MARTINS FERRY, Ohio,
July 29, 2020 /PRNewswire/ -- United
Bancorp, Inc. (NASDAQ: UBCP) reported diluted earnings per share of
$0.57 and net income of $3,254,000 for the six months ended June 30, 2020, as compared to $0.57 and $3,260,000, respectively, for the corresponding
six-month period in 2019. The Company's diluted earnings per
share for the three months ended June 30,
2020 was $0.29 as compared to
$0.29 for the same period in the
previous year. Even though the Company achieved the same
level of earnings on a year-over-year basis, year-to-date 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 current events,
we are pleased to report on our overall solid financial performance
for both the most recently ended quarter and the six months ended
June 30, 2020. As noted above,
our Company achieved diluted earnings per share of $0.29 for the second quarter of 2020 and
$0.57 year-to-date--- which was the
same for both corresponding periods the previous year--- even
though we booked an additional $1,761,000 of loan loss provision to give proper
recognition to the risks posed to our Company by the continuing
COVID-19 pandemic. 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 $20.5 million, or 4.8%, and securities and other
restricted stock increased by $30.3
million or 18.3%. This strong growth in our earning
assets, along with robust loan fee generation during the first six
months of this year, led to an increase in total interest income of
$1.3 million, or 10.1%, 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 $436,000 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 $868,000 or
8.4%. As of June 30, 2020, our
Company's net interest margin was 3.52%, which compares favorably
to our peer."
Greenwood continued, "Even though we fully realize that the
continuing 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 June 30, 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
$2.0 million, or 0.43 percent of
total loans, at quarter end versus $3.3
million and 0.79 percent, respectively, the previous
year. Further, net loans charged off, excluding overdrafts,
was $162,000, or .07%
annualized. With our additional provision for loan losses
this past quarter, our total allowance for loan losses increased
forty basis points over the course of the past twelve months to a
level of 0.90% and our total allowance for loan losses to
nonaccrual loans was 254.2%, both of which are up significantly
year-over-year. 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 present regulatory and accounting
guidance. 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. Toward the end of
the most recent quarter, we have started to see a large percentage
of our loan customer base that received some level of payment
relief begin to resume contractual payments on their loans.
We are hopeful that this current trend will continue over the
course of the remainder of the year; but, being realistic, we
firmly recognize that our credit quality metrics could become worse
if our economy does not normalize in the near term."
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 shareholder's equity grow by $9.0 million, or 15.8%, year-over-year, and its
book value increase by $1.69 or
17.4%."
Scott A. Everson, President and
CEO stated, "As our Company continues to navigate through these
very uncertain times, we are extremely grateful to report on our
level of quarterly and six month earnings for 2020. Even
though the earnings that we achieved for both of these periods
equaled those realized last year when we had a record year, we
continue to posture our Company for a longer duration downturn due
to the negative macroeconomic forces with which we are presently
confronted related to the impacts of the COVID-19 pandemic on both
our domestic and world economies. Accordingly, we did sell
some investment securities in the most recently ended quarter,
which led to a gain of $1.18
million. With the present gain position that we have
within our investment portfolio, we felt a partial monetization of
this gain was prudent under the current circumstances in order to
further build our allowance for loan losses to protect our
Company. On a year-over-year basis, our allowance for loan
losses has increased by $1.873
million or 87.4%." Everson continued, "We are somewhat
encouraged by the continuing strong performance of our overall loan
portfolio; but, we firmly realize that some of the potential risk
within this portfolio could be masked due to present payment relief
practices and government stimulus support which ultimately will go
away. Only time will truly tell how great this potential risk
is for our Company and all financial institutions." Everson
further stated, "We are comforted to know that our Company
continues to be well capitalized under regulatory and industry
guidelines, which should help us weather any storm that may
confront us. In addition, 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."
Everson concluded, "Our thoughts and prayers continue to go out
to everyone as we work through the challenges presented to all of
us by this horrible and unprecedented COVID-19 pandemic. Our
number one priority continues to be protecting 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. From an operating perspective, our Company
was able to get back to some semblance of normalcy during the
latter part of the second quarter as we reopened our lobbies and,
once again, began in-person banking without a scheduled
appointment. Although we are now open to the public once
again, we are taking extreme precautions in our operations by
following strict and evolving guidance provided by both
governmental and health department authorities. We are truly
blessed to have an extremely caring and resilient team of employees
that continue to provide a high level of service while operating on
a more restricted basis. It is only through the diligence of
our team members that we have been able to produce the operating
results that we have during the first six months of 2020. For
this, our team is to be commended and I am extremely proud of their
fortitude!"
As of June 30, 2020, United
Bancorp, Inc. has total assets of $701.3
million and total shareholder's equity of $66.0 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 June 30,
|
|
%
|
|
$
|
|
2020
|
|
2019
|
|
Change
|
|
Change
|
Earnings
|
|
|
|
|
|
|
|
Interest income on
loans
|
$
5,162,032
|
|
$
5,109,571
|
|
1.03%
|
|
$
52,461
|
Loan fees
|
262,967
|
|
288,302
|
|
-8.79%
|
|
$
(25,335)
|
Interest income on
securities
|
1,524,563
|
|
1,250,230
|
|
21.94%
|
|
$
274,333
|
Total interest
income
|
6,949,562
|
|
6,648,103
|
|
4.53%
|
|
$
301,459
|
Total interest expense
|
1,426,867
|
|
1,468,420
|
|
-2.83%
|
|
$
(41,553)
|
Net interest income
|
5,522,695
|
|
5,179,683
|
|
6.62%
|
|
$
343,012
|
Provision for loan losses
|
1,408,000
|
|
120,000
|
|
1073.33%
|
|
$
1,288,000
|
Net interest income after provision for loan losses
|
4,114,695
|
|
5,059,683
|
|
-18.68%
|
|
$
(944,988)
|
Service charges on deposit accounts
|
670,712
|
|
693,487
|
|
-3.28%
|
|
$
(22,775)
|
Net realized gains on sale of available-for-sale
securities
|
1,180,863
|
|
-
|
|
N/A
|
|
$
1,180,863
|
Net realized gains on sale of loans
|
40,338
|
|
9,286
|
|
334.40%
|
|
$
31,052
|
Other noninterest income
|
263,091
|
|
244,278
|
|
7.70%
|
|
$
18,813
|
Total noninterest income
|
2,155,004
|
|
947,051
|
|
127.55%
|
|
$
1,207,953
|
Total noninterest expense
|
4,578,268
|
|
4,171,876
|
|
9.74%
|
|
$
406,392
|
Earnings before income taxes
|
1,691,431
|
|
1,834,858
|
|
-7.82%
|
|
$
(143,427)
|
Income tax expense
|
16,533
|
|
188,033
|
|
-91.21%
|
|
$
(171,500)
|
Net income
|
$
1,674,898
|
|
$
1,646,825
|
|
1.70%
|
|
$
28,073
|
|
|
|
|
|
|
|
|
Per
share
|
|
|
|
|
|
|
|
Earnings per common share - Basic
|
$
0.29
|
|
$
0.29
|
|
0.00%
|
|
|
Earnings per common share - Diluted
|
0.29
|
|
0.29
|
|
0.00%
|
|
|
Cash dividends paid
|
0.1425
|
|
0.1350
|
|
5.56%
|
|
|
|
|
|
|
|
|
|
|
Shares
Outstanding
|
|
|
|
|
|
|
|
Average - Basic
|
5,466,035
|
|
5,520,259
|
|
--------
|
|
|
Average - Diluted
|
5,466,035
|
|
5,520,259
|
|
--------
|
|
|
|
|
|
|
|
|
|
|
|
For the Six Months
Ended June 30,
|
|
%
|
|
$
|
|
2020
|
|
2019
|
|
Change
|
|
Change
|
Earnings
|
|
|
|
|
|
|
|
Interest income on
loans
|
$
10,492,066
|
|
$
10,240,712
|
|
2.45%
|
|
$
251,354
|
Loan fees
|
775,102
|
|
392,779
|
|
97.34%
|
|
$
382,323
|
Interest income on
securities
|
3,001,308
|
|
2,329,796
|
|
28.82%
|
|
$
671,512
|
Total interest
income
|
14,268,476
|
|
12,963,287
|
|
10.07%
|
|
$
1,305,189
|
Total interest expense
|
3,112,302
|
|
2,675,608
|
|
16.32%
|
|
$
436,694
|
Net interest income
|
11,156,174
|
|
10,287,679
|
|
8.44%
|
|
$
868,495
|
Provision for loan losses
|
1,971,000
|
|
210,000
|
|
838.57%
|
|
$
1,761,000
|
Net interest income after provision for loan losses
|
9,185,174
|
|
10,077,679
|
|
-8.86%
|
|
$
(892,505)
|
Service charges on deposit accounts
|
1,329,859
|
|
1,406,781
|
|
-5.47%
|
|
$
(76,922)
|
Net realized gains on sale of available-for-sale
securities
|
1,250,363
|
|
-
|
|
N/A
|
|
$
1,250,363
|
Net realized gains on sale of loans
|
46,370
|
|
13,090
|
|
254.24%
|
|
$
33,280
|
Other noninterest income
|
573,321
|
|
472,128
|
|
21.43%
|
|
$
101,193
|
Total noninterest income
|
3,199,913
|
|
1,891,999
|
|
69.13%
|
|
$
1,307,914
|
Total noninterest expense
|
8,988,850
|
|
8,334,204
|
|
7.85%
|
|
$
654,646
|
Earnings before income taxes
|
3,396,237
|
|
3,635,474
|
|
-6.58%
|
|
$
(239,237)
|
Income tax expense
|
142,175
|
|
375,041
|
|
-62.09%
|
|
$
(232,866)
|
Net income
|
$
3,254,062
|
|
$
3,260,433
|
|
-0.20%
|
|
$
(6,371)
|
|
|
|
|
|
|
|
|
Per
share
|
|
|
|
|
|
|
|
Earnings per common share - Basic
|
$
0.57
|
|
$
0.57
|
|
0.00%
|
|
|
Earnings per common share - Diluted
|
0.57
|
|
0.57
|
|
0.00%
|
|
|
Cash dividends paid
|
0.2850
|
|
0.2675
|
|
6.54%
|
|
|
Annualized yield based on quarter end close
|
4.95%
|
|
4.65%
|
|
0.30%
|
|
|
|
|
|
|
|
|
|
|
Shares
Outstanding
|
|
|
|
|
|
|
|
Average - Basic
|
5,464,899
|
|
5,517,852
|
|
--------
|
|
|
Average - Diluted
|
5,464,899
|
|
5,517,852
|
|
--------
|
|
|
Common stock, shares issued
|
5,966,351
|
|
5,939,351
|
|
--------
|
|
|
Shares held as Treasury
|
79,593
|
|
42,410
|
|
--------
|
|
|
At quarter
end
|
|
|
|
|
|
|
|
Total assets
|
$
701,327,751
|
|
$
648,627,000
|
|
8.12%
|
|
$
52,700,751
|
Total assets (average)
|
695,557,000
|
|
629,540,000
|
|
10.49%
|
|
$
66,017,000
|
Other real estate and repossessions ("OREO")
|
719,000
|
|
30,000
|
|
2296.67%
|
|
$
689,000
|
Gross loans
|
445,900,352
|
|
425,432,621
|
|
4.81%
|
|
$
20,467,731
|
Allowance for loan losses
|
4,014,502
|
|
2,141,790
|
|
87.44%
|
|
$
1,872,712
|
Net loans
|
441,885,850
|
|
423,290,831
|
|
4.39%
|
|
$
18,595,019
|
Non-accrual loans
|
1,579,116
|
|
2,814,220
|
|
-43.89%
|
|
$
(1,235,104)
|
Loans past due 30+ days (excludes non accrual loans)
|
375,457
|
|
530,648
|
|
-29.25%
|
|
$
(155,191)
|
Net loans charged-off
|
162,427
|
|
56,179
|
|
189.12%
|
|
$
106,248
|
Net overdrafts charged-off
|
25,187
|
|
54,919
|
|
-54.14%
|
|
$
(29,732)
|
Net charge-offs
|
187,614
|
|
111,098
|
|
68.87%
|
|
$
76,516
|
Average loans
|
447,023,000
|
|
415,829,000
|
|
7.50%
|
|
$
31,194,000
|
Cash and due from Federal Reserve Bank
|
21,647,194
|
|
20,107,980
|
|
7.65%
|
|
$
1,539,214
|
Average cash and due from Federal Reserve Bank
|
8,257,000
|
|
5,272,000
|
|
56.62%
|
|
$
2,985,000
|
Securities and other restricted stock
|
195,951,994
|
|
165,617,415
|
|
18.32%
|
|
$
30,334,579
|
Average securities and other restricted stock
|
188,128,000
|
|
131,739,000
|
|
42.80%
|
|
$
56,389,000
|
Total deposits
|
592,020,465
|
|
546,246,079
|
|
8.38%
|
|
$
45,774,386
|
Non interest
bearing demand
|
127,582,412
|
|
113,354,585
|
|
12.55%
|
|
$
14,227,827
|
Interest bearing
demand
|
255,090,198
|
|
205,850,931
|
|
23.92%
|
|
$
49,239,267
|
Savings
|
116,559,001
|
|
110,884,640
|
|
5.12%
|
|
$
5,674,361
|
Time <
$100,000
|
80,887,226
|
|
99,092,547
|
|
-18.37%
|
|
$
(18,205,321)
|
Time >
$100,000
|
11,901,628
|
|
17,063,376
|
|
-30.25%
|
|
$
(5,161,748)
|
Average total
deposits
|
567,931,000
|
|
543,553,000
|
|
4.48%
|
|
$
24,378,000
|
Advances from the Federal Home Loan Bank
|
-
|
|
1,633
|
|
N/A
|
|
$
(1,633)
|
Overnight
advances
|
-
|
|
-
|
|
N/A
|
|
$
-
|
Term
advances
|
-
|
|
1,633
|
|
N/A
|
|
$
(1,633)
|
Subordinated debt (net of unamortized issuance costs)
|
19,449,651
|
|
19,396,372
|
|
N/A
|
|
$
53,279
|
Securities sold under agreements to repurchase
|
9,494,389
|
|
7,674,291
|
|
23.72%
|
|
$
1,820,098
|
Stockholders' equity
|
65,984,734
|
|
57,005,357
|
|
15.75%
|
|
$
8,979,377
|
Stockholders' equity (average)
|
65,326,000
|
|
57,028,000
|
|
14.55%
|
|
$
8,298,000
|
Stock
data
|
|
|
|
|
|
|
|
Market value - last close (end of period)
|
$
11.52
|
|
$
11.50
|
|
0.17%
|
|
|
Dividend payout ratio
|
50.00%
|
|
46.93%
|
|
3.07%
|
|
|
Price earnings ratio
|
9.93
|
x
|
10.09
|
x
|
-0.16%
|
|
|
Book value (end of period)
|
$
11.42
|
|
$
9.73
|
|
17.37%
|
|
|
Market price to book value
|
100.88%
|
|
118.19%
|
|
-14.65%
|
|
|
Key performance
ratios
|
|
|
|
|
|
|
|
Return on average assets (ROA)
|
0.94%
|
|
1.04%
|
|
-0.10%
|
|
|
Return on average equity (ROE)
|
9.96%
|
|
11.43%
|
|
-1.47%
|
|
|
Net interest margin (federal tax equivalent))
|
3.52%
|
|
3.73%
|
|
-0.21%
|
|
|
Interest expense to average assets
|
0.89%
|
|
0.85%
|
|
0.04%
|
|
|
Total allowance for
loan losses to nonaccrual loans
|
254.22%
|
|
76.11%
|
|
178.11%
|
|
|
Total allowance for loan
losses to total loans
|
0.90%
|
|
0.50%
|
|
0.40%
|
|
|
Nonaccrual loans to total loans
|
0.35%
|
|
0.66%
|
|
-0.31%
|
|
|
Nonaccrual loans and OREO to total assets
|
0.33%
|
|
0.44%
|
|
-0.11%
|
|
|
Net
charge-offs (recoveries) to average loans
|
0.08%
|
|
0.05%
|
|
0.03%
|
|
|
Equity
to assets at period end
|
9.41%
|
|
8.79%
|
|
0.62%
|
|
|
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multimedia:http://www.prnewswire.com/news-releases/united-bancorp-inc-reports-on-its-earnings-for-the-six-months-ended-june-30-2020-301102369.html
SOURCE United Bancorp, Inc.