United Bancorp's Q2 Earnings Grow Y/Y on Loan Expansion

Core Viewpoint - United Bancorp, Inc. demonstrated steady earnings growth in Q2 2025, with a notable increase in net income and interest income, despite facing macroeconomic pressures and a recent stock pullback [1][2][5]. Financial Performance - Earnings per share (EPS) for Q2 2025 reached 33 cents, up from 30 cents a year earlier [1]. - Total interest income increased by 5.4% year over year to $10.4 million, driven by a 9.3% rise in interest income on loans and a 30.3% surge in loan fees [2]. - Net income rose to $1.9 million, marking a 10% increase from $1.7 million in the same quarter of 2024 [2]. - Noninterest income reached $1.4 million, up 17.3% from the previous year, supported by a 65.6% increase in other noninterest income [3]. Cost and Expense Management - Noninterest expenses increased by 3.1% to $5.8 million, attributed to ongoing investment initiatives [3]. - Despite rising expenses, earnings before income taxes improved to $1.9 million, a 20.1% increase from the prior-year quarter [3]. Credit Quality - Provision for credit losses decreased by 12.2% to $0.2 million [4]. - Total nonaccrual loans rose to $1.8 million from $0.4 million a year earlier, primarily due to a single commercial account [4]. - Loans past due by more than 30 days declined by 43.3%, maintaining total past-due and nonaccrual loans at a modest 0.45% of gross loans [4]. Management Insights - The Chief Financial Officer highlighted the company's earnings growth as encouraging amidst macroeconomic challenges, emphasizing investments in branch expansion and technology [5]. - The Chief Executive Officer reinforced long-term growth ambitions, focusing on a strong small-business-oriented commercial loan portfolio, which constitutes 80% of total loans [6]. Strategic Initiatives - The company is advancing several strategic initiatives, including the construction of a new regional banking center in Wheeling, WV, expected to open within 90 days [11]. - Technology enhancements and AI integration into customer service are part of a broader digital transformation effort aimed at improving efficiency and client engagement [12]. Shareholder Returns - United Bancorp raised its regular cash dividend by 5.8% and its special dividend by 16.7% year over year, resulting in total cash dividends of 54.25 cents per share in the first half of 2025, a 9.1% increase from the prior year [12].