United Bancorp(UBCP) - 2023 Q4 - Annual Report

Customer and Market Position - Unified has no single customer or related group of customers whose banking activities would materially impact earnings capabilities[10] - As of June 30, 2023, Unified ranked fifth in total deposit market share among approximately 39 commercial banking institutions in its Ohio and West Virginia markets[12] - The banking industry is highly competitive, with Unified competing against various financial institutions in its geographic areas[11] Regulatory Environment - Unified's deposits are insured by the FDIC, which assesses premiums based on capital levels and supervisory evaluations[32] - The Dodd-Frank Act has led to new rules regarding deposit insurance assessments, including a risk-based assessment system for institutions with at least $10 billion in total assets[34] - Unified exceeded its minimum capital requirements under applicable guidelines as of December 31, 2023[28] - The Federal Reserve requires prior approval for the acquisition of more than 5% of voting shares of any bank or bank holding company[24] - Unified is subject to regulation and examination by both the Ohio Division of Financial Institutions and the FDIC[31] - The Company is required to file quarterly information with the Federal Reserve under the Bank Holding Company Act[23] - The Company is subject to various federal regulations regarding capital maintenance, affiliate transactions, and loan limitations[51] Financial Performance - Total interest and dividend income increased by $3,067,000 in 2022 compared to 2021, driven by a $2,326,000 increase in volume and a $741,000 increase due to rate changes[63] - Net interest income rose to $25,571,000 in 2022, up from $23,181,000 in 2021, reflecting a net interest spread increase from 3.35% to 3.58%[60] - Total assets increased from $722,400,000 in 2021 to $735,775,000 in 2022, with total liabilities rising from $651,239,000 to $677,059,000[60] - Total interest-bearing assets increased to $685,476,000 in 2022, with a net yield on interest-earning assets rising from 3.48% to 3.73%[60] - Demand deposits increased from $256,638,000 in 2021 to $262,763,000 in 2022, with the interest rate on demand deposits rising from 0.12% to 0.32%[60] Credit Risk Management - The allowance for credit losses (ACL) to total loans ratio was 0.81% in 2023, up from 0.45% in 2022, indicating a more conservative approach to credit risk management[75] - The ratio of net charge-offs to average loans outstanding for the year decreased to 0.02% in 2023 from 0.14% in 2022, suggesting improved loan performance[75] - The company plans to continue monitoring economic conditions and adjust its credit loss estimates accordingly, reflecting a proactive risk management strategy[70] - As of December 31, 2023, the total allowance for credit losses was $3.918 billion, an increase from $2.052 billion in 2022[76] - The allocation for commercial real estate loans was $1.408 billion, representing 60.40% of the total allowance for credit losses in 2023[76] - The allowance for credit losses for residential real estate loans was $1.843 billion, accounting for 19.32% of the total allowance in 2023[76] - The allowance for commercial and industrial loans was $573 million, which is 18.89% of the total allowance for credit losses[76] - The amount of consumer loans in the allowance for credit losses was $94 million, representing 1.39% of the total[76] - The allowance for credit losses for commercial real estate loans increased from $815 million in 2022 to $1.408 billion in 2023[76] Employee and Operational Information - Unified has 115 full-time employees, with 31 in management positions and 11 part-time employees[53] - The Company operates solely in the banking sector, with no other business lines reported[56] Deposit and Maturity Information - Uninsured deposits amounted to approximately $102.9 million as of December 31, 2023, up from $89.8 million in 2022[77] - The total maturity of time deposits greater than $250,000 was $37.607 million as of December 31, 2023[78] - The time deposits over twelve months amounted to $15.426 million as of December 31, 2023[78] - The aggregate amount of uninsured deposits has increased by approximately 31.5% from 2021 to 2023[77] Compliance and Governance - The SEC's Executive Compensation Clawback Rules require listed companies to implement policies to recoup bonuses if financial results are misstated, with compliance due by December 1, 2023[42] - The Federal Deposit Insurance Act prioritizes claims of depositors in the event of liquidation, ensuring their claims are settled before other unsecured claims[45] Accounting Standards - The implementation of Basel III accounting standards began in March 2015, enhancing capital adequacy measurement for banks[36] - The average tax equivalent yield on total securities available for sale was 4.24% at year-end 2023, with a fair value of $242,760,000[64]