MARTINS FERRY, Ohio, Oct. 20,
2020 /PRNewswire/ -- United Bancorp, Inc. (NASDAQ:
UBCP) reported diluted earnings per share of $0.93 and net income of $5,313,000 for the nine months ended September 30, 2020, as compared to $0.88 and $5,041,000, respectively, for the corresponding
nine-month period in 2019. The Company's diluted earnings per
share for the three months ended September
30, 2020 was $0.36, as
compared to $0.31 for the same period
in the previous year, an increase of 16.1%. Even though the
Company has achieved a higher level of earnings on a year-over-year
basis, year-to-date earnings have been negatively affected by a
higher provision for loan losses that it recognized due to the
continued impact of the COVID-19 pandemic on our national economy
and the tremendous level of uncertainty that it has
created.
Randall M. Greenwood, Senior Vice
President, CFO and Treasurer remarked, "In light of the events that
have had a significant impact on our Company and economy as a whole
this current year, we are pleased to report on our overall solid
financial performance for both the most recently ended quarter and
the nine months ended September 30,
2020. As noted above, our Company achieved diluted earnings
per share of $0.36 for the third
quarter of 2020, which was an increase of $0.05, or 16.1%, over the previous year. We
achieved this improved level of performance even though we booked
an additional $1,213,000 of loan loss
provision during the current quarter to give proper recognition to
the risks posed to our Company by the continuing COVID-19
pandemic. For the nine months ending September 30, 2020, our Company had earnings of
$0.93 versus $0.88 for the preceding year, an increase of
5.7%--- even though we booked an additional $2,974,000 in loan loss provision during the
current year, raising the level of our total allowance for loan
losses to total loans from 0.50% to 1.18% as of September 30, 2020.
Contributing to our achievement of a sound level of earnings this
past quarter and year-to-date was the solid growth that our Company
experienced in its earning assets on a year-over-year basis.
Year-over-year, average loans increased by $27.8 million, or 6.7%, and average securities
and other required stock increased by $30.7
million or 20.6%. This strong growth in our earning
assets, along with robust loan fee generation during the first nine
months of this year, led to an increase in total interest income of
$1.1 million, or 5.4%, over the
previous year. As we have formerly disclosed, our Company
started to position its balance sheet to be more liability
sensitive early in the second quarter of 2019 in response to the
FOMC's sudden change in the direction of monetary policy, which
helped to reduce overall interest expense levels. This past
quarter, our Company saw its total interest expense decrease
$778,000 for the
quarter--- a level which has helped us lower our
overall total interest expense on a year-over-year basis for the
first time in several years as we had properly and responsively
prepared for the downward trending rate environment in which we
presently operate and foresee operating within for an extended
period. With our focus on both growing earning assets and
aggressively managing our sensitivity, our Company saw a
year-over-year increase in its net interest income of $1,418,000 or 9.2%. As of September 30, 2020, our Company's net interest
margin was 3.58%, which is up six basis points on a linked-quarter
basis and compares favorably to our peer. Obviously, if rates
stay lower for longer as the FOMC has communicated, this could
challenge us to maintain our net interest margin at its present
level."
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 September 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
$1.66 million, or 0.37% of total
loans, at quarter end versus $3.15
million and 0.75%, respectively, the previous year.
Further, net loans charged off, excluding overdrafts, was
$266,000, or .07% annualized.
With our increased provision for loan losses this past quarter and
for the present year, our total allowance for loan losses more than
doubled year-over-year and our total allowance for loan losses to
nonaccrual loans was 338.6% as of September
30, 2020. 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 storm and our Company to
maintain overall sound credit quality. Over the course of
this most recent quarter, we have continued to see a large
percentage of our loan customer base that had previously received
some level of payment relief begin to resume contractual or
interest only payments on their loans. We are hopeful that
this current trend will continue; 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
shareholders' equity grow by $6.6
million, or 11.1%, and its book value increase by
$1.08, or 10.6%,
year-over-year."
Scott A. Everson, President and
CEO stated, "As our Company continues to navigate through these
very uncertain times, we are extremely proud to report on our level
of quarterly and nine month earnings for 2020. We are
exceptionally grateful that this level of increased earnings
achieved in the very challenging economic environment in which we
are operating is greater than the level achieved last year…
especially, giving consideration to the reality that our Company
achieved record earnings in 2019. Even though the earnings
that we achieved so far in the current year are greater than the
earnings that we produced the previous year, we continue to posture
our Company for a longer duration downturn due to the negative
macroeconomic forces with which we continue to be 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 $1.34 million.
With the present gain position that we have within our investment
portfolio, we felt another partial monetization of this gain was,
once again, prudent this past quarter 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 $3.107 million or 146.5%."
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 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 service possible under the circumstances.
During this time of great uncertainty, we are blessed to have both
systems and personnel capable of delivering quality service and
support to our valued customers. From an operating
perspective, our Company was back to full operations and
availability during the totality of the past quarter. In
addition, I am extremely happy to report that we opened our newest
Banking Center in Moundsville, West
Virginia on August 3,
2020. This new location, our Company's twentieth full-service
Banking Center, is our first one located in the State of West
Virginia. Although we are open to the public, 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
perform at a high level in arguably the most challenging and
unprecedented operating environment in which any of us have ever
worked. 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 nine months of 2020. For this, our team
is to be commended and--- as always--- I am extremely proud of
their fortitude!"
As of September 30, 2020, United
Bancorp, Inc. has total assets of $692.5
million and total shareholder's equity of $66.7 million. Through its single bank
charter, Unified Bank, the Company currently has
twenty banking centers that serve the Ohio Counties of Athens, Belmont, Carroll, Fairfield, Harrison, Jefferson and Tuscarawas and Marshall County in West Virginia. The Company also operates a
Loan Production Office in Wheeling,
WV (Ohio County).
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 September 30,
|
|
%
|
|
$
|
|
2020
|
|
2019
|
|
Change
|
|
Change
|
Earnings
|
|
|
|
|
|
|
|
Interest income on loans
|
$
5,065,516
|
|
$
5,320,063
|
|
-4.78%
|
|
$
(254,547)
|
Loan fees
|
312,763
|
|
188,383
|
|
66.03%
|
|
$
124,380
|
Interest income on securities
|
1,312,757
|
|
1,412,494
|
|
-7.06%
|
|
$
(99,737)
|
Total interest income
|
6,691,036
|
|
6,920,940
|
|
-3.32%
|
|
$
(229,904)
|
Total interest expense
|
947,279
|
|
1,726,523
|
|
-45.13%
|
|
$
(779,244)
|
Net interest income
|
5,743,757
|
|
5,194,417
|
|
10.58%
|
|
$
549,340
|
Provision for loan losses
|
1,333,000
|
|
120,000
|
|
1010.83%
|
|
$
1,213,000
|
Net interest income after provision for loan losses
|
4,410,757
|
|
5,074,417
|
|
-13.08%
|
|
$
(663,660)
|
Service charges on deposit accounts
|
645,024
|
|
731,066
|
|
-11.77%
|
|
$
(86,042)
|
Net realized gains on sale of available-for-sale
securities
|
1,343,250
|
|
-
|
|
N/A
|
|
$
1,343,250
|
Net realized gains on sale of loans
|
46,645
|
|
24,851
|
|
87.70%
|
|
$
21,794
|
Other noninterest income
|
304,842
|
|
246,726
|
|
23.55%
|
|
$
58,116
|
Total noninterest income
|
2,339,761
|
|
1,002,643
|
|
133.36%
|
|
$
1,337,118
|
Total noninterest expense
|
4,491,275
|
|
4,161,797
|
|
7.92%
|
|
$
329,478
|
Earnings before taxes
|
2,259,243
|
|
1,915,263
|
|
17.96%
|
|
$
343,980
|
Income tax
expense
|
200,214
|
|
134,515
|
|
48.84%
|
|
$
65,699
|
Net income
|
$
2,059,029
|
|
$
1,780,748
|
|
15.63%
|
|
$
278,281
|
|
|
|
|
|
|
|
|
Per
share
|
|
|
|
|
|
|
|
Earnings per common share - Basic
|
$
0.36
|
|
$
0.31
|
|
16.13%
|
|
|
Earnings per common share - Diluted
|
0.36
|
|
0.31
|
|
16.13%
|
|
|
Cash Dividends paid
|
0.1425
|
|
0.1375
|
|
3.64%
|
|
|
Annualized yield based on quarter end close
|
4.53%
|
|
4.93%
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
Shares
Outstanding
|
|
|
|
|
|
|
|
Average - Basic
|
5,467,523
|
|
5,519,677
|
|
--------
|
|
|
Average - Diluted
|
5,467,523
|
|
5,519,677
|
|
--------
|
|
|
Common stock, shares issued
|
5,976,351
|
|
5,959,351
|
|
--------
|
|
|
Shares used for Book Value Computation
|
5,860,848
|
|
5,867,401
|
|
|
|
|
Shares held as treasury stock
|
79,593
|
|
42,409
|
|
--------
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Nine
Months Ended September 30,
|
|
%
|
|
$
|
|
2020
|
|
2019
|
|
Change
|
|
Change
|
Earnings
|
|
|
|
|
|
|
|
Interest income on loans
|
$
15,557,582
|
|
$
15,560,775
|
|
-0.02%
|
|
$
(3,193)
|
Loan fees
|
1,087,865
|
|
581,162
|
|
87.19%
|
|
$
506,703
|
Interest income on securities
|
4,314,065
|
|
3,742,290
|
|
15.28%
|
|
$
571,775
|
Total interest income
|
20,959,512
|
|
19,884,227
|
|
5.41%
|
|
$
1,075,285
|
Total interest expense
|
4,059,581
|
|
4,402,131
|
|
-7.78%
|
|
$
(342,550)
|
Net interest income
|
16,899,931
|
|
15,482,096
|
|
9.16%
|
|
$
1,417,835
|
Provision for loan losses
|
3,304,000
|
|
330,000
|
|
901.21%
|
|
$
2,974,000
|
Net interest income after provision for loan losses
|
13,595,931
|
|
15,152,096
|
|
-10.27%
|
|
$
(1,556,165)
|
Service charges on deposit accounts
|
1,974,883
|
|
2,137,847
|
|
-7.62%
|
|
$
(162,964)
|
Net realized gains on sale of available-for-sale
securities
|
2,593,613
|
|
-
|
|
N/A
|
|
$
2,593,613
|
Net realized gains on sale of loans
|
93,015
|
|
37,941
|
|
145.16%
|
|
$
55,074
|
Other noninterest income
|
878,163
|
|
718,854
|
|
22.16%
|
|
$
159,309
|
Total noninterest income
|
5,539,674
|
|
2,894,642
|
|
91.38%
|
|
$
2,645,032
|
Total noninterest expense
|
13,480,125
|
|
12,496,001
|
|
7.88%
|
|
$
984,124
|
Earnings before income taxes
|
5,655,480
|
|
5,550,737
|
|
1.89%
|
|
$
104,743
|
Income tax expense
|
342,389
|
|
509,556
|
|
-32.81%
|
|
$
(167,167)
|
Net income
|
$
5,313,091
|
|
$
5,041,181
|
|
5.39%
|
|
$
271,910
|
Per
share
|
|
|
|
|
|
|
|
Earnings per common share - Basic
|
$
0.93
|
|
$
0.88
|
|
5.68%
|
|
|
Earnings per common share - Diluted
|
0.93
|
|
0.88
|
|
5.68%
|
|
|
Cash dividends paid
|
0.4275
|
|
0.4050
|
|
5.56%
|
|
|
Shares
Outstanding
|
|
|
|
|
|
|
|
Average - Basic
|
5,465,854
|
|
5,518,500
|
|
--------
|
|
|
Average - Diluted
|
5,465,854
|
|
5,518,500
|
|
--------
|
|
|
At quarter
end
|
|
|
|
|
|
|
|
Total assets
|
$
692,521,286
|
|
$
675,821,076
|
|
2.47%
|
|
$
16,700,210
|
Total assets (average)
|
692,446,000
|
|
640,070,000
|
|
8.18%
|
|
$
52,376,000
|
Other real estate and repossessions
|
746,450
|
|
30,000
|
|
2388.17%
|
|
$
716,450
|
Gross loans
|
443,276,115
|
|
421,264,659
|
|
5.23%
|
|
$
22,011,456
|
Allowance for loan losses
|
5,228,387
|
|
2,120,999
|
|
146.51%
|
|
$
3,107,388
|
Net loans
|
438,047,728
|
|
419,143,660
|
|
4.51%
|
|
$
18,904,068
|
Net loans (charge offs)
|
(265,710)
|
|
(163,888)
|
|
62.13%
|
|
$
(101,822)
|
Net overdrafts (charge offs)
|
(41,021)
|
|
(88,001)
|
|
-53.39%
|
|
$
46,980
|
Total
net (charge offs)
|
(306,731)
|
|
(251,889)
|
|
21.77%
|
|
$
(54,842)
|
Non-accrual loans
|
1,544,306
|
|
2,619,976
|
|
-41.06%
|
|
$
(1,075,670)
|
Loans past due 30+ days (excludes non accrual loans)
|
116,810
|
|
526,215
|
|
-77.80%
|
|
$
(409,405)
|
Average loans
|
445,934,000
|
|
418,129,000
|
|
6.65%
|
|
$
27,805,000
|
Cash and due from Federal Reserve Bank
|
50,936,353
|
|
13,347,316
|
|
281.62%
|
|
$
37,589,037
|
Average cash and due from Federal Reserve Bank
|
28,747,000
|
|
19,699,000
|
|
45.93%
|
|
$
9,048,000
|
Securities and other required stock
|
162,495,967
|
|
204,887,864
|
|
-20.69%
|
|
$
(42,391,897)
|
Average securities and other required stock
|
179,560,000
|
|
148,863,000
|
|
20.62%
|
|
$
30,697,000
|
Average total deposits
|
571,250,000
|
|
537,064,000
|
|
6.37%
|
|
$
34,186,000
|
Total deposits
|
576,856,068
|
|
549,996,178
|
|
4.88%
|
|
$
26,859,890
|
Non interest
bearing demand
|
121,270,536
|
|
112,854,830
|
|
7.46%
|
|
$
8,415,706
|
Interest bearing
demand
|
248,506,236
|
|
215,883,974
|
|
15.11%
|
|
$
32,622,262
|
Savings
|
117,487,476
|
|
109,049,618
|
|
7.74%
|
|
$
8,437,858
|
Time
|
89,591,820
|
|
112,207,756
|
|
-20.16%
|
|
$
(22,615,936)
|
Securities sold under
agreements to repurchase
|
17,027,320
|
|
9,901,835
|
|
71.96%
|
|
$
7,125,485
|
Advances from the Federal Home Loan Bank
|
-
|
|
20,800,000
|
|
-100.00%
|
|
$
(20,800,000)
|
Overnight
advances
|
-
|
|
20,800,000
|
|
N/A
|
|
$
(20,800,000)
|
Term
advances
|
-
|
|
-
|
|
|
|
$
-
|
Shareholders' equity
|
66,691,031
|
|
60,054,705
|
|
11.05%
|
|
$
6,636,326
|
Shareholders' equity (average)
|
66,691,000
|
|
60,055,000
|
|
11.05%
|
|
$
6,636,000
|
Stock
data
|
|
|
|
|
|
|
|
Market value - last close (end of period)
|
$
12.56
|
|
$
11.15
|
|
12.65%
|
|
|
Dividend payout ratio
|
45.97%
|
|
46.02%
|
|
-0.12%
|
|
|
Book
value (end of period)
|
11.32
|
|
10.24
|
|
10.55%
|
|
|
Market
price to book value
|
110.95%
|
|
108.89%
|
|
1.90%
|
|
|
Key performance
ratios
|
|
|
|
|
|
|
|
Return on average assets (ROA)
|
1.02%
|
|
1.05%
|
|
-0.04%
|
|
|
Return on average equity (ROE)
|
10.62%
|
|
11.19%
|
|
-0.58%
|
|
|
Net interest margin (federal tax equivalent)
|
3.58%
|
|
3.67%
|
|
-0.09%
|
|
|
Interest expense to average assets
|
0.78%
|
|
0.92%
|
|
-0.14%
|
|
|
Total allowance for loan losses
|
|
|
|
|
|
|
|
to
nonaccrual loans
|
338.56%
|
|
80.95%
|
|
257.61%
|
|
|
Total allowance for loan losses
|
|
|
|
|
|
|
|
to total
loans
|
1.18%
|
|
0.50%
|
|
0.68%
|
|
|
Nonaccrual loans to total loans
|
0.35%
|
|
0.62%
|
|
-0.27%
|
|
|
Nonaccrual assets to average assets
|
0.33%
|
|
0.41%
|
|
-0.08%
|
|
|
Net
charge-offs to average loans
|
0.07%
|
|
0.06%
|
|
0.01%
|
|
|
Equity
to assets at period end
|
9.63%
|
|
8.89%
|
|
0.74%
|
|
|
View original content to download
multimedia:http://www.prnewswire.com/news-releases/united-bancorp-inc-reports-on-its-earnings-for-the-three-and-nine-months-ended-september-30-2020-301156002.html
SOURCE United Bancorp, Inc.