Business
United Bancorp, Inc. (Company) is a bank holding company
headquartered in Martins Ferry, Ohio. The Company is an Ohio corporation which filed its initial articles of incorporation on July
8, 1983. At December 31, 2020 the Company has one wholly-owned subsidiary bank, Unified Bank, Martins Ferry, Ohio (Unified, or
the Bank).
The Company serves customers in
northeastern, eastern, southeastern and south central Ohio and the Northern panhandle of West Virginia and is engaged in the business
of commercial and retail banking in Belmont, Harrison, Jefferson, Tuscarawas, Carroll, Athens, Hocking, and Fairfield counties
and the surrounding localities. The bank also operates in Marshall County West Virginia. The Bank provides a broad range of banking
and financial services, which includes accepting demand, savings and time deposits and granting commercial, real estate and consumer
loans. Unified conducts its business through its main office and stand alone operations center in Martins Ferry, Ohio and nineteen
branches located in the counties mentioned above. Unified operates a Loan Production Office in Wheeling, West Virginia.
Unified has no single customer
or related group of customers whose banking activities, whether through deposits or lending, would have a material impact on the
continued earnings capabilities if those activities were removed.
Competition
The markets in which Unified operates
continue to be highly competitive. Unified competes for loans and deposits with other retail commercial banks, savings and loan
associations, finance companies, credit unions and other types of financial institutions within the Mid-Ohio valley geographic
area along the eastern border of Ohio including Belmont, Harrison and Jefferson counties and extending into the northern panhandle
of West Virginia and the Tuscarawas and Carroll County geographic areas of northeastern Ohio. Unified also encounters similar competition
for loans and deposits throughout the Athens, and Fairfield County geographic areas of central and southeastern Ohio.
Pursuant to deposit market
share information provided by the FDIC as of June 30, 2020, Unified competes with approximately 36 other commercial banking institutions
in its primary Ohio markets. Based on this information, the Bank ranked sixth in total deposit market share. The top five institutions
in Unified’s primary Ohio banking markets included: Huntington National Bank; JP Morgan Chase Bank; PNC Bank; Wesbanco Bank;
and Park National Bank.
Supervision and Regulation
General
The Company is a corporation organized
under the laws of the State of Ohio. The business in which the Company and its subsidiary are engaged is subject to extensive supervision,
regulation and examination by various bank regulatory authorities. The supervision, regulation and examination to which the Company
and its subsidiary are subject are intended primarily for the protection of depositors and the deposit insurance funds that insure
the deposits of banks, rather than for the protection of shareholders.
Several of the more significant
regulatory provisions applicable to banks and bank holding companies to which the Company and Unified are subject are discussed
below. To the extent that the following information describes statutory or regulatory provisions, it is qualified in its entirety
by reference to the particular statutory provisions. Any change in applicable law or regulation may have a material effect on the
business and prospects of the Company and Unified.
Regulatory
Agencies
The Company is a registered bank
holding company and is subject to inspection, examination and supervision by the Board of Governors of the Federal Reserve System
(the “Federal Reserve”) pursuant to the Bank Holding Company Act of 1956, as amended.
Unified is an Ohio chartered commercial bank. It is
subject to regulation and examination by both the Ohio Division of Financial Institutions (the “ODFI”) and the Federal
Deposit Insurance Corporation (the “FDIC”).
Regulatory
Reform
Overview.
Congress, the U.S. Department of the Treasury (“Treasury”), and the federal banking regulators, including the FDIC,
have taken broad action since early September 2008 to address volatility in the U.S. banking system and financial markets.
Beginning in late 2008, the U.S. and global financial markets experienced deterioration of the worldwide credit markets, which
created significant challenges for financial institutions both in the United States and around the world. These actions included
the adoption by Congress of both the Emergency Economic Stabilization Act of 2008 (“EESA”), and the American Recovery
and Reinvestment Act of 2009 (“ARRA”). The most recent significant piece of legislation adopted in response to this
crisis was the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (“Dodd-Frank Act”), which was signed
into law on July 21, 2010, and which is discussed more thoroughly below.
Dodd-Frank Wall Street Reform
and Consumer Protection Act. The Dodd-Frank Act created many new restrictions and an expanded framework of regulatory oversight
for financial institutions, including insured depository institutions. Currently, federal regulators are still in the process of
drafting the implementing regulations for many portions of the Dodd-Frank Act. Federal regulators continue to implement many provisions
of the Dodd-Frank Act. The Dodd-Frank Act created an independent regulatory body, the Bureau of Consumer Financial Protection (“Bureau”),
with authority and responsibility to set rules and regulations for most consumer protection laws applicable to all banks - both
large and small. Oversight of Federal consumer financial protection functions have been transferred to the Bureau. The Bureau has
responsibility for mortgage reform and enforcement, as well as broad new powers over consumer financial activities which could
impact what consumer financial services would be available and how they are provided. The following consumer protection laws are
the designated laws that fall under the Bureau’s rulemaking authority: the Alternative Mortgage Transactions Parity Act of
1928, the Consumer Leasing Act of 1976, the Electronic Fund Transfer Act, the Equal Credit Opportunity Act, the Fair Credit Billing
Act, the Fair Credit Reporting Act subject to certain exclusions, the Fair Debt Collection Practices Act, the Home Owners Protection
Act, certain privacy provisions of the Gramm-Leach-Bliley Act, the Home Mortgage Disclosure Act (HMDA), the Home Ownership and
Equity Protection Act of 1994, the Real Estate Settlement Procedures Act (RESPA), the S.A.F.E. Mortgage Licensing Act of 2008 (SAFE
Act), and the Truth in Lending Act. Review and revision of current financial regulations in conjunction with added new financial
service regulations will heighten the regulatory compliance burden and increase litigation risk for the banking industry.
Many aspects of the Dodd-Frank
Act are still subject to rulemaking and will take effect over several years, making it difficult to anticipate the overall financial
impact on the Company, its subsidiaries, their respective customers or the financial services industry more generally. The Company
is closely monitoring all relevant sections of the Dodd-Frank Act to ensure continued compliance with these regulatory requirements.
The Holding
Company Regulation
As a holding company incorporated
and doing business within the State of Ohio, the Company is subject to regulation and supervision under the Bank Holding Act of
1956, as amended (the "Act"). The Company is required to file with the Federal Reserve on quarterly basis information
pursuant to the Act. The Federal Reserve may conduct examinations or inspections of the Company and Unified.
The Company is required to obtain
prior approval from the Federal Reserve for the acquisition of more than five percent of the voting shares or substantially all
of the assets of any bank or bank holding company. In addition, the Company is generally prohibited by the Act from acquiring direct
or indirect ownership or control of more than five percent of the voting shares of any company which is not a bank or bank holding
company and from engaging directly or indirectly in activities other than those of banking, managing or controlling banks or furnishing
services to its subsidiaries. The Company may, however, subject to certain prior approval requirements of the Federal Reserve,
engage in, or acquire shares of companies engaged in activities which are deemed by the Federal Reserve by order or by regulation
to be financial in nature or closely related to banking.
On November 12, 1999, the Gramm-Leach-Bliley
Act (the "GLB Act") was enacted into law. The GLB Act made sweeping changes with respect to the permissible financial
services which various types of financial institutions may now provide. The Glass-Steagall Act, which had generally prevented banks
from affiliation with securities and insurance firms, was repealed. Pursuant to the GLB Act, bank holding companies may elect to
become a "financial holding company," provided that all of the depository institution subsidiaries of the bank holding
company are “well capitalized” and “well managed” under applicable regulatory standards.
Under the GLB Act, a bank holding
company that has elected to become a financial holding company may affiliate with securities firms and insurance companies and
engage in other activities that are financial in nature. Activities that are "financial in nature" include securities
underwriting, dealing and market-making, sponsoring mutual funds and investment companies, insurance underwriting and agency, merchant
banking, and activities that the Federal Reserve has determined to be closely related to banking. No Federal Reserve approval is
required for a financial holding company to acquire a company, other than a bank holding company, bank or savings association,
engaged in activities that are financial in nature or incidental to activities that are financial in nature, as determined by the
Federal Reserve. As with bank holding companies, prior Federal Reserve approval is required before a financial holding company
may acquire the beneficial ownership or control of more than five percent of the voting shares, or substantially all of the assets,
of a bank holding company, bank or savings association. If any subsidiary bank of a financial holding company ceases to be "well
capitalized" or "well managed" under applicable regulatory standards, the Federal Reserve may, among other actions,
order the Company to divest the subsidiary bank. Alternatively, the company may elect to conform its activities to those permissible
for a bank holding company that is not also a financial holding company. If any subsidiary bank of a financial holding company
receives a rating under the Community Reinvestment Act of 1977 of less than satisfactory, the company will be prohibited from engaging
in new activities or acquiring companies other than bank holding companies, banks or savings associations. The Company is not a
financial holding company and has no current intention of making such an election.
Dividends and Capital Reductions.
The Board of Governors of the Federal Reserve has issued Supervisory Guidance and Regulations on the Payment of Dividends, Stock
Redemptions, and Stock Repurchases by Bank Holding Companies (the “Policy Statement”). In the Policy Statement, the
Federal Reserve stated that it is important for a banking organization’s board of directors to ensure that the dividend level
is prudent relative to the organization’s financial position and is not based on overly optimistic earnings scenarios. As
a general matter, the Policy Statement provides that the board of directors of a bank holding company should inform the Federal
Reserve and should eliminate, defer, or significantly reduce its dividends if:
(1) net income available to shareholders
for the past four quarters, net of dividends previously paid during that period, is not sufficient to fully fund the dividends;
(2) the prospective rate of earnings
retention is not consistent with the company’s capital needs and overall current and prospective financial condition; or
(3) the company will not meet, or
is in danger of not meeting, its minimum regulatory capital adequacy ratios.
Failure to do so could result in
a supervisory finding that the organization is operating in an unsafe and unsound manner. Moreover, the Policy Statement requires
a bank holding company to inform the Federal Reserve reasonably in advance of declaring or paying a dividend that exceeds earnings
for the period (e.g., quarter) for which the dividend is being paid or that could result in a material adverse change to the organization’s
capital structure. Declaring or paying a dividend in either circumstance could raise supervisory concerns. As described above,
Unified exceeded its minimum capital requirements under applicable guidelines as of December 31, 2020.
Control Acquisitions. The
Federal Change in Bank Control Act prohibits a person or group of persons from acquiring "control" of the Company unless
the Federal Reserve has been notified and has not objected to the transaction. The acquisition of 10% or more of a class of voting
stock of a bank holding company with a class of securities registered under Section 12 of the Exchange Act, such as the Company,
is rebuttably presumed to constitute the acquisition of control of the bank holding company. In addition, a company is required
to obtain the approval of the Federal Reserve under the Federal Bank Holding Company Act before acquiring 25% (5% in the case of
an acquirer that is a bank holding company) or more of any class of outstanding voting stock of a bank holding company, or otherwise
obtaining control or a "controlling influence" over that bank holding company.
Liability for Banking Subsidiaries.
Under the current Federal Reserve policy, the Company is expected to act as a source of financial and managerial strength to its
subsidiary bank and to maintain resources adequate to support the Bank. This support may be required at times when the Company
may not have the resources to provide it. In the event of the Company's bankruptcy, any commitment to a U.S. federal bank regulatory
agency to maintain the capital of the Bank would be assumed by the bankruptcy trustee and entitled to priority of payment.
Regulation
of the Bank
General. Unified is an Ohio-chartered
bank that is not a member of the Federal Reserve System. Unified is therefore regulated by the ODFI as well as the FDIC. The regulatory
agencies have the authority to regularly examine Unified, which is subject to all applicable rules and regulations promulgated
by its supervisory agencies. In addition, the deposits of Unified are insured by the FDIC to the fullest extent permitted by law.
Deposit Insurance. As an
FDIC-insured institution, Unified is required to pay deposit insurance premium assessments to the FDIC. The FDIC has adopted a
risk-based assessment system under which all insured depository institutions are placed into one of nine categories and assessed
insurance premiums based upon their respective levels of capital and results of supervisory evaluations. Institutions classified
as well-capitalized (as defined by the FDIC) and considered healthy pay the lowest premium while institutions that are less than
adequately capitalized (as defined by the FDIC) and considered of substantial supervisory concern pay the highest premium. Risk
classification of all insured institutions is made by the FDIC for each semi-annual assessment period.
The FDIC may terminate the deposit
insurance of any insured depository institution if the FDIC determines, after a hearing, that the institution has engaged or is
engaging in unsafe or unsound practices, is in an unsafe or unsound condition to continue operations or has violated any applicable
law, regulation, order, or any condition imposed in writing by, or written agreement with, the FDIC. The FDIC may also suspend
deposit insurance temporarily during the hearing process for a permanent termination of insurance if the institution has no tangible
capital. Management of the Company is not aware of any activity or condition that could result in termination of the deposit insurance
of Unified.
The Dodd-Frank Act revised the
statutory authorities governing the FDIC’s management of the DIF. Key requirements from the Dodd-Frank Act resulted in the
FDIC’s adoption of new rules in February 2011 regarding Assessments, Dividends, Assessment Base, and Large Bank Pricing.
The new rules implemented the following changes: (1) redefined the definition of an institution’s deposit insurance assessment
base from one based on domestic deposits to one based on assets now defined as “average consolidated total assets minus average
tangible equity”; (2) changed the assessment rate adjustments to better account for risk based on an institution’s
funding sources; (3) revised the deposit insurance assessment rate schedule in light of the new assessment base and assessment
rate adjustments; (4) implemented Dodd-Frank Act dividend provisions; (5) revised the large insured depository institution assessment
system to better differentiate for risk and to take into account losses the FDIC may incur from large institution failures; and
(6) provided technical and other changes to the FDIC’s assessment rules. Though deposit insurance assessments maintain a
risk-based approach, the FDIC imposed a more extensive risk-based assessment system on large insured depository institutions with
at least $10 billion in total assets since they are more complex in nature and could pose greater risk.
Regulatory Capital Requirements Unified
is required to maintain minimum levels of capital in accordance with FDIC capital adequacy guidelines. If capital falls below minimum
guideline levels, a bank, among other things, may be denied approval to acquire or establish additional branches or organize or
acquire other non-bank businesses. The required capital levels and the Bank’s's capital position at December 31, 2020 and
2019 are summarized in the table included in Note 11 to the consolidated financial statements.
Beginning in 2015, bank
holding companies and banks were required to measure capital adequacy using Basel III accounting. Basel III is a
comprehensive set of reform measures, developed by the Basel Committee on Banking Supervision, to strengthen the regulation,
supervision and risk management of the banking sector. Implementation of the rules will be overseen by the Federal Reserve,
the FDIC and the OCC. Reporting under the new rules began with the March 2015 quarterly regulatory filings.
FDICIA
The Federal Deposit Insurance Corporation
Improvement Act of 1991 ("FDICIA"), and the regulations promulgated under FDICIA, among other things, established five
capital categories for insured depository institutions-well capitalized, adequately capitalized, undercapitalized, significantly
undercapitalized and critically undercapitalized-and requires U.S. federal bank regulatory agencies to implement systems for "prompt
corrective action" for insured depository institutions that do not meet minimum capital requirements based on these categories.
Unless a bank is well capitalized, it is subject to restrictions on its ability to offer brokered deposits and on certain other
aspects of its operations. An undercapitalized bank must develop a capital restoration plan and its parent bank holding company
must guarantee the bank's compliance with the plan up to the lesser of 5% of the bank’s assets at the time it became undercapitalized
and the amount needed to comply with the plan. As of December 31, 2020 the Bank was well capitalized pursuant to these prompt corrective
action guidelines.
Dividends. Ohio law prohibits
Unified, without the prior approval of the ODFI, from paying dividends in an amount greater than the lesser of its undivided profits
or the total of its net income for that year, combined with its retained net income from the preceding two years. The payment of
dividends by any financial institution is also affected by the requirement to maintain adequate capital pursuant to applicable
capital adequacy guidelines and regulations.
Safety and Soundness Standards.
The Federal banking agencies have adopted guidelines that establish operational and managerial standards to promote the safety
and soundness of federally insured depository institutions. The guidelines set forth standards for internal controls, information
systems, internal audit systems, loan documentation, credit underwriting, interest rate exposure, asset growth, compensation, fees
and benefits, asset quality and earnings.
In general, the safety and soundness
guidelines prescribe the goals to be achieved in each area, and each institution is responsible for establishing its own procedures
to achieve those goals. If an institution fails to comply with any of the standards set forth in the guidelines, the institution’s
primary federal regulator may require the institution to submit a plan for achieving and maintaining compliance. If an institution
fails to submit an acceptable compliance plan, or fails in any material respect to implement a compliance plan that has been accepted
by its primary federal regulator, the regulator is required to issue an order directing the institution to cure the deficiency.
Until the deficiency cited in the regulator’s order is cured, the regulator may restrict the institution’s rate of
growth, require the institution to increase its capital, restrict the rates the institution pays on deposits or require the institution
to take any action the regulator deems appropriate under the circumstances. Noncompliance with the standards established by the
safety and soundness guidelines may also constitute grounds for other enforcement action by the federal banking regulators, including
cease and desist orders and civil money penalty assessments.
Branching Authority. Ohio
chartered banks have the authority under Ohio law to establish branches anywhere in the State of Ohio, subject to receipt of all
required regulatory approvals. Additionally, in May 1997 Ohio adopted legislation “opting in” to the provisions
of Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994 (the “Interstate Act”) which allows banks to
establish interstate branch networks through acquisitions of other banks, subject to certain conditions, including certain limitations
on the aggregate amount of deposits that may be held by the surviving bank and all of its insured depository institution affiliates.
Effective with the enactment of The Dodd-Frank Act, the FDI Act and the National Bank Act have been amended to remove the expressly
required “opt-in” concept applicable to de novo interstate branching and now permits national and insured state
banks to engage in de novo in interstate branching if, under the laws of the state where the new branch is to be established,
a state bank chartered in that state would be permitted to establish a branch.
Affiliate Transactions.
Various governmental requirements, including Sections 23A and 23B of the Federal Reserve Act, limit borrowings by holding companies
and non-bank subsidiaries from affiliated insured depository institutions, and also limit various other transactions between holding
companies and their non-bank subsidiaries, on the one hand, and their affiliated insured depository institutions on the other.
Section 23A of the Federal Reserve Act also generally requires that an insured depository institution's loan to its non-bank affiliates
be secured, and Section 23B of the Federal Reserve Act generally requires that an insured depository institution's transactions
with its non-bank affiliates be on arms-length terms.
Depositor Preference.
The Federal Deposit Insurance Act provides that, in the event of the “liquidation or other resolution” of an
insured depository institution, the claims of depositors of the institution, including the claims of the FDIC as subrogee of
insured depositors, and certain claims for administrative expenses of the FDIC as a receiver, will have priority over other
general unsecured claims against the institution. If an insured depository institution fails, insured and uninsured
depositors, along with the FDIC, will have priority in payment ahead of unsecured, non deposit creditors and shareholders of
the institution.
Privacy Provisions of Gramm-Leach-Bliley
Act. Under GLB, federal banking regulators adopted rules that limit the ability of banks and other financial institutions to
disclose non-public information about consumers to non-affiliated third parties. These limitations require disclosure of privacy
policies to consumers and, in some circumstances, allow consumers to prevent disclosure of certain personal information to non-affiliated
third parties. The privacy provisions of GLB affect how consumer information is transmitted through diversified financial companies
and conveyed to outside vendors.
Anti-Money Laundering Provisions
of the USA Patriot Act of 2001. On October 26, 2001, the USA Patriot Act of 2001 (the “Patriot Act”) was signed
into law. The Patriot Act is intended to strengthen U.S. law enforcement’s and the intelligence community’s ability
to work cohesively to combat terrorism on a variety of fronts. The potential impact of the Patriot Act on financial institutions
of all kinds is significant and wide-ranging. The Patriot Act contains sweeping anti-money laundering and financial transparency
laws and requires various regulations, including: (a) due diligence requirements for financial institutions that administer,
maintain, or manage private bank accounts or correspondent accounts for non-U.S. persons; (b) standards for verifying customer
identification at account opening; and (c) rules to promote cooperation among financial institutions, regulators and law enforcement
entities in identifying parties that may be involved in terrorism or money laundering.
Fiscal and Monetary Policies.
Unified’s business and earnings are affected significantly by the fiscal and monetary policies of the federal government
and its agencies. Unified is particularly affected by the policies of the Federal Reserve, which regulates the supply of money
and credit in the United States. Among the instruments of monetary policy available to the Federal Reserve are (a) conducting
open market operations in United States government securities, (b) changing the discount rates of borrowings of depository
institutions, (c) imposing or changing reserve requirements against depository institutions’ deposits, and (d) imposing
or changing reserve requirements against certain borrowing by banks and their affiliates. These methods are used in varying degrees
and combinations to affect directly the availability of bank loans and deposits, as well as the interest rates charged on loans
and paid on deposits. For that reason alone, the policies of the Federal Reserve have a material effect on the earnings of Unified.
Environmental Laws. Banks
that hold mortgages on property as secured lenders are exempt from liability under Federal environmental protection laws if certain
criteria are met. The Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) contains a secured creditor
exemption that eliminates owner or operator liability for lenders who take an ownership interest in a property primarily to protect
their interest in the facility as security on a loan, provided that the bank does not participate in the management of the facility.
Generally, participation in management applies if a bank exercises decision-making control over a property’s environmental
compliance, or exercises control at a level similar to a manager of the facility or property.
Additional and Pending Regulation.
Unified is also subject to federal regulation as to such matters as the maintenance of required reserves against deposits, limitations
in connection with affiliate transactions, limitations as to the nature and amount of its loans and investments, regulatory approval
of any merger or consolidation, issuance or retirement by Unified of its own securities and other aspects of banking operations.
In addition, the activities and operations of Unified are subject to a number of additional detailed, complex and sometimes overlapping
laws and regulations. These include state usury and consumer credit laws, state laws relating to fiduciaries, the Federal Truth-in-Lending
Act and Regulation Z, the Federal Equal Credit Opportunity Act and Regulation B, the Fair Credit Reporting Act, the Truth
in Savings Act, the Community Reinvestment Act, anti-redlining legislation and antitrust laws.
Congress regularly considers legislation
that may have an impact upon the operation of the Company and Unified. At this time, the Company is unable to predict whether any
proposed legislation will be enacted and, therefore, is unable to predict the impact such legislation may have on the operations
of the Company.
Employees
The Company itself, as a holding
company, has no compensated employees. Unified has 112 full time employees, with 22 of these serving in a management capacity,
and 20 part time employees.
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Executive Officers Positions held with Company;
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Name
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Age
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Business Experience
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Scott Everson
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|
53
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President and Chief Executive Officer
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|
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Matthew F. Branstetter
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53
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Senior Vice President – Chief Operating Officer
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Randall M. Greenwood
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57
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Senior Vice President, Chief Financial Officer & Treasurer
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Lisa A. Basinger
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60
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Corporate Secretary
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Each individual has held the position
noted during the past five years.
Each of these Executive Officers
is appointed annually by the Company’s board of directors and is serving at-will in their current positions.
Industry Segments
United Bancorp and its subsidiary
are engaged in one line of business, banking. Item 8 of this 10-K provides financial information for United Bancorp’s business.
Statistical Disclosures
by Bank Holding Companies
I Distribution
of Assets, Liabilities and Stockholders’ Equity; Interest Rates and Interest Differential
Refer to Management’s Discussion
and Analysis “Average Balances, Net Interest Income and Yields Earned and Rates Paid” and “Rate/Volume Analysis
on pages 19 and 20 of our 2020 Annual Report filed herewith as Exhibit 13, which is incorporated by reference.
Average Balances, Net Interest Income and Yields Earned and
Rates Paid
The following table
provides average balance sheet information and reflects the taxable equivalent average yield on interest-earning assets and the
average cost of interest-bearing liabilities for the years ended December 31, 2019 and 2018. The yields and costs are calculated
by dividing income or expense by the average balance of interest-earning assets or interest-bearing liabilities.
The average balance of available-for-sale
securities is computed using the carrying value of securities while the yield for available for sale securities has been computed
using the average amortized cost. Average balances are derived from average month-end balances, which include nonaccruing loans
in the loan portfolio, net of the allowance for loan losses. Interest income has been adjusted to tax-equivalent basis.
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2019
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2018
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(Dollars In thousands)
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Interest
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Interest
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|
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Average
|
|
Income/
|
|
Yield/
|
|
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Average
|
|
Income/
|
|
Yield/
|
|
|
|
Balance
|
|
Expense
|
|
Rate
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|
|
Balance
|
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Expense
|
|
Rate
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Assets
|
|
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|
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Interest-earning assets
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|
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|
|
|
|
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|
|
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Loans
|
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$
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420,487
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|
|
21,803
|
|
|
5.19
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%
|
|
$
|
382,164
|
|
|
18,885
|
|
|
4.94
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%
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Taxable securities - AFS
|
|
|
48,911
|
|
|
996
|
|
|
2.04
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|
|
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45,250
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|
|
765
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|
|
1.69
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Tax-exempt securities - AFS
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|
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106,528
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|
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4,687
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|
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4.40
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|
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35,424
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|
|
1,493
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|
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4.21
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Federal funds sold
|
|
|
17,285
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|
|
333
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|
|
1.93
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|
|
|
12,958
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|
|
197
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|
|
1.59
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FHLB stock and other
|
|
|
4,049
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|
|
211
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|
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5.21
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|
|
|
4,179
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|
|
249
|
|
|
5.91
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Total interest-earning assets
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|
|
597,260
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|
|
28,030
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|
|
4.69
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479,975
|
|
|
21,589
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|
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4.50
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Noninterest-earning assets
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Cash and due from banks
|
|
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5,405
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|
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|
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|
|
|
|
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2,000
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|
|
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Premises and equipment (net)
|
|
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12,232
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|
|
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|
|
|
|
|
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11,838
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|
|
|
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Other nonearning assets
|
|
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22,787
|
|
|
|
|
|
|
|
|
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20,274
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|
|
|
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Less: allowance for loan losses
|
|
|
(2,127
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)
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|
|
|
|
|
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(2,085
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)
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|
|
Total noninterest-earning
assets
|
|
|
38,297
|
|
|
|
|
|
|
|
|
|
32,027
|
|
|
|
|
|
|
|
Total assets
|
|
|
635,557
|
|
|
|
|
|
|
|
|
|
512,002
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities & stockholders’
equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Demand deposits
|
|
$
|
209,810
|
|
|
2,381
|
|
|
1.13
|
%
|
|
$
|
183,754
|
|
|
1,433
|
|
|
0.78
|
%
|
Savings deposits
|
|
|
109,806
|
|
|
188
|
|
|
0.17
|
|
|
|
88,900
|
|
|
54
|
|
|
0.06
|
|
Time deposits
|
|
|
112,211
|
|
|
2,258
|
|
|
2.01
|
|
|
|
77,558
|
|
|
1,104
|
|
|
1.42
|
|
FHLB advances
|
|
|
27
|
|
|
1
|
|
|
3.70
|
|
|
|
14,393
|
|
|
299
|
|
|
2.08
|
|
Federal funds purchased
|
|
|
8,933
|
|
|
185
|
|
|
2.07
|
|
|
|
162
|
|
|
9
|
|
|
5.56
|
|
Trust preferred debentures
|
|
|
16,276
|
|
|
975
|
|
|
5.99
|
|
|
|
4,124
|
|
|
143
|
|
|
3.47
|
|
Repurchase agreements
|
|
|
9,699
|
|
|
136
|
|
|
1.40
|
|
|
|
12,874
|
|
|
136
|
|
|
1.06
|
|
Total interest-bearing
liabilities
|
|
|
466,762
|
|
|
6,124
|
|
|
1.31
|
|
|
|
381,756
|
|
|
3,178
|
|
|
0.83
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest-bearing
liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Demand deposits
|
|
|
109,349
|
|
|
|
|
|
|
|
|
|
80,243
|
|
|
|
|
|
|
|
Other liabilities
|
|
|
5,054
|
|
|
|
|
|
|
|
|
|
3,102
|
|
|
|
|
|
|
|
Total noninterest-bearing liabilities
|
|
|
114,403
|
|
|
|
|
|
|
|
|
|
83,345
|
|
|
|
|
|
|
|
Total liabilities
|
|
|
-
|
|
|
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
|
Total stockholders’ equity
|
|
|
54,392
|
|
|
|
|
|
|
|
|
|
46,904
|
|
|
|
|
|
|
|
Total liabilities &
stockholders’ equity
|
|
$
|
635,557
|
|
|
|
|
|
|
|
|
$
|
512,002
|
|
|
|
|
|
|
|
Net interest income
|
|
|
|
|
$
|
21,906
|
|
|
|
|
|
|
|
|
$
|
18,411
|
|
|
|
|
Net interest spread
|
|
|
|
|
|
|
|
|
3.38
|
%
|
|
|
|
|
|
|
|
|
3.67
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
yield on interest-earning assets
|
|
|
|
|
|
|
|
|
3.67
|
%
|
|
|
|
|
|
|
|
|
3.84
|
%
|
• For purposes of this schedule,
nonaccrual loans are included in loans.
• Fees collected on loans are
included in interest on loans.
Rate/Volume Analysis
The table below describes
the extent to which changes in interest rates and changes in volume of interest-earning assets and interest-bearing liabilities
have affected interest income and expense during 2019. For purposes of this table, changes in interest due to volume and rate were
determined using the following methods:
• Volume
variance results when the change in volume is multiplied by the previous year’s rate.
• Rate
variance results when the change in rate is multiplied by the previous year’s volume.
• Rate/volume
variance results when the change in volume is multiplied by the change in rate.
NOTE: The rate/volume variance was
allocated to volume variance and rate variance in proportion to the relationship of the absolute dollar amount of the change in
each. Non accrual loans are ignored for purposes of the calculations due to the nominal amount of the loans.
|
|
2019 Compared to 2018
Increase/(Decrease)
|
|
(In thousands)
|
|
|
|
|
Change
|
|
|
Change
|
|
|
|
Total
|
|
|
Due To
|
|
|
Due To
|
|
|
|
Change
|
|
|
Volume
|
|
|
Rate
|
|
Interest and dividend income
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans
|
|
$
|
2,918
|
|
|
|
1,956
|
|
|
|
962
|
|
Taxable securities available for sale
|
|
|
231
|
|
|
|
65
|
|
|
|
166
|
|
Tax-exempt securities available for sale
|
|
|
3,194
|
|
|
|
3,126
|
|
|
|
68
|
|
Federal funds sold
|
|
|
136
|
|
|
|
76
|
|
|
|
60
|
|
FHLB stock and other
|
|
|
(38
|
)
|
|
|
(8
|
)
|
|
|
(30
|
)
|
Total interest and dividend income
|
|
|
6,441
|
|
|
|
5,215
|
|
|
|
1,226
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense
|
|
|
|
|
|
|
|
|
|
|
|
|
Demand deposits
|
|
|
948
|
|
|
|
225
|
|
|
|
723
|
|
Savings deposits
|
|
|
134
|
|
|
|
15
|
|
|
|
119
|
|
Time deposits
|
|
|
1,154
|
|
|
|
599
|
|
|
|
555
|
|
FHLB advances
|
|
|
(298
|
)
|
|
|
(429
|
)
|
|
|
131
|
|
Federal funds purchased
|
|
|
176
|
|
|
|
185
|
|
|
|
(9
|
)
|
Trust Preferred debentures
|
|
|
832
|
|
|
|
—
|
|
|
|
832
|
|
Repurchase agreements
|
|
|
---
|
|
|
|
(38
|
)
|
|
|
38
|
|
Total interest expense
|
|
|
2,946
|
|
|
|
557
|
|
|
|
2,389
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income
|
|
$
|
3,495
|
|
|
|
4,658
|
|
|
|
(1,163
|
)
|
|
A
|
The following table sets forth the carrying amount of securities at December 31, 2020, 2019 and 2018.
|
|
|
|
|
|
December 31,
|
|
|
|
|
|
|
2020
|
|
|
2019
|
|
|
2018
|
|
|
|
(In thousands)
|
|
Available for sale (at fair value)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U. S. government agencies
|
|
|
$
|
10,053
|
|
|
$
|
39,528
|
|
|
$
|
44,750
|
|
State and municipal obligations
|
|
|
|
143,509
|
|
|
|
144,725
|
|
|
|
79,241
|
|
Subordinated notes
|
|
|
|
4,505
|
|
|
|
4,532
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total securities available for sale
|
|
|
$
|
158,067
|
|
|
$
|
188,785
|
|
|
$
|
123,991
|
|
|
B
|
Contractual maturities of securities at year-end 2020 were as follows:
|
|
|
Amortized
Cost
|
|
|
Estimated
Fair Value
|
|
|
Average Tax
Equivalent Yield
|
|
|
|
(dollars in
thousands)
|
|
Available for Sale
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
US government agencies
|
|
|
|
|
|
|
|
|
|
|
|
|
Under 1 Year
|
|
|
---
|
|
|
|
---
|
|
|
|
---
|
|
1 – 5 Years
|
|
|
10,000
|
|
|
|
10,053
|
|
|
|
2.32
|
%
|
5-10 Years
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
Over 10 Years
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
State and municipal obligations
|
|
|
|
|
|
|
|
|
|
|
|
|
Under 1 Year
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
1 – 5 Years
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
5-10 Years
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
Over 10 Years
|
|
|
129,006
|
|
|
|
143,509
|
|
|
|
4.01
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Subordinated Debt
|
|
|
|
|
|
|
|
|
|
|
|
|
Under 1 Year
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
1 – 5 Years
|
|
|
4,500
|
|
|
|
4,505
|
|
|
|
4.78
|
%
|
5-10 Years
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
Over 10 Years
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total securities available for sale
|
|
$
|
143,506
|
|
|
$
|
158,067
|
|
|
|
3.92
|
%
|
|
C
|
Excluding holdings of U.S. Government agency obligations, there were no investments in securities of any one issuer exceeding 10% of the Company’s consolidated shareholders’ equity at December 31, 2020.
|
The amounts of gross loans
outstanding at December 31, 2020, 2019, 2018, 2017, and 2016 are shown in the following table according to types of loans:
|
|
December 31,
|
|
|
|
2020
|
|
|
2019
|
|
|
2018
|
|
|
2017
|
|
|
2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(In thousands)
|
|
Commercial loans
|
|
$
|
103,277
|
|
|
$
|
99,995
|
|
|
$
|
93,690
|
|
|
$
|
81,327
|
|
|
$
|
74,514
|
|
Commercial real estate loans
|
|
|
246,167
|
|
|
|
254,651
|
|
|
|
223,462
|
|
|
|
198,936
|
|
|
|
191,686
|
|
Residential real estate loans
|
|
|
85,789
|
|
|
|
77,205
|
|
|
|
78,767
|
|
|
|
75,853
|
|
|
|
76,154
|
|
Installment loans
|
|
|
8,258
|
|
|
|
9,697
|
|
|
|
13,765
|
|
|
|
12,473
|
|
|
|
14,367
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total loans
|
|
$
|
443,491
|
|
|
$
|
441,548
|
|
|
$
|
409,684
|
|
|
$
|
368,589
|
|
|
$
|
356,721
|
|
Construction loans were not
significant at any date indicated above.
|
B
|
Maturities and Sensitivities of Loans to Changes in Interest Rates
|
The following is a schedule
of commercial and commercial real estate loans at December 31, 2019 maturing within the various time frames indicated:
|
|
One Year
or
Less
|
|
|
One
Through
Five Years
|
|
|
After
Five Years
|
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(In thousands)
|
|
Commercial loans
|
|
$
|
6,092
|
|
|
$
|
49,858
|
|
|
$
|
47,327
|
|
|
$
|
103,277
|
|
Commercial real estate loans
|
|
|
5,753
|
|
|
|
21,980
|
|
|
|
218,434
|
|
|
|
246,167
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
11,845
|
|
|
$
|
71,838
|
|
|
$
|
265,761
|
|
|
$
|
349,444
|
|
The following is a schedule
of fixed-rate and variable-rate commercial and commercial real estate loans at December 31, 2020 due to mature after one year:
|
|
Fixed
Rate
|
|
|
Variable Rate
|
|
|
Total >
One
Year
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(In thousands)
|
|
Commercial loans
|
|
$
|
48,236
|
|
|
$
|
48,949
|
|
|
$
|
97,185
|
|
Commercial real estate loans
|
|
|
22,491
|
|
|
|
217,923
|
|
|
|
240,414
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
70,727
|
|
|
$
|
266,872
|
|
|
$
|
337,599
|
|
Variable rate loans are those
loans with floating or adjustable interest rates.
1. Nonaccrual, Past
Due, Restructured and Impaired Loans
The following schedule summarizes
nonaccrual loans, accruing loans which are contractually 90 days or more past due, impaired loans and newly classified troubled
debt restructurings at December 31, 2020, 2019, 2018, 2017 and 2016:
|
|
December
31,
|
|
|
|
2020
|
|
2019
|
|
2018
|
|
2017
|
|
2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(In
thousands)
|
|
Nonaccrual
basis
|
|
$
|
626
|
|
$
|
1,452
|
|
$
|
1,245
|
|
$
|
1,395
|
|
$
|
1,361
|
|
Accruing
loans 90 days or greater past due
|
|
|
—
|
|
|
226
|
|
|
155
|
|
|
—
|
|
|
236
|
|
Total
impaired loans
|
|
|
376
|
|
|
1,036
|
|
|
960
|
|
|
1,008
|
|
|
4,652
|
|
Impaired
loan with related allowance for unconfirmed losses
|
|
|
72
|
|
|
—
|
|
|
400
|
|
|
410
|
|
|
693
|
|
Impaired
loan without related allowance for unconfirmed losses
|
|
|
304
|
|
|
1,036
|
|
|
560
|
|
|
598
|
|
|
3,959
|
|
Troubled
debt restructured loans
|
|
|
86
|
|
|
83
|
|
|
—
|
|
|
228
|
|
|
133
|
|
The additional amount of interest
income that would have been recorded on nonaccrual loans, had they been current, totaled approximately $13,000 for the year ended
December 31, 2020. Interest income that was recorded for the year on nonaccrual loans, totaled $68,000 for the year ended December
31, 2020.
The Company’s policy is
to generally not allow loans greater than 90 days past due to accrue interest unless the loan is both well secured and in the process
of collection. Interest income is not reported when full loan repayment is doubtful, typically when the loan is impaired. Payments
received on such loans are reported as principal reductions.
On December 27, 2020, the President
signed into law the 2021 Consolidated Appropriations Act. The $900 billion relief package includes legislation that extends certain
relief provisions from the March 2020 Coronavirus Aid, Relief, and Economic Security Act (CARES Act) that were set to expire at
the end of this year. CARES Act §4013 permitted financial institutions to suspend TDR assessment and reporting requirements
under generally accepted accounting principles for loan modifications. Set to expire on December 31, 2020, this new legislation
extends this relief to the earlier of 60 days after the national emergency termination date or January 1, 2022.
2. Potential
Problem Loans
The Company had no potential
problem loans as of December 31, 2020 which have not been disclosed in Table C 1., but where known information about possible credit
problems of borrowers causes management to have serious doubts as to the ability of such borrowers to comply with the present loan
repayment terms and which may result in disclosure of such loans into one of the problem loan categories.
|
IV
|
Summary of Loan Loss Experience
|
The allowance for loan
losses is a valuation allowance for probable incurred credit losses, increased by the provision for loan losses and decreased by
charge-offs less recoveries. Management estimates the allowance balance required based on past loan loss experience, the nature
and volume of the portfolio, information about specific borrower situations and estimated collateral values, economic conditions
and other factors. Allocations of the allowance may be made for specific loans, but the entire allowance is available for any loan
that, in management’s judgment, should be charged-off.
Loan losses are charged
against the allowance when management believes the uncollectibility of a loan balance is confirmed. The Company accounts for impaired
loans in accordance with ASC 310-10-35-16, “Accounting by Creditors for Impairment of a Loan.” ASC 310-10-35-16 requires
that impaired loans be measured based upon the present value of expected future cash flows discounted at the loan’s effective
interest rate or, as an alternative, at the loan’s observable market price or fair value of the collateral. A loan is defined
under ASC 310-10-35-16 as impaired when, based on current information and events, it is probable that a creditor will be unable
to collect all amounts due according to the contractual terms of the loan agreement. In applying the provisions of ASC 310-10-35-16,
the Company considers its investment in one-to-four family residential loans and consumer installment loans to be homogenous and
therefore excluded from separate identification for evaluation of impairment. With respect to the Company’s investment in
nonresidential and multi-family residential real estate loans, and its evaluation of impairment thereof, such loans are generally
collateral dependent and, as a result, are carried as a practical expedient at the fair value of the collateral.
Collateral dependent loans which
are more than ninety days delinquent are considered to constitute more than a minimum delay in repayment and are evaluated for
impairment under ASC 310-10-35-16 at that time.
For additional explanation of
factors which influence management’s judgment in determining amounts charged to expense, refer to pages 13-15 of the “Management’s
Discussion and Analysis” and Notes to Consolidated Financial Statements set forth in our 2020 Annual Report, which is incorporated
herein by reference.
|
A
|
Analysis of the Allowance for Loan Losses
|
The following schedule presents an analysis of the allowance
for loan losses, average loan data and related ratios for the years ended December 31, 2020, 2019, 2018, 2017 and 2016:
|
|
2020
|
|
|
2019
|
|
|
2018
|
|
|
2017
|
|
|
2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(In thousands)
|
|
Loans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross loans outstanding
|
|
$
|
443,491
|
|
|
$
|
441,548
|
|
|
$
|
409,684
|
|
|
$
|
368,589
|
|
|
$
|
356,721
|
|
Average loans outstanding
|
|
$
|
446,256
|
|
|
$
|
420,487
|
|
|
$
|
382,164
|
|
|
$
|
356,224
|
|
|
$
|
343,243
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for Loan Losses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at beginning of year
|
|
$
|
2,231
|
|
|
$
|
2,043
|
|
|
$
|
2,122
|
|
|
$
|
2,341
|
|
|
$
|
2,437
|
|
Loan charge-offs:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial
|
|
|
69
|
|
|
|
18
|
|
|
|
—
|
|
|
|
49
|
|
|
|
2
|
|
Commercial real estate
|
|
|
225
|
|
|
|
431
|
|
|
|
—
|
|
|
|
81
|
|
|
|
108
|
|
Residential real estate
|
|
|
104
|
|
|
|
141
|
|
|
|
208
|
|
|
|
78
|
|
|
|
143
|
|
Installment
|
|
|
169
|
|
|
|
180
|
|
|
|
241
|
|
|
|
230
|
|
|
|
417
|
|
Total loan charge-offs
|
|
|
567
|
|
|
|
770
|
|
|
|
449
|
|
|
|
438
|
|
|
|
670
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loan recoveries
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial
|
|
|
23
|
|
|
|
1
|
|
|
|
3
|
|
|
|
52
|
|
|
|
78
|
|
Commercial real estate
|
|
|
—
|
|
|
|
—
|
|
|
|
2
|
|
|
|
2
|
|
|
|
102
|
|
Residential real estate
|
|
|
17
|
|
|
|
14
|
|
|
|
4
|
|
|
|
20
|
|
|
|
22
|
|
Installment
|
|
|
72
|
|
|
|
35
|
|
|
|
64
|
|
|
|
45
|
|
|
|
71
|
|
Total loan recoveries
|
|
|
112
|
|
|
|
50
|
|
|
|
73
|
|
|
|
119
|
|
|
|
273
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loan charge-offs
|
|
|
455
|
|
|
|
720
|
|
|
|
376
|
|
|
|
319
|
|
|
|
397
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for loan losses
|
|
|
3,337
|
|
|
|
908
|
|
|
|
297
|
|
|
|
100
|
|
|
|
301
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at end of year
|
|
$
|
5,113
|
|
|
$
|
2,231
|
|
|
$
|
2,043
|
|
|
$
|
2,122
|
|
|
$
|
2,341
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ratio of net charge-offs to average loans outstanding for the year
|
|
|
0.10
|
%
|
|
|
0.17
|
%
|
|
|
0.10
|
%
|
|
|
0.09
|
%
|
|
|
0.12
|
%
|
|
B
|
Allocation of the Allowance for Loan Losses
|
The following table allocates
the allowance for loan losses at December 31, 2020, 2019, 2018, 2017 and 2016. Management adjusts the allowance periodically to
account for changes in national trends and economic conditions in the Bank’s service areas. The allowance has been allocated
according to the amount deemed to be reasonably necessary to provide for the probability of losses being incurred within the following
categories of loans at the dates indicated:
|
|
2020
|
|
|
2019
|
|
|
2018
|
|
|
2017
|
|
|
2016
|
|
|
|
Allowance
Amount
|
|
|
%
of
Loans
to Total
Loans
|
|
|
Allowance
Amount
|
|
|
%
of Loans
to Total
Loans
|
|
|
Allowance
Amount
|
|
|
%
of
Loans
to Total
Loans
|
|
|
Allowance
Amount
|
|
|
%
of
Loans
to Total
Loans
|
|
|
Allowance
Amount
|
|
|
%
of
Loans
to Total
Loans
|
|
|
|
(In
thousands)
|
|
Loan type
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial
|
|
$
|
1,397
|
|
|
|
23.29
|
%
|
|
$
|
568
|
|
|
|
22.65
|
%
|
|
$
|
389
|
|
|
|
22.87
|
%
|
|
$
|
537
|
|
|
|
22.06
|
%
|
|
$
|
495
|
|
|
|
20.89
|
%
|
Commercial
real estate
|
|
|
1,821
|
|
|
|
55.51
|
%
|
|
|
792
|
|
|
|
57.67
|
%
|
|
|
672
|
|
|
|
54.54
|
%
|
|
|
843
|
|
|
|
53.97
|
%
|
|
|
804
|
|
|
|
53.73
|
%
|
Residential
real estate
|
|
|
1,471
|
|
|
|
19.34
|
%
|
|
|
572
|
|
|
|
17.49
|
%
|
|
|
519
|
|
|
|
19.23
|
%
|
|
|
436
|
|
|
|
20.58
|
%
|
|
|
591
|
|
|
|
21.35
|
%
|
Installment
|
|
|
424
|
|
|
|
1.86
|
%
|
|
|
299
|
|
|
|
2.19
|
%
|
|
|
463
|
|
|
|
3.36
|
%
|
|
|
218
|
|
|
|
3.39
|
%
|
|
|
107
|
|
|
|
4.03
|
%
|
General
|
|
|
—
|
|
|
|
N/A
|
|
|
|
—
|
|
|
|
N/A
|
|
|
|
—
|
|
|
|
N/A
|
|
|
|
88
|
|
|
|
N/A
|
|
|
|
344
|
|
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
5,113
|
|
|
|
100.00
|
%
|
|
$
|
2,231
|
|
|
|
100.00
|
%
|
|
$
|
2,043
|
|
|
|
100.00
|
%
|
|
$
|
2,122
|
|
|
|
100.00
|
%
|
|
$
|
2,431
|
|
|
|
100.00
|
%
|
|
A
|
Schedule of Average Deposit Amounts and Rates
|
Refer to Section I of this “Statistical
Disclosures by Bank Holding Companies” section and to Management’s Discussion and Analysis “Average Balances,
Net Interest Income and Yields Earned and Rates Paid” on page 19 of our 2020 Annual Report filed herewith as Exhibit 13,
which is incorporated by reference.
|
B
|
Maturity analysis of time deposits greater than $250,000.
|
At December 31, 2020, the time
to remaining maturity for time deposits in excess of $250,000 was:
|
|
2020
|
|
|
|
(In thousands)
|
|
Three months or less
|
|
$
|
664
|
|
Over three through six months
|
|
|
3,598
|
|
Over six through twelve months
|
|
|
2,946
|
|
Over twelve months
|
|
|
562
|
|
|
|
|
|
|
Total
|
|
$
|
7,770
|
|
|
VI
|
Return on Equity and Assets
|
Our dividend payout ratio and
equity to assets ratio were as follows:
|
|
December 31,
|
|
|
|
2020
|
|
|
2019
|
|
|
2018
|
|
Dividend Payout Ratio
|
|
|
41.01
|
%
|
|
|
45.80
|
%
|
|
|
63.41
|
%
|
Equity to Assets
|
|
|
9.85
|
%
|
|
|
8.74
|
%
|
|
|
8.53
|
%
|
Return on Average Assets
|
|
|
1.15
|
%
|
|
|
1.07
|
%
|
|
|
0.83
|
%
|
Return on Average Equity
|
|
|
11.45
|
%
|
|
|
12.52
|
%
|
|
|
8.03
|
%
|
|
VII
|
Short-Term Borrowings
|
Information concerning securities
sold under agreements to repurchase is summarized as follows:
|
|
2020
|
|
|
2019
|
|
|
2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Dollars in thousands)
|
|
Balance at December 31,
|
|
$
|
12,705
|
|
|
$
|
6,915
|
|
|
$
|
8,068
|
|
Weighted average interest rate at December 31
|
|
|
0.29
|
%
|
|
|
1.37
|
%
|
|
|
1.06
|
%
|
Average daily balance during the year
|
|
$
|
12,524
|
|
|
$
|
9,272
|
|
|
$
|
12,874
|
|
Average interest rate during the year
|
|
|
0.29
|
%
|
|
|
1.40
|
%
|
|
|
1.13
|
%
|
Maximum month-end balance during the year
|
|
$
|
16,503
|
|
|
$
|
13,441
|
|
|
$
|
16,161
|
|
Securities sold under agreements
to repurchase are financing arrangements whereby the Company sells securities and agrees to repurchase the identical securities
at the maturities of the agreements at specified prices.
No other individual component
of borrowed funds with the exception of borrowings from the Federal Home Loan Bank comprised more than 30% of shareholders’
equity and accordingly is not disclosed in detail.