MARTINS FERRY, Ohio,
Jan. 23, 2020 /PRNewswire/
-- United Bancorp, Inc. (NASDAQ: UBCP) reported diluted
earnings per share of $1.19 and net
income of $6,809,000 for the twelve
months ended December 31, 2019, as
compared to $0.82 and $4,282,000, respectively, for the corresponding
twelve-month period in 2018. The Company's diluted earnings
per share for the three months ended December 31, 2019 was $0.31 as compared to $0.10 for the same period in the previous
year. Last year's fourth quarter performance was impacted by
the Company's acquisition of Powhatan Point Community
Bancshares. These year-over-year improvements in UBCP's
earnings are directly related to the Company executing its
strategic vision of achieving profitable growth by both growing
organically and acquiring other like-minded community banking
organizations.
Randall M. Greenwood, Senior Vice
President, CFO and Treasurer remarked, "We are extremely pleased to
report on our solid financial performance for the year 2019.
For the most recently-ended quarter, our Company had an increase in
net income of $1,177,000. For
the twelve-month period ending December 31,
2019, our Company saw its net income increase by
$2,527,000, or 59%, to a level of
$6,809,000--- which is a new earnings
record for our Company. This increase in earnings is highly
correlated to the strong organic and acquisition-related growth
that our Company experienced during the past year. Even with
the issuance of common shares to facilitate our most recent
acquisition completed in the fourth quarter of 2018, our diluted
earnings per share was $1.19 versus
$0.82 in 2018, an increase of
45%. The combination of the acquisition-related and strong
organic growth that we achieved this past year facilitated the
increase in the level of our Company's higher-yielding earning
assets, which grew by $92.2 million,
or 16%, on a year-over-year basis. This growth in earning
assets was divided between steady growth in our Company's loan
portfolio, which increased by $31.9
million, or 7.8%, and solid growth in our investment
portfolio, with securities and other restricted stock increasing by
$64.6 million, or 50.4%. With
our increased level of higher-yielding earning assets, our Company
saw a year-over-year increase in the level of interest income that
it generated in 2019 of $5.7 million
or 27%."
Greenwood further stated, "In order to fund this strong growth
in our earning assets--- while improving our overall levels of
profitability--- our Company needed to effectively attract new
funding while controlling its overall cost of funding.
Considering that the Federal Open Market Committee (FOMC) was
postured to increase its target rate for the overnight borrowing
rate (known as the Fed Funds Rate) at year-end 2018, we were
positioned for a rising rate environment. With the sudden
turn in monetary policy by the FOMC during the course of this past
year, our Company made a strategic decision to become more
liability-sensitive by the late second quarter of this past year
and allowed some of the retail funding that we had on our balance
sheet to runoff and be replaced with more price-sensitive,
overnight wholesale funding. Accordingly, total deposits grew
at a somewhat slower pace than we had been experiencing prior
thereto; while overnight advances from the Federal Home Loan Bank
increased by $39.7 million,
year-over-year. By adopting this position, we are hopeful
that our Company will mitigate further compression of our net
interest margin in the coming year. As of year-end 2019, our
Company's net interest margin was 3.67%, which compares very
favorably with our peers. Also, by reasonably controlling our
overall cost of funding, our Company experienced a very solid
increase in net interest income in 2019 of $2,770,000, or 15.3%, which also compares very
favorably to our competitors within our industry."
Greenwood continued, "From a qualitative perspective, we have
successfully maintained overall strength and stability within our
loan portfolio. 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 $2.7 million, or 0.60
percent of total loans, at December
31, 2019. Further, net loans charged off, excluding
overdrafts, was $601,000 in 2019,
which was higher than the $259,000
charged off the previous year. Net loan charge offs to
average loans for the year was 0.14% versus 0.07% for the same
period in 2018. Year-over-year, this number was slightly
higher due to a loan-related charge-off realized in the fourth
quarter in the amount of $428,000,
which we fully covered with an offsetting provision to our loan
loss reserve." Greenwood further stated, "This was an
isolated incident resulting from an individual borrower having
legal issues. With the borrower facing upcoming incarceration, the
borrower's loans became non-performing. With this matter
being highly correlated to a character issue with the borrower and
an isolated incident, we firmly believe that our credit quality
remains very sound and are very satisfied with the overall stable
performance of our loan portfolio from a credit quality
perspective."
Greenwood concluded, "Once again, we are very satisfied with the
record earnings that our Company produced this past year and
project that we will continue with positive earnings growth into
2020."
Scott A. Everson, President and
CEO stated, "We are extremely gratified to report on the strong
earnings that our Company produced in 2019. We greatly
benefited from the positive execution of our strategic plan, which
calls for us to grow through acquiring other like-minded community
banking organizations, building new banking centers in key and
complementary markets and capitalizing on prudent, yet profitable,
organic opportunities. Over the course of the past year, we
had success in these key areas on which we keenly focus. With
the double-digit growth in assets that we have experienced during
this time frame, our Company has produced record earnings. In
addition, we are well on our way to achieving our strategic vision
of growing our assets to a level of $1.0
billion, or greater, which should also help our Company gain
even greater efficiencies and higher levels of earnings. As
previously announced, in the late second quarter of this past year,
our Company issued $20.0 million in
subordinated debt at very favorable terms. Although this does
not contribute to our Tier I Capital at the corporate-level, it
does add to our Tier I Capital at our bank-level. Having this
new leverageable (or growth) capital at our affiliate bank-level
will greatly aid in helping us attain our lofty goal for growth and
driving our earnings in a positive fashion in future
periods."
Everson continued, "By continuing to utilize the "playbook" that
we did this past year to achieve profitable growth, we are very
optimistic about our future prospects. In addition, we will
continue focusing on building our infrastructure (or, foundation)
to support further growth while achieving greater
efficiencies. As we have previously stated, we are strongly
committed to remaining relevant within our industry by investing in
our technology and support/origination/service platforms.
Ultimately, our vision is to be a leader amongst community banks in
digital transformation--- having complete channel integration and
offering mobility to our customers--- thereby, serving them on
their terms and through their preferred channels. We have
started this initiative and believe that, for a community-minded
bank, we will have a complete digital solution that will be highly
appealing to our target clientele. Coupling this investment
in technology with continued investment in growing our Company
through acquisition and new branch construction in key
complementary markets, we firmly believe that we can continue to
grow at acceptable levels while remaining very profitable."
Everson further commented, "As we have previously announced, our
Company purchased land in Moundsville,
West Virginia and has started the construction of a new
banking center in this very vibrant community in the heart of the
proposed ethane cracker region. This will be the Company's
first full service office in the State of
West Virginia and this new location will further enhance our
developing footprint in the Upper Ohio Valley Region (which is our
traditional market). In addition, this new banking center
will nicely complement our expansion into Powhatan Point, Ohio, which is across the Ohio
River from this new and exciting market. We anticipate that
our new Moundsville Banking Center will be open for business early
in the second quarter of this year. Even with the high level
of growth that we experienced over the course of the past several
quarters, we continued to maintain our overall profitability.
With our record earnings in 2019, our Company had a return on
equity (ROE) of 11.3% and a return on assets (ROA) of 1.05%.
For many quarters, we have stated that our pursuit of growth must
be accomplished in a satisfactorily profitable fashion. We
are extremely delighted that we are presently achieving this and
strongly anticipate this trend will carry into
2020."
Everson concluded, "Our primary focus continues to be rewarding
our shareholders by paying a very solid cash dividend and
increasing their shareholder value in our Company. During the
course of 2019, we increased our cash dividend payout by
$0.0025 each quarter and are
currently paying $0.14. On a
forward basis, our current cash dividend produces a yield of 3.92%
based on our closing price as of the most recent quarter end.
Regarding our present market valuation, we saw the market reward us
this past year as our stock finished the year trading at
$14.30, which was an increase of 25%
over the previous year-end. Even at this level and on a
forward basis, we are currently trading at a price to earnings
multiple of 12 times. We firmly believe that this positions
our stock nicely to experience further market value appreciation in
the coming year--- assuming that we continue to drive our
earnings as we project, which is at very solid levels relative to
peer. Overall, we are extremely pleased with the direction
that we are going and the results that we are producing. We
continue to be highly optimistic about our future potential and
look forward to realizing this upside potential in future
periods!"
As of December 31, 2019, United
Bancorp, Inc. has total assets of $685.7
million and total shareholder's equity of $59.9 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"
|
|
For the Three
Months Ended
|
|
%
|
|
December
31,
|
|
December
31,
|
|
|
|
2019
|
|
2018
|
|
Change
|
Earnings
|
|
|
|
|
|
Interest income on
loans
|
$
5,287,127
|
|
$
4,891,033
|
|
8.10%
|
Loan fees
|
361,019
|
|
207,762
|
|
73.77%
|
Interest income on
securities
|
1,501,386
|
|
966,406
|
|
55.36%
|
Total interest
income
|
7,149,532
|
|
6,065,201
|
|
17.88%
|
Total interest expense
|
1,720,946
|
|
1,055,887
|
|
62.99%
|
Net interest income
|
5,428,586
|
|
5,009,314
|
|
8.37%
|
Provision for loan losses
|
578,000
|
|
96,000
|
|
502.08%
|
Net interest income after provision for loan losses
|
4,850,586
|
|
4,913,314
|
|
-1.28%
|
Service charges on deposit accounts
|
705,799
|
|
660,971
|
|
6.78%
|
Net realized gains on sale of loans
|
16,285
|
|
11,917
|
|
36.65%
|
BOLI benefit in excess of surrender value
|
-
|
|
100,000
|
|
N/A
|
Other noninterest income
|
271,590
|
|
221,867
|
|
22.41%
|
Total noninterest income
|
993,674
|
|
994,755
|
|
-0.11%
|
Total noninterest expense
|
3,986,369
|
|
5,232,976
|
|
-23.82%
|
Income before income taxes
|
1,857,891
|
|
675,093
|
|
175.21%
|
Income tax expense
|
89,482
|
|
83,457
|
|
7.22%
|
Net income
|
$
1,768,409
|
|
$
591,636
|
|
198.90%
|
Per
share
|
|
|
|
|
|
Earnings per common share - Basic
|
$
0.31
|
|
$
0.10
|
|
210.00%
|
Earnings per common share - Diluted
|
0.31
|
|
0.10
|
|
210.00%
|
Cash Dividends paid
|
0.14
|
|
0.13
|
|
7.69%
|
|
|
|
|
|
|
Shares
Outstanding
|
|
|
|
|
|
Average - Basic
|
5,550,469
|
|
5,325,499
|
|
--------
|
Average - Diluted
|
5,550,469
|
|
5,554,294
|
|
--------
|
|
|
|
|
|
|
|
For the Year Ended
December 31,
|
|
%
|
|
2019
|
|
2018
|
|
Change
|
Earnings
|
|
|
|
|
|
Interest income on loans
|
$
20,847,902
|
|
$
17,953,373
|
|
16.12%
|
Loan fees
|
942,181
|
|
921,911
|
|
2.20%
|
Interest income on securities
|
5,243,676
|
|
2,444,638
|
|
114.50%
|
Total interest income
|
27,033,759
|
|
21,319,922
|
|
26.80%
|
Total interest expense
|
6,123,077
|
|
3,178,886
|
|
92.62%
|
Net interest income
|
20,910,682
|
|
18,141,036
|
|
15.27%
|
Provision for loan losses
|
908,000
|
|
297,000
|
|
205.72%
|
Net interest income after provision for loan losses
|
20,002,682
|
|
17,844,036
|
|
12.10%
|
Service charges on deposit accounts
|
2,843,646
|
|
2,608,392
|
|
9.02%
|
BOLI benefit in excess of surrender value
|
-
|
|
100,000
|
|
N/A
|
Net realized gains on sale of loans
|
54,226
|
|
66,335
|
|
-18.25%
|
Other noninterest income
|
990,444
|
|
885,094
|
|
11.90%
|
Total noninterest income
|
3,888,316
|
|
3,659,821
|
|
6.24%
|
Total noninterest expense
|
16,482,370
|
|
16,421,455
|
|
0.37%
|
Income before income taxes
|
7,408,628
|
|
5,082,402
|
|
45.77%
|
Income tax expense
|
599,038
|
|
800,006
|
|
-25.12%
|
Net income
|
$
6,809,590
|
|
$
4,282,396
|
|
59.01%
|
Per
share
|
|
|
|
|
|
Earnings per common share - Basic
|
$
1.19
|
|
$
0.82
|
|
45.12%
|
Earnings per common share - Diluted
|
1.19
|
|
0.82
|
|
45.12%
|
Cash Dividends paid
|
0.545
|
|
0.52
|
|
4.81%
|
Special Cash Dividend
|
-
|
|
0.05
|
|
N/A
|
Book value (end of period)
|
10.24
|
|
9.71
|
|
5.46%
|
Shares
Outstanding
|
|
|
|
|
|
Average - Basic
|
5,525,965
|
|
4,952,471
|
|
--------
|
Average - Diluted
|
5,525,965
|
|
4,952,471
|
|
--------
|
Common stock, shares issued
|
5,959,351
|
|
5,926,851
|
|
--------
|
Shares held as Treasury Stock
|
42,400
|
|
5,744
|
|
--------
|
At year
end
|
|
|
|
|
|
Total assets
|
$
685,705,764
|
|
$
593,213,576
|
|
15.59%
|
Total assets (average)
|
648,930,000
|
|
511,323,000
|
|
26.91%
|
Cash and due from Federal
Reserve Bank
|
14,984,518
|
|
25,253,071
|
|
-40.66%
|
Average cash and due from
Federal Reserve Bank
|
5,405,000
|
|
14,958,000
|
|
-63.87%
|
Securities and other restricted stock
|
192,797,436
|
|
128,233,537
|
|
50.35%
|
Average Securities and other restricted stock
|
157,659,000
|
|
84,174,000
|
|
87.30%
|
Other real estate and repossessions ("OREO")
|
818,450
|
|
91,000
|
|
799.40%
|
Gross loans
|
441,548,353
|
|
409,683,408
|
|
7.78%
|
Average loans
|
420,487,000
|
|
387,978,000
|
|
8.38%
|
Allowance for loan losses
|
2,231,118
|
|
2,042,888
|
|
9.21%
|
Net loans
|
439,317,235
|
|
407,640,520
|
|
7.77%
|
Net loans charged off
|
601,007
|
|
258,591
|
|
132.42%
|
Net overdrafts charged off
|
118,763
|
|
117,759
|
|
0.85%
|
Total
net charge offs
|
719,770
|
|
376,350
|
|
91.25%
|
Non-accrual loans
|
1,452,050
|
|
1,245,328
|
|
16.60%
|
Loans past due 30+ days (excludes non accrual loans)
|
1,208,227
|
|
2,388,485
|
|
-49.41%
|
Average
total deposits
|
541,176,000
|
|
457,884,000
|
|
18.19%
|
Total
Deposits
|
548,068,392
|
|
525,443,133
|
|
4.31%
|
Non interest bearing
deposits
|
101,334,810
|
|
112,032,355
|
|
-9.55%
|
Interest bearing
demand
|
233,044,782
|
|
197,472,184
|
|
18.01%
|
Savings
|
108,218,061
|
|
111,251,215
|
|
-2.73%
|
Time
|
105,470,739
|
|
104,687,379
|
|
0.75%
|
Repurchase Agreements
|
6,915,603
|
|
8,068,497
|
|
-14.29%
|
Advances
from the Federal Home Loan Bank
|
39,800,000
|
|
106,351
|
|
37323.25%
|
Overnight
advances
|
39,800,000
|
|
-
|
|
N/A
|
Term
advances
|
-
|
|
106,351
|
|
N/A
|
Shareholders' equity
|
59,921,955
|
|
50,642,299
|
|
18.32%
|
Shareholders' equity (average)
|
60,368,000
|
|
46,901,000
|
|
28.71%
|
Stock
data
|
|
|
|
|
|
Market value - last close (end of period)
|
$
14.30
|
|
$
11.43
|
|
25.11%
|
Dividend payout ratio
|
45.80%
|
|
63.41%
|
|
-27.78%
|
Price earnings ratio
|
12.02
|
x
|
13.94
|
x
|
-13.79%
|
Market Price to Book Value
|
140%
|
|
118%
|
|
22.00%
|
Annualized yield based on year end close (exclude special
dividend)
|
3.92%
|
|
4.55%
|
|
-0.63%
|
Key performance
ratios
|
|
|
|
|
|
Return on average assets (ROA)
|
1.05%
|
|
0.84%
|
|
0.21%
|
Return on average equity (ROE)
|
11.28%
|
|
9.13%
|
|
2.00%
|
Net interest margin (Federal tax equivalent)
|
3.67%
|
|
3.84%
|
|
-0.17%
|
Interest expense to average assets
|
0.94%
|
|
0.62%
|
|
0.32%
|
Total allowance for loan losses
|
|
|
|
|
|
to
nonperforming loans
|
153.65%
|
|
164.04%
|
|
-10.39%
|
Total allowance for loan losses
|
|
|
|
|
|
to total
loans
|
0.51%
|
|
0.50%
|
|
0.01%
|
Nonaccrual loans to total loans
|
0.33%
|
|
0.30%
|
|
0.03%
|
Non
accrual loans and OREO to total assets
|
0.33%
|
|
0.23%
|
|
0.10%
|
Net loan
charge-offs to average loans (excludes overdraft
charge-offs)
|
0.14%
|
|
0.07%
|
|
0.07%
|
Equity
to assets at period end
|
8.74%
|
|
8.54%
|
|
0.20%
|
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SOURCE United Bancorp, Inc.