UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

~~QUARTERLY REPORT PURSUANT TO 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934~~

☒ QUARTERLY REPORT PURSUANT TO 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, ~~2017~~ 2023

~~TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE ACT~~

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE ACT

For the transition period from ~~____________ to _______________~~___________ to___________

Commission File Number: 0-16540

UNITED BANCORP, ~~INC.~~INC.

(Exact name of registrant as specified in its charter)

Ohio

~~Ohio~~		34-1405357
(State or other jurisdiction of		(IRS Employer Identification No.)
incorporation or organization)

~~201 South Fourth Street, Martins Ferry, Ohio 43935-0010~~

201 South Fourth Street, Martins Ferry, Ohio 43935-0010

(Address of principal executive offices)

(740) 633-0445

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

~~(Address~~Securities registered pursuant to Section 12(b) of ~~principal executive offices)~~the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, Par Value $1.00	UBCP	NASDQ Capital Market

~~(740) 633-0445~~

~~(Registrant’s telephone number, including area code)~~

~~N/A~~

~~(Former name, former address and former fiscal year, if changed since last report)~~

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.

Yesx☒ No¨

☐

Indicate by check mark whether the registrant has submitted electronically ~~and posted on its corporate Web site, if any,~~ every Interactive Data File required to be submitted ~~and posted~~ pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit ~~and post~~ such files).x

Yes ¨☒ No

☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth ~~company.~~company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.



Large accelerated filer ☐		Accelerated filer ☐
Non-accelerated filer ☒
Smaller Reporting Company ☒		Emerging growth company ☐

~~Large Accelerated filer~~¨ ~~Accelerated filer~~¨ ~~Non-accelerated filer~~¨ ~~Smaller reporting company~~x~~Emerging growth company~~¨

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section ~~7(a)(2)(B)~~13(a) of the ~~Securities~~Exchange Act. ¨

☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act)

Yes ☐No ☒

~~Yes~~¨ Nox

Indicate the number of shares outstanding of the issuer’s classes of common stock as of the latest practicable date: As of November ~~3, 2017, 5,435,304~~9, 2023, 5,716,495 shares of the Company’s common stock, $1.00 par value, were issued and outstanding.

Table of Contents


PART I - FINANCIAL INFORMATION

Item 1	Condensed Consolidated Balance Sheets	3

	Condensed Consolidated Statements of Income	4

	Condensed Consolidated Statements of Comprehensive Income (Loss)	5

	Condensed Consolidated Statements of Stockholders’ Equity	6

	Condensed Consolidated Statements of Cash Flows	6 7

	Notes to Condensed Consolidated Financial Statements	8

Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	38 30

Item 3	Quantitative and Qualitative Disclosures About Market Risk	46 37

Item 4	Controls and Procedures	47 37

PART II - OTHER INFORMATION

Item 1	Legal Proceedings	48 38

Item 1A	Risk Factors	48 38

Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	48 38

Item 3	Defaults Upon Senior Securities	48 38

Item 4	~~Other Information~~Mine Safety Disclosures	49 38

Item 5	~~Exhibits~~Other Information	49 38

~~SIGNATURES~~Item 6	50Exhibits	39

SIGNATURES		40

Table of Contents

ITEM 1. Financial Statements

United Bancorp, Inc.

Condensed Consolidated Balance Sheets

(In thousands, except share data)

September 30, December 31,
2017 2016
(Unaudited)

Assets
Cash and due from banks $ 4,692 $ 4,233
Interest-bearing demand deposits 18,416 7,308
Cash and cash equivalents 23,108 11,541
Available-for-sale securities 39,129 39,766
Loans, net of allowance for loan losses of $2,195 and $2,341 at September 30, 2017 and December 31, 2016, respectively 358,194 354,380
Premises and equipment 11,867 11,884
Federal Home Loan Bank stock 4,164 4,164
Foreclosed assets held for sale, net 434 335
Accrued interest receivable 913 840
Deferred income taxes 823 850
Bank-owned life insurance 12,049 11,822
Other assets 3,830 2,436
Total assets $ 454,511 $ 438,018

Liabilities and Stockholders’ Equity
Liabilities
Deposits
Demand $ 233,642 $ 203,745
Savings 81,770 81,825
Time 65,439 53,233
Total deposits 380,851 338,803
Securities sold under repurchase agreements 16,188 9,393
Federal Home Loan Bank advances 5,257 39,855
Subordinated debentures 4,124 4,124
Interest payable and other liabilities 3,975 3,202
Total liabilities 410,395 395,377
Stockholders’ Equity
Preferred stock, no par value, authorized 2,000,000 shares; no shares issued — —
Common stock, $1 par value; authorized 10,000,000 shares; issued 2017 –5,435,304 shares, 2016 – 5,425,304 shares; outstanding 2017 – 5,429,560, 2016 - 5,208,051 5,435 5,425
Additional paid-in capital 17,983 18,024
Retained earnings 23,404 22,483
Stock held by deferred compensation plan; 2017 –180,623 shares, 2016 – 211,509 shares (1,616 ) (1,880 )
Unearned ESOP compensation (830 ) (911 )
Accumulated other comprehensive loss (214 ) (454 )
Treasury stock, at cost 2017 –5,744 shares, 2016 – 5,744 shares (46 ) (46 )
Total stockholders’ equity 44,116 42,641
Total liabilities and stockholders’ equity $ 454,511 $ 438,018


	September 30,		December 31,
	2023		2022
	(Unaudited)
Assets
Cash and due from banks	$	7,952	$	8,279
Interest-bearing demand deposits		62,940		21,801
Cash and cash equivalents		70,892		30,080
Available-for-sale securities, amortized cost of $245,389 net of allowance for credit losses of $0 at September 30, 2023		224,679		217,624
Loans, net of allowance for credit losses of $4,112 and $2,052 at September 30, 2023 and December 31, 2022, respectively		462,730		458,823
Premises and equipment		12,336		12,144
Federal Home Loan Bank stock		3,979		2,499
Foreclosed assets held for sale, net		3,480		3,519
Core deposit other intangible asset		297		410
Goodwill		682		682
Accrued interest receivable		3,724		3,403
Deferred federal income tax		5,094		2,423
Bank-owned life insurance		19,320		19,000
Other assets		7,068		6,793
Total assets	$	814,281	$	757,400
Liabilities and Stockholders’ Equity
Liabilities
Deposits
Demand	$	354,300	$	402,341
Savings		134,423		145,836
Time		139,289		101,736
Total deposits		628,012		649,913
Securities sold under repurchase agreements		28,584		18,106
Subordinated debentures		23,771		23,726
Advances Federal Home Loan Bank		75,000		—
Interest payable and other liabilities		6,324		5,918
Total liabilities		761,691		697,663

Stockholders’ Equity
Preferred stock, no par value, authorized 2,000,000 shares; no shares issued		—		—
Common stock, $1 par value; authorized 10,000,000 shares; issued 6,063,851 shares at September 30, 2023, and 6,043,851 shares at December 31, 2022; outstanding - 5,716,495 and 5,740,251 shares at September 30, 2023 and December 31, 2022, respectively		6,064		6,044
Additional paid-in capital		25,481		24,814
Retained earnings		42,629		41,945
Stock held by deferred compensation plan; 167,993 and 174,237 shares at September 30, 2023 and December 31, 2022		(2,003)		(1,902)
Accumulated other comprehensive loss		(17,020)		(9,336)
Treasury stock, at cost 179,363 and 129,363 shares- at September 30, 2023 and December 31, 2022, respectively		(2,561)		(1,828)
Total stockholders’ equity		52,590		59,737
Total liabilities and stockholders’ equity	$	814,281	$	757,400

See Notes to Condensed Consolidated Financial Statements

Table of Contents

United Bancorp, Inc.

Condensed Consolidated Statements of Income

(In thousands, except per share data)

(Unaudited)

Three months ended Nine months ended
September 30, September 30,
2017 2016 2017 2016
Interest and dividend income
Loans, including fees $ 4,345 $ 4,014 $ 12,457 $ 11,931
Taxable securities 118 85 330 237
Non-taxable securities — 18 7 67
Federal funds sold 68 7 115 30
Dividends on Federal Home Loan Bank stock and other 55 42 151 126
Total interest and dividend income 4,586 4,166 13,060 12,391
Interest expense
Deposits
Demand 144 34 331 91
Savings 9 9 28 27
Time 182 140 500 453
Borrowings 114 249 466 773
Total interest expense 449 432 1,325 1,344
Net interest income 4,137 3,734 11,735 11,047
Provision for loan losses 25 131 75 307
Net interest income after provision for loan losses 4,112 3,603 11,660 10,740
Noninterest income
Service charges on deposit accounts 633 667 1,862 1,968
Realized gains on sales of loans 44 25 88 68
Other income 215 364 643 789
Total noninterest income 892 1,056 2,593 2,825
Noninterest expense
Salaries and employee benefits 1,799 1,835 5,391 5,185
Net occupancy and equipment expense 529 507 1,562 1,388
Professional services 145 175 573 555
Insurance 91 60 230 165
Deposit insurance premiums 53 63 141 169
Franchise and other taxes 97 76 277 244
Advertising 108 86 317 237
Stationery and office supplies 24 28 93 85
Net realized loss on sale of other real estate and repossessions 16 6 12 16
Other expenses 594 509 1,571 1,694
Total noninterest expense 3,456 3,345 10,167 9,738
Income before federal income taxes 1,548 1,314 4,086 3,827
Federal income taxes 548 386 1,320 1,148
Net income $ 1,000 $ 928 $ 2,766 $ 2,679

EARNINGS PER COMMON SHARE
Basic $ 0.20 $ 0.18 $ 0.56 $ 0.54
Diluted $ 0.20 $ 0.18 $ 0.55 $ 0.53
DIVIDENDS PER COMMON SHARE $ 0.12 $ 0.11 $ 0.34 $ 0.31

~~See Notes to Condensed Consolidated Financial Statements~~

~~United Bancorp, Inc.~~


	Three months ended September 30,				Nine months ended September 30,
	2023		2022		2023		2022
Interest and dividend income
Loans, including fees	$	6,454	$	5,378	$	18,389	$	15,083
Taxable securities		707		558		2,068		1,228
Non-taxable securities		1,500		1,162		4,357		3,088
Federal funds sold		909		152		2,171		246
Dividends on Federal Home Loan Bank stock and other		81		47		160		94
Total interest and dividend income		9,651		7,297		27,145		19,739
Interest expense
Deposits
Demand		493		261		1,445		440
Savings		33		35		101		42
Time		1,071		194		2,595		290
Borrowings		1,488		438		3,670		1,120
Total interest expense		3,085		928		7,811		1,892
Net interest income		6,566		6,369		19,334		17,847
Provision for (reversal of) credit loss expense - loans		(154)		15		(300)		(970)
Net interest income after provision for (reversal of) credit loss expense		6,720		6,354		19,634		18,817
Noninterest income
Service charges on deposit accounts		704		754		2,202		2,181
Realized gains on sales of loans		1		6		8		33
Other income		258		283		815		804
Total noninterest income		963		1,043		3,025		3,018
Noninterest expense
Salaries and employee benefits		2,480		2,399		7,814		7,788
Net occupancy and equipment expense		546		569		1,550		1,731
Professional services		371		358		1,100		981
Insurance		144		144		448		422
Deposit insurance premiums		96		50		267		149
Franchise and other taxes		139		136		417		408
Advertising		100		124		300		277
Stationery and office supplies		33		32		92		78
Amortization of core deposit premium		38		38		113		113
Other expenses		1,286		1,029		3,659		2,891
Total noninterest expense		5,233		4,879		15,760		14,838
Income before federal income taxes		2,450		2,518		6,899		6,997
Federal income taxes		58		215		339		646
Net income	$	2,392	$	2,303	$	6,560	$	6,351
EARNINGS PER COMMON SHARE
Basic	$	0.42	$	0.40	$	1.15	$	1.10
Diluted	$	0.42	$	0.40	$	1.15	$	1.10
DIVIDENDS PER COMMON SHARE	$	0.1675	$	0.1575	$	0.6450	$	0.6150

~~Condensed Consolidated Statements of Comprehensive Income~~

~~(In thousands)~~

~~(Unaudited)~~

Three months ended Nine months ended
September 30, September 30,
2017 2016 2017 2016

Net income $ 1,000 $ 928 $ 2,766 $ 2,679

Other comprehensive income, net of tax:
Unrealized holding (losses) gains on securities during the period, net of taxes (benefits) of $(4), $(3), $123 and $1 for each respective period (8 ) (6 ) 240 2

Comprehensive income $ 992 $ 922 $ 3,006 $ 2,681

See Notes to Condensed Consolidated Financial Statements

Table of Contents

United Bancorp, Inc.

Condensed Consolidated Statements of ~~Cash Flows~~Comprehensive Income (Loss)

Three and Nine Months Ended September 30, 2023 and 2022

(In ~~thousands)~~thousands, except per share data)

(Unaudited)

Nine months ended
September 30,
2017 2016
Operating Activities
Net income $ 2,766 $ 2,679
Items not requiring (providing) cash
Depreciation and amortization 683 601

Expense related to share based compensation plans 104 103
Provision for loan losses 75 307
Provision for losses on foreclosed real estate — 6
Bank-owned life insurance (227 ) (233 )
Accretion of premiums and discounts on securities, net — (1 )
Originations of loans held for sale (3,772 ) (3,294 )
Proceeds from sale of loans held for sale 3,860 3,362
Realized gains on sales of loans (88 ) (68 )
Amortization of ESOP 210 165
Realized losses on sales of other real estate and repossessed assets 12 16
Realized gains on sale of Bankers Bancshares, Inc. — (162 )
Amortization of mortgage servicing rights 5 9
Net change in accrued interest receivable and other assets (1,660 ) (286 )
Net change in accrued expenses and other liabilities 773 (309 )

Net cash provided by operating activities 2,741 2,895

Investing Activities
Securities available for sale:
Maturities, prepayments and calls 7,249 23,827
Purchases (6,248 ) (21,000 )
Proceeds from sale of available-for-sale securities — —
Securities held to maturity:
Maturities, prepayments and calls — —
Net change in loans (3,909 ) (21,250 )
Proceeds from sale of Great Lake Bankers Bank stock — 208
Purchases of premises and equipment (674 ) (1,959 )
Proceeds from sale of other real estate and repossessed assets and premise and equipment 9 70

Net cash used by investing activities (3,573 ) (20,104 )


	Three months ended				Nine months ended
	September 30,				September 30,
	2023		2022		2023		2022
Net income	$	2,392	$	2,303	$	6,560	$	6,351
Unrealized holding losses on securities during the period, net of tax (benefit) of ($1,940), ($1,773), ($2,043) and ($5,704) for each respective period		(7,298)		(6,670)		(7,684)		(21,444)
Comprehensive income (loss)	$	(4,906)	$	(4,367)	$	(1,124)	$	(15,093)

See Notes to Condensed Consolidated Financial Statements

Table of Contents

United Bancorp, Inc.

Consolidated Statements of Stockholders’ Equity

Three Months Ended September 30, 2023 and 2022

(In thousands except per share data)

(Unaudited)


					Treasury				Accumulated
			Additional		Stock and				Other
	Common		Paid-in		Deferred		Retained		Comprehensive
	Stock		Capital		Compensation		Earnings		Income (Loss)		Total
Balance July 1, 2022	$	6,044	$	24,528	$	(3,618)	$	39,169	$	(7,810)	$	58,313
Net income		—		—		—		2,303		—		2,303
Other comprehensive loss		—		—		—		—		(6,670)		(6,670)
Cash dividends - $0.1575 per share		—		—		—		(887)		—		(887)
Deferred compensation plan activity		—		108		(108)		—		—		—
Expense/shares repurchase related to share-based compensation plans		—		87		—		—		—		87
Balance, September 30, 2022	$	6,044	$	24,723	$	(3,726)	$	40,585	$	(14,480)	$	53,146
Balance July 1, 2023		6,044		25,328		(4,464)		41,223		(9,722)		58,409
Net income		—		—		—		2,392		—		2,392
Other comprehensive loss		—		—		—		—		(7,298)		(7,298)
Cash dividends - $0.1675 per share		—		—		—		(986)		—		(986)
Deferred compensation plan activity		—		100		(100)		—		—		—
Expense/shares repurchase related to share-based compensation plans		20		53		—		—		—		73
Balance, September 30, 2023	$	6,064	$	25,481	$	(4,564)	$	42,629	$	(17,020)	$	52,590


					Treasury				Accumulated
			Additional		Stock and				Other
	Common		Paid-in		Deferred		Retained		Comprehensive
	Stock		Capital		Compensation		Earnings		Income (Loss)		Total
Balance January 1, 2022	$	6,054	$	23,635	$	(2,799)	$	37,847	$	6,964	$	71,701
Net income		—		—		—		6,351		—		6,351
Other comprehensive loss		—		—		—		—		(21,444)		(21,444)
Cash dividends - $0.6150 per share		—		—		—		(3,613)		—		(3,613)
Deferred compensation plan activity		—		159		(927)		—		—		(768)
Repurchase of common stock		—		919		—		—		—		919
Expense/shares repurchase related to share-based compensation plans		(10)		10		—		—		—		—
Balance, September 30, 2022	$	6,044	$	24,723	$	(3,726)	$	40,585	$	(14,480)	$	53,146
Balance January 1, 2023		6,044		24,814		(3,730)		41,945		(9,336)		59,737
Net income		—		—		—		6,560		—		6,560
Other comprehensive loss		—		—		—		—		(7,684)		(7,684)
Cash dividends - $0.645 per share		—		—		—		(3,788)		—		(3,788)
Cumulative effect of adoption of ASU 2016-13		—		—		—		(2,088)		—		(2,088)
Deferred compensation plan activity		—		101		(101)		—		—		—
Repurchase of common stock		—		—		(733)		—		—		(733)
Expense/shares repurchase related to share-based compensation plans		20		566		—		—		—		586
Balance, September 30, 2023	$	6,064	$	25,481	$	(4,564)	$	42,629	$	(17,020)	$	52,590

See Notes to Condensed Consolidated Financial Statements

Table of Contents

United Bancorp, Inc.

Condensed Consolidated Statements of Cash Flows

Nine Months Ended September 30, 2023 and 2022

(In ~~thousands)~~thousands except per share data)

(Unaudited)

Nine months ended
September 30,
2017 2016
Financing Activities
Net change in deposits $ 42,048 $ 4,490
Net change in short-term borrowings 6,795 7,863
Net change in Federal Home Loan Bank overnight borrowings (19,500 ) 13,200
Repayments of long-term borrowings (15,098 ) (6,125 )
Cash dividends paid on common stock (1,846 ) (1,673 )

Net cash provided by financing activities 12,399 17,755

Increase (Decrease) in Cash and Cash Equivalents 11,567 546
Cash and Cash Equivalents, Beginning of Period 11,541 12,701

Cash and Cash Equivalents, End of Period $ 23,108 $ 13,247

Supplemental Cash Flows Information
Interest paid on deposits and borrowings $ 1,370 $ 1,362

Federal income taxes paid $ 448 $ 1,007


	Nine months ended
	September 30,
	2023		2022
Operating Activities
Net income	$	6,560	$	6,351
Items not requiring (providing) cash
Accretion of premiums and discounts on securities, net		271		389
Amortization of intangible asset		113		113
Depreciation and amortization		744		768
Expense related to share based compensation plans		586		919
Provision for (reversal of) credit loss expense		(300)		(970)
Increase in value of bank-owned life insurance		(320)		(90)
Gain on sale of loans		(8)		(33)
Proceeds from sale of loans held for sale		396		1,819
Originations of loans held for sale		(404)		(1,786)
Loss on sale or write down of foreclosed assets		62		23
Amortization of debt instrument costs		46		46
Net change in accrued interest receivable and other assets		(1,227)		(2,014)
Net change in accrued expenses and other liabilities		229		(173)

Net cash provided by operating activities		6,748		5,362

Investing Activities
Securities available for sale:
Maturities, prepayments and calls		2,275		5,570
Purchases		(19,329)		(98,634)
Net change in loans		(5,524)		(14,043)
Purchase of FHLB stock		(3,149)		—
Redemption of Federal Home Loan Bank Stock		1,669		1,205
Purchases of premises and equipment		(952)		(425)
Proceeds from sale of foreclosed and fixed assets		16		267

Net cash used in investing activities		(24,994)		(106,060)

Financing Activities
Net change in deposits		(21,901)		44,965
Net change in securities sold under repurchase agreements		10,478		12,412
Peoceeds from Federal Home Loan Bank advances		75,000		—
Repurchase of common stock		(733)		(768)
Cash dividends paid on common stock		(3,786)		(3,613)
Net cash provided by financing activities		59,058		52,996

Increase (Decrease) in Cash and Cash Equivalents		40,812		(47,702)
Cash and Cash Equivalents, Beginning of Period		30,080		82,999

Cash and Cash Equivalents, End of Period	$	70,892	$	35,297

Supplemental Cash Flows Information
Interest paid on deposits and borrowings	$	7,604	$	2,257

Federal income taxes paid	$	—	$	300

Supplemental Disclosure of Non-Cash Investing and Financing Activities
Transfers from loans to foreclosed assets held for sale	$	13	$	—

See Notes to Condensed Consolidated Financial Statements

Table of Contents

United Bancorp, Inc.

Notes to Condensed Consolidated Financial Statements

~~For the Three and Nine Months Ended September 30, 2017 and 2016~~(In thousands)

~~Note 1:~~

Note 1: Summary of Significant Accounting Policies

These interim financial statements are prepared without audit and reflect all adjustments which, in the opinion of management, are necessary to present fairly the financial position of United Bancorp, Inc. (“Company”) at September 30, ~~2017,~~2023, and its results of operations and cash flows for the interim periods presented. All such adjustments are normal and recurring in nature. The accompanying condensed consolidated financial statements have been prepared in accordance with the instructions for Form 10-Q and, therefore, do not purport to contain all the necessary financial disclosures required by accounting principles generally accepted in the United States of America that might otherwise be necessary in the circumstances and should be read in conjunction with the Company’s consolidated financial statements and related notes for the year ended December 31, ~~2016~~2022 included in its Annual Report on Form 10-K. Reference is made to the accounting policies of the Company described in the Notes to the Consolidated Financial Statements contained in its Annual Report on Form 10-K. The results of operations for the three ~~months~~ and nine months ended September 30,2023, are not necessarily indicative of the results to be expected for the full year. The condensed consolidated balance sheet of the Company as of December 31, ~~2016~~2022 has been derived from the audited consolidated balance sheet of the Company as of that date.

Principles of Consolidation

The consolidated financial statements include the accounts of United Bancorp, Inc. (“United” or “the Company”) and its wholly-owned subsidiary, Unified ~~Bank. Prior to October 10, 2017 The Company’s wholly-owned subsidiary was The Citizens Savings~~ Bank of Martins Ferry, Ohio (“the Bank” ~~or “Citizens”~~). The Bank operated two divisions, The Community Bank, a division of The Citizens Savings Bank and The Citizens Bank, a division of The Citizens Savings Bank. As of October 10, 2017 the name of the Citizens Savings Bank was changed to Unified Bank. All intercompany transactions and balances have been eliminated in consolidation.

Nature of Operations

The Company’s revenues, operating income and assets are almost exclusively derived from banking. Accordingly, all of the Company’s banking operations are considered by management to be aggregated in one reportable operating segment. Customers ~~of Unified Bank~~ are mainly located in Athens, Belmont, Carroll, Fairfield, Harrison, Jefferson and Tuscarawas Counties in Ohio and Marshall and Ohio Counties in West Virginia and the surrounding localities in northeastern, east-central and southeastern Ohio and include a wide range of individuals, businesses and other organizations. Unified Bank conducts its business through its main office in Martins Ferry, Ohio and branches in ~~Amesville,~~ Bridgeport, Colerain, Dellroy, ~~Dillonvale,~~ Dover, Glouster, Jewett, Lancaster Downtown, Lancaster East, Nelsonville, New Philadelphia, Powhatan Point, St. Clairsville East, St. Clairsville West, Sherrodsville, Strasburg, Tiltonsville, Ohio and ~~Tiltonsville, Ohio. Unified Bank also operates a Loan Production office in Wheeling,~~Moundsville West Virginia.

The Company’s primary deposit products are checking, savings and term certificate accounts and its primary lending products are residential mortgage, commercial and installment loans. Substantially all loans are secured by specific items of collateral including business assets, consumer assets and real estate. Commercial loans are expected to be repaid from cash flow from operations of businesses. Real estate loans are secured by both residential and commercial real estate. Net interest income is affected by the relative amount of interest-earning assets and interest-bearing liabilities and the interest received or paid on these balances. The level of interest rates paid or received by the Company can be significantly influenced by a number of environmental factors, such as governmental monetary and fiscal policies, that are outside of management’s control.

Revenue Recognition

Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers (“ASC 606”), establishes principles for reporting information about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entity’s contracts to provide goods or services to customers. The core principle requires an entity to recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration that it expects to be entitled to receive in exchange for those goods or services recognized as performance obligations are satisfied.

The majority of the Company’s revenue-generating transactions are not ~~considered “sub prime” type loans. The targeted lending areas~~subject to ASC 606, including revenue generated from financial instruments, such as loans, investment securities, as well as revenue related to mortgage banking activities, as these activities are subject to other GAAP discussed elsewhere within the Company’s disclosures.

Table of ~~our Bank operations encompass four separate metropolitan areas, minimizing~~Contents

United Bancorp, Inc.

Notes to Condensed Consolidated Financial Statements

(In thousands)

Descriptions of the ~~risk to changes in economic conditions~~Company’s revenue-generating activities that are within the scope of ASC 606, which are presented in the ~~communities housing~~income statements as components of non-interest income are as follows:

Service charges on deposit accounts - these represent general service fees for monthly account maintenance and activity- or transaction-based fees and consist of transaction-based revenue, time-based revenue (service period), item-based revenue or some other individual attribute-based revenue. Revenue is recognized when the ~~Company’s branch locations.~~

performance obligation is completed which is generally monthly for account maintenance services or when a transaction has been completed (such as a wire transfer). Payment for such performance obligations are generally received at the time the performance obligations are satisfied.

Use of Estimates

To prepare financial statements in conformity with accounting principles generally accepted in the United States of America, management makes estimates and assumptions based on available information. These estimates and assumptions affect the amounts reported in the financial statements and the disclosures provided and future results could differ. The allowance for ~~loan~~credit losses and fair values of financial instruments are particularly subject to change.

Investment Securities

Management determines the appropriate classification of debt securities at the time of purchase and re-evaluates such designation as of each balance sheet date.

Investment securities classified as available for sale are those securities that the Company intends to hold for an indefinite period of time but not necessarily to maturity. Securities available for sale are carried at fair value. Any decision to sell a security classified as available for sale would be based on various factors, including significant movements in interest rates, changes in the maturity mix of the Company’s assets and liabilities, liquidity needs, regulatory capital considerations, and other similar factors. Unrealized gains or losses are reported as increases or decreases in other comprehensive income (loss), net of the deferred tax effect. Realized gains or losses, determined on the basis of the cost of the specific securities sold, are included in earnings. Premiums and discounts are recognized in interest income using the interest method over the terms of the securities.

Allowance for Credit Losses – Available for Sale Securities

The Company measures expected credit losses on available-for-sale debt securities when the Company does not intend to sell, or when it is not more likely than not that it will be required to sell, the security before recovery of its amortized cost basis. If either of the criteria regarding intent or requirement to sell is met, the security’s amortized cost basis is written down to fair value through income. For available-for-sale debt securities that do not meet the aforementioned criteria, the Company evaluates whether the decline in fair value has resulted from credit losses or other factors. In making this assessment, the Company considers the extent to which fair value is less than amortized cost, any changes to the rating of the security by a rating agency, and adverse conditions specifically related to the security, among other factors. If this evaluation indicates that a credit loss exists, the present value of cash flows expected to be collected from the security are compared to the amortized cost basis of the security. If the present value of cash flows expected to be collected is less than the amortized cost basis, a credit loss exists and an allowance for credit losses is recorded for the credit loss, equal to the amount that the fair value is less than the amortized cost basis. Economic forecast data is utilized to calculate the present value of expected cash flows. The Company utilizes independent firms to evaluate the Company’s State and Municipal Obligations and Subordinated Notes to measure any expected credit losses. Any impairment that has not been recorded through an allowance for credit losses is recognized in other comprehensive income (loss).

The allowance for credit losses on available-for-sale debt securities is included within investment securities available-for-sale on the consolidated balance sheet. Changes in the allowance for credit losses are recorded within provision for credit losses on the consolidated statement of income. Losses are charged against the allowance when the Company believes the collectability of an available-for-sale security is in jeopardy or when either of the criteria regarding intent or requirement to sell is met.

Table of Contents

United Bancorp, Inc.

Notes to Condensed Consolidated Financial Statements

~~For the Three and Nine Months Ended~~(In thousands)

Accrued interest receivable on available-for-sale debt securities totaled $2.5 million at September 30, ~~2017~~2023 and ~~2016~~

is included within the line item accrued interest receivable on the consolidated balance sheet. This amount is excluded from the estimate of expected credit losses. Available-for-sale debt securities are typically classified as nonaccrual when the contractual payment of principal or interest has become 90 days past due or management has serious doubts about the further collectability of principal or interest. When available-for-sale debt securities are placed on nonaccrual status, unpaid interest credited to income is reversed.

Loans

Loans receivable that management has the intent and ability to hold for the foreseeable future or until maturity or ~~payoffs~~payoff are ~~reported~~stated at their outstanding unpaid principal balances, ~~adjusted for unearned income, charge-offs, the~~net of an allowance for ~~loan~~credit losses and any ~~unamortized~~ deferred fees or ~~costs~~costs. Accrued interest receivable totaled $1.2 million at September 30, 2023 and was reported in the line item accrued interest receivable on ~~originated loans~~the consolidated balance sheets and ~~unamortized premiums or discounts on purchased loans.~~

~~For loans amortized at cost, interest~~is excluded from the estimate of credit losses. Interest income is accrued ~~based~~ on the unpaid principal balance. Loan origination fees, net of certain direct origination costs, ~~as well as premiums and discounts,~~ are deferred and ~~amortized~~recognized as ~~a level~~an adjustment of the yield ~~adjustment~~(interest income) of the related loans. The Company is amortizing these amounts over the ~~respective term~~contractual life of the loan. Premiums and discounts on purchased loans are amortized as adjustments to interest income using the effective yield method.

The loans receivable portfolio is segmented into commercial and industrial, which are typically utilized for general business purposes and commercial real estate, which are collaterized by real estate. Homogenouse loans consisting similar products that are smaller in amount and distributed over a large number of individual borrowers include residential real estate and consumer loans.

For all ~~loan~~ classes of loans receivable, the accrual of interest is discontinued atwhen the ~~time the loan is~~contractual payment of principal or interest has become 90 days past due unless the credit is well-secured and in process of collection. Past due status is based on contractual terms of the loan. For all loan classes, the entire balance of the loan is considered past due if the minimum payment contractually required to be paid is not received by the contractual due date. For all loan classes, loans are placed on nonaccrual or ~~charged off at an earlier date if collection~~management has serious doubts about further collectability of principal or interest, ~~is considered doubtful.~~

Management’s general practice is to proactively charge down loans individually evaluated for impairment to the fair value of the underlying collateral. Consistent with regulatory guidance, charge-offs on all loan segments are taken when specific loans, or portions thereof, are considered uncollectible. The Company’s policy is to promptly charge these loans off in the period the uncollectible loss is reasonably determined.

For all loan portfolio segments except residential and consumer loans, the Company promptly charges-off loans, or portions thereof, when available information confirms that specific loans are uncollectible based on information that includes, but is not limited to, (1) the deteriorating financial condition of the borrower, (2) declining collateral values, and/or (3) legal action, including bankruptcy, that impairs the borrower’s ability to adequately meet its obligations. For impaired loans that are considered to be solely collateral dependent, a partial charge-off is recorded when a loss has been confirmed by an updated appraisal or other appropriate valuation of the collateral.

The Company charges-off residential and consumer loans when the Company reasonably determines the amount of the loss. The Company adheres to timeframes established by applicable regulatory guidance which provides for the charge-down of 1-4 family first and junior lien mortgages to the net realizable value less costs to sell wheneven though the loan is ~~120 days past due, charge-off of unsecured open-end loans when the~~currently performing. A loan may remain on accrual status if it is 120 days past due, and charge down to the net realizable value when other secured loans are 120 days past due. Loans at these respective delinquency thresholds for which the Company can clearly document that the loan is both well-secured and in the process of collection ~~such that collection will occur regardless of delinquency status, need not be charged off.~~

~~For all classes, all interest accrued but not collected for loans that are~~and is either guaranteed or well secured. When a loan is placed on nonaccrual status, unpaid interest credited to income in the current year is reversed and unpaid interest accrued in prior years is charged against the allowance for loan losses. Interest generally is either applied against principal or ~~charged off~~reported as interest income on a cash basis, according to management’s judgment as to the collectability of principal. Generally, loans are ~~reversed against interest income. The interest on these loans is accounted for on the cash-basis or cost-recovery method, until qualifying for return to accrual. Loans are returned~~restored to accrual status when ~~all~~ the obligation is brought current, has performed in accordance with the contractual terms for a reasonable period of time (generally six months), and the ultimate collectability of the total contractual principal and interest amounts contractually due are brought current and future payments are reasonably assured. Nonaccrual loans are returned to accrual status when, in the opinion of management, the financial position of the borrower indicates there is no longer ~~any reasonable doubt as~~in doubt. The past-due status of all classes of loans receivable is determined based on contractual due dates for loan payments.

Allowance for Credit Losses - Loans

The allowance for credit losses (“ACL”) is a valuation reserve established and maintained by charges against income and is deducted from the amortized cost basis of loans to present the ~~timely collection~~net amount expected to be collected on the loans. Loans, or portions thereof, are charged off against the ACL when they are deemed uncollectible. Expected recoveries do not exceed the aggregate of ~~interest or principal.~~amounts previously charged-off and expected to be charged-off.

The ACL is an estimate of expected credit losses, measured over the contractual life of a loan, that considers our historical loss experience, current conditions and forecasts of future economic conditions. Determination of an appropriate ACL is inherently subjective and may have significant changes from period to period.

The methodology for determining the ACL has two main components: evaluation of expected credit losses for certain groups of homogeneous loans that share similar risk characteristics and evaluation of loans that do not share risk characteristics with other loans.

The allowance for credit losses is measured on a collective (pool) basis when similar risk characteristics exist. The Company ~~requires a period~~uses the call report classification as its segment breakout and measures the allowance for credit losses using the Weighted Average Remaining Maturity method for all loan segments.

Table of ~~satisfactory performance of not less than six months before returning a nonaccrual loan to accrual status.~~

Contents

United Bancorp, Inc.

Notes to Condensed Consolidated Financial Statements

~~For the Three and Nine Months Ended September 30, 2017 and 2016~~(In thousands)

When cash payments are received on impaired loans in each loan class, the Company records the payment as interest income unless collection of the remaining recorded principal amount is doubtful, at which time payments are used to reduce the principal balance of the loan. Troubled debt restructured loans recognize interest income on an accrual basis at the renegotiated rate if the loan is in compliance with the modified terms, no principal reduction has been granted and the loan has demonstrated the ability to perform in accordance with the renegotiated terms for a period of at least six months.

~~Allowance for Loan Losses~~

The allowance for loan losses is established as losses are estimated to have occurred through a provision for loan losses charged to income. Loan losses are charged against the allowance when management believes the uncollectability of a loan balance is confirmed. Subsequent recoveries, if any, are credited to the allowance.

The allowance for loan losses is evaluated on a regular basis by management and is based upon management’s periodic review of the collectability of the loans in light of historical experience, the nature and volume of the loan portfolio, adverse situations that may affect the borrower’s ability to repay, estimated value of any underlying collateral and prevailing economic conditions. This evaluation is inherently subjective as it requires estimates that are susceptible to significant revision as more information becomes available.

The allowance consists of allocated and general components. The allocated component relates to loans that are classified as impaired. For those loans that are classified as impaired, an allowance is established when the discounted cash flows (or collateral value or observable market price) of the impaired loan is lower than the carrying value of that loan. The general component covers non-impaired loans and is based on historical charge-off experience by segment. The historicalHistorical credit loss experience is ~~determined by portfolio segment and is based on~~ the ~~actual loss history experienced by~~basis for the ~~Company over the prior three years.Management believes the three year~~estimation of expected credit losses. We apply historical loss ~~experience methodology is appropriate in~~rates to pools of loans with similar risk characteristics. After consideration of the historic loss calculation, management applies qualitative adjustments to reflect the current ~~economic environment.~~ Other adjustments (qualitative/environmental considerations) for each segment may be added to the allowance for each loan segment after an assessment of internal or external influences on credit quality that areconditions and reasonable and supportable forecasts not ~~fully~~already reflected in the historical loss ~~or risk rating data.~~information at the balance sheet date. Our reasonable and supportable forecast adjustment is based on a 2 year unemployment forecast provided by Bloomberg and management judgment. For periods beyond our reasonable and supportable forecast, we revert back to historical annual loss rates for the remainder of the life of each pool after the forecast period. The qualitative adjustments for current conditions are based upon current level of inflation, changes in lending policies and practices, experience and ability of lending staff, quality of the Company’s loan review system, value of underlying collateral, the existence of and changes in concentrations and other external factors. These modified historical loss rates are multiplied by the outstanding principal balance of each loan to calculate a required reserve.

AThe Company has elected to exclude accrued interest receivable from the measurement of its ACL. When a loan is ~~considered impaired~~placed on non-accrual status, any outstanding accrued interest is reversed against interest income.

The ACL for individual loans begins with the use of normal credit review procedures to identify whether a loan no longer shares similar risk characteristics with other pooled loans and therefore, should be individually assessed. We evaluate all commercial and industrial and commercial real estate loans, as well as residential and installment loans greater than $100,000 that meet the following criteria: 1) when ~~based on current information and events,~~ it is determined that foreclosure is probable, ~~that~~2) substandard, doubtful and nonperforming loans when repayment is expected to be provided substantially through the ~~Company will be unable to collect the scheduled payments of principal~~operation or ~~interest when due according to the contractual terms~~sale of the ~~loan agreement. Factors considered~~collateral, 3) when it is determined by management ~~in determining impairment include payment status, collateral value and the probability of collecting scheduled principal and interest payments when due~~that a loan does not share similar risk characteristics with other loans. Specific reserves are established based on the ~~loan’s current payment status and~~following three acceptable methods for measuring the borrower’s financial condition including available sources of cash flows. Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired. Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length of the delay, the reasons for the delay, the borrower’s prior payment record and the amount of the shortfall in relation to the principal and interest owed. Impairment is measured on a loan-by-loan basis for non-homogenous type loans such as commercial, non-owner residential and construction loans by eitherACL: 1) the present value of expected future cash flows discounted at the loan’s original effective interest ~~rate,~~rate; 2) the loan’s ~~obtainable~~observable market ~~price~~price; or 3) the fair value of the collateral ifwhen the loan is collateral dependent. ~~For impaired~~Our individual loan evaluations consist primarily of the fair value of collateral method because most of our loans ~~where~~are collateral dependent. Collateral values are discounted to consider disposition costs when appropriate. A specific reserve is established or a charge-off is taken if the fair value of the loan is less than the loan balance.


			January 1, 2023
Loan Categories (in thousands)	Pre-adoption		Adoption Impact		As Reported
Commercial and Industrial	$	215	$	755	$	970
Commercial Real Estate		815		388		1,203
Residential Real Estate		816		1,379		2,195
Consumer		206		(103)		103

	$	2,052	$	2,419	$	4,471

Allowance for Credit Losses on Off-Balance Sheet Credit Exposures

The Company estimates expected credit losses over the contractual period in which the Company ~~utilizes~~is exposed to credit risk via a contractual obligation to extend credit, unless that obligation is unconditionally cancellable by the ~~discounted cash flows~~Company. The allowance for credit losses on off-balance sheet credit exposures is adjusted through credit loss expense. The estimate includes consideration of the likelihood that funding will occur and an estimate of expected credit losses on commitments expected to ~~determine the level~~be funded over its estimated life.

Table of ~~impairment, the Company includes the entire change in the present value of cash flows as bad debt expense.~~

Contents

United Bancorp, Inc.

Notes to Condensed Consolidated Financial Statements

~~For the Three and Nine Months Ended September 30, 2017 and 2016~~

~~The fair values of collateral dependent impaired loans are based on independent appraisals of the collateral.~~ (In general, the Company acquires an updated appraisal upon identification of impairment and annually thereafter for commercial, commercial real estate and multi-family loans. If the most recent appraisal is over a year old, and a new appraisal is not performed, due to lack of comparable values or other reasons, the existing appraisal is utilized and discounted generally 10% -35% based on the age of the appraisal, condition of the subject property, and overall economic conditions. After determining the collateral value as described, the fair value is calculated based on the determined collateral value less selling expenses. The potential for outdated appraisal values is considered in our determination of the allowance for loan losses through our analysis of various trends and conditions including the local economy, trends in charge-offs and delinquencies, etc. and the related qualitative adjustments assigned by the Company.thousands)

Segments of loans with similar risk characteristics are collectively evaluated for impairment based on the segment’s historical loss experience adjusted for changes in trends, conditions and other relevant factors that affect repayment of the loans. Accordingly, the Company does not separately identify individual consumer and residential loans for impairment measurements, unless such loans are the subject of a restructuring agreement due to financial difficulties of the borrower.

In the course of working with borrowers, the Company may choose to restructure the contractual terms of certain loans. In this scenario, the Company attempts to work-out an alternative payment schedule with the borrower in order to optimize collectability of the loan. Any loans that are modified are reviewed by the Company to identify if a troubled debt restructuring (“TDR”) has occurred, which is when, for economic or legal reasons related to a borrower’s financial difficulties, the Company grants a concession to the borrower that it would not otherwise consider. Terms may be modified to fit the ability of the borrower to repay in line with its current financial status and the restructuring of the loan may include the transfer of assets from the borrower to satisfy the debt, a modification of loan terms, or a combination of the two. If such efforts by the Company do not result in a satisfactory arrangement, the loan is referred to legal counsel, at which time foreclosure proceedings are initiated. At any time prior to a sale of the property at foreclosure, the Company may terminate foreclosure proceedings if the borrower is able to work-out a satisfactory payment plan.

It is the Company’s policy to have any restructured loans which are on nonaccrual status prior to being restructured remain on nonaccrual status until six months of satisfactory borrower performance at which time management would consider its return to accrual status. If a loan was accruing at the time of
~~restructuring, the Company reviews the loan to determine if it is appropriate to continue the accrual of interest on the restructured loan.~~

With regard to determination of the amount of the allowance for credit losses, trouble debt restructured loans are considered to be impaired. As a result, the determination of the amount of impaired loans for each portfolio segment within troubled debt restructurings is the same as detailed previously.

Earnings Per Share

~~Basic earnings~~Earnings per share ~~represents income available to common stockholders divided by the weighted-average number~~(EPS) were computed as follows:


	Three Months Ended September 30, 2023
			Weighted-	Per
	Net		Average	Share
	Income		Shares	Amount
	(In thousands)
Net income	$	2,392
Less allocated earnings on non-vested restricted stock		(54)
Less allocated dividends on non-vested restricted stock		(38)
Net income allocated to common stockholders		2,300
			5,488,995
Basic and diluted earnings per share				$	0.42


	Three Months Ended September 30, 2022
			Weighted-
	Net		Average	Per Share
	Income		Shares	Amount
	(In thousands)
Net income	$	2,303
Less allocated earnings on non-vested restricted stock		(61)
Less allocated dividends on non-vested restricted stock		(40)
Net income allocated to common stockholders		2,202
			5,488,121
Basic and diluted earnings per share				$	0.40


	Nine Months Ended September 30, 2023
			Weighted-	Per
	Net		Average	Share
	Income		Shares	Amount
	(In thousands)
Net income	$	6,560
Less allocated earnings on non-vested restricted stock		(111)
Less allocated dividends on non-vested restricted stock		(153)
Net income allocated to common stockholders		6,296
			5,490,072
Basic and diluted earnings per share				$	1.15


	Nine Months Ended September 30, 2022
			Weighted-
			Average	Per Share
	Net Income		Shares	Amount
	(In thousands)
Net income	$	6,351
Less allocated earnings on non-vested restricted stock		(124)
Less dividends on non-vested restricted stock		(161)
Net income allocated to common stockholders		6,066
			5,482,865
Basic and diluted earnings per share				$	1.10

Table of common shares outstanding during each period. Diluted earnings per share reflects additional potential common shares that would have been outstanding if dilutive potential common shares had been issued, as well as any adjustment to income that would result from the assumed issuance. Potential common shares that may be issued by the Company relate to outstanding stock options and restricted stock awards and are determined using the treasury stock method.

Contents

United Bancorp, Inc.

Notes to Condensed Consolidated Financial Statements

~~For the Three and Nine Months Ended September 30, 2017 and 2016~~(In thousands)

~~Treasury stock shares, deferred compensation shares and unearned ESOP shares are not deemed outstanding for earnings per share calculations.~~

Three months ended
September 30, Nine months ended
September 30,
2017 2016 2017 2016
(In thousands, except share and per share data)
Basic
Net income $ 1,000 $ 928 $ 2,766 $ 2,679
Dividends on non-vested restricted stock (9 ) (20 ) (26 ) (48 )
Net income allocated to stockholders $ 991 $ 908 $ 2,740 $ 2,631
Weighted average common shares outstanding 4,882,238 4,944,328 4,855,305 4,895,371
Basic earnings per common share $ 0.20 $ 0.18 $ 0.56 $ 0.54

Diluted
Net income allocated to stockholders $ 991 $ 908 $ 2,740 $ 2,631
Weighted average common shares outstanding for basic earnings per common share 4,882,238 4,944,328 4,855,305 4,895,371
Add: Dilutive effects of assumed exercise of stock options and restricted stock 127,093 116,277 128,093 116,276
Average shares and dilutive potential common shares 5,009,331 5,060,605 4,983,395 5,011,647

Diluted earnings per common share $ 0.20 $ 0.18 $ 0.55 $ 0.53

Income Taxes

The Company is subject to income taxes in the U.S. federal jurisdiction, as well as various state jurisdictions. Tax regulations within each jurisdiction are subject to the interpretation of the related tax laws and regulations and require significant judgment to apply. With few exceptions, the Company is no longer subject to U.S. federal, state and local income tax examinations by tax authorities for the years before ~~2013.~~2019.

~~United Bancorp, Inc.~~

~~Notes to Condensed Consolidated Financial Statements~~

~~For the Three and Nine Months Ended September 30, 2017 and 2016~~

~~Recent~~ Accounting Pronouncements

~~ASU No. 2017-09 was issued~~ Adopted in May 2017 and provides guidance about which changes to the terms or condition of a share-based payment award require and entity to apply modification accounting in Topic 718.The amendments in this Update are effective for all entities for annual periods, and interim periods within those annual periods, beginning after December 15, 2017. The Company assessed ASU 2017-09 and does not expect a significant impact on its accounting and disclosures.

ASU No. 2017-07 was issued in March 2017 and applies to all employers that offer to their employees defined benefit pension plans, other postretirement benefit plans, or other types of benefits accounted for under Topic 715. The amendments in this update require that an employer report the service cost component in the same line item or items as other compensation costs arising from services rendered by the pertinent employees during the period. The other components of net benefit cost, as defined, are required to be presented in the income statement separately from the service cost component and outside a subtotal of income from operations, if one is presented. If a separate line item or items are not used, the line item or items used in the income statement to present the other components of net benefit cost must be disclosed. The amendments in ASU No. 2017-07 are effective for public business entities for annual periods beginning after December 15, 2017, including interim periods within those annual periods. The amendments in this update are to be applied retrospectively for the presentation of the service cost component and the other components of net periodic pension cost and net periodic postretirement benefit cost in the income statement. The Company assessed ASU 2017-07 and does not expect a significant impact on its accounting and disclosures.

~~In August 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2016-15~~~~"Statement of Cash Flows (Topic 230)~~-~~Classification of Certain Cash Receipts and Cash Payments.~~" ASU 2016-15 provides cash flow statement classification guidance for certain transactions including how the predominance principle should be applied when cash receipts and cash payments have aspects of more than one class of cash flows. The guidance is effective for public business entities for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted, including adoption in an interim period. The Company assessed ASU 2016-15 and does not expect a significant impact on its accounting and disclosures.

2023

In June 2016, the FASB issued ASU No. 2016-13, ““Financial ~~Instruments-Credit~~Instruments – Credit Losses (Topic 326) -: Measurement of Credit Losses on Financial ~~Instruments.”~~Instruments” ~~The provisions of~~and subsequent related updates. This ASU ~~2016-13 were issued~~replaces the incurred loss methodology for recognizing credit losses and requires businesses and other organizations to ~~provide financial statement users with more decision-useful information about~~measure the current expected credit losses (CECL) on financial instruments that are not accounted for at fair value through net income, including loans held for investment, held-to-maturity debt securities, trade and other receivables, net investment in leases and other commitments to extend credit held by a reporting entity at each reporting date. ASU 2016-13 requires that financial assets measured at amortized cost, including loans and held-to-maturity securities, net investments in leases, off-balance sheet credit exposures such as unfunded commitments, and other financial instruments. In addition, ASC 326 requires credit losses on available-for-sale debt securities to be presented atas an allowance rather than as a write-down when management does not intend to sell or believes that it is not more likely than not they will be required to sell. This guidance became effective on January 1, 2023 for the ~~net amount expected~~Company. The results reported for periods beginning after January 1, 2023 are presented under ASC 326 while prior period amounts continue to be ~~collected, through an allowance~~reported in accordance with previously applicable accounting standards.

The Company adopted this guidance, and subsequent related updates, using the modified retrospective approach for credit losses that is deducted from the amortized cost basis. The amendments in ASU 2016-13 eliminate the probable incurred loss recognition in current GAAP and reflect an entity’s current estimate of all expected credit losses. The measurement of expected credit losses is based upon historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the financial assets.

~~For purchased~~ financial assets ~~with a more-than-insignificant amount of credit deterioration since origination (“PCD assets”) that are~~ measured at amortized cost, the initial allowance for credit losses is added to the purchase price rather than being reported as a credit loss expense. Subsequent changes in the allowance for credit losses on PCD assets are recognized through the statement of income as a credit loss expense.

~~United Bancorp, Inc.~~

~~Notes to Condensed Consolidated Financial Statements~~

~~For the Three~~including loans and ~~Nine Months Ended September 30, 2017 and 2016~~

~~Credit losses relating to~~ available-for-sale debt securities ~~will be~~and unfunded commitments. On January 1, 2023, the Company recorded ~~through an allowance for credit losses rather than as~~ a ~~direct write-down~~cumulative effect decrease to ~~the security.~~ retained earnings of $2,088,000, net of tax, of which $1,911,000 related to loans, $177,000 related to unfunded commitments.

ASU 2016-13 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Early adoption is permitted for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. The Company ~~is currently evaluating~~adopted the ~~impact~~provisions of ~~these amendments~~ASC 326 related to the Company’s financial position and results of operations and currently does not know or cannot reasonably quantify the impact of the adoption of the amendments as a result of the complexity and extensive changes from the amendments. The Allowance for Loan Losses (ALL) estimate is material to the Company and given the change from an incurred loss model to a methodology that considers the credit loss over the life of the loan, there is the potential for an increase in the ALL at adoption date. The Company is anticipating a significant change in the processes and procedures to calculate the ALL, including changes in assumptions and estimates to consider expected credit losses over the life of the loan versus the current accounting practice that utilizes the incurred loss model. In addition, the current accounting policy and procedures for thepresenting other-than-temporary impairment on available-for-sale debt securities ~~will be replaced with an allowance approach. The Company continues~~prior to ~~work with an outside vendor to begin developing and implementing processes during~~January 1, 2023 using the ~~next two years to ensure it is fully compliant with the amendments at adoption date. For additional information~~prospective transition approach, though no such charges had been recorded on the ~~allowance for loan losses, see Note 3.~~

~~ASU No. 2016-01, "Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities"~~

~~ASU No. 2016-01 was issued in January 2016 and applies to all entities that hold financial assets or owe financial liabilities. ASU 2016-01 is intended to improve~~securities held by the recognition and measurement of financial instruments by requiring equity investments to be measured at fair value with changes in fair value recognized in net income; requiring public entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes; requiring separate presentation of financial assets and financial liabilities by measurement category and form of financial asset on the balance sheet or the accompanying notes to the financial statements; eliminating the requirement for public business entities to disclose the method(s) and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured and amortized at cost on the balance sheet; and requiring a reporting organization to present separately in other comprehensive income the portion of the total change in the fair value of a liability resulting from a change in the instruments specific credit risk when the organization has elected to measure the liability at fair value in accordance with the fair value option for financial instruments. ASU 2016-01 is effective for annual periods and interim periods within those periods, beginning after December 15, 2017. The amendments should be applied by means of a cumulative-effect adjustment to the balance sheet as of the beginning of the fiscal year of adoption. The amendments related to equity securities without readily determinable fair values (including disclosure requirements) should be applied prospectively to equity instruments that existCompany as of the date of adoption. The Company ~~is currently evaluating~~did not change the ~~impact of these amendments, but does not expect them to have a material effect on~~segmentation from the Company’s financial position or results of operations since it does not have any equity securities or a valuation allowance. However, the amendments will have an impact on certain items that are disclosed at fair value that are not currently utilizing the exit price notion when measuring fair value. The Company is continuing to assess the impactincurred loss method upon adoption of ASC ~~2016-01 on its fair value and other disclosure requirements. The current accounting policies and procedures will be modified after~~326.

In January 2023, the Company ~~has fully evaluated the standard to comply with~~adopted ASU 2022-02, “Financial Instruments - Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures” (“ASU 2022-02”), which eliminated the accounting ~~changes mentioned above. For additional information~~guidance for troubled debt restructurings (“TDRs”) while enhancing disclosure requirements for certain loan refinancing and restructurings by creditors when a borrower is experiencing financial difficulty. This guidance was applied on ~~fair value~~a prospective basis. Upon adoption of ~~assets and liabilities, see Note 16.~~

~~United Bancorp, Inc.~~

~~Notes~~this guidance, the Company no longer establishes a specific reserve for modifications to ~~Condensed Consolidated Financial Statements~~

~~For the Three and Nine Months Ended September 30, 2017 and 2016~~

~~In May 2014, the FASB issued ASU No. 2014-09 “~~~~Revenue from Contracts with Customers (Topic 606)~~~~” (ASU 2014-09). This update~~borrowers experiencing financial difficulty. Instead, these modifications are included in their historical loss rate which is applied to the ~~ASC is~~current loan balance to arrive at the culmination of efforts by the FASB and the International Accounting Standards Board (IASB) to develop a common revenue standard for U.S. GAAP and International Financial Reporting Standards (IFRS). ASU 2014-09 supersedes Topic 605 – Revenue Recognition and most industry-specific guidance. The core principlequantitative baseline portion of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchangeAllowance for those goods or services. The guidance in ASU 2014-09 describes a 5-step process entities can apply to achieve the core principle of revenue recognition and requires disclosures sufficient to enable users of financial statements to understand the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers and the significant judgments used in determining that information. Originally, the amendments in ASU 2014-09 were effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period and early application is not allowed. In July 2015, the FASB extended the implementation date to annual reporting periods beginning after December 15, 2017 including interim periods within that reporting period. Transitional guidance is included in the update. Earlier adoption is permitted only as of annual reporting periods beginning after December 31, 2016, including interim periods within that reporting period. The Company’s revenue is comprised of net interest income, which is explicitly excluded from the scope of ASU 2014-09, and non interest income. ASU 2014-09 may require the Company to change how it recognizes certain revenue streams related to the non interest income and additional disclosures will be required. The Company continues to follow the guidance of the FASB and the Transition Resource Group for Revenue Recognition related to non interest income and expects the adoption of ASU 2014-09 on January 1, 2018 will not have a material impact on its results of operations and financial condition.Credit Losses.

~~On February 25, 2016, the FASB issued ASU 2016-02 “~~~~Leases (Topic 842).~~” ASU 2016-02 is intended to improve financial reporting about leasing transactions. This ASU affects all companies and other organization that lease assets such as real estate, airplanes, and manufacturing equipment.

~~Under the current accounting model, an organization applies a classification test to determine the accounting for the lease arrangement:~~

~~(a)~~

~~Some leases are classified as capital where by the lessee would recognize lease assets and liabilities on the balance sheet.~~

~~(b)~~

~~Other leases are classified as operating leases whereby the lessee would not recognize lease assets and liabilities on the balance sheet.~~

Under the new guidance, a lessee will be required to recognize assets and liabilities for leases with lease terms of more than 12 months. Consistent with Generally Accepted Accounting Principles (GAAP), the recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee primarily will depend on its classification as a finance or operating lease.

~~However, unlike current GAAP—which requires only capital leases to be recognized on the balance sheet—the new ASU will require both types of leases to be recognized on the balance sheet.~~

For public companies, the ASU is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. Thus, for a calendar year company, it would be effective January 1, 2019. ~~The impact is not expected to have a material effect on the Company’s financial position or results of operations since the Company does not have a material amount of lease agreements.~~

~~United Bancorp, Inc.~~

~~Notes to Condensed Consolidated Financial Statements~~

~~For the Three and Nine Months Ended September 30, 2017 and 2016~~

~~Note 2:~~

Note 2: Securities

The amortized cost and fair values, together with gross unrealized gains and losses of securities are as follows:


												Gross		Gross		Allowance
												Unrealized		Unrealized		for Credit
										Amortized Cost		Gains		Losses		Losses		Fair Value
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
	(In thousands)
										(In thousands)
Available-for-sale Securities:
September 30, 2017
September 30, 2023:
U.S. government agencies	$	39,249	$	—	$	(120	)	$	39,129	$	45,000	$	—	$	(1,355)	$	—	$	43,645

	$	39,249	$	—	$	(120	)	$	39,129

Available-for-sale Securities:
December 31, 2016:
U.S. government agencies	$	39,000	$	—	$	(486	)	$	38,514
State and political subdivisions		1,249		3		—			1,249

	$	40,249	$	3	$	(486	)	$	39,766
State and municipal obligations											171,346		6		(14,353)		—		156,999
Subordinated notes											29,043		—		(5,008)		—		24,035
Total debt securities										$	245,389	$	6	$	(20,716)	$	—	$	224,679

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United Bancorp, Inc.

Notes to Condensed Consolidated Financial Statements

(In thousands)


			Gross		Gross
			Unrealized		Unrealized
	Amortized Cost		Gains		Losses		Fair Value

	(In thousands)
Available-for-sale Securities:
December 31, 2022:
U.S. government agencies	$	45,000	$	—	$	(968)	$	44,032
State and municipal obligations		152,447		459		(7,408)		145,498
Subordinated note		31,160		—		(3,066)		28,094
Total debt securities	$	228,607	$	459	$	(11,442)	$	217,624

The amortized cost and fair value of available-for-sale securities at September 30, ~~2017,~~2023, by contractual maturity, are shown below. Expected maturities will differ from contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties.


					Amortized		Fair
					Cost		Value
	Available-for-sale
	Amortized Cost		Fair Value
	(in thousands)
					(In thousands)
Under 1 year					$	10,000	$	9,841
One to five years		39,249		39,129		35,611		34,394

Five to ten years						31,358		26,065
Over ten years						168,420		154,379
Totals	$	39,249	$	39,129	$	245,389	$	224,679

The carrying value of securities pledged as collateral, to secure public deposits and for other purposes, was ~~$36.1~~$68.1 million and ~~$27.9~~$68.7 million at September 30, ~~2017~~2023 and December 31, ~~2016,~~2022, respectively.

Certain investments in debt securities are reported in the consolidated financial statements at an amount less than their historical cost. The total fair value of these investments at September 30, ~~2017 and December 31, 2016,~~2023 was ~~$6.0 million and $38.5~~$222.7 million, which represented ~~approximately 15.3% and 96.6%, respectively,~~99% of the Company’s available-for-sale investment portfolio.

The total fair value of these investments at December 31, 2022 was $166.1 million, which represented less than 76% of the Company’s available-for-sale.

Based on evaluation of available evidence, including recent changes in market interest rates, credit rating information and information obtained from regulatory filings, management believes the declines in fair value for these securities are temporary and are a result onof an ~~general~~ increase in longer term interest rates.

~~United Bancorp, Inc.~~

~~Notes to Condensed Consolidated Financial Statements~~

~~For the Three and Nine Months Ended September 30, 2017 and 2016~~

Should the impairment of any of these securities become other-than-temporary, the cost basis of the investment will be reduced and the resulting loss recognized in net income in the period the other-than-temporary impairment is identified.

The following tables show the Company’s investments’ gross unrealized losses and fair value, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position at September 30, ~~2017 and December 31, 2016:~~2023:


	September 30, 2023
	Less than 12 Months				12 Months or More				Total
Description of			Unrealized				Unrealized				Unrealized
Securities	Fair Value		Losses		Fair Value		Losses		Fair Value		Losses

	(In thousands)
U.S. Government agencies	$	—	$	—	$	43,645	$	(1,355)	$	43,645	$	(1,355)
State and municipal obligations		107,520		(4,831)		47,455		(9,522)		154,975		(14,353)
Subordinated notes		3,710		(822)		20,325		(4,186)		24,035		(5,008)
Total temporarily impaired securities	$	111,230	$	(5,653)	$	111,425	$	(15,063)	$	222,655	$	(20,716)

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United Bancorp, Inc.

September 30, 2017
Less than 12 Months 12 Months or More Total
Description of
Securities Fair
Value Unrealized
Losses Fair
Value Unrealized
Losses Fair
Value Unrealized
Losses
(In thousands)

U.S. Government agencies $ 30,154 $ (94 ) $ 8,975 $ (26 ) $ 39,129 $ (120 )

Notes to Condensed Consolidated Financial Statements

December 31, 2016
Less than 12 Months 12 Months or More Total
Description of
Securities Fair
Value Unrealized
Losses Fair
Value Unrealized
Losses Fair
Value Unrealized
Losses
(In thousands)

U.S. Government agencies $ 38,514 $ (486 ) $ — $ — $ 38,514 $ (486 )

(In thousands)


	December 31, 2022
	Less than 12 Months				12 Months or More				Total
Description of			Unrealized				Unrealized				Unrealized
Securities	Fair Value		Losses		Fair Value		Losses		Fair Value		Losses

	(In thousands)
US government agencies	$	44,032	$	(968)	$	—	$	—	$	44,032	$	(968)
State and municipal obligations		100,599		(7,408)		—		—		100,599		(7,408)
Subordinated notes		11,185		(1,565)		10,300		(1,501)		21,485		(3,066)
Total temporarily impaired securities	$	155,816	$	(9,941)	$	10,300	$	(1,501)	$	166,116	$	(11,442)

The unrealized losses on the Company’s 125 investments in ~~U.S. Government agency~~available for sale securities were caused primarily by interest rate changes. The contractual terms of those investments do not permit the issuer to settle the securities at a price less than the amortized cost bases of the investments. Because the Company does not intend to sell the investments and it is not more likely than not the Company will be required ~~or need~~ to sell the investments before recovery of their amortized cost ~~bases,~~basis, which may be maturity, the Company does not consider those investments to be ~~other-than-temporarily impaired~~indicative of credit losses at September 30, ~~2017 and December 31, 2016.~~

2023.

There were no ~~available-for–sale~~sales of investment ~~sales~~securities for the three and nine months ended September 30, ~~2017~~2023 and ~~2016. There were no investment sales~~2022.

Note 3: Loans and Allowance for ~~the three months ended September 30, 2017 and 2016.~~

~~United Bancorp, Inc.~~

~~Notes to Condensed Consolidated Financial Statements~~

~~For the Three and Nine Months Ended September 30, 2017 and 2016~~

~~Note 3:~~

~~Loans and Allowance for Loan~~Credit Losses

Categories of loans include:


							September 30,		December 31,
							2023		2022
	September 30,			December 31,
	2017			2016
	(In thousands)

Commercial loans	$	75,288		$	74,514
							(In thousands)
Commercial and Industrial							$	94,840	$	90,548
Commercial real estate		195,727			191,686			272,457		270,312
Residential real estate		76,501			76,154			92,746		94,012
Installment loans		12,873			14,367

Consumer loans								6,799		6,003

Total gross loans		360,389			356,721			466,842		460,875

Less allowance for loan losses		(2,195	)		(2,341	)


Less allowance for credit losses								(4,112)		(2,052)

Total loans	$	358,194		$	354,380		$	462,730	$	458,823

The amount of deferred loan fees at September 30, 2023 was $64 and $96 at December 31, 2022. The risk characteristics of each loan portfolio segment are as follows:

Commercial

and Industrial, and Commercial Real Estate

Commercial loans are primarily based on the identified cash flows of the borrower and secondarily on the underlying collateral provided by the borrower. The cash flows of borrowers, however, may not be as expected and the collateral securing these loans may fluctuate in value. Most commercial loans are secured by the assets being financed or other business assets, such as accounts receivable or inventory, and may include a personal guarantee. Short-term loans may be made on an unsecured basis. In the case of loans secured by accounts receivable, the availability of funds for the repayment of these loans may be substantially dependent on the ability of the borrower to collect amounts due from its customers.

~~Commercial Real Estate~~

Commercial real estate loans are viewed primarily as cash flow loans and secondarily as loans secured by real estate. Commercial real estate lending typically involves higher loan principal amounts and the repayment of these loans is generally dependent on the successful operation of the property securing the loan or the business conducted on the property securing the loan. Commercial real estate loans may be more adversely affected by conditions in the real estate markets or in the general economy. The characteristics of properties securing the Company’s commercial real estate portfolio are diverse, but with geographic location almost entirely in the Company’s market area. Management monitors and evaluates commercial real estate loans based on collateral, geography and risk grade criteria. In general,

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United Bancorp, Inc.

Notes to Condensed Consolidated Financial Statements

(In thousands)

the Company avoids financing single purpose projects unless other underwriting factors are present to help mitigate risk. In addition, management tracks the level of owner-occupied commercial real estate versus nonowner-occupied loans.

~~United Bancorp, Inc.~~

~~Notes to Condensed Consolidated Financial Statements~~

~~For the Three and Nine Months Ended September 30, 2017 and 2016~~

Residential Real Estate and Consumer

Residential real estate and consumer loans consist of two segments - residential mortgage loans and personal loans. For residential mortgage loans that are secured by 1-4 family residences and are generally owner-occupied, the Company generally establishes a maximum loan-to-value ratio and requires private mortgage insurance if that ratio is exceeded. Home equity loans are typically secured by a subordinate interest in 1-4 family residences, and consumer personal loans are secured by consumer personal assets, such as automobiles or recreational vehicles. Some consumer personal loans are unsecured, such as small installment loans and certain lines of credit. Repayment of these loans is primarily dependent on the personal income of the borrowers, which can be impacted by economic conditions in their market areas, such as unemployment levels. Repayment can also be impacted by changes in property values on residential properties. Risk is mitigated by the fact that the loans are of smaller individual amounts and spread over a large number of borrowers.

Allowance for Credit Losses and Recorded Investment in Loans

As of and for the three and nine month periods ended September 30, 2023


			Commercial
	Commercial		Real Estate		Residential		Consumer		Total

	(in thousands)
Allowance for credit losses:

Balance, July 1, 2023	$	902	$	1,079	$	2,092	$	208	$	4,281
Provision (credit) for credit loss exposure		(26)		11		(75)		(64)		(154)
Losses charged off		(1)		—		—		(32)		(33)
Recoveries		12		—		—		6		18
Balance, September 30, 2023	$	887	$	1,090	$	2,017	$	118	$	4,112
Balance, January 1, 2023	$	215	$	815	$	816	$	206	$	2,052
Impact of adopting ASC 326		755		388		1,379		(103)		2,419
Provision (credit) for credit loss exposure		(104)		(113)		(178)		95		(300)
Losses charged off		(1)		—		—		(94)		(95)
Recoveries		22		—		—		14		36
Balance, September 30, 2023	$	887	$	1,090	$	2,017	$	118	$	4,112

Allocation:

Ending balance: individually evaluated for credit losses	$	—	$	—	$	—	$	—	$	—
Ending balance: collectively evaluated for credit losses	$	887	$	1,090	$	2,017	$	118	$	4,112
Loans:
Ending balance: individually evaluated for credit losses	$	—	$	24	$	—	$	—	$	24
Ending balance: collectively evaluated for credit losses	$	94,840	$	272,433	$	92,746	$	6,799	$	466,818

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United Bancorp, Inc.

Notes to Condensed Consolidated Financial Statements

~~For the Three and Nine Months Ended September 30, 2017 and 2016~~(In thousands)

Allowance for Loan Losses and Recorded Investment in Loans

As of and for the three and nine month ~~period~~periods ended September 30, ~~2017~~2022

Commercial Commercial
Real Estate Residential Installment Unallocated Total
(In thousands)
Allowance for loan losses:

Balance, July 1, 2017 $ 532 $ 845 $ 447 $ 291 $ 177 $ 2,292
Provision charged to expense (26 ) 13 1 43 (6 ) 25
Losses charged off (30 ) (59 ) (6 ) (40 ) — (135 )
Recoveries — 1 1 11 — 13

Balance, September 30, 2017 $ 476 $ 800 $ 443 $ 305 $ 171 $ 2,195

Balance, January 1, 2017 $ 495 $ 804 $ 591 $ 107 $ 344 $ 2,341
Provision charged to expense 10 57 (149 ) 330 (173 ) 75
Losses charged off (30 ) (64 ) (6 ) (167 ) — (267 )
Recoveries 1 3 7 35 — 46

Balance, September 30, 2017 $ 476 $ 800 $ 443 $ 305 $ 171 $ 2,195
Ending balance:  individually evaluated for impairment $ 3 $ 120 $ — $ — $ — $ 123
Ending balance:  collectively evaluated for impairment $ 473 $ 680 $ 443 $ 305 $ 171 $ 2,072

Loans:
Ending balance:  individually evaluated for impairment $ 95 $ 661 $ — $ 305 $ — $ 1,061
Ending balance:  collectively evaluated for impairment $ 75,193 $ 195,066 $ 76,501 $ 12,568 $ — $ 359,328


			Commercial
	Commercial		Real Estate		Residential		Consumer		Total

	(In thousands)
Allowance for loan losses:

Balance, July 1, 2022	$	497	$	1,219	$	814	$	123	$	2,653
Provision (credit) charged to expense		(125)		24		(7)		123		15
Losses charged off		(16)		—		(2)		(38)		(56)
Recoveries		—		—		—		7		7
Balance, September 30, 2022	$	356	$	1,243	$	805	$	215	$	2,619
Balance, January 1, 2022	$	1,046	$	1,235	$	1,121	$	271	$	3,673
Provision (credit) charged to expense		(696)		8		(314)		32		(970)
Losses charged off		(16)		—		(2)		(112)		(130)
Recoveries		22		—		—		24		46
Balance, September 30, 2022	$	356	$	1,243	$	805	$	215	$	2,619

Allocation:

Ending balance: individually evaluated for impairment	$	—	$	406	$	—	$	—	$	406
Ending balance: collectively evaluated for impairment	$	356	$	837	$	805	$	215	$	2,213
Loans:
Ending balance: individually evaluated for impairment	$	15	$	3,792	$	—	$	—	$	3,807
Ending balance: collectively evaluated for impairment	$	92,455	$	270,206	$	95,666	$	6,230	$	464,557

~~United Bancorp, Inc.~~

~~Notes to Condensed Consolidated Financial Statements~~

~~For the Three and Nine Months Ended September 30, 2017 and 2016~~

~~Allowance for Loan Losses and Recorded Investment in Loans~~

~~As of and for the three and nine month period ended September 30, 2016~~

Commercial Commercial
Real Estate Residential Installment Unallocated Total
(In thousands)
Allowance for loan losses:

Balance, July 1, 2016 $ 497 $ 427 $ 163 $ 141 $ 1,237 $ 2,465
Provision charged to expense (272 ) 246 11 41 105 131
Losses charged off — (108 ) (24 ) (53 ) — (185 )
Recoveries 1 14 10 18 — 43

Balance, September 30, 2016 $ 226 $ 579 $ 160 $ 147 $ 1,342 $ 2,454

Balance, January 1, 2016 $ 184 $ 597 $ 170 $ 113 $ 1,373 $ 2,437
Provision charged to expense (34 ) 69 83 220 (31 ) 307
Losses charged off (2 ) (108 ) (115 ) (244 ) — (469 )
Recoveries 78 21 22 58 — 179

Balance, September 30, 2016 $ 226 $ 579 $ 160 $ 147 $ 1,342 $ 2,454
Ending balance:  individually evaluated for impairment $ — $ 156 $ — $ — $ — $ 156
Ending balance:  collectively evaluated for impairment $ 226 $ 423 $ 160 $ 147 $ 1,342 $ 2,298

Loans:
Ending balance:  individually evaluated for impairment $ 19 $ 1,340 $ — $ — $ — $ 1,359
Ending balance:  collectively evaluated for impairment $ 89,801 $ 167,177 $ 77,469 $ 14,836 $ — $ 349,283

~~United Bancorp, Inc.~~

~~Notes to Condensed Consolidated Financial Statements~~

~~For the Three and Nine Months Ended September 30, 2017 and 2016~~

Allowance for Loan Losses and Recorded Investment in Loans

As of December 31, ~~2016~~2022


			Commercial
	Commercial		Real Estate		Residential		Consumer		Total

	(In thousands)
Allowance for loan losses:
Ending balance: individually evaluated for impairment	$	—	$	—	$	––	$	––	$	—
Ending balance: collectively evaluated for impairment	$	215	$	815	$	816	$	206	$	2,052

Loans:
Ending balance: individually evaluated for impairment	$	—	$	57	$	—	$	—	$	57
Ending balance: collectively evaluated for impairment	$	90,548	$	270,255	$	94,012	$	6,003	$	460,875

Commercial Commercial
Real Estate Residential Installment Unallocated Total
(In thousands)
Allowance for loan losses:

Ending balance:  individually evaluated for impairment $ 11 $ 108 $ — $ — $ — $ 119
Ending balance:  collectively evaluated for impairment $ 484 $ 696 $ 591 $ 107 $ 344 $ 2,222

Loans:
Ending balance:  individually evaluated for impairment $ 3,148 $ 1,178 $ — $ 326 $ — $ 4,652
Ending balance:  collectively evaluated for impairment $ 71,366 $ 190,508 $ 76,154 $ 14,041 $ — $ 352,069

~~The following tables show the portfolio quality indicators.~~

September 30, 2017
Loan Class Commercial Commercial
Real Estate Residential Installment Total
(In thousands)

Pass Grade $ 72,464 $ 191,761 $ 76,501 $ 12,567 $ 353,293
Special Mention 32 3,131 — — 3,163
Substandard 2,792 835 — 306 3,933
Doubtful — — — — —

$ 75,288 $ 195,727 $ 76,501 $ 12,873 $ 360,389

December 31, 2016
Loan Class Commercial Commercial
Real Estate Residential Installment Total
(In thousands)

Pass Grade $ 71,302 $ 187,255 $ 76,154 $ 14,041 $ 348,752
Special Mention 64 3,253 — — 3,317
Substandard 3,148 1,178 — 326 4,652
Doubtful — — — — —

$ 74,514 $ 191,686 $ 76,154 $ 14,367 $ 356,721

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United Bancorp, Inc.

Notes to Condensed Consolidated Financial Statements

~~For~~(In thousands)

The following tables show the ~~Three and Nine Months Ended~~portfolio quality indicators.

Based on the most recent analysis performed, the following table presents the recorded investment in non-homogeneous loans by internal risk rating system as of September 30, ~~2017~~2023 (in thousands):


													Revolving		Revolving
													Loans		Loans
													Amortized		Converted
September 30, 2023	2023		2022		2021		2020		2019		Prior		Cost Basis		to Term		Total
Commercial and industrial
Risk Rating
Pass	$	15,880	$	16,474	$	14,235	$	15,192	$	6,537	$	6,092	$	20,279	$	—	$	94,689
Special Mention		—		26		—		—		—		125		—		—		151
Substandard		—		—		—		—		—		—		—		—		—
Doubtful		—		—		—		—		—		—		—		—		—
Total	$	15,880	$	16,500	$	14,235	$	15,192	$	6,537	$	6,217	$	20,279	$	—	$	94,840

Commercial and industrial
Current period gross charge-offs	$	1	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	1

Commercial real estate
Risk Rating
Pass	$	7,915	$	31,262	$	49,136	$	25,267	$	27,223	$	60,548	$	66,892	$	—	$	268,243
Special Mention		—		—		244		2,067		—		1,879		—		—		4,190
Substandard		—		—		—		—		—		24		—		—		24
Doubtful		—		—		—		—		—		—		—		—		—
Total	$	7,915	$	31,262	$	49,380	$	27,334	$	27,223	$	62,451	$	66,892	$	—	$	272,457

Commercial real estate
Current period gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

Total
Pass	$	23,795	$	47,736	$	63,371	$	40,459	$	33,760	$	66,640	$	87,171	$	—	$	362,932
Special Mention		—		26		244		2,067		—		2,004		—		—		4,341
Substandard		—		—		—		—		—		24		—		—		24
Doubtful		—		—		—		—		—		—		—		—		—
Total	$	23,795	$	47,762	$	63,615	$	42,526	$	33,760	$	68,668	$	87,171	$	—	$	367,297
Current period gross charge-offs	$	1	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	1

Table of Contents

United Bancorp, Inc.

Notes to Condensed Consolidated Financial Statements

(In thousands)

The Company monitors the credit risk profile by payment activity for residential and ~~2016~~consumer loan classes. Loans past due 90 days or more and loans on nonaccrual status are considered nonperforming. Nonperforming loans are reviewed quarterly. The following table presents the amortized cost in residential and consumer loans based on payment activity (in thousands):


													Revolving		Revolving
													Loans		Loans
													Amortized		Converted
September 30, 2023	2023		2022		2021		2020		2019		Prior		Cost Basis		to Term		Total
Residential Real Estate
Payment Performance
Performing	$	8,489	$	18,664	$	16,479	$	20,070	$	5,945	$	22,891	$	—	$	—	$	92,538
Nonperforming		—		—		—		—		39		169		—		—		208
Total	$	8,489	$	18,664	$	16,479	$	20,070	$	5,984	$	23,060	$	—	$	—	$	92,746

Residential real estate
Current period gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

Consumer
Payment Performance
Performing	$	2,227	$	1,554	$	750	$	503	$	358	$	1,035	$	372	$	—	$	6,799
Nonperforming		—		—		—		—		—		—		—		—		—
Total	$	2,227	$	1,554	$	750	$	503	$	358	$	1,035	$	372	$	—	$	6,799

Consumer
Current period gross charge-offs	$	93	$	1	$	—	$	—	$	—	$	—	$	—	$	—	$	94

Total
Payment Performance
Performing	$	10,716	$	20,218	$	17,229	$	20,573	$	6,303	$	23,926	$	372	$	—	$	99,337
Nonperforming		—		—		—		—		39		169		—		—		208
Total	$	10,716	$	20,218	$	17,229	$	20,573	$	6,342	$	24,095	$	372	$	—	$	99,545


	December 31, 2022
			Commercial
Loan Class	Commercial		Real Estate		Residential		Consumer		Total

	(In thousands)
Pass Grade	$	90,548	$	262,472	$	94,012	$	6,003	$	453,035
Special Mention		—		4,066		—		—		4,066
Substandard		—		3,774		—		—		3,774
Doubtful		—		—		—		—		—

	$	90,548	$	270,312	$	94,012	$	6,003	$	460,875

Table of Contents

United Bancorp, Inc.

Notes to Condensed Consolidated Financial Statements

(In thousands)

To facilitate the monitoring of credit quality within the loan portfolio, and for purposes of analyzing historical loss rates used in the determination of the ~~ALLL,~~allowance for credit losses, the Company utilizes the following categories of credit grades: pass, special mention, substandard, and doubtful. The four categories, which are derived from standard regulatory rating definitions, are assigned upon initial approval of credit to borrowers and updated periodically thereafter. Pass ratings, which are assigned to those borrowers that do not have identified potential or well defined weaknesses and for which there is a high likelihood of orderly repayment, are updated periodically based on the size and credit characteristics of the borrower. All other categories are updated on at least a quarterly basis.

The Company assigns a special mention rating to loans that have potential weaknesses that deserve management’s close attention. If left uncorrected, these potential weaknesses may, at some future date, result in the deterioration of the repayment prospects for the loan or the Company’s credit position.

The Company assigns a substandard rating to loans that are inadequately protected by the current sound worth and paying capacity of the borrower or of the collateral pledged. Substandard loans have well defined weaknesses or weaknesses that could jeopardize the orderly repayment of the debt. Loans and leases in this grade also are characterized by the distinct possibility that the Company will sustain some loss if the deficiencies noted are not addressed and corrected.

The Company assigns a doubtful rating to loans that have all the attributes of a substandard rating with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable. The possibility of loss is extremely high, but because of certain important and reasonable specific pending factors that may work to the advantage of and strengthen the credit quality of the loan or lease, its classification as an estimated loss is deferred until its more exact status may be determined. Pending factors may include a proposed merger or acquisition, liquidation proceeding, capital injection, perfecting liens on additional collateral or refinancing plans.

The Company evaluates the loan risk grading system definitions and allowance for ~~loan~~credit losses methodology on an ongoing basis. No significant changes were made to either during the past year to date period.

Loan Portfolio Aging Analysis

As of September 30, ~~2017~~2023


															30-59 Days		60‑89 Days		Greater
															Past Due		Past Due		Than 90 Days				Total Past
															and		and		and				Due and				Total Loans
															Accruing		Accruing		Accruing		Non Accrual		Non Accrual		Current		Receivable
	30-59 Days Past Due and Accruing		60-89 Days Past Due and Accruing		Greater Than 90 Days and Accruing		Non Accrual		Total Past Due and Non Accrual		Current		Total Loans Receivable
	(In thousands)
															(In thousands)
Commercial	$	194	$	16	$	—	$	72	$	282	$	75,006	$	75,288	$	58	$	218	$	—	$	—	$	276	$	94,564	$	94,840
Commercial real estate		163		—		—		487		650		195,077		195,727		—		—		—		8		8		272,449		272,457
Residential		840		89		—		733		1,662		74,839		76,501		159		42		—		208		409		92,337		92,746
Installment		74		—		—		5		79		12,794		12,873

Consumer																16		—		—		—		16		6,783		6,799
Total	$	1,271	$	105	$	—	$	1,297	$	2,673	$	357,716	$	360,389	$	233	$	260	$	—	$	216	$	709	$	466,133	$	466,842

Table of Contents

United Bancorp, Inc.

Notes to Condensed Consolidated Financial Statements

~~For the Three and Nine Months Ended September 30, 2017 and 2016~~(In thousands)

Loan Portfolio Aging Analysis

As of December 31, ~~2016~~2022


															30‑59 Days		60‑89 Days		Greater
															Past Due		Past Due		Than 90 Days				Total Past
															and		and		and				Due and				Total Loans
															Accruing		Accruing		Accruing		Non Accrual		Non Accrual		Current		Receivable
	30-59 Days Past Due and Accruing		60-89 Days Past Due and Accruing		Greater Than 90 Days and Accruing		Non Accrual		Total Past Due and Non Accrual		Current		Total Loans Receivable
	(In thousands)
															(In thousands)
Commercial	$	153	$	105	$	75	$	49	$	382	$	74,132	$	74,514	$	126	$	—	$	—	$	—	$	126	$	90,422	$	90,548
Commercial real estate		—		55		—		335		390		191,296		191,686		158		—		—		9		167		270,145		270,312
Residential		805		135		161		922		2,023		74,131		76,154		102		24		—		173		299		93,713		94,012
Installment		213		8		—		55		276		14,091		14,367

Consumer																15		—		—		—		15		5,988		6,003
Total	$	1,171	$	303	$	236	$	1,361	$	3,071	$	353,650	$	356,721	$	401	$	24	$	—	$	182	$	607	$	460,268	$	460,875

ANonperforming Loans

The following table present the amortized cost basis of loans on nonaccrual status and loans past due over 90 days still accruing interest as of September 30, 2023:


							Loans Past
							Due Over 90 Days		Total
	Nonaccrual with no ACL		Nonaccrual with ACL		Total Nonaccrual		Still Accruing		Nonperforming

	(In thousands)
Commercial	$	—	$	—	$	—	$	—	$	—
Commercial real estate		—		8		8		—		8
Residential		192		16		208		—		208
Consumer		—		—		—		—		—
Total	$	192	$	24	$	216	$	—	$	216

The Company did recognized approximately $6,000 interest income on nonaccrual loans during the the period ended September 30, 2023.

Impaired Loans

For 2022, a loan is considered impaired, in accordance with the impairment accounting guidance (ASC 310-10-35-16), when based on current information and events, it is probable the Company will be unable to collect all amounts due from the borrower in accordance with the contractual terms of the loan. Impaired loans include nonperforming commercial loans but also include loans modified in troubled debt restructurings where concessions have been granted to borrowers experiencing financial difficulties. These concessions could include a reduction in the interest rate on the loan, payment extensions, forgiveness of principal, forbearance or other actions intended to maximize collection.

Table of Contents

United Bancorp, Inc.

Notes to Condensed Consolidated Financial Statements

~~For the Three and Nine Months Ended September 30, 2017 and 2016~~(In thousands)

Impaired Loans


																					For the three months ended				For the nine months ended
															As of September 30, 2022						September 30, 2022				September 30, 2022
																	Unpaid				Average		Interest		Average		Interest
															Recorded		Principal		Specific		Investment in		Income		Investment in		Income
															Balance		Balance		Allowance		Impaired Loans		Recognized		Impaired Loans		Recognized
	As of September 30, 2017						For the three months ended September 30, 2017				For the nine months ended September 30, 2017
	Recorded Balance		Unpaid Principal Balance		Specific Allowance		Average Investment in Impaired Loans		Interest Income Recognized		Average Investment in Impaired Loans		Interest Income Recognized
	(In thousands)
															(In thousands)
Loans without a specific valuation allowance:
Commercial	$	64	$	64	$	—	$	65	$	—	$	62	$	2	$	15	$	30	$	—	$	30	$	—	$	31	$	1
Commercial real estate		180		180		—		592		3		607		8		2,839		2,839		—		2,844		—		2,842		—
Residential		—		—		—		—		—		—		—		—		—		—		—		—		—		—
Installment		306		306		—		306		—		313		3
		550		550		—		963		3		982		13

Consumer																—		—		—		—		—		—		—
																2,854		2,869		—		2,874		—		2,873		—
Loans with a specific valuation allowance:
Commercial		30		30		3		30		4		97		7		—		—		—		—		—		—		—
Commercial real estate		481		481		120		535		2		496		14		953		953		406		983		—		983		30
Residential		—		—		—		—		—		—		—		—		—		—		—		—		—		––
Installment		—		—		—		—		—		—		—
		511		511		123		565		6		593		21

Consumer																––		––		––		––		—		—		—
																953		953		406		983		—		983		30
Total:
Commercial	$	94	$	94	$	3	$	95	$	4	$	159	$	9	$	15	$	30	$	—	$	30	$	—	$	31	$	1
Commercial real estate	$	661	$	661	$	120	$	1,127	$	5	$	1,103	$	22	$	3,792	$	3,792	$	406	$	3,827	$	—	$	3,825	$	30
Residential	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Installment	$	306	$	306	$	—	$	306	$	—	$	313	$	3
Consumer															$	—	$	—	$	—	$	—	$	—	$	—	$	—

~~United Bancorp, Inc.~~

~~Notes to Condensed Consolidated Financial Statements~~

~~For the Three and Nine Months Ended September 30, 2017 and 2016~~

~~Impaired Loans~~

As of December 31, 2016 For the three months ended
September 30, 2016 For the nine months ended
September 30, 2016
Recorded
Balance Unpaid
Principal
Balance Specific
Allowance Average
Investment in
Impaired Loans Interest
Income
Recognized Average
Investment in
Impaired Loans Interest
Income
Recognized
(In thousands)
Loans without a specific valuation allowance:
Commercial $ 2,975 $ 2,975 $ — $ 19 $ — $ 19 $ —
Commercial real estate 658 766 — 1,219 15 1,228 32
Residential — — — — — — —
Installment 326 326 — — — — —
3,959 4,067 — 1,238 15 1,247 32

Loans with a specific valuation allowance:
Commercial 173 173 11 — — — —
Commercial real estate 520 520 108 757 4 769 21
Residential — — — — — — —
Installment — — — — — — 2
693 693 119 757 4 769 23

Total:
Commercial $ 3,148 $ 3,148 $ 11 $ 19 $ — $ 19 $ —
Commercial real estate $ 1,178 $ 1,286 $ 108 $ 1,976 $ 19 $ 1,997 $ 53
Residential $ 326 $ 326 $ — $ — $ — $ — $ —
Installment $ — $ — $ — $ — $ — $ — $ 2

Interest income recognized on a cash basis was not ~~materially~~materiality different than interest income recognized.

~~United Bancorp, Inc.~~

~~Notes to Condensed Consolidated Financial Statements~~

~~For the Three and Nine Months Ended September 30, 2017 and 2016~~

For the TDRs noted in the tables below, the Company extended the maturity dates and granted interest rate concessions as part of each of those loan restructurings. The loans included in the tables are considered impaired and specific loss calculations are performed on the individual loans. In conjunction with the restructuring there were no amounts charged-off.


							Nine Months Ended September 30, 2022
							Interest						Total
							Only		Term		Combination		Modification
	Three Months ended September 30, 2017
	Number of Contracts		Pre- Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment
	(In thousands)

							(In thousands)
Commercial		2	$	40	$	40	$	—	$	—	$	—	$	—
Commercial real estate		1		62		62		1		1		—		1
Residential		—		—		—		—		—		—		—
Installment		—		—		—
Consumer								—		—		—		—

Three Months ended September 30, 2017
Interest
Only Term Combination Total
Modification
(In thousands)

Commercial $ — $ 40 $ — $ 40
Commercial real estate — 62 — 62
Residential — — — —
Consumer — — — —

Nine Months ended September 30, 2017
Number of
Contracts Pre- Modification
Outstanding
Recorded
Investment Post-Modification
Outstanding
Recorded
Investment
(In thousands)

Commercial 2 $ 40 $ 40
Commercial real estate 3 189 165
Residential — — —
Installment — — —

Nine Months Ended September 30, 2017
Interest
Only Term Combination Total
Modification
(In thousands)

Commercial $ — $ 40 $ — $ 40
Commercial real estate — 165 — 165
Residential — — — —
Consumer — — — —

~~United Bancorp, Inc.~~

~~Notes to Condensed Consolidated Financial Statements~~

~~For the Three and Nine Months Ended September 30, 2017 and 2016~~

Three Months ended September 30, 2016
Number of
Contracts Pre- Modification
Outstanding
Recorded
Investment Post-Modification
Outstanding
Recorded
Investment
(In thousands)

Commercial 1 $ 17 $ 17
Commercial real estate 1 29 29
Residential — — —
Installment — — —

Three Months Ended September 30, 2016
Interest
Only Term Combination Total
Modification
(In thousands)

Commercial $ — $ 17 $ — $ 17
Commercial real estate — 29 — 29
Residential — — — —
Consumer — — — —

Nine Months ended September 30, 2016
Number of
Contracts Pre- Modification
Outstanding
Recorded
Investment Post-Modification
Outstanding
Recorded
Investment
(In thousands)

Commercial 1 $ 17 $ 17
Commercial real estate 3 115 115
Residential — — —
Installment — — —

Nine Months Ended September 30, 2016
Interest
Only Term Combination Total
Modification
(In thousands)

Commercial $ — $ 17 $ — $ 17
Commercial real estate — 115 — 115
Residential — — — —
Consumer — — — —

~~United Bancorp, Inc.~~

~~Notes to Condensed Consolidated Financial Statements~~

~~For the Three and Nine Months Ended September 30, 2017 and 2016~~

During the nine ~~the~~ months ended September 30, 2017, troubled debt restructurings described above increased the allowance for loan losses by $20,000. During the nine the months ended September 30, 2016, troubled debt restructurings described above increased the allowance for loan losses by $8,000. At September 30, 2017 and 2016 and for three and nine month periods then ended,2022 there were no material defaults of any modified loans or troubled debt restructurings that were modified in the last 12 months. The Company generally considers TDR’s that become 90 days or more past due under the modified terms as subsequently defaulted.

~~Note 4:~~

Table of Contents

United Bancorp, Inc.

Notes to Condensed Consolidated Financial Statements

(In thousands)

Note 4: Benefit Plans

Pension expense includes the following:


													Three months ended				Nine months ended
													September 30,				September 30,
													2023		2022		2023		2022
	Three months ended September 30,						Nine months ended September 30,
	2017			2016			2017			2016
	(In thousands)

													(In thousands)
Service cost	$	68		$	78		$	204		$	234		$	76	$	130	$	228	$	390
Interest cost		50			50			150			150			78		68		234		204
Expected return on assets		(90	)		(86	)		(270	)		(258	)		(133)		(144)		(399)		(432)
Amortization of prior service cost and net loss		(6	)		(2	)		(18	)		(6	)

Amortization (accretion) of prior service cost and net loss														(10)		24		(30)		72

Pension expense	$	22		$	40		$	66		$	120		$	11	$	78	$	33	$	234

All components of pension expense are reflected within the salaries and employee benefits line of the consolidated income statement.

~~Note 5:~~

Note 5: Off-balance-sheet Activities

Some financial instruments, such as loan commitments, credit lines, letters of credit and overdraft protection, are issued to meet customer financing needs. These are agreements to provide credit or to support the credit of others, as long as conditions established in the contracts are met, and usually have expiration dates. Commitments may expire without being used. Off-balance-sheet risk to credit loss exists up to the face amount of these instruments, although material losses are not anticipated. The same credit policies are used to make such commitments as are used for loans, including obtaining collateral at exercise of the commitment.

~~United Bancorp, Inc.~~

~~Notes to Condensed Consolidated Financial Statements~~

~~For the Three and Nine Months Ended September 30, 2017 and 2016~~

A summary of the notional or contractual amounts of financial instruments with off-balance-sheet risk at the indicated dates is as follows:


					September 30,		December 31,
					2023		2022
	September 30,		December 31,
	2017		2016
	(In thousands)

					(In thousands)
Commercial loans unused lines of credit	$	23,429	$	20,942	$	92,083	$	79,718
Commitment to originate loans		11,887		12,349		89,514		77,889
Consumer open end lines of credit		37,567		35,590		37,371		37,600
Standby lines of credit						136		136

~~Note 6:~~

~~Accumulated Other Comprehensive Loss~~

The Company adopted the provisions of ASC 326 and recognized an initial implementation amount of $224,000. During the nine months ended June 30, 2023, there was no change in the provision for credit expense for off balance sheet exposure.

Note 6: Accumulated Other Comprehensive Income (Loss)

The components of accumulated other comprehensive ~~loss,~~income (loss), included in stockholders’ equity, are as follows:


							September 30,		December 31,
							2023		2022
	September 30, 2017			December 31, 2016
	(In thousands)

							(In thousands)
Net unrealized loss on securities available-for-sale	$	(120	)	$	(483	)	$	(20,710)	$	(10,984)
Net unrealized loss for funded status of defined benefit plan liability		(205	)		(205	)

		(325	)		(688	)
Tax effect		111			234

Net unrealized loss for unfunded status of defined benefit plan liability								(835)		(835)
								(21,545)		(11,819)
Less: Tax effect								4,525		2,483
Net-of-tax amount	$	(214	)	$	(454	)	$	(17,020)	$	(9,336)

Table of Contents

United Bancorp, Inc.

Notes to Condensed Consolidated Financial Statements

(In thousands)

~~Note 7:~~

Note 7: Fair Value Measurements

The Company defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Company also utilizes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels of inputs that may be used to measure fair value:

Level 1 Quoted prices in active markets for identical assets or liabilities that the entity can access at the measurement date

	~~Level 1~~	~~Quoted prices in active markets for identical assets or liabilities~~

	~~Level 2~~	Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities

	~~Level 3~~	Level 2 Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities Level 3Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities

~~United Bancorp, Inc.~~

~~Notes to Condensed Consolidated Financial Statements~~

~~For the Three and Nine Months Ended September 30, 2017 and 2016~~

Following is a description of the valuation methodologies used for assets measured at fair value on a recurring basis and recognized in the accompanying consolidated balance sheets, as well as the general classification of such instruments pursuant to the valuation hierarchy.

Available-for-sale Securities

Where quoted market prices are available in an active market, securities are classified within Level 1 of the valuation hierarchy. The Company’s equity securities are classified within Level 1 of the hierarchy. If quoted market prices are not available, then fair values are estimated by using quoted prices of securities with similar characteristics or independent asset pricing services and pricing models, the inputs of which are market-based or independently sourced market parameters, including, but not limited to, yield curves, interest rates, volatilities, prepayments, defaults, cumulative loss projections and cash flows. Such securities are classified in Level 2 of the valuation hierarchy.

The following table presents the fair value measurements of assets recognized in the accompanying consolidated balance sheets measured at fair value on a recurring basis and the level within the fair value hierarchy in which the fair value measurements fall at September 30, ~~2017~~2023 and December 31, ~~2016:~~2022:

Fair Value Measurements Using
Fair
Value Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1) Significant
Other
Observable
Inputs
(Level 2) Significant
Unobservable
Inputs
(Level 3)
(In thousands)
September 30, 2017
U.S. government agencies $ 39,129 $ — $ 39,129 $ —

December 31, 2016
U.S. government agencies $ 38,514 $ — $ 38,514 $ —
State and political subdivisions 1,252 — 1,252 —


			Fair Value Measurements Using
			Quoted Prices
			in Active		Significant
			Markets for		Other		Significant
			Identical		Observable		Unobservable
			Assets		Inputs		Inputs
	Fair Value		(Level 1)		(Level 2)		(Level 3)

	(In thousands)
September 30, 2023
U.S. government agencies	$	43,645	$	—	$	43,645	$	—
Subordinated notes		24,038		—		24,038		—
State and municipal obligations		156,996		—		156,996		—


December 31, 2022
U.S. government agencies	$	44,032	$	—	$	44,032	$	—
Subordinated notes		28,094		—		28,094		—
State and municipal obligations		145,498		—		145,498		—

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United Bancorp, Inc.

Notes to Condensed Consolidated Financial Statements

~~For the Three and Nine Months Ended September 30, 2017 and 2016~~(In thousands)

Following is a description of the valuation methodologies used for assets measured at fair value on a nonrecurring basis and recognized in the accompanying consolidated balance sheets, as well as the general classification of such assets pursuant to the valuation hierarchy. For assets classified within Level 3 of the fair value hierarchy, the process used to develop the reported fair value is described below.

~~Impaired Loans (Collateral Dependent)~~

Collateral Dependent

Collateral dependent ~~impaired~~ loans consisted primarily of loans secured by nonresidential real estate. Management has determined fair value measurements on ~~impaired~~collateral dependent loans primarily through evaluations of appraisals performed. Due to the nature of the valuation inputs, ~~impaired~~collateral dependent loans are classified within Level 3 of the hierarchy.

The Company considers the appraisal or evaluation as the starting point for determining fair value and then considers other factors and events in the environment that may affect the fair value. Appraisals of the collateral underlying collateral-dependent loans are obtained when the loan is determined to be collateral-dependent and subsequently as deemed necessary by the Company’s Chief Lender. Appraisals are reviewed for accuracy and consistency by the Company’s Chief Lender. Appraisers are selected from the list of approved appraisers maintained by management. The appraised values are reduced by discounts to consider lack of marketability and estimated cost to sell if repayment or satisfaction of the loan is dependent on the sale of the collateral. These discounts and estimates are developed by the Company’s Chief Lender by comparison to historical results.

Foreclosed Assets Held for Sale

Assets acquired through, or in lieu of, loan foreclosure are held for sale and are initially recorded at fair value (based on current appraised value) at the date of foreclosure, establishing a new cost basis. Subsequent to foreclosure, valuations are periodically performed by management and the assets are carried at the lower of carrying amount or fair value less cost to sell. Management has determined fair value measurements on other real estate owned primarily through evaluations of appraisals performed, and current and past offers for the other real estate under evaluation. Due to the nature of the valuation inputs, foreclosed assets held for sale are classified within Level 3 of the hierarchy.

Appraisals of OREO are obtained when the real estate is acquired and subsequently as deemed necessary by the Company’s Chief lender. Appraisals are reviewed for accuracy and consistency by the Company’s Chief Lender and are selected from the list of approved appraisers maintained by management.

~~United Bancorp, Inc.~~

~~Notes to Condensed Consolidated Financial Statements~~

~~For the Three and Nine Months Ended September 30, 2017 and 2016~~

The following table presents the fair value measurements of assets recognized in the accompanying consolidated balance sheets measured at fair value on a nonrecurring basis and the level within the fair value hierarchy in which the fair value measurements fall at September 30, ~~2017~~2023 and December 31, ~~2016.~~2022.

Fair Value Measurements Using
Fair
Value Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1) Significant
Other
Observable
Inputs
(Level 2) Significant
Unobservable
Inputs
(Level 3)
(In thousands)
September 30, 2017
Collateral dependent impaired loans $ 363 $ — $ — $ 363
Foreclosed assets held for sale 174 — — 174

December 31, 2016
Collateral dependent impaired loans $ 3,435 $ — $ — $ 3,435
Foreclosed assets held for sale 249 — — 249


			Fair Value Measurements Using
			Quoted Prices
			in Active		Significant
			Markets for		Other		Significant
			Identical		Observable		Unobservable
	Fair		Assets		Inputs		Inputs
	Value		(Level 1)		(Level 2)		(Level 3)

	(In thousands)
September 30, 2023
Collateral dependent loans	$	—	$	—	$	—	$	—
Foreclosed assets held for sale		3,480		—		—		3,480

December 31, 2022
Collateral dependent loans	$	9	$	—	$	—	$	9
Foreclosed assets held for sale		3,519		—		—		3,519

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United Bancorp, Inc.

Notes to Condensed Consolidated Financial Statements

(In thousands)

Unobservable (Level 3) Inputs

The following table presents quantitative information about unobservable inputs used in recurring and nonrecurring Level 3 fair value measurements.

Fair Value at
9/30/17 Valuation
Technique Unobservable Inputs Range
(In thousands)

Collateral-dependent impaired loans $ 363 Market comparable properties Comparability adjustments Not available

Foreclosed assets held for sale 174 Market comparable properties Marketability discount 10% – 15%

Fair Value at
12/31/16 Valuation
Technique Unobservable Inputs Range
(In thousands)

Collateral-dependent impaired loans $ 3,435 Market comparable properties Comparability adjustments Not available

Foreclosed assets held for sale $ 249 Market comparable properties Marketability discount 10% – 35%

	33
	Fair Value at		Valuation	Unobservable
	9/30/23		Technique	Inputs	Range

	(In thousands)
Collateral-dependent loans	$	—	Market comparable properties	Comparability adjustments	5% – 10%
Foreclosed assets held for sale		3,480	Market comparable properties	Marketability discount	10% – 35%


	Fair Value at		Valuation	Unobservable
	12/31/22		Technique	Inputs	Range

	(In thousands)
Collateral-dependent loans	$	9	Market comparable properties	Comparability adjustments	5% – 10%
Foreclosed assets held for sale		3,519	Market comparable properties	Marketability discount	10% – 35%

~~United Bancorp, Inc.~~

~~Notes to Condensed Consolidated Financial Statements~~

~~For the Three and Nine Months Ended September 30, 2017 and 2016~~

There were no significant changes in the valuation techniques used during ~~2017.~~

2023.

The following table presents estimated fair values of the Company’s financial instruments. The fair values of certain of these instruments were calculated by discounting expected cash flows, which involves significant judgments by management and uncertainties. Because no market exists for certain of these financial instruments and because management does not intend to sell these financial instruments, the Company does not know whether the fair values shown below represent values at which the respective financial instruments could be sold individually or in the aggregate.


											Fair Value Measurements Using
											Quoted Prices
											in Active		Significant
											Markets for		Other		Significant
											Identical		Observable		Unobservable
									Carrying		Assets		Inputs		Inputs
									Amount		(Level 1)		(Level 2)		(Level 3)
			Fair Value Measurements Using
	Carrying Amount		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	(In thousands)
September 30, 2017

									(In thousands)
September 30, 2023:

Financial assets
Cash and cash equivalents	$	23,108	$	23,108	$	—	$	—	$	70,892	$	70,892	$	—	$	—
Loans, net of allowance		358,194		—		—		361,023		462,730		—		—		440,243
Federal Home Loan Bank stock		4,164		—		4,164		—		3,979		—		3,979		—
Accrued interest receivable		913		—		913		—		3,724		—		3,724		—


Financial liabilities
Deposits		380,851		—		351,459		—	$	628,012	$	—	$	626,332	$	—
Short term borrowings		16,188		—		16,188		—
Federal Home Loan Bank Advances		5,257		—		5,281		—
Securities sold under agreements to repurchase										28,584		—		28,584		—
Subordinated debentures		4,124		—		3,435		—		23,771		—		21,953		—
Advance Federal Home Loan Bank										75,000		—		73,195		—
Interest payable		66		—		66		—		514		—		514		—

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United Bancorp, Inc.

Notes to Condensed Consolidated Financial Statements

~~For the Three and Nine Months Ended September 30, 2017 and 2016~~(In thousands)


			Fair Value Measurements Using
			Quoted Prices
			in Active		Significant
			Markets for		Other		Significant
			Identical		Observable		Unobservable
	Carrying		Assets		Inputs		Inputs
	Amount		(Level 1)		(Level 2)		(Level 3)

	(In thousands)
December 31, 2022:

Financial assets
Cash and cash equivalents	$	30,080	$	30,080	$	—	$	—
Loans, net of allowance		458,823		—		—		444,704
Federal Home Loan Bank stock		2,499		—		2,499		—
Accrued interest receivable		3,403		—		3,403		—

Financial liabilities
Deposits	$	649,913	$	—	$	646,455	$	—
Securities sold under agreements to repurchase		18,106		—		18,106		—
Subordinated debentures		23,726		—		24,454		—
Interest payable		304		—		304		—

Fair Value Measurements Using
Carrying
Amount Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1) Significant
Other
Observable
Inputs
(Level 2) Significant
Unobservable
Inputs
(Level 3)
(In thousands)
December 31, 2016

Financial assets
Cash and cash equivalents $ 11,541 $ 11,541 $ — $ —
Loans, net of allowance 354,380 — — 355,753
Federal Home Loan Bank stock 4,164 — 4,164 —
Accrued interest receivable 840 — 840 —

Financial liabilities
Deposits 338,803 — 312,240 —
Short term borrowings 9,393 — 9,393 —
Federal Home Loan Bank Advances 39,855 — 40,120 —
Subordinated debentures 4,124 — 3,435 —
Interest payable 111 — 111 —

The following methods and assumptions were used to estimate the fair value of each class of financial instruments.

Cash and Cash Equivalents, Accrued Interest Receivable and Federal Home Loan Bank Stock

The carrying amounts approximate fair value.

~~United Bancorp, Inc.~~

~~Notes to Condensed Consolidated Financial Statements~~

~~For the Three and Nine Months Ended September 30, 2017 and 2016~~

Loans

~~The fair value~~Fair values of loans isand leases are estimated ~~by discounting the future cash flows using the current rates at which similar loans would be made to borrowers with similar~~on an exit price basis incorporating discounts for credit, ~~ratings~~liquidity and ~~for the same remaining maturities. Loans with similar characteristics were aggregated for purposes of the calculations.~~

marketability factors.

Deposits

Deposits include demand deposits, savings accounts, NOW accounts and certain money market deposits. The carrying amount approximates fair value. The fair value of fixed-maturity time deposits is estimated using a discounted cash flow calculation that applies the rates currently offered for deposits of similar remaining maturities.

Interest Payable

The carrying amount approximates fair value.

~~Short-term Borrowings,~~Securities sold under agreements to repurchase, Federal Home Loan Bank Advances and Subordinated Debentures

Rates currently available to the Company for debt with similar terms and remaining maturities are used to estimate the fair value of existing debt.

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United Bancorp, Inc.

Notes to Condensed Consolidated Financial Statements

(In thousands)

Commitments to Originate Loans, Letters of Credit and Lines of Credit

The fair value of commitments to originate loans is estimated using the fees currently charged to enter into similar agreements, taking into account the remaining terms of the agreements and the present creditworthiness of the counterparties. For fixed-rate loan commitments, fair value also considers the difference between current levels of interest rates and the committed rates. The fair values of letters of credit and lines of credit are based on fees currently charged for similar agreements or on the estimated cost to terminate or otherwise settle the obligations with the counterparties at the reporting date. Fair values of commitments were not material at September 30, ~~2017~~2023 and December 31, ~~2016.~~2022.

Note 8: Repurchase Agreements

Securities sold under agreements to repurchase (“repurchase agreements”) with customers represent funds deposited by customers, generally on an overnight basis that are collateralized by investment securities owned by the Company.

At September 30, 2017 and December 31, 2016, repurchase agreement borrowings totaled $16,188,000 and $9,393,000, respectively and are included in short-term borrowings on the consolidated condensed balance sheets. All repurchase agreements are subject to term and conditions of repurchase/security agreements between the Company and the customer and are accounted for as secured borrowings. The Company’s repurchase agreements reflected in short-term borrowings consist of customer accounts and securities which are pledged on an individual security basis.

~~United Bancorp, Inc.~~

~~Notes to Condensed Consolidated Financial Statements~~

~~For the Three and Nine Months Ended September 30, 2017 and 2016~~

The following table presents the Company’s repurchase agreements accounted for as secured borrowings:

Remaining Contractual Maturity of the Agreement

Remaining Contractual Maturity of the Agreement
(In thousands)
September 30, 2017 Overnight and
Continuous Up to 30 Days 30-90 Days Greater than 90
Days Total

Repurchase Agreements

U.S. government agencies $ 16,188 $ — $ — $ — $ 16,188

Total $ 16,188 $ — $ — $ — $ 16,188

(In thousands)

December 31, 2016 Overnight and
Continuous Up to 30 Days 30-90 Days Greater than 90
Days Total

Repurchase Agreements

U.S. government agencies $ 9,393 $ — $ — $ — $ 9,393

Total $ 9,393 $ — $ — $ — $ 9,393



	Overnight and						Greater than
September 30, 2023	Continuous		Up to 30 Days		30‑90 Days		90 Days		Total
Repurchase Agreements
State and municipal obligations	$	28,584	$	—	$	—	$	—	$	28,584
Total	$	28,584	$	—	$	—	$	—	$	28,584


	Overnight and						Greater than
December 31, 2022	Continuous		Up to 30 Days		30‑90 Days		90 Days		Total
Repurchase Agreements
State and municipal obligations	$	18,106	$	—	$	—	$	—	$	18,106
Total	$	18,106	$	—	$	—	$	—	$	18,106

These borrowings were collateralized with ~~U.S. government~~state and ~~agency securities~~municipal obligations with a carrying value of ~~$17.8~~$37.8 million at September 30, ~~2017~~2023 and ~~$13.0~~$38.8 million at December 31, ~~2016.~~2022. Declines in the fair value would require the Company to pledge additional securities.

Note 9: Core Deposits and Intangible Assets

The following table shows the changes in the carrying amount of goodwill for September 30, 2023 and December 31, 2022 (in thousands):


	September 30,		December 31,
	2023		2022
Balance beginning of year	$	682	$	682
Additions from acquisition		—		—
Balance, end of period	$	682	$	682

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United Bancorp, Inc.

Notes to Condensed Consolidated Financial Statements

(In thousands)

Intangible assets in the consolidated balance sheets at September 30, 2023 and December 31, 2022 were as follows (in thousands):

Nine Months Ended September 30, 2023

Year Ended December 31, 2022

Gross

Intangible

Accumulated

Net Intangible

Intangible

Accumulated

Net Intangible

Assets

Amortization

Assets

Amortization

Assets

Core deposit intangibles

1,041

744

297

1,041

631

410

The estimated aggregate future amortization expense remaining as of September 30, 2023 is as follows (in thousands):


2023	$	38
2024		150
2025		109

At each reporting date between annual goodwill impairment tests, the Company considers potential indicators of impairment. At the conclusion of the assessment, the Company determined that as of September 30, 2023 it was more likely than not that the fair value exceeded its carrying values. The Company will continue to monitor the overall economic conditions and any other triggering events or circumstances that may indicate an impairment of goodwill in the future.

Note 10: Advances from the Federal Home Loan Bank

At September 30, 2023, advance from the Federal Home Loan Bank were $75 million. The Company did not have any advances from the Federal Home Loan Bank at December 31, 2022.

At September 30, 2023, required annual payments on Federal Home Loan Bank advances were for year ending December 31, 2026 $20 million (4.39% fixed rate), December 31, 2027 $35 million (4.24% fixed rate) and December 31, 2028 $20 million (4.11% fixed rate).

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United Bancorp, Inc.

Management’s Discussion and Analysis of Financial

Condition and Results of Operations

~~ITEM 2.~~

The following discusses the consolidated financial condition of the Company as of September 30, ~~2017,~~2023, as compared to December 31, ~~2016,~~2022, and the results of consolidated operations for the three and nine months ended September 30, ~~2017,~~2023, compared to the same period in ~~2016.~~2022. This discussion should be read in conjunction with the interim condensed consolidated financial statements and related footnotes included herein.

Introduction

~~The~~Our Company reported diluted earnings per share of ~~$0.55~~$0.42 and net income of ~~$2,766,000 for the nine months ended September 30, 2017, as compared to $0.53 and $2,679,000 for the same period in 2016. The Company’s diluted earnings per share and net income~~$2,392,000 for the three months ended September 30, ~~2017 was $0.20 and $1,000,000 as compared to $0.18 and $928,000 respectively for~~2023. For the ~~prior~~first nine months of the current year, ~~an increase of 11.1% in~~UBCP reported diluted earnings per ~~share.~~

share of $1.15 and net income of $6,560,000. Both of the reported quarterly and year-to-date numbers are increases over the levels achieved the previous year.

We are ~~happy~~pleased to report on the ~~increase~~earnings performance of United Bancorp, Inc. (UBCP) for the ~~net interest income~~third quarter ended September 30, 2023 and the first nine months of 2023. For the quarter, our Company ~~for~~achieved solid net income and diluted earnings per share results of $2,392,000 and $0.42, which were respective increases of $89,000, or 3.9%, and $0.02, or 5.0%, over the results achieved during the third quarter of last year. For the nine months ended September 30, ~~2017. During~~2023, our Company produced net income of $6,560,000 and diluted earnings per share of $1.15, increases over the results achieved for the same nine-month period the prior year of $209,000, or 3.3%, and $0.05, or 5.0%, respectively. As we have previously reported, UBCP has been able to capitalize on the historically extreme tightening of monetary policy undertaken by the Federal Open Market Committee of the Federal Reserve (FOMC) over the course of the past eighteen months, which has caused interest rates to rise rapidly during this ~~period,~~timeframe from a range of 25 to 50 basis points in March 2022 to a range of 5.25% to 5.50% as of September 2023. Although it has been somewhat challenging to produce improving results in such a fast-paced, increasing interest rate environment, our Company was properly positioned to take advantage of this dramatic increase in interest rates over the course of the past eighteen months and, accordingly, we experienced an improvement in the level of net interest income that we generated on both a quarterly and year-to-date basis as of September 30, 2023. For the most recently ended quarter, our Company’s net interest income increased by ~~$688,000,~~$197,000, or ~~6.2%~~3.1%, ~~from~~over the previous year. ~~The primary driver~~Year-to-date, for the first nine months of ~~this increase of~~ the current year our Company’s net interest income ~~was~~increased by $1,487,000 or 8.3%. Accordingly, as September 30, 2023, our net interest margin improved by 3 basis points to 3.63% over the ~~increase in~~previous year and, additionally, increased on a linked-quarter basis by 5 basis points.

We are grateful to see that our net interest income ~~on loans, which was up by $508,000, or 4.5%, year-over-year. The~~and net interest margin levels continue to increase in the current, dynamic economic environment in which we are operating. We have achieved this positive result by seeing our loan portfolio yield increase in the current rising rate environment, even though from a volume perspective, our gross loans are marginally lower on a year-over-year basis by $1,522,000 or 0.3%. More strongly contributing to the improvement in our net interest income level achieved and net interest margin improvement in the current year are our higher balance sheet totals for both our average Cash and due from the Federal Reserve Bank and average investment securities. Our overnight funds that ~~our Company realized is directly attributed to~~are parked in cash have benefited from the ~~focus~~inverted yield curve that we ~~had on enhancing our lending platform~~have experienced over the course of the past ~~year. For~~year, which has been driven by the aggressive tightening policy of the Federal Open Market Committee (FOMC). At September 30, 2023, these overnight, liquid funds totaled $71.0 million, an increase of $35.6 million over the previous year, and are presently yielding approximately 5.4% for our Company. Each time the FOMC increases the target for the federal funds rate, our Company ~~had an~~benefits by seeing the yield on these liquid funds increase ~~in its average loans of $14.2 million or 4.1%. Our company was able to achieve this~~by a like amount. The most impactful force upon our Company’s improving level of ~~growth~~net interest income is the increasing balance in our investment securities portfolio in this rising rate environment. As we have previously stated, we did not invest in securities for almost two years beginning in March of 2020 when rates dramatically decreased due to the Zero Interest Rate policy implemented by the FOMC due to the pandemic. Quite simply, we patiently waited for policy tightening by the FOMC to begin and rates to increase to more historically normalized levels. Accordingly, we started to, once again, invest in securities when rates began to rise to more appealing levels toward the end of the first quarter of last year and continued until March of this year when challenges arose for our industry and liquidity became more of a focus for us. On a year-over-year basis, average securities for our Company increased by $87.0 million to a level of $245.9 million. Although this has helped the returns for our Company, it has led to an accumulated other comprehensive loss net of taxes (AOCI) of $17.0 million at the most recent quarter end. Even with this adjustment, which does not impact regulatory capital, our Company saw its level of shareholder’s equity decrease by a marginal $556,000 on a year-over-year basis to a level of $52.6 million and equity to assets lower from 7.0% to 6.5% as of the most recent quarter end. With the overall quality of our investment portfolio, our well capitalized position, our solid liquidity position and our low level of uninsured deposits (which are 17.7% of total deposits as of the most recent quarter-end), we firmly believe that any issues, which could potentially create a risk to our capital and capital position, are very minimal.

Table of Contents

United Bancorp, Inc.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

Even with the continued heightened inflation levels and related increases in interest rates that may be impacting some of our borrowers with higher operating costs and rate resets to higher interest rate levels on their loans, ~~outstanding while maintaining its overall~~we have successfully maintained credit-related strength and stability ~~in credit quality. Year-over-year,~~within our loan portfolio as of the ~~Company continued to have very solid credit quality-related metrics supported by~~most recently ended quarter. As of September 30, 2023, our Company’s total nonaccrual loans and loans past due ~~30+~~30 plus days ~~decreasing from a level~~were $709,000, or 0.15% of ~~$2.75 million to $2.67 million, a decline of $80,000. Further— net~~gross loans, ~~charged off, excluding overdrafts, was $154,000 through September 30, 2017, which is~~ a decrease of ~~$48,000 from~~$3.7 million, or 84%, year-over-year. Nonaccrual assets to average assets (which includes other real estate or OREO) was 0.46%, a decrease of thirteen basis points over the previous ~~year. At this present level, total past due~~year, and ~~nonaccrual loans to gross loans is a very solid 0.70%, versus 0.80% the prior year. In addition,~~ net ~~charge offs~~charge-offs to average loans was 0.06% for the nine months ended September 30, 2017. The net interest income for our Company increased year-over-year even as we focused on growing retail core deposits to fund our loan growth. Total deposits increased by $52.7 million, or 16.1%, to a level of $380.9 milliontotaled 0.02% annualized as of September 30, ~~2017. The~~2023. Interestingly, our Company ~~was~~had net charge offs of $59,000 year-to-date, which included a net recovery of $22,000 in loans and a net charge off in overdrafts of $82,000. As of the most recently ended quarter and with the enhanced loan loss reserve build-up under CECL in the current year (and, our Company’s improved credit quality metrics), we were able to ~~control its~~have a negative provision for credit losses in the third quarter of $154,000, which added approximately $122,000 to net income and $0.02 to diluted earnings per share for the quarter. For the year though, our Company’s provision for credit losses increased by $670,000 over the previous year, which reduced our year-to-date net income and diluted earnings per share by respective amounts of $529,000 and $0.10 relative to the prior year. We are very happy that we were able to overcome the lower level of negative credit provisioning in the current year while maintaining a robust total allowance for credit losses to total loans of 0.88% and having total allowance for credit losses to nonperforming loans of 1,899%. Overall, we firmly believe that we are presently well reserved with very strong coverage.

Considering the exceedingly dynamic monetary policy environment in which we have operated for the past eighteen months and the more recent issues which have impacted our industry since mid-March, we are very happy to report on the very strong earnings performance that United Bancorp, Inc. (UBCP) achieved in the first nine months of 2023. Relating to the excessive tightening of our country’s monetary policy over the course of the past year and a half, we are extremely pleased that we have been able to grow the level of interest income that our Company generated while controlling overall interest expense ~~levels by attracting lower-cost funding alternatives. Overall,~~levels; thereby, expanding the ~~Company saw low-cost retail funding (consisting~~level of ~~non-interest~~net interest income that we realized and our net interest ~~bearing demand and savings deposits) comprise $41.2 million~~margin. This is somewhat of ~~its growth in retail deposits year-over-year. In addition,~~a counter-trend to what occurred within our industry over this timeframe. With the Company’s time deposits, which consist of certificate of deposit or term funding, increased by $11.6 million for the same period. Even with the above-peer growth in retail core deposit funding, the Company had a decrease in its overall interest expense to average assets, which decreased on a year-over-year basis from 0.43% to 0.40%. This decreaseaforementioned developments that occurred within our industry late in the first quarter of this year, we transitioned into a more conservative operating position that greatly increased our overall ~~cost~~liquidity and locked in a fair portion of our funding ~~is directly attributed to the repricing of $15.0~~as a hedge against further interest rate increases by taking a $75.0 million ~~of the Company’s fixed rate advances~~advance from the Federal Home Loan Bank (FHLB). ~~The Company forecasts additional reductions in~~Initially, this significant advance had somewhat of a dilutive impact on our returns and margins (such as our return on assets and our net interest margin); but, it was immediately accretive to our bottom-line earnings. Since rates have continued to rise since the cost of its present wholesale funding, which consists of an additional $5.0 million fixed rate advance with the FHLB, in the fourth quarter. By year-end, this FHLB advance (which presently costs the Company 3.08%) will be paid off with the current liquidity the company has on its balance sheet. By paying off this fixed rate advance with lower cost retail-based funding, the Company should realize additional savings or containment in its overall interest expense levels.

~~United Bancorp, Inc.~~

~~Management’s Discussion and Analysis of Financial~~

~~Condition and Results of Operations~~

~~Noninterest income of the Company was down by $232,000 year-over-year. The majority~~origination of this ~~decrease~~now competitively priced advance (to which we locked in ~~noninterest income is related to~~on a $162,000 non-recurring gain that the Company realized on the sale of Bankers Bancshares, Inc. stock during 2016. On the noninterest expense-side of the net noninterest margin (and, as budgeted), the Company saw an increase in its overall noninterest expense levels after several years of decline. The Company saw its noninterest expense increase by $429,000 or 4.4%. Most of the increase in our noninterest expense was related to personnel-related expenses on the production-side and expenses related to our expansion into the Wheeling, West Virginia market with our new Loan Production Office, which should lead to our Company realizing higher levels of revenue as we have begun to see in the most recently completed quarter. Considering that most of this expense is “fixed,” we firmly believe that we should be able to drive higher levels of revenue without significantly adding to our overall noninterest expense levels in the short-term; therefore, enhancing our Company’s earnings and returns.

~~We are pleased to report that we are executing upon our growth strategy, Mission 2020, which calls for our Company to grow its assets (in~~blended basis at a profitable fashion) to a level of $1.0 billion or greater by the end of 2020. Even though we realize that we have an extremely long way to go in order to achieve our ambitious growth goal, it is gratifying to see the organic growth that we achieved year-over-year. Although we will need to have a compounded annual growth rate of approximately ~~twenty-three percent from the beginning~~4.24% for an approximate term of this year to achieve the level of growth envisioned under Mission 2020, we firmly believe that it is achievable with the present vision that we have (which includes both organic and acquisition-related growth). From an organic perspective this past year, our Company grew its assets $29.0 million, or 6.8%four years), to an overall level of $455.0 million as of September 30, 2017. As previously mentioned, most of this growth in assets occurred in our Company’s higher-yielding loan portfolio, which enhanced the overall interest income that we realized. As previously mentioned, the overall net interest income realized by our Company increased year-over-year. Our Company was able to achieve this increase in net interest income by growing both its loans outstanding and core deposit funding. As expected, we saw marginal growth in the net income that our Company produced in the first two quarters of this year and we are extremely pleased to see that our earnings growth level is back to double digits on a percentage basis in the third quarter. After several years of containment, our Company saw its overall noninterest expense levels increase this past year as we continue to build for the future and support our overall mission for growth. Most of the increase in our noninterest expense levels occurred in the following areas: hiring additional loan origination personnel to drive the revenue of our Company; completing the renovation of our Main Office to support an enhanced loan origination platform; reorganizing and enhancing our Information Technology function to better manage risk and serve our valued customers; opening a new Loan Production Office in the Wheeling, West Virginia market to increase overall loan production and to introduce our Company to a new, highly desirable market; marketing expense relating to the prime retail deposit pricing that we have been ~~successfully promoting; and, lastly, legal and other expenses related~~able to ~~the renaming of~~more selectively manage our Company’s single bank charter. Regarding the renaming of our single bank charter and as previously announced in the third quarter, The Citizens Savings Bank and its two divisions— The Citizens Bank and The Community Bank— were renamed to Unified Bank, which became effective on October 10, 2017. Renaming our bank-level charter, Unified Bank, will allowdepository portfolio; thus, helping us to ~~establish a more effective brand~~control our interest expense, while maintaining very adequate liquidity levels and ~~better support~~generating increasing returns on this strategic posture. Overall, our ~~envisioned growth objective.~~capital levels remain very strong and our Company is classified as being well-capitalized based on industry standards. We firmly believe with our ~~positioning~~strong liquidity, our relatively stable core deposits base with minimal levels of uninsured deposits and our solid earnings, our risk to capital is very low, and, fundamentally, our Company’s financial position and future prospects are very solid.

Our primary focus is protecting the investment of our shareholders in our Company and rewarding them in a balanced fashion by growing their value and paying an attractive cash dividend. In the third quarter, we paid a regular cash dividend of $0.1675, which was an increase of $0.01, or 6.3%, over that paid in the third quarter of the previous year. On a year-to-date basis, our total cash dividend payout was $0.6450, which included a special cash dividend of $0.15 paid in the first quarter. This is a 4.9% increase over the total cash dividend paid during the first nine months of the previous year and produces a near-industry leading total dividend yield of 7.10%. This total dividend yield is based on our third quarter cash dividend on a forward basis, plus the special dividend paid in the first quarter (which combined total $0.82) and our quarter-end fair market value of $11.55. Even though our fair market value decreased during the most recent quarter (as did the fair market value of many financial institution stocks), our Company still had a market price to tangible book value of 132%, which compares favorably to industry standards as of quarter-end.

Considering that we continue to operate in a challenging economic and concerning industry-related environment, we are very pleased with our overall present performance and future prospects. Even with the present threats with which our overall industry is exposed, we are very optimistic about the future growth and earnings prospects for United Bancorp, Inc. (UBCP). We firmly believe that with the challenges that our industry has experienced over the course of the past ~~year,~~few years, our Company has ~~high operating leverage which should allow us~~evolved into a more fundamentally sound organization with a focus of growing to ~~enhance our revenue,~~achieve greater efficiencies and scales, while controlling overall costs. We have invested in areas that will lead to our ~~noninterest expense levels— thus, leading to~~continued and future relevancy within our industry along with anticipated higher ~~earnings~~revenue generation while implementing cost control initiatives, where needed, by consolidating delivery channels in markets in which we had low banking center performance and ~~returns over the course of the next twelve to eighteen months.~~considerable overlap. We ~~continue to have very solid credit quality metrics, which should~~still have a ~~positive impact on our earnings for the foreseeable future. In addition, we continue~~vision of growing UBCP to ~~have very robust capital levels, as evidenced by our overall equity to~~an asset ~~ratio~~threshold of ~~9.71%, which will support our vision for growth~~$1.0 billion or greater in the ~~intermediate term. Our Company continues to pay~~near term in a very solid cash dividend, which totals $0.50 on a trailing twelve month (TTM) basis (including the $0.05 special dividend paid this past December), which produces at TTM Yield of 4.2% as of quarter-end. At this level, our Company’s cash dividend yield is significantly higher than that of the average bank in our country. With our recent focus of increasing the operating leverageprudent and ~~revenue of~~profitable fashion. Excitingly, our Company ~~we firmly believe~~announced in the third quarter that we ~~will continue to generate higher levels~~have

Table of net income and reward our shareholders by paying higher dividends and having further appreciation in our market value. Our number one focus continues to be growing our shareholders’ investment in our Company through profitable operations and strategic growth. In addition to driving the market value appreciation of our shareholders’ ownership, we will continue striving to reward our owners by paying a solid cash dividend. Overall, we are pleased with the performance of our Company and the direction that we are going. We are extremely optimistic about our future potential and look forward to realizing this upside potential in future periods!Contents

United Bancorp, Inc.

Management’s Discussion and Analysis of Financial

Condition and Results of Operations

plans to open a new regional banking center in the very appealing market of Wheeling, West Virginia. This is a market in which we already have a solid customer base, which we firmly believe we can more fully leverage to help us achieve our growth goals in a profitable fashion. We are truly excited about our Company’s direction and the potential that it brings. In addition, we will continue to build upon our solid foundation and maintain a longer-term vision. With a keen focus on continual process improvement, product development and delivery, we firmly believe the future for our Company is very bright.

Forward-Looking Statements

When used in this document, the words or phrases “will likely result,” “are expected to,” “will continue,” “is anticipated,” “estimated,” “projected” or similar expressions are intended to identify “forward looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are subject to certain risks and uncertainties including changes in economic conditions in the Bank’s market areas, changes in policies by regulatory agencies, fluctuations in interest rates, demand for loans in the Bank’s market areas and competition, that could affect the Company’s financial performance and cause actual results to differ materially from historical earnings and those presently anticipated or ~~projected. Factors listed above~~projected with respect to future periods. These risks and uncertainties should be considered in evaluating forward looking statements, and undue reliance should not be placed on such statements. Additional information concerning the Company and its business, including other factors that could materially affect the Company’s financial ~~performance and could cause~~results, is included in the Company’s ~~actual results for future periods to differ materially from any statements expressed~~filings with ~~respect to future periods.~~

the Securities and Exchange Commission.

The Company is not aware of any trends, events or uncertainties that will have or are reasonably likely to have a material effect on its financial condition, results of operations, liquidity or capital resources except as discussed herein. The Company is not aware of any current recommendation by regulatory authorities that would have such effect if implemented except as discussed herein.

The Company does not undertake, and specifically disclaims any obligation, to publicly revise any forward-looking statements to reflect events or circumstances after the date such statements were made or to reflect the occurrence of anticipated or unanticipated events.

Critical Accounting Policies

The Company’s consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America. Management makes certain judgments that affect the amounts reported in the financial statements and footnotes. These estimates, assumptions and judgments are based on information available as of the date of the financial statements, and as this information changes, the financial statements could reflect different estimates, assumptions, and judgments.

See Note 1, “Summary of Significant Accounting Policies” for additional information on the adoption of ASC 326, which changes the methodology under which management calculates its reserve for loans, investment securities, and off balance sheet exposures, now referred to as the allowance for credit losses. Management considers the measurement of the allowance for credit losses on loans to be a critical accounting policy. The procedures for assessing the adequacy of the allowance for ~~loan~~credit losses reflect our ~~evaluation~~evaluations of credit risk after careful consideration of all information available to management. In developing this assessment, management must rely on estimates and exercise ~~judgment~~judgement regarding matters where the ultimate outcome is unknown such as economic factors, ~~developments~~development affecting companies in specific industries and issues with respect to single borrowers. Depending on changes in circumstances, future assessments of credit risk may yield materially different results, which may require an increase or a decrease in the allowance for credit loan losses.

~~The allowance is regularly reviewed by management~~This discussion of the Company’s critical accounting policies should be read in conjunction with the Company’s consolidated financial statements and the board to determine whether the amount is considered adequate to absorb probable losses. This evaluation includes specific loss estimates on certain individually reviewed loans, statistical loss estimates for loan pools that are based on historical loss experience, and general loss estimates that are based on the size, quality and concentration characteristicsaccompanying notes presented elsewhere herein, as well as other relevant portions of the various loan portfolios, adverse situations that may affect a borrower’s ability to repay and current economic and industry conditions. Also considered as part of that judgment is a review of the Bank’s trend in delinquencies and loan losses, and economic factors.

The allowance for loan losses is maintained at a level believed adequate by management to absorb probable loan losses inherent in the loan portfolio. Management’s evaluation of the adequacy of the allowance is an estimate based on management’s current judgment about the credit quality of the loan portfolio. While the Company strives to reflect all known risk factors in its evaluation, judgment errors may occur.

~~United Bancorp, Inc.~~

Management’s Discussion and Analysis of Financial

Condition and Results of ~~Operations~~Operations.

Analysis of Financial Condition

Earning Assets – Loans

~~Our~~The Company’s focus as a community bank is to meet the credit needs of the markets ~~we serve.~~it serves. At September 30, ~~2017,~~2023, gross loans were ~~$360.4~~$466.8 million, compared to ~~$356.6~~$460.9 million at December 31, ~~2016,~~2022, an increase of ~~$3.8~~$5.9 million after offsetting repayments for the period. The overall increase in the loan portfolio was comprised of a ~~$4.8~~$6.4 million increase in commercial and commercial real estate loans and a ~~$347,000 increase~~$1.3 million decrease in residential ~~loans~~real estate lending and a ~~$1.5 million decrease~~$796,000 increase in installment loans since December 31, ~~2016.~~2022.

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United Bancorp, Inc.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

Commercial and commercial real estate loans comprised ~~75.2%~~78.7% of total loans at September 30, ~~2017,~~2023, compared to ~~74.6%~~78.3% at December 31, ~~2016.~~2022. Commercial and commercial real estate loans have increased ~~$4.8~~$6.4 million, or ~~2.0%~~1.8% since December 31, ~~2016.~~2022. This segment of the loan portfolio includes originated loans in ~~our~~its market areas and purchased participations in loans from other banks for out-of-area commercial and commercial real estate loans to benefit from consistent economic growth outside the Company’s primary market area, but mainly within the state of Ohio and West Virginia. During the third quarter of 2016, the Company opened up a Loan Production office in Wheeling, West Virginia. It is anticipated this market will provide the Company with continued strong loan growth opportunities.area.

~~Residential real estate~~Installment loans ~~were 21.2%~~represented 1.5% of total loans at September 30, ~~2017~~2023 and ~~21.4%~~1.3% at December 31, 2016, representing an increase of $347,000 since December 31, 2016. As of September 30, 2017, the Bank has approximately $5.4 million in fixed-rate loans that have been sold in the secondary market but still serviced by the Company as compared to $6.3 million at December 31, 2016. The level of fixed rate mortgages serviced by the Company will continue to decline as the Company will not retain servicing rights on new sales going forward for these types of products. The Company will continue to service these loans for a fee that is typically 25 basis points. At September 30, 2017, the Company did not hold any loans for sale.

~~Installment loans represented 3.6% of total loans at September 30, 2017 and 4.0% at December 31, 2016.~~2022. Some of the installment loans carry somewhat more risk than real estate lending; however, it also provides for higher yields. Installment loans have ~~decreased $1.5 million,~~increased $796,000, or ~~10.4%~~13.3%, since December 31, ~~2016.~~2022. The targeted lending areas encompass four separate metropolitan areas, minimizing the risk to changes in economic conditions in the communities housing the Company’s banking locations.

Residential real estate loans were 19.9% of total loans at September 30, 2023 and 20.4% at December 31, 2022, representing a decrease of $1.3 million or 1.3% since December 31, 2022. At September 30, 2023, the Company did not hold any loans for sale.

The ~~strategic direction~~Company adopted ASU No. 2016-13 effective January 1, 2023. The impact of the ~~Company is not to grow installment based loans~~adoption was and $2.4 million in the allowance for credit losses. The allowance for credit losses totaled $4.5 million at ~~this time.~~

September 30, 2023, which represented 0.88% of total loans. The allowance for loan losses ~~totaled $2.2 million at September 30, 2017, which represented 0.61% of total loans, and $2.3 million at~~prior to adopting ASU 2016-13 December 31, ~~2016,~~2021, or ~~0.66%~~was $2.1 million or 0.45% of total loans. The allowance represents the amount which management and the Board of Directors estimates is adequate to provide for probable losses inherent in the loan portfolio. The allowance balance and the provision charged to expense are reviewed by management and the Board of Directors monthly using a risk evaluation model that considers borrowers’ past due experience, economic conditions and various other circumstances that are subject to change over time. Management believes the current balance of the allowance for ~~loan~~credit losses is adequate to absorb probable incurred credit losses associated with the loan portfolio. Net loan (recoveries) charge-offs (exclusive of overdrafts net charge-offs of $82,000) for the nine months ended September 30, ~~2017~~2023 were approximately ~~$221,000, compared to $290,000 during~~($22,000) . Net loans charged off (exclusive of overdrafts net charge-offs $85,000) was ($1,000) for the ~~same period in 2016.~~nine months ended September 30, 2022.

~~United Bancorp, Inc.~~

~~Management’s Discussion and Analysis of Financial~~

~~Condition and Results of Operations~~

Earning Assets – Securities

The securities portfolio is comprised of U.S. Government agency-backed securities, tax-exempt obligations of state and political subdivisions and certain other investments. Securities available for sale at September 30, ~~2017 decreased~~2023 increased approximately ~~$637,000~~$7.1 million from December 31, ~~2016~~2022 totals. ~~The Company has invested in shorter duration securities to reinvest liquid funds.~~

Sources of Funds – Deposits

The Company’s primary source of funds is core deposits from retail and business customers. These core deposits include all categories of interest-bearing and noninterest-bearing deposits, ~~excluding~~and certificates of ~~deposit greater than $100,000.~~deposits. For the period ended September 30, ~~2017,~~2023, total ~~core~~ deposits ~~increased~~decreased approximately ~~$38.2~~$30.0 million, or ~~11.3%. The Company’s savings accounts decreased $55,000 or less than 1.0%~~3.4% from December 31, ~~2016~~2022 totals. The Company’s interest-bearing and non-interest bearing demand deposits increased $29.9 million or 14.7% while certificates of deposit under $100,000 increased by $8.4 million, or 16.2%. The Company considers core deposit to be stable; therefore, the amount of funds anticipated to flow out in the next three to six months is not considered materialIn addition to the ~~overall liquidity position~~decrease in deposits for the nine months ended September 30, 2023, the Company has also experienced a shift of deposits from interest bearing and savings to certificate of deposits during the ~~Company.~~

nine months ended September 30, 2023.

The Company has a strong deposit base from public agencies, including local school districts, city and township municipalities, public works facilities and others that may tend to be more seasonal in nature resulting from the receipt and disbursement of state and federal grants. These entities have maintained fairly static balances with the Company due to various funding and disbursement timeframes.

Certificates of deposit greater than $100,000 are not considered part of core deposits and as such are used to balance rate sensitivity as a tool of funds management. At September 30, 2017, certificates of deposit greater than $100,000 increased $3.8 million from December 31, 2016 totals.

Sources of Funds – Securities Sold under Agreements to Repurchase and Other Borrowings

Other interest-bearing liabilities include securities sold under agreements to repurchase and Federal Home Loan Bank (“FHLB”) advances. The majority of the Company’s repurchase agreements are with local school districts and city and county governments. The Company’s ~~short-term borrowings~~repurchase agreements increased approximately ~~$6.8~~$10.5 million from December 31, ~~2016~~2022 totals. At September 30, ~~2017, FHLB advances totaled $5.3 million compared to $39.9 million at December 31, 2016. During 2017,~~2023, the Company ~~paid off FHLB overnight borrowings of $19.5 million and $15.0~~has $75 million of fixed rate advances that ~~matured with~~mature over the ~~excess deposits growth during the same period. The Company’s last fixed rate advance~~next 3 to 5 years. Refer to footnote 10 for further information.

Table of ~~$5.0 million matures in the fourth quarter~~Contents

United Bancorp, Inc.

Management’s Discussion and ~~it is anticipated the Company will use its excess liquidity at the Federal Reserve Bank to pay off this advance.~~Analysis of Financial Condition and Results of Operations

Results of Operations for the Nine Months Ended September 30, ~~2017~~2023 and ~~2016~~

2022

Net Income

For the nine months ended September 30, ~~2017~~2023 the Company reported net earnings of ~~$2,766,000,~~$6,560,000, compared to ~~$2,679,000~~$6,351,000 for the nine months ended September 30, ~~2016.~~2022. On a per share basis, the Company’s diluted earnings were ~~$0.55~~$1.15 for the nine months ended September 30, ~~2017, as compared to $0.53~~2023 and $1.10 for the nine months ended September 30, ~~2016.~~2022, an increase of 4.5%.

~~United Bancorp, Inc.~~

~~Management’s Discussion and Analysis of Financial~~

~~Condition and Results of Operations~~

Net Interest Income

Net interest income, by definition, is the difference between interest income generated on interest-earning assets and the interest expense incurred on interest-bearing liabilities. Various factors contribute to changes in net interest income, including volumes, interest rates and the composition or mix of interest-earning assets in relation to interest-bearing liabilities. Net interest income before the provision for credit losses increased ~~6.2%~~8.3%, or ~~$688,000~~$1.5 million for the nine months ended September 30, ~~2017~~2023 compared to the same period in ~~2016.~~2022. The ~~earnings improvement~~increase is mainly attributable to an increase in available-for-sale securities and the repricing of ~~our Company~~loans in an updward rate environment.

Provision for (Reversal of ) Credit Loss Expense - Loans

Net loans recovered for the nine months ended September 30, ~~2017 is reflective~~2023, excluding overdrafts, was $22,000. Giving strong consideration to our overall solid credit related metrics our Company had a reversal of ~~the growth in loan related earning assets~~

~~Provision for Loan Losses~~

~~Non-accrual loans were decreased $102,000 to a level~~credit loss expense of $1.3 million as of September 30, 2017. With the decrease in the level of non accrual loans and loans past due 30 plus days, the level of risk in loss exposure has decreased since December 31, 2016. Net loans charged off were $221,000 or 0.06% of average loans. The Company decreased the provision for loan losses which was $307,000 for$300,000 during the nine months ended September 30, ~~2016 compared~~2023. The overall improvement in the economy post COVID also contributed to ~~$75,000 for~~ the ~~nine months ended September 30, 2017, a decrease~~reversal of ~~$232,000.~~credit loss expense.

Noninterest Income

Total noninterest income is made up of bank related fees and service charges, as well as other income producing services provided, sales of loans in the secondary market, ATM income, early redemption penalties for certificates of deposit, safe deposit rental income, internet bank service fees, earnings on bank-owned life insurance and other miscellaneous items.

~~The Company’s service charges on deposit accounts decreased by $106,000~~Noninterest income for the nine months ended September 30, ~~2017~~2023 as compared to the same period in ~~2016.~~2022 increased $7,000 or less than 1.0%.

Noninterest Expense

~~Noninterest~~The Company saw its noninterest expense ~~increased on a year-over-year basis~~increase by ~~$429,000~~$922,000 or ~~4.4%. Salaries and employee benefit expense increased $206,000, or 4.0%, for the nine month period ended September 30, 2017, compared~~6.2% year-over-year. A general increase due to ~~the same period in 2016. Part~~inflation contributed to most of ~~this increase in salaries and employee benefit expense is attributed to~~ the increase in lending personnel that have driven the solid growth in loan production. Net occupancy and equipment expense increased $174,000 or 12.5%, for the nine month period ended September 30, 2017, compared to the same period in 2016. As previously discussed, the Company opened up a Loan Production Office in Wheeling West Virginia during 2016.noninterest expense.

Federal Income Taxes

The provision for federal income taxes was ~~$1,320,000~~$339,000 for the nine months ended September 30, ~~2017, an increase~~2023, a decrease of ~~$172,000~~$307,000 compared to the same period in ~~2016.~~2022. The effective tax rate was ~~32.3%~~4.9% and ~~30.0%~~9.2% for the nine months ended September 30, ~~2017~~2023 and ~~2016,~~2022, respectively.

~~United Bancorp, Inc.~~

~~Management’s Discussion and Analysis of Financial~~

~~Condition and Results of Operations~~

Results of Operations for the Three Months Ended September 30, ~~2017~~2023 and ~~2016~~

2022

Net Income

For the three months ended September 30, ~~2017~~2023 the Company reported net earnings of ~~$1,000,000,~~$2,392,000, compared to ~~$928,000~~$2,303,000 for the three months ended September 30, ~~2016.~~2022. On a per share basis, the Company’s diluted earnings were ~~$0.20~~$0.42 for the three months ended September 30, ~~2017, as compared to $0.18~~2023 and $0.40 for 2022.

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United Bancorp, Inc.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

Net Interest Income

Net interest income increased 3.1%, or $197,000, for the three months ended September 30, ~~2016.~~

~~Net Interest Income~~

~~Net interest~~2023 compared to the same period in 2022. This increase was mainly driven by income ~~increased 10.8%, or $403,000~~on loans and fed funds sold and investment securities, for the three months ended September 30, ~~2017 compared to~~2023 over the same period in ~~2016. The~~2022.

Provision for (Reversal of ) Credit Loss Expense - Loans

Giving strong consideration to our overall solid credit related metrics and the forecast for unemployment improving, our Company had a reversal of credit loss expense of $154,000 during the three months ended September 30, 2023. During the three months ended September 30, 2022, the Company recorded a credit loss expense of $15,000.

Noninterest Income

Total noninterest income is made up of bank related fees and service charges, as well as other income producing services provided, sales of loans in the secondary market, ATM income, early redemption penalties for certificates of deposit, safe deposit rental income, internet bank service fees, earnings ~~improvement of our Company~~on bank-owned life insurance and other miscellaneous items.

Noninterest income for the three months ended September 30, ~~2017 is reflective~~2023 as compared to the same period in 2022 decreased $80,000 or 7.7%. The main component of the ~~growth~~change is a decrease in ~~loan related earning assets.~~

~~Provision for Loan Losses~~

~~The provision for loan losses was $25,000~~service charges on deposit accounts for the three months ended September 30, ~~2017, compared to $131,000 for the same period in 2016.~~2023.

Noninterest ~~Income~~

Expense

The ~~Company’s service charges on deposit accounts decreased~~Company saw its noninterest expense increase by ~~$34,000 for the three months ended September 30, 2017 as compared to the same period in 2016.~~$354,000 or 7.3% year-over-year.

~~Noninterest Expense~~

~~Noninterest expense increased on a quarter-over-quarter basis by $111,000 or 3.3%.~~

Federal Income Taxes

The provision for federal income taxes was ~~$548,000~~$58,000 for the three months ended September 30, ~~2017, an increase~~2023, a decrease of ~~$162,000~~$157,000 compared to the same period in ~~2016. The effective tax rate was 35.4% and 29.4% for the three months ended September 30, 2017 and 2016, respectively.~~2022.

~~United Bancorp, Inc.~~

~~Management’s Discussion and Analysis of Financial~~

~~Condition and Results of Operations~~

Capital Resources

Internal capital growth, through the retention of earnings, is the primary means of maintaining capital adequacy for the Company. Stockholders’ equity totaled ~~$44.1~~$52.6 million at September 30, ~~2017~~2023, compared to ~~$42.6~~$59.7 million at December 31, ~~2016,~~2022, a ~~$1.5~~$7.1 million ~~increase.~~ decrease. The Company adopted this guidance, and subsequent related updates, using the modified retrospective approach for all financial assets measured at amortized cost, including loans and available-for-sale debt securities and unfunded commitments. On January 1, 2023, the Company adopted ASU 2016-12 and recorded a cumulative effect decrease to retained earnings of $2,088,000, net of tax, of which $1,911,000 related to loans, $177,000 related to unfunded commitments.

Total ~~average~~ stockholders’ equity in relation to total ~~average~~ assets was ~~9.71%~~6.46% at September 30, ~~2017~~2023 and ~~9.74%~~7.89% at December 31, ~~2016. Our shareholders approved an amendment to the~~2022. The Company’s Articles of Incorporation ~~to create~~allows for a class of preferred shares with 2,000,000 authorized shares. This enables the Company, at the option of the Board of Directors, to issue series of preferred shares in a manner calculated to take advantage of financing techniques which may provide a lower effective cost of capital to the Company. The amendment also provides greater flexibility to the Board of Directors in structuring the terms of equity securities that may be issued by the Company. Although this preferred stock is a financial tool, it has not been utilized to date.

The Company has offered for many years a Dividend Reinvestment Plan (“The Plan”) for shareholders under which the Company’s common stock will be purchased by the Plan for participants with automatically reinvested dividends. The Plan does not represent a change in the Company’s dividend policy or a guarantee of future dividends.

The Company is subject to the regulatory requirements of The Federal Reserve System as a bank holding company. The Bank is subject to regulations of the FDIC and the State of Ohio, Division of Financial Institutions. The most important of these various regulations address capital adequacy.

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United Bancorp, Inc.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

On January 1, 2015, the final rules of the Federal Reserve Board went into effect implementing in the United States the Basel III regulatory capital reforms from the Basel Committee on Banking Supervision and certain changes required by the Dodd-Frank Wall Street Reform and Consumer Protection Act.

Under the final rule, minimum requirements increased for both the quality and quantity of capital held by banking organizations. The rule requires a new minimum ratio of common equity tier 1 capital to risk-weighted assets of 4.5 percent and a common equity tier 1 capital conservation buffer of 2.5 percent of risk-weighted assets that will apply to all supervised financial institutions. The rule also raises the minimum ratio of tier 1 capital to risk-weighted assets from 4 percent to 6 percent and includes a minimum leverage ratio of 4 percent for all banking organizations.

~~As of September 30, 2017, the Company~~The Bank continues to be well-capitalized in accordance with Federal regulatory capital requirements as the capital ratios below show:


Common equity tier 1 capital ratio	14.18	~~11.96~~	%
Tier 1 capital ratio	14.18	~~13.07~~	%
Total capital ratio	14.93	~~13.67~~	%
Leverage ratio	9.47	~~10.65~~	%

~~United Bancorp, Inc.~~

~~Management’s Discussion and Analysis of Financial~~

~~Condition and Results of Operations~~

Liquidity

Management’s objective in managing liquidity is maintaining the ability to continue meeting the cash flow needs of its customers, such as borrowings or deposit withdrawals, as well as its own financial commitments. The principal sources of liquidity are net income, loan payments, maturing securities and sales of securities available for sale, federal funds sold and cash and deposits with banks. Along with its liquid assets, the Company has additional sources of liquidity available to ensure that adequate funds are available as needed. These include, but are not limited to, the purchase of federal funds, the ability to borrow funds under line of credit agreements with correspondent banks, a borrowing agreement with the Federal Home Loan Bank of Cincinnati and the adjustment of interest rates to obtain depositors. Management feels that it has the capital adequacy and profitability to meet the current and projected liquidity needs of its customers.

Inflation

Substantially all of the Company’s assets and liabilities relate to banking activities and are monetary in nature. The consolidated financial statements and related financial data are presented in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). U.S. GAAP currently requires the Company to measure the financial position and results of operations in terms of historical dollars, with the exception of securities available for sale, certain ~~impaired~~collateral dependent loans and certain other real estate and loans that may be measured at fair value. Changes in the value of money due to rising inflation can cause purchasing power loss.

Management’s opinion is that movements in interest rates affect the financial condition and results of operations to a greater degree than changes in the rate of inflation. It should be noted that interest rates and inflation do affect each other, but do not always move in correlation with each other. The Company’s ability to match the interest sensitivity of its financial assets to the interest sensitivity of its liabilities in its asset/liability management may tend to minimize the effect of changes in interest rates on the Company’s performance.

Table of Contents

United Bancorp, Inc.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

ITEM 3 Quantitative and Qualitative Disclosures About Market Risk
Smaller Reporting Companies are not required to provide this disclosures.

~~ITEM 3~~ ~~Quantitative and Qualitative Disclosures About Market Risk~~
~~There has been no significant change from disclosures included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016.~~
46
~~United Bancorp, Inc.~~
~~Management’s Discussion and Analysis of Financial~~
~~Condition and Results of Operations~~
~~ITEM 4.~~
ITEM 4.Controls and Procedures
The Company, under the supervision, and with the participation, of its management, including the ~~Company's~~Company’s Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the design and operation of the ~~Company's~~Company’s disclosure controls and procedures pursuant to the requirements of Exchange Act Rule 13a-15. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the ~~Company's~~Company’s disclosure controls and procedures were effective as of September 30, ~~2016,~~2023, in timely alerting them to material information relating to the Company (including its consolidated subsidiary) required to be included in the ~~Company's~~Company’s periodic SEC filings.
There was no ~~change~~changes in the ~~Company's~~Company’s internal ~~control~~controls over financial reporting that occurred during the ~~Company's~~Company’s fiscal quarter ended September 30, ~~2017~~2023 that has materially affected, or is reasonably likely to materially affect the ~~Company's~~Compay’s internal ~~control~~controls over financial reporting.

47

37

Table of Contents

United Bancorp, Inc.
Part II – Other Information
~~ITEM 1.~~
ITEM 1.      Legal Proceedings
None, other than ordinary routine litigation incidental to the Company’s business.

ITEM 1A.     Risk Factors
Smaller reporting companies are not required to provide this information.

~~ITEM 1A.~~ ~~Risk Factors~~
~~There have been no material changes from risk factors as previously disclosed in Part 1 Item 1A of the Company’s Form 10-K for the year ended December 31, 2016.~~
~~ITEM 2.~~
ITEM 2.       Unregistered Sales of Equity Securities and Use of Proceeds
ISSUER PURCHASES OF EQUITY SECURITIES

~~Period~~

~~(a)~~

(c)
(d)

Total Number of

Maximum Number or

Shares (or Units)
~~Purchased~~

Approximate Dollar

(a)

Purchased as Part

Value) of Shares (or

Total Number of

(b)

Of Publicly

Units) that May Yet

Shares (or Units)

Average Price Paid

Announced Plans

Be Purchased Under
Period

Purchased

Per Share (or Unit)
~~(c)~~
~~Total Number of~~
~~Shares (or Units)~~
~~Purchased as Part~~
~~Of Publicly~~
~~Announced Plans~~
Or Programs
~~(d)~~
~~Maximum Number or~~
~~Approximate Dollar~~
~~Value) of Shares (or~~
~~Units) that May Yet Be~~
~~Purchased Under~~
the
Plans or Programs
Month #1 7/1/2023 to 7/32/2023
––

––
––
––
7/
Month #2 8/1/~~2017~~2023 to 8/31/2023
—
—

—
—
––
— —
––
~~7/31/2017~~
~~Month #2~~
~~8/1/2017 to~~ — — — —
~~8/31/2017~~
Month #3 9/1/2023 to 9/30/2023
––

––
––
~~9/1/2017 to~~ — — — —
~~9/30/2017~~
––

The Company adopted the United Bancorp, Inc. Affiliate Banks Directors and Officers Deferred Compensation Plan (the “Plan”), which is an unfunded deferred compensation plan. Amounts deferred pursuant to the Plan remain unrestricted assets of the Company, and the right to participate in the Plan is limited to members of the Board of Directors and Company officers. Under the Plan, directors or other eligible participants may defer fees and up to 50% of their annual incentive award payable to them by the Company, which are used to acquire common shares which are credited to a participant’s respective account. Except in the event of certain emergencies, no distributions are to be made from any account as long as the participant continues to be an employee or member of the Board of Directors. Upon termination of service, the aggregate number of shares credited to ~~the~~a participant’s account ~~are~~is distributed ~~to him or her along~~ with any cash proceeds credited to the account which have not yet been invested in the Company’s stock. ~~On May 11, 2017, the Plan purchased a total of 3,626 common shares for participant accounts.~~ All purchases under this deferred compensation plan are funded with either earned director fees or officer incentive award payments.
No underwriting fees, discounts, or commissions are paid in connection with the Plan. The shares allocated to participant accounts have not been registered under the Securities Act of 1933 in reliance upon the exemption provided by Section 4(2) thereof.

~~ITEM 3.~~
ITEM 3.       Defaults Upon Senior Securities
Not applicable.

48
~~United Bancorp, Inc.~~
~~Part II – Other Information~~
~~ITEM 4.~~
ITEM 4.       Mine Safety Disclosures
Not applicable.

ITEM 5.Other Indormation
Not applicable

Table of Contents

United Bancorp, Inc.
Part II – Other Information
ITEM 6. Exhibits
~~ITEM 5.~~
~~Exhibits~~

EX-3.1

~~EX-3.1~~

Amended Articles of Incorporation of United Bancorp, Inc.⁽¹⁾

	~~EX-3.2~~
EX-3.2		Amended and Restated Code of Regulations of United Bancorp, Inc.⁽²⁾

	~~EX-4.0~~	~~Instruments Defining the Rights~~
EX-4.1		Description of ~~Security Holders~~ ~~(See Exhibits3.1~~Registrant’s Common Stock ⁽³⁾ ~~and3.2~~)


EX 4.2		Forms of 6.00% Fixed to Floating Rate Subordinated Note due May 15, 2029 ⁽⁴⁾

EX 31.1		Rule 13a-14(a) Certification – CEO


EX 31.2		Rule 13a-14(a) Certification – CFO


EX 32.1		Section 1350 Certification – CEO


EX 32.2		Section 1350 Certification – CFO


EX 101.INS		XBRL Instance Document


EX 101.SCH		XBRL Taxonomy Extension Schema Document


EX 101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document


EX 101.DEF		XBRL Taxonomy Extension Definition Linkbase Document


EX 101.LAB		XBRL Taxonomy Extension Label Linkbase Document


EX 101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document

104		Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)

(1)

⁽¹⁾

Incorporated by reference to Appendix B to the registrant’s Definitive Proxy Statement filed with the Securities and Exchange Commission on March 14, 2001.

(2)

⁽²⁾

Incorporated by reference to Exhibit 3.2 to the registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on ~~August 22, 2014.~~November 18, 2016.

(3)	Incorporated by reference to Exhibit 4 to the registrant’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 20, 2020.

(4)	Incorporated by reference to Exhibit 4.1 to the registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on May 14, 2019.

Table of Contents

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	/s/ United Bancorp, Inc.

Date: November ~~14, 2017~~13, 2023	By:	/s/Scott A. Everson
		Scott A. Everson
		President and Chief Executive Officer

Date: November ~~14, 2017~~13, 2023	By:	/s/Randall M. Greenwood
		Randall M. Greenwood
		~~Senior Vice President, Chief Financial Officer and Treasurer~~ EXECUTIVE VICE PRESIDENT CHIEF FINANCIAL AND RISK OFFICER

~~Exhibit Index~~

~~Exhibit No.~~		~~Description~~

~~31.1~~		~~Rule 13a-14(a) Certification – Principal Executive Officer~~

~~31.2~~		~~Rule 13a-14(a) Certification – Principal Financial Officer~~

~~32.1~~		~~Certification pursuant to 18 U.S.C. Section 1350, as enacted pursuant to Section 906 of The Sarbanes-Oxley act of 2002.~~

~~32.2~~		~~Certification pursuant to 18 U.S.C. Section 1350, as enacted pursuant to Section 906 of The Sarbanes-Oxley Act of 2002.~~