United Bancorp(UBCP) - 2024 Q4 - Annual Report

Regulatory Environment - Unified is subject to supervision and regulation by the Federal Reserve, FDIC, and Ohio Division of Financial Institutions, which ensures financial safety and soundness [13]. - The Dodd-Frank Act created new restrictions and expanded regulatory oversight for financial institutions, impacting Unified's operations [22]. - The Dodd-Frank Act revised the FDIC's management of the Deposit Insurance Fund, implementing new rules regarding assessments and dividends [34]. - The Company is subject to various federal regulations regarding capital maintenance, affiliate transactions, and loan limitations [51]. - The Company must obtain prior approval from the Federal Reserve for acquisitions exceeding five percent of voting shares [24]. - The Company must obtain prior approval from the ODFI before paying dividends exceeding certain limits based on undivided profits and net income [38]. - The FDIC may terminate deposit insurance if Unified engages in unsafe practices or is in an unsafe condition [33]. - Unified is required to pay deposit insurance premium assessments to the FDIC, which uses a risk-based assessment system [32]. - Unified is not a financial holding company and has no current intention of making such an election [26]. Financial Performance - Total interest and dividend income increased by $9,594 thousand, with a significant contribution from loans, which rose by $4,508 thousand [63]. - Net interest income for 2023 was $27,424 thousand, compared to $25,571 thousand in 2022, reflecting a growth of 7.25% [63]. - Total assets increased to $802,054 thousand in 2023 from $735,775 thousand in 2022, representing an increase of 9.0% [61]. - The company reported a net interest spread of 3.28% for 2023, down from 3.58% in 2022 [63]. - The total interest expense for 2023 was $7,741 thousand, an increase of 7,741 thousand compared to the previous year, driven primarily by time deposits and advances from the Federal Home Loan Bank [63]. - The average yield on interest-earning assets was 5.12% in 2023, compared to 4.21% in 2022, indicating a significant increase in asset yield [61]. - The company’s total stockholders' equity decreased to $52,288 thousand in 2023 from $58,716 thousand in 2022, a decline of 10.0% [61]. Capital Adequacy - Unified exceeded its minimum capital requirements under applicable guidelines as of December 31, 2024 [28]. - The Bank was well capitalized as of December 31, 2024, in accordance with prompt corrective action guidelines [37]. - Unified is required to maintain minimum capital levels according to FDIC capital adequacy guidelines, with specific capital positions detailed in Note 11 of the consolidated financial statements [35]. Employee Information - Unified has 115 full-time employees, including 31 in management positions and 11 part-time employees [53]. Credit Losses and Loan Performance - The allowance for credit losses (ACL) is based on historical loss experience and current economic conditions, with significant qualitative adjustments made for inflation and interest rate increases [73]. - The ratio of net charge-offs to average loans outstanding for 2024 is 0.07%, an increase from 0.02% in 2023 and a decrease from 0.14% in 2022 [78]. - The total allowance for credit losses to total loans is 0.82% in 2024, slightly up from 0.81% in 2023 and significantly higher than 0.45% in 2022 [78]. - The total allowance for credit losses allocated to commercial real estate loans is $1,488 million, representing 59.41% of total loans in 2024 [79]. - The ratio of installment loans net charge-off to average consumer loans is 2.16% in 2024, up from 1.93% in 2023 and 1.90% in 2022 [78]. - The allowance for credit losses for residential real estate loans is $1,708 million, accounting for 18.68% of total loans in 2024 [79]. - The ratio of commercial loans and industrial net charge-offs to average commercial loans is 0.13% in 2024, compared to (0.03)% in 2023 [78]. Business Operations - Unified has no single customer or related group of customers whose banking activities would materially impact earnings capabilities [10]. - Unified is engaged in one line of business, banking, with financial information detailed in Item 8 of the 10-K report [57].