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Section 1: 8-K (8-K)

8-K

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

Pursuant to Section 13 OR 15(d)

of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): May 1, 2020

 

 

UNITED BANCORP, INC.

(Exact name of registrant as specified in its charter)

 

 

 

Ohio   0-16540   34-1405357

(State or other jurisdiction

of incorporation)

 

(Commission

File Number)

 

(IRS Employer

Identification No.)

201 South 4th Street, Martins Ferry, Ohio   43935-0010
(Address of principal executive offices)   (Zip Code)

Registrant’s telephone number, including area code: (740) 633-0445

 

(Former name or former address, if changed since last report.)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

 

Trading

Symbol(s)

 

Name of each exchange

on which registered

Common Stock, Par Value $1.00   UBCP   NASDQ Capital Market

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

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.  ☐

 

 

 


Item 2.02.

Results of Operations and Financial Condition.

On May 1, 2020, United Bancorp, Inc. issued a press release announcing its results of operations and financial condition for and as of the three month period ended March 31, 2020, unaudited. The press release is furnished as Exhibit No. 99.

 

Item 9.01.

Financial Statements and Exhibits.

 

(d)

Exhibits

The following exhibits are furnished herewith:

 

Exhibit

Number

  

Exhibit Description

99    Press release, dated May 1, 2020, announcing Registrant’s results of operations and financial condition for and as of the three month period ended March 31, 2020, unaudited.


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 hereunto duly authorized.

 

Dated: May 4, 2020

      UNITED BANCORP, INC.
     

/s/ Randall M. Greenwood

      Randall M. Greenwood
      Senior Vice President and
      Chief Financial Officer
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Section 2: EX-99 (EX-99)

EX-99

Exhibit 99

 

LOGO

 

 

 

PRESS RELEASE

 

 

United Bancorp, Inc. 201 South 4th at Hickory Street, Martins Ferry, OH 43935

 

Contacts:    Scott A. Everson    Randall M. Greenwood
   President and CEO    Senior Vice President, CFO and Treasurer
   (740) 633-0445, ext. 6154    (740) 633-0445, ext. 6181
   [email protected]    [email protected]

FOR IMMEDIATE RELEASE:        3:00 p.m. May 1, 2020

United Bancorp, Inc. Reports on Its Earnings for the Three Months Ended March 31, 2020

MARTINS FERRY, OHIO ◆◆◆ United Bancorp, Inc. (NASDAQ: UBCP) reported diluted earnings per share of $0.28 and net income of $1,579,000 for the three months ended March 31, 2020, as compared to $0.28 and $1,614,000, respectively, for the corresponding three-month period in 2019. Even though the Company achieved the same level of earnings on a year-over-year basis, first quarter earnings were negatively impacted by a higher provision for loan losses in recognition of the unprecedented economic environment in which it is presently operating due to the global COVID-19 pandemic.

Randall M. Greenwood, Senior Vice President, CFO and Treasurer remarked, “In light of recent events, we are pleased to report on our overall solid financial performance for the quarter ended March 31, 2020. As noted above, our Company achieved diluted earnings per share of $0.28 in the first quarter of 2020 — which was the same level as the previous year — even though we booked an additional $473,000 of loan loss provision to give proper recognition to the risks posed to our Company by the COVID-19 pandemic. Significantly contributing to our achievement of a sound level of earnings this past quarter was the solid growth that our Company experienced in its earning assets on a year-over-year basis. Year-over-year, gross loans increased by $34.4 million, or 8.3%, and securities and other restricted stock increased by $57.5 million or 39.8%. This strong growth in our earning assets, along with robust loan fee generation during the first quarter of this year, led to an increase in total interest income of $1.0 million, or 15.9%, over the previous year. As we have formerly disclosed, our Company started to position its balance sheet to be more liability sensitive over the course of the past year in response to the FOMC’s sudden change in the direction of monetary policy, which helped to control overall interest expense levels. Even with this change, interest expense did increase by $478,000 over last year’s level. But, with our focus on both growing assets and aggressively managing our sensitivity, our Company saw a year-over-year increase in its net interest income of $525,000 or 10.3%. As of March 31, 2020, our Company’s net interest margin was 3.76%, which compares very favorably to our peer and is relatively stable compared to the previous year.”

Greenwood continued, “Even though we fully realize that the present pandemic situation has the potential to change our qualitative metrics relating to credit, we have successfully maintained overall strength and stability within our loan portfolio as of March 31, 2020. Year-over-year, our Company continues to have very solid credit quality-related metrics supported by a relatively low level of


nonaccrual loans and loans past due 30 plus days, which were $2.6 million, or 0.58 percent of total loans at quarter end versus $3.5 million and .85%, respectively, the previous year. Further, net loans charged off, excluding overdrafts, was $63,000, or .06% annualized. With our additional provision for loan losses this past quarter, our total allowance for loan losses increased ten basis points on a year-over-year basis to a level of 0.60% and our total allowance for loan losses to nonperforming loans was 146.4%, which was up over the previous year by 14.2%. We are committed under the present situation with which we are confronted to closely work with our valued loan customers to keep their loans current by adopting payment relief practices fully supported by both regulatory and accounting guidance, which has evolved over the course of recent weeks. We are hopeful that these positive actions will allow our customers to weather this present storm and our Company to maintain overall sound credit quality. Obviously, time will ultimately bear this out.” Greenwood further stated, “Our Company continues to have very sound levels of capital. As previously announced in the second quarter of last year, we enhanced our capital levels by issuing $20.0 million in subordinated debt at very favorable terms. Even though this capital is only measured at the bank-level, it has provided some very welcome cushion during these very challenging times. Overall, our Company saw shareholders’ equity grow by $9.1 million, or 17.0%, year-over-year, and its book value increase (on a percentage basis) by the same amount to a level of $10.75.”

Scott A. Everson, President and CEO stated, “It is truly amazing how quickly things can change on a global basis. The COVID-19 pandemic has had a tremendous and negative impact on all of us. Our thoughts and prayers go out to everyone as we work to navigate through this unimaginable time and come to some semblance of normalcy, once again. I am extremely grateful that both our valued employees and customers have adapted to the modified operating structure that we adopted during the latter half of the first quarter. Our number one priority at this time is to protect the health and welfare of our team members and customer base while delivering the highest quality of service possible under the circumstances. We are blessed to have both systems and personnel capable of enacting quick change in our delivery, which has led to results that are similar to those when we are fully functional as a community bank. Being observant of both the stay-at-home orders and best practices guidance being provided by governmental authorities, many of our team members are currently working from home. In addition, delivery of our services is primarily being conducted at our drive-ups or through electronic/ digital channels. Despite all of the challenges with which we are presently confronted, our Company produced very solid earnings results in the first quarter of 2020… even with the additional loan loss provision expense of $473,000, which was over six times the level that we allocated the previous year. Prior to the stay-at-home order and pandemic spread, our loan production team had an excellent quarter of loan generation as evidenced by the $322,000 increase in loan fees quarter-over-quarter.” Everson concluded, “Our Company has always had a long-term view, predicated on sound underwriting practices, superior customer service and prudent liquidity and capital management, which has served us well through various operating environments. We are confident that this operating philosophy will, once again, prove to be sound as we support our customers and work through this present crisis; therefore, protecting our shareholder value.”

As of March 31, 2020, United Bancorp, Inc. has total assets of $715.8 million and total shareholders’ equity of $62.9 million. Through its single bank charter, Unified Bank, the Company currently has nineteen banking offices that serve the Ohio Counties of Athens, Belmont, Carroll, Fairfield, Harrison, Jefferson and Tuscarawas. The Company also operates a Loan Production Office in Wheeling, WV. United Bancorp, Inc. trades on the NASDAQ Capital Market tier of the NASDAQ Stock Market under the symbol UBCP, Cusip #909911109.

Certain statements contained herein are not based on historical facts and are “forward-looking statements” within the meaning of Section 21A of the Securities Exchange Act of 1934. Forward-looking statements, which are based on various assumptions (some of which are beyond the Company’s control), may be identified by reference to a future period or periods, or by the use of forward-looking terminology, such as “may,” “will,” “believe,” “expect,” “estimate,” “anticipate,” “continue,” or similar terms or variations on those terms, or the negative of these terms. Actual results could differ materially from those set forth in forward-looking statements, due to a variety of factors, including, but not limited to, those related to the economic environment, particularly in the market areas in which the company operates, competitive products and pricing, fiscal and monetary policies of the U.S. Government, changes in government regulations affecting financial institutions, including regulatory fees and capital requirements, changes in prevailing interest rates, acquisitions and the integration of acquired businesses, credit risk management, asset/liability management, changes in the financial and securities markets, including changes with respect to the market value of our financial assets, and the availability of and costs associated with sources of liquidity. The Company undertakes no obligation to update or carry forward-looking statements, whether as a result of new information, future events or otherwise.


UNITED BANCORP, INC.

“UBCP”

 

     At or for the Quarter Ended              
     March 31,     March 31,     %     $  
     2020     2019     Change     Change  

Earnings

        

Interest income on loans

   $ 5,330,034     $ 5,045,302       5.64   $ 284,732  

Loan fees

     512,135       190,316       169.10   $ 321,819  

Interest income on securities

     1,476,745       1,079,566       36.79   $ 397,179  
  

 

 

   

 

 

     

Total interest income

     7,318,914       6,315,184       15.89   $ 1,003,730  

Total interest expense

     1,685,435       1,207,188       39.62   $ 478,247  
  

 

 

   

 

 

     

Net interest income

     5,633,479       5,107,996       10.29   $ 525,483  

Provision for loan losses

     563,000       90,000       525.56   $ 473,000  

Net interest income after provision for loan losses

     5,070,479       5,017,996       1.05   $ 52,483  

Service charge on deposit account

     659,147       713,294       -7.59   $ (54,147

Net realized gains on sale of loans

     6,032       3,804       58.57   $ 2,228  

Other noninterest income

     379,730       227,850       66.66   $ 151,880  

Total noninterest income

     1,044,909       944,948       10.58   $ 99,961  

Total noninterest expense

     4,410,582       4,162,328       5.96   $ 248,254  

Income tax expense

     125,642       187,008       -32.81   $ (61,366
  

 

 

   

 

 

     

Net income

   $ 1,579,164     $ 1,613,608       -2.13   $ (34,444

Key performance data

        

Earnings per common share - Basic

   $ 0.28     $ 0.28       0.00   $ —    

Earnings per common share - Diluted

     0.28       0.28       0.00   $ —    

Cash dividends paid

     0.1425       0.1325       7.55   $ 0.01000  

Stock data

        

Dividend payout ratio

     50.89     47.32     3.57  

Price earnings ratio

     10.58     9.69     9.17  

Market price to book value

     103     118     -13.17  

Annualized yield based on quarter end close

     5.17     4.88     5.94  

Market value - last close (end of period)

     11.02       10.85       1.57  

Book value (end of period)

     10.75       9.19       16.97  

Shares Outstanding

        

Average - Basic

     5,463,739       5,515,418       —      

Average - Diluted

     5,463,739       5,515,418       —      

Common stock, shares issued

     5,959,351       5,897,227       —      

Shares held as treasury stock

     79,593       29,624       —      

Return on average assets (ROA)

     0.91     1.08     -0.17  

Return on average equity (ROE)

     10.03     12.00     -1.96  

At quarter end

        

Total assets

   $ 715,821,865     $ 621,007,755       15.27   $ 94,814,110  

Total assets (average)

     693,400,000       599,312,000       15.70   $ 94,088,000  

Cash and due from Federal Reserve Bank

     28,042,242       32,692,099       -14.22   $ (4,649,857

Average cash and due from Federal Reserve Bank

     10,850,000       21,723,000       -50.05   $ (10,873,000

Securities and other restricted stock

     201,853,626       144,329,961       39.86   $ 57,523,665  

Average securities and other restricted stock

     193,449,000       131,402,000       47.22   $ 62,047,000  

Other real estate and repossessions

     818,450       91,000       799.40   $ 727,450  

Gross loans

     448,336,574       413,896,086       8.32   $ 34,440,488  

Allowance for loan losses

     (2,708,559     (2,083,480     30.00   $ (625,079

Net loans

     445,628,015       411,812,606       8.21   $ 33,815,409  

Average loans

     444,116,000       412,671,000       7.62   $ 31,445,000  

Net loans charged-off

     63,290       18,420       243.59   $ 44,870  

Net overdrafts charged-off

     22,268       30,988       -28.14   $ (8,720

Total net charge offs

     85,558       49,408       73.17   $ 36,150  

Nonaccrual loans

     1,850,476       1,576,045       17.41   $ 274,431  

Loans past due 30+ days (excludes non accrual loans)

     765,019       1,953,368       -60.84   $ (1,188,349

Total Deposits

        

Noninterest bearing demand

     104,010,945       102,447,401       1.53   $ 1,563,544  

Interest bearing demand

     241,437,588       212,620,075       13.55   $ 28,817,513  

Savings

     111,065,936       110,923,522       0.13   $ 142,414  

Time < $250,000

     86,723,750       94,268,487       -8.00   $ (7,544,737

Time > $250,000

     12,279,625       18,671,486       -34.23   $ (6,391,861

Total Deposits

     555,517,844       538,930,971       3.08   $ 16,586,873  

Average total deposits

     547,025,000       526,632,000       3.87   $ 20,393,000  

Advances from the Federal Home Loan Bank

     51,000,000       79,505       64046.91   $ 50,920,495  

Overnight advances

     11,000,000       —         N/A     $ 11,000,000  

Term advances

     40,000,000       79,505       50211.30   $ 39,920,495  

Repurchase Agreements

     14,587,355       13,440,580       8.53   $ 1,146,775  

Shareholders’ equity

     62,948,669       53,786,271       17.03   $ 9,162,398  

Shareholders’ equity (average)

     62,988,000       53,786,000       17.11   $ 9,202,000  

Key performance ratios

        

Net interest margin (Federal tax equivalent)

     3.76     3.80     -0.04  

Interest expense to average assets

     0.97     0.81     0.16  

Total allowance for loan losses to nonperforming loans

     146.37     132.20     14.17  

Total allowance for loan losses to total loans

     0.60     0.50     0.10  

Total past due and nonaccrual loans to gross loans

     0.58     0.85     -0.27  

Nonperforming assets to total assets

     0.37     0.27     0.10  

Net charge-offs to average loans

     0.08     0.05     0.03  

Equity to assets at period end

     8.79     8.66     0.13  
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