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United Bancorp, Inc. Reports an Increase in Net Income of 41% for the Three Months Ended March 31, 2019; Diluted Earnings Per Share of $0.28 Versus $0.23 Reported in 2018, and a Forward Dividend Yield of 4.88%

MARTINS FERRY, Ohio , April 24, 2019 /PRNewswire/ -- United Bancorp, Inc. ( UBCP ), reported net income of $1,614,000 and diluted earnings per share of $0.28 for the three months ended March 31, 2019 , as compared to $1,148,000 and $0.23 respectively for 2018.  These year-over-year improvements in UBCP's earnings are directly related to the Company executing its strategic vision to achieve profitable growth by growing in both an organic fashion and through acquiring other like-minded community banking organizations.

United Bancorp, Inc. logo (PRNewsfoto/United Bancorp, Inc.)

Randall M. Greenwood , Senior Vice President, CFO and Treasurer remarked, "We are pleased to report on our solid financial performance for the three-month period ended March 31 , 2019.  Our Company had an increase in net income of $466,000 , or 40.6%, on a year-over-year basis at the end of this most recently completed quarter.  This increase in earnings is strongly correlated to the strong organic and acquisition-related growth that our Company experienced during the past twelve months.  From an acquisition perspective (and, as previously reported), we acquired Powhatan Point Community Bancshares in the fourth quarter of last year and the merger is now completed… both financially and operationally.  Even with the issuance of common shares to facilitate this purchase, our diluted earnings per share was $0.28 versus $0.23 the prior year, an increase of 21.7%.  The combination of this acquisition and the strong organic growth that we achieved this past year facilitated the increase in the level of our Company's higher-yielding earning assets by $112.5 million , or 25.2%, on a year-over-year basis.  This growth in earning assets was divided between steady growth in our Company's loan portfolio, which increased by $43.4 million or 11.7%, and solid growth in our investment portfolio, with securities and other restricted stock increasing by $69.1 million or 92%.  With our increased level of higher-yielding earning assets, our Company saw a year-over-year increase in the level of interest income that it generated of $1.7 million or 36.6%."

Greenwood further stated, "In order to fund this strong growth in our earning assets--- while improving our overall levels of profitability--- our Company needed to attract a substantial level of cost effective funding.  We achieved this by successfully growing our lower-cost, retail balances (consisting of noninterest bearing and interest bearing demand deposits and savings deposits) by $91.6 million , or 27%, year-over-year.  The remaining growth in deposits came in the area of time deposits (consisting of certificates of deposit or term funding), which increased by $43.3 million since March 2018.  By funding our above-peer growth in earning assets primarily with lower-costing retail funding this past year--- even though we operated in a rising rate environment; wherein, the Federal Open Market Committee (FOMC) increased the target rate for Federal funds by 1.0% over the course of the year---  our Company was able to maintain its solid net interest margin.  For the three months ended March 31, 2019 , our net interest margin was 3.80%, compared to 3.86% for the same period in 2018."

Greenwood continued, "From a qualitative perspective, we have successfully maintained overall strength and stability within our loan portfolio.  Year-over-year, our Company continues to have very solid credit quality-related metrics supported by a relatively low level of nonaccrual loans, which was approximately $1.6 million , or 0.38 percent of total loans at March 31, 2019 , compared to $1.4 million at March 31, 2018 , an increase of $200,000 .  Further--- net loans charged off, excluding overdrafts, was $18,000 for the three months ended March 31, 2019 , which is a decrease of $14,000 from the previous year.  We are very satisfied with the continued strong performance of our loan portfolio from a credit quality perspective.  With the anticipation of our economy remaining fundamentally sound in the near to intermediate term, we anticipate that this trend will continue in the current year."

Greenwood concluded, "Considering that we anticipate our earning assets to continue growing at very acceptable levels and our overall credit quality to remain very solid, we strongly expect that we will be able to continue growing our earnings at the double-digit level that we experienced in the first quarter of this year throughout the course of 2019."

Scott A. Everson , President and CEO stated, "We are extremely gratified to report on the strong earnings that our Company produced for the first quarter of 2019.  We greatly benefited from the positive execution of our strategic plan, which calls for us to grow through acquiring other like-minded community banking organizations and capitalizing on prudent, yet profitable, organic opportunities.  Over the course of the past twelve months, we had success in both of these key areas on which we keenly focus.  By profitably growing our Company, we achieved two milestones at March 31 , 2019.  One milestone is that for the first time in our history, our Company's first quarter net income exceeded $1.6 million .  The second milestone is that, for the first time, our Company's total assets surpassed the $600 million threshold… finishing the quarter at $621 million , an increase of $132.6 million or 27.2% year-over-year.  Excitingly, we are well on our way to achieving our current vision of having assets in excess of $1.0 billion within the course of the next few years and we strongly anticipate that we will continue to see our Company produce record levels of core earnings for the foreseeable future."

Everson continued, "By continuing to utilize the 'playbook' that we did last year to achieve profitable growth, we are very optimistic about our future prospects.  In addition, we will continue focusing on building our infrastructure (or, foundation) to support further growth while achieving greater efficiencies.  As we have previously stated, we are strongly committed to remaining relevant within our industry by investing in our technology and origination/service platforms.  Ultimately, our vision is to become an omnichannel bank---  by having complete channel integration and offering mobility to our customers---  thereby, serving them on their terms and through their preferred channels.  We have started this initiative and believe that, for a community-minded bank, we will have a complete digital solution that will be highly appealing to our target clientele within the next year or two.  Coupling this investment in technology with continued investment in growing our Company through acquisition and new branch construction in key complimentary markets, we firmly believe that we can continue to grow at acceptable levels while remaining very profitable.  Even with the high level of growth that we experienced over the course of the past twelve months, we continued to maintain our overall profitability.  With our record earnings in the first quarter, our Company had a return on equity (ROE) of 12.0% and a return on assets (ROA) of 1.08% for the three months ended, March 31 , 2019.  We have stated for many quarters that our goal is to profitably grow our Company.  We are extremely delighted that we are presently accomplishing this."

Everson concluded, "Our primary foci are rewarding our shareholders by paying a very solid cash dividend while driving their shareholder value in our Company.  In the first quarter of this year, we increased our cash dividend payout from $0.13 to $0.1325 which, on a forward basis, produces a dividend yield of 4.88% based on our closing price as of the most recent quarter end.  Regarding our present market valuation, on a forward basis we are currently trading at a price to earnings multiple of 9.7 times.  With our market sector trading more in the range of 13.5 times at present, we are highly optimistic that we will see a higher market valuation in future periods… assuming that we continue to drive our earnings at the levels we have seen and currently project.  Overall, we are extremely pleased with the direction that we are going and the results that we are producing.  We continue to be highly optimistic about our future potential and look forward to realizing this upside potential in future periods!"

United Bancorp, Inc. is headquartered in Martins Ferry, Ohio and has total assets of $621.0 million and total shareholder's equity of $53.8 million as of March 31 , 2019.  Through its single bank charter, Unified Bank, the Company has nineteen banking offices that serve the Ohio Counties of Athens , Belmont , Carroll , Fairfield , Harrison , Jefferson and Tuscarawas . The Company also operates a Loan Production Office in Wheeling, WV .  United Bancorp, Inc. trades on the NASDAQ Capital Market tier of the NASDAQ Stock Market under the symbol UBCP, Cusip #909911109.

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


UNITED BANCORP, INC.  (UBCP)


At or for the Quarter Ended






March 31,


March 31,


%


$


2019


2018


Change


Change

Earnings








     Interest income on loans

$         5,045,302


$      4,112,870


22.67%


$            932,432

     Loan fees

190,316


215,237


-11.58%


$            (24,921)

     Interest income on securities

1,079,566


296,756


263.79%


$            782,810

    Total interest income

6,315,184


4,624,863


36.55%


$         1,690,321

    Total interest expense

1,207,188


523,605


130.55%


$            683,583

    Net interest income

5,107,996


4,101,258


24.55%


$         1,006,738

    Provision for loan losses

90,000


57,000


57.89%


$              33,000

    Net interest income after provision for loan losses

5,017,996


4,044,258


24.08%


$            973,738

    Service charge on deposit account

713,294


630,589


13.12%


$              82,705

    Net realized gains on sale of loans

3,804


14,220


-73.25%


$            (10,416)

    Other noninterest income

227,850


235,346


-3.19%


$              (7,496)

    Total noninterest income

944,948


880,155


7.36%


$              64,793

    Total noninterest expense

4,162,328


3,578,562


16.31%


$            583,766

    Income tax expense

187,008


198,299


-5.69%


$            (11,291)

    Net income

$         1,613,608


$      1,147,552


40.61%


$            466,056

Key performance data








    Earnings per common share - Basic

$                  0.28


$               0.23


21.74%


$                0.050

    Earnings per common share - Diluted

0.28


0.23


21.74%


$                0.050

    Cash dividends paid

0.1325


0.130


1.92%


$            0.00250

Stock data








    Dividend payout ratio

47.32%


59.09%


-11.77%



    Price earnings ratio

9.69

x

14.72

x

-34.17%



    Market price to book value

118%


147%


-19.68%



    Annualized yield based on quarter end close

4.88%


4.02%


21.39%



    Market value - last close (end of period)

10.85


12.95


-16.22%



    Book value (end of period)

9.19


8.81


4.31%



Shares Outstanding








    Average - Basic

5,515,418


4,874,479


--------



    Average - Diluted

5,515,418


4,874,479


--------



    Common stock, shares issued

5,897,227


5,560,304


--------



    Shares held as treasury stock

29,624


5,744


--------



    Return on average assets (ROA)

1.08%


1.00%


0.08%



    Return on average equity (ROE)

12.00%


10.38%


1.63%



At quarter end








    Total assets

$     621,007,755


$  488,376,569


27.16%


$     132,631,186

    Total assets (average)

599,312,000


461,300,000


29.92%


$     138,012,000

     Cash and due from Federal Reserve Bank

32,692,099


14,770,515


121.33%


$       17,921,584

     Average cash and due from Federal Reserve Bank

21,723,000


14,043,000


54.69%


$         7,680,000

     Securities and other restricted stock

144,329,961


75,228,928


91.85%


$       69,101,033

     Average securities and other restricted stock

131,402,000


52,518,000


150.20%


$       78,884,000

    Other real estate and repossessions

91,000


384,630


-76.34%


$          (293,630)

    Gross loans

413,896,086


370,485,374


11.72%


$       43,410,712

    Allowance for loan losses

(2,083,480)


(2,125,369)


-1.97%


$              41,889

    Net loans

411,812,606


368,360,005


11.80%


$       43,452,601

    Average loans

412,671,000


366,173,000


12.70%


$       46,498,000

    Net loans charged-off

18,420


32,376


-43.11%


$            (13,956)

    Net overdrafts charged-off

30,988


21,493


44.18%


$                9,495

    Total net charge offs

49,408


53,869


-8.28%


$              (4,461)

    Nonaccrual loans

1,576,045


1,395,363


12.95%


$            180,682

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

1,953,368


1,999,059


-2.29%


$            (45,691)

    Total Deposits








        Noninterest bearing demand

102,447,401


66,418,796


54.24%


$       36,028,605

        Interest bearing demand

212,620,075


183,544,936


15.84%


$       29,075,139

        Savings

110,923,522


84,474,961


31.31%


$       26,448,561

        Time < $250,000

94,268,487


63,783,823


47.79%


$       30,484,664

        Time > $250,000

18,671,486


5,840,817


219.67%


$       12,830,669

    Total Deposits

538,930,971


404,063,333


33.38%


$     134,867,638

    Average total deposits

526,632,000


394,127,000


33.62%


$     132,505,000

    Advances from the Federal Home Loan Bank

79,505


8,194,518


-99.03%


$       (8,115,013)

       Overnight advances

-


8,000,000


N/A


$       (8,000,000)

       Term advances

79,505


194,518


-59.13%


$          (115,013)

    Repurchase Agreements

13,440,580


15,583,346


-13.75%


$       (2,142,766)

    Shareholders' equity

53,786,271


44,274,344


21.48%


$         9,511,927

    Shareholders' equity (average)

53,786,000


44,211,000


21.66%


$         9,575,000

Key performance ratios








    Net interest margin (Federal tax equivalent)

3.80%


3.86%


-0.06%



    Interest expense to average assets

0.81%


0.45%


0.36%



    Total allowance for loan losses








       to nonperforming loans

132.20%


152.32%


-20.12%



    Total allowance for loan losses








        to total loans

0.50%


0.57%


-0.07%



   Total past due and nonaccrual loans to gross loans

0.85%


0.92%


0.07%



   Nonperforming assets to total assets

0.27%


0.36%


-0.09%



   Net charge-offs to average loans

0.05%


0.06%


-0.01%



   Equity to assets at period end

8.66%


9.07%


-0.41%












Cision

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