8-K: United Bancorp, Inc. Reports First Quarter Earnings Performance

United Bancorp, Inc. announced its first quarter 2025 results, reporting diluted earnings per share of $0.32 and net income of $1,872,000.

Summary

• United Bancorp, Inc. reported diluted earnings per share of $0.32 and net income of $1,872,000 for the quarter ended March 31, 2025.
• These results represent a decrease compared to the first quarter of the previous year, with net income down by $121,000 (6.1%) and diluted earnings per share down by $0.03 (8.6%).
• However, on a linked-quarter basis, net income increased by $23,000 and diluted earnings per share increased by $0.01.
• The first quarter of the previous year included non-recurring items that added approximately $271,000 to net income and $0.05 to diluted earnings per share.
• This year's first quarter included a net realized gain on the sale of available for sale securities, which added approximately $113,000 to net income and $0.02 to diluted earnings per share.
• Net interest income increased by $131,000 (2.2%) year-over-year, and the net interest margin improved by 14 basis points to 3.60%.
• Total assets decreased slightly by $3.3 million (0.40%) to $830.7 million.
• Gross loans outstanding increased by $16.6 million (3.5%).
• Total deposits decreased by $1.7 million (0.27%).
• Nonaccrual loans and loans past due 30+ days were $2.8 million, or 0.57% of gross loans.
• The company had net loans charged off (excluding overdrafts) of ($3,000) for the first quarter of this year, which annualized is (0.02%) of average loans.
• The provision for credit loss expense was $96,000 for the quarter.
• The total allowance for credit losses to total loans was 0.82%, and the total allowance for credit losses to nonaccrual loans was 211% as of March 31, 2025.
• The company remains well-capitalized with an equity to assets ratio of 7.32%.

Sentiment

Score: 6

Explanation: The sentiment is moderately positive. While earnings are down year-over-year, there's optimism about future growth and the company is taking steps to improve its performance. The management acknowledges the economic challenges but expresses confidence in the company's ability to navigate them.

Positives

• Net interest income increased by $131,000 (2.2%) year-over-year.
• Net interest margin improved by 14 basis points to 3.60%.
• Gross loans outstanding increased by $16.6 million (3.5%).
• The company paid a combined dividend of $0.3575, representing a 6.7% dividend yield.
• The company is developing a new regional banking center in Wheeling, West Virginia.
• The company is investing in technology and developing a Unified Center to improve customer service.
• The company's loan portfolio remains relatively stable and low by historic standards.
• The company had net loans charged off (excluding overdrafts) of ($3,000) for the first quarter of this year, which annualized is (0.02%) of average loans.
• The company remains well-capitalized with an equity to assets ratio of 7.32%.

Negatives

• Net income decreased by $121,000 (6.1%) year-over-year.
• Diluted earnings per share decreased by $0.03 (8.6%) year-over-year.
• Total assets decreased slightly by $3.3 million (0.40%).
• Total deposits decreased by $1.7 million (0.27%).
• Nonaccrual loans and loans past due 30+ days were $2.8 million, or 0.57% of gross loans, up from last year by $1.4 million.
• Nonperforming assets to total assets was 0.68%, an increase of seventeen (17) basis points from the previous years level of 0.51%.

Risks

• The economic environment poses challenges due to uncertainty related to tariffs and potential slowing economic output.
• The higher interest rate environment may impact borrowers and loan performance.
• The company faces competition in the industry.
• The company is exposed to risks related to economic conditions, government regulations, and changes in interest rates.

Future Outlook

The company anticipates positive trends in net interest income and net interest margin to continue in the coming quarters. Management aims to grow the asset base to $1.0 billion or greater in the near term.

Management Comments

• Randall M. Greenwood, Senior Vice President, CFO and Treasurer remarked, 'We are pleased to report on the earnings performance of United Bancorp, Inc. (UBCP) for the first quarter ended March 31, 2025.'
• Greenwood continued, 'As we all know, the economic environment in which we are operating is posing challenges for all businesses with the present high degree of uncertainty that permeates our national and world economies as a result of the tariffs that were announced under the new administration and which are in the process of being enacted.'
• Scott A. Everson, Chairman, President and CEO stated, 'Even though we continue to operate in an environment emanating a heightened level of uncertainty, United Bancorp, Inc. (UBCP) is performing in an admirable fashion at present.'

Industry Context

The report acknowledges the challenging economic environment and the impact of new trade policies on businesses. It highlights the company's focus on growth and efficiency in a competitive industry.

Comparison to Industry Standards

• The company's nonperforming assets to total assets ratio of 0.68% is stated to compare favorably to peer levels.
• The company's market price to book value was 132%, which compares favorably to current industry standards.
• The company's total dividend yield of 6.7% is described as a near-industry leading level.

Stakeholder Impact

• Shareholders are rewarded with dividends, including a special cash dividend.
• Customers will benefit from improved customer service and new technology.
• Employees will have opportunities in the new banking center and Unified Center.

Next Steps

• The company plans to open a new regional banking center in Wheeling, West Virginia, in late Q3 2025.
• The company will continue to develop its Unified Mortgage Division and Treasury Management function.
• The company will continue to invest in technology and implement AI solutions.
• The company will develop the Customer Support function at the Unified Center.

Key Dates

Keywords

earnings, net income, diluted earnings per share, net interest income, loans, deposits, dividends, banking, financial performance, UBCP, United Bancorp