Date: May 15, 2024 | By: | /s/Scott A. Everson |
| Scott A. Everson | |
|
| President and Chief Executive Officer |
|
| |
Date: May 15, 2024 | By: | /s/Randall M. Greenwood |
| Randall M. Greenwood | |
|
| EXECUTIVE VICE PRESIDENT CHIEF FINANCIAL AND |
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