United Bancorp(UBCP) - 2025 Q4 - Annual Report

Regulatory Environment - Unified has no single customer or related group of customers whose banking activities would materially impact earnings capabilities[10] - Unified is required to maintain minimum levels of capital in accordance with FDIC capital adequacy guidelines, with specific capital positions detailed in the financial statements[35] - The FDIC may terminate deposit insurance if Unified engages in unsafe practices or is in an unsafe condition[33] - Unified exceeded its minimum capital requirements under applicable guidelines as of December 31, 2025[28] - The Dodd-Frank Act has imposed new rules affecting deposit insurance assessments and capital requirements for financial institutions[34] - Unified is subject to supervision and regulation by the Federal Reserve, FDIC, and Ohio Division of Financial Institutions[20] - The regulatory environment is highly competitive, with Unified facing competition from various financial institutions in its operating regions[11] - The Company is required to obtain prior approval from the Federal Reserve for significant acquisitions and control changes[24] - The implementation of Basel III accounting for capital adequacy began in March 2015, overseen by the Federal Reserve, FDIC, and OCC[36] - As of December 31, 2025, the Bank was classified as well capitalized under the prompt corrective action guidelines[37] Financial Performance - Total assets increased to $828,079 million in 2024 from $802,054 million in 2023, representing a growth of 3.1%[61] - Net interest income decreased by $597 million, from $27,424 million in 2023 to $26,827 million in 2024[63] - Total interest and dividend income rose by $3,111 million, driven by an increase in loans by $3,134 million[63] - Total interest expense increased by $3,708 million, with time deposits contributing $2,493 million to this rise[63] - The net interest spread decreased from 3.28% in 2023 to 3.01% in 2024[61] - The average yield on tax-exempt securities available for sale was 4.71% in 2024, compared to 4.82% in 2023[61] - Total interest-bearing liabilities increased to $608,613 million in 2024 from $597,737 million in 2023, marking a rise of 1.5%[61] Employee Information - Unified has 125 full-time employees, with 39 in management positions and 8 part-time employees[53] - The Company has no compensated employees, as it operates as a holding company[53] Credit Losses and Loan Concentrations - The allowance for credit losses (ACL) is based on historical loss experience and current economic conditions, with significant changes expected from period to period[70] - The company’s largest loan concentration as of December 31, 2025, includes 1st lien 1-4 family loans at $89,580 million, representing 18.2% of total loans[68] - The ratio of net charge-offs to average loans outstanding increased to 0.08% in 2025 from 0.07% in 2024 and 0.02% in 2023[78] - The total allowance for credit losses to total loans rose to 0.87% in 2025, compared to 0.82% in 2024 and 0.81% in 2023[78] - The allowance for credit losses allocated to commercial real estate loans was $2,571 million, representing 61.65% of the total allowance in 2025[79] - The ratio of nonaccrual loans to total loans increased to 0.46% in 2025 from 0.15% in 2024 and 0.10% in 2023[78] - The ratio of total allowance for credit losses to nonperforming loans decreased to 188.02% in 2025 from 508.33% in 2024 and 611.23% in 2023[78] - The ratio of installment loans net charge-off to average consumer loans was 1.93% in 2025, consistent with 2023 but down from 2.16% in 2024[78] - The allowance for credit losses allocated to residential real estate loans was $1,034 million, accounting for 18.22% of the total allowance in 2025[79] - The allowance for credit losses allocated to commercial and industrial loans was $544 million, representing 18.72% of the total allowance in 2025[79] Deposit Insurance and Claims - Unified's deposits are insured by the FDIC, which assesses premiums based on capital levels and supervisory evaluations[32] - The Federal Deposit Insurance Act prioritizes claims of depositors in the event of liquidation, ensuring they are paid before unsecured creditors[45] - Uninsured deposits increased to approximately $124.2 million in 2025, up from $110.2 million in 2024 and $89.8 million in 2023[80] - The total amount of time deposits greater than $250,000 was $41,486 thousand as of December 31, 2025[81] Government Policies - The fiscal and monetary policies of the federal government, particularly those of the Federal Reserve, significantly affect Unified's business and earnings[49] - The SEC's final Executive Compensation Clawback Rules require listed companies to implement policies to recoup bonuses if financial results are misstated, with compliance required by December 1, 2023[42] Business Operations - Ohio chartered banks can establish branches anywhere in Ohio, subject to regulatory approvals, and can also engage in interstate branching under certain conditions[43] - The Company operates solely in the banking sector, with no diversification into other business lines[57]