United Bancorp, Inc. — Third Quarter 2026 Earnings Summary

Financial Performance

• Reported diluted earnings per share (EPS) of $0.25 and net income of $1,401,000 for the three months ended September 30, 2026, representing a 26.47% year-over-year decrease in EPS and a 27.40% decrease in net income.
• For the nine months ended September 30, 2026, reported diluted EPS of $0.94 and net income of $5,407,000, a 5.05% year-over-year decrease in EPS and a 5.42% decrease in net income.
• Net interest income increased 4.00% year-over-year to $6,998,334 for the quarter and 4.81% to $20,513,342 for the nine-month period.
• Net interest margin expanded 18 basis points year-over-year to 3.84% for the nine-month period.
• Provision for credit loss expense was $2,421,721 for the quarter, a 1,202% increase year-over-year, driven by a $2,953,000 charge-off on a single commercial borrower.
• Total noninterest income surged 70.91% year-over-year to $2,303,447 for the quarter, including a $559,939 net realized gain on the sale of available-for-sale securities.
• Total noninterest expense decreased 2.82% year-over-year to $5,811,930 for the quarter.
• Pre-Provision Net Revenue (PPNR) totaled $3,490,000 for the quarter, a 66.45% increase year-over-year, excluding the one-time credit loss event.
• Total assets gross of accumulated other comprehensive loss increased 5.5% year-over-year to $923.2 million; total assets net of accumulated other comprehensive loss were $899.3 million.
• Total deposits grew 12.0% year-over-year to $722.5 million, with lower-cost funding (noninterest bearing demand, interest bearing demand, and savings) increasing 12.2% to $511.9 million.
• Total interest expense decreased 5.4% year-over-year to $3,680,374 for the quarter, with the interest expense to average assets ratio dropping 17 basis points to 1.63%.
• Nonaccrual loans and loans past due 30+ days totaled $2.9 million (0.57% of gross loans), a 12.03% year-over-year decrease and a 58.0% sequential decrease.
• Regulatory capital (stockholders' equity plus accumulated other comprehensive loss) was $76.0 million, or 8.7% of average assets, up 1.2% year-over-year.

Guidance and Future Outlook

• Management anticipates the increasing trends in net interest income and net interest margin to continue for the remainder of 2026.
• The company expects to redeploy funds currently in lower-yielding overnight investments into higher-yielding loan products in the upcoming quarter.
• Management projects a solid return on infrastructure investments over the next twelve to twenty-four months.
• The company aims to become a community financial institution with assets of $1.0 billion or greater in the very near term.
• New technology and support functions, including an AI solution and omnichannel account opening system, are scheduled for rollout by the end of the first quarter of 2027.
• The new Wheeling, West Virginia regional hub is expected to be a top performer within five years.

Business Segments and Product Lines

• Unified Mortgage Division continues to contribute meaningfully to fee income and is being scaled with the addition of mortgage loan originators.
• Treasury Management capabilities are being developed to support small business customers with cash management, merchant services, and payments, driving low-cost deposit growth.
• Gross loans increased 1.48% year-over-year to $503.9 million.
• Bank owned life insurance increased 92.78% year-over-year to $38.9 million.
• Cash and due from Federal Reserve Bank increased 54.18% year-over-year to $70.2 million.
• Advances from the Federal Home Loan Bank decreased 26.67% year-over-year to $55.0 million, following the maturity of a $20.0 million advance in the first quarter.

Market and Competitive Landscape

• The company operates 19 banking centers serving Ohio counties (Athens, Belmont, Carroll, Fairfield, Harrison, Jefferson, Tuscarawas) and Ohio and Marshall Counties in West Virginia.
• Economic forecasts for 2026 anticipated solid growth and rate cuts, but the Federal Reserve tightened monetary policy by 25 basis points to curb inflation.
• Global uncertainties and restrained economic activity persist, yet the company achieved solid balance sheet growth.
• The new Wheeling, West Virginia market has been well-received, contributing significantly to depository base growth.
• The company notes that delinquency trends remain near historic lows, comparing favorably with peers.

Risks and Challenges

• A one-time commercial credit charge-off of $2,953,000 on a single borrower significantly impacted third-quarter earnings and provision for credit losses.
• Inflation has proven more ingrained in the economy than anticipated, leading to unexpected monetary tightening.
• Infrastructure investments have a dilutive impact on short-term earnings, though management expects long-term payoff.
• Accumulated other comprehensive loss increased significantly to $23.8 million, impacting total assets net of this loss.
• Forward-looking statements carry risks related to economic environment, interest rates, regulatory changes, credit risk, and liquidity availability.

Management Commentary and Tone

• CFO Randall M. Greenwood expressed satisfaction with "normalized" performance and core financial results, attributing the quarter's underperformance to an anomaly.
• CEO Scott A. Everson highlighted a committed focus on growing the balance sheet profitably and investing in infrastructure to ensure long-term relevancy.
• Management remains "very encouraged" by the development of infrastructure investments and believes the full potential will be realized over the next 12-24 months.
• Everson described the future as "exceedingly bright" despite short-term dilution from capital expenditures.
• Management emphasized that the single-relationship credit issue is not indicative of the overall loan portfolio quality.

Other Key Points

• Paid a regular cash dividend of $0.1975 per share in the third quarter, a 5.3% increase year-over-year.
• Year-to-date cash dividends totaled $0.7600 per share, including a special cash dividend of $0.1750 paid in the first quarter.
• The forward yield on the regular dividend is 5.3%, and 6.5% inclusive of the special dividend, based on a quarter-end stock price of $14.79.
• Stock market value increased 5.8% year-over-year.
• The company is implementing a "Unified Care Center" in St. Clairsville, Ohio, to centralize customer service and sales functions, aiming to create a "digital bank" experience.
• The company trades on the NASDAQ Capital Market under the symbol UBCP.