UBCP 10-K & 10-Q changes, risk factors and insider trading

The following discusses the consolidated financial condition of the Company as of MarchJune 31,30, 2026, as compared to December 31, 2025, and the results of consolidated operations for the three and six months ended MarchJune 31,30, 2026, compared to the same period in 2025. This discussion should be read in conjunction with the interim condensed consolidated financial statements and related footnotes included herein.

We are happy to report on the increased earnings for the second quarter ended June 30, 2026 and, the overall solid performance ofachieved by United Bancorp, Inc. (UBCP) for the first quartersix endedmonths March 31,of 2026. For the quarter, our Company produced net income and diluted earnings per share of $2,095,000 and $0.36, which are respective increases of $180,000, or 9.4%, and $0.03, or 9.1%, over the results achieved solidfor the second quarter of the previous year. In addition, on a linked-quarter basis, our Company’s net income and diluted earnings per share results ofalso $1,911,000respectively increased by $184,000, or 9.6%, and $0.33,$0.03 whichor were9.1%. respectiveFor increasesthe first six months of $39,000,2026, UBCP produced net income of $4,006,000, an increase of $219,000, or 2.1%, and $0.01, or 3.1%,5.8%, over the resultsprevious achievedyear forand eachdiluted metricearnings duringper the first quartershare of last$0.69, year.which is an increase of $0.04, or 6.2%, year-over-year. We are very pleased that our first quarteryear-to-date results as of June 30, 2026 are higher than those achieved for the same period of time in 2025 considering that… as we have previously mentioned… our Company is focused on the future and has undertaken several transformative projects that have created additional expense for UBCP and are somewhat dilutive to earnings at present. In addition, even though there has been a tremendous level of uncertainty permeating our economy in recent years… that level of uncertainty has increased in the mostfirst recent quarter with a new realm of uncertainty created by geopolitical concerns that escalated over the coursehalf of the firstcurrent quarteryear ofas thisgeopolitical year.risks increased, which created disruption in our global economy. Regardless, we are satisfied with our increasing earnings and content with how our investment in our infrastructure and growth is developing in accordance with our visions and projections. We firmly believe that over the course of the next twelve to twenty-four months, we will see a very nice return on these investments in our Company’s infrastructure, which should lead to higher levels of earnings and help ensure the relevancy of UBCP for many years to come.

Many thought that the economic uncertainty with which our country has been dealing for the past several years was finally going to be inbehind the rear-view mirrorus in 2026. Even though inflation had stagnated at a level a little bit higher than the Federal Open Market Committee (FOMC) of the Federal Reserve Bank liked, it was getting closer to their established target of two percent. In addition, they were mostly satisfied with current employment-related data within our economy. As we entered 2026, forecasts called for solid economic growth as the impact of the tariffs implemented last year was thought to also be behind us and the anticipated increase in tax refund payouts under our new tax policy were anticipated to fuel consumption and growth, driving our Gross Domestic Product (GDP) higher to levels rarely seen. In addition, forecasts for interest rates projected two to three cuts for the fed funds target rate, which would align our country’s monetary policy with a more neutral position. How quickly things can change! With the United States and Israel commencing military action on Iran in late February, the economic uncertainty that we thought was finally behind us heightened to levels even greater than before. Even with all of this concern and uncertainty, our Company was able to achieve growth in its balance sheet infor the first quartersix-months ended MarchJune 31,30, 2026. Year-over-year, total assets increased by $27.8$30.1 million, or 3.6%, to a level of $858.5$878.0 million. This increase in total assets is primarily attributed to year-over-year increases in gross loanssecurities by $3.5$13.1 million (to a level of $500.3$244.3 million; securities by $6.0 million to a level of $239.9 million;) and, bank owned life insurance by $18.3$18.5 million (to a level of $38.2$38.5 million.million). Overall, the increase in the level of interest earning assets on our balance sheet in the first six months of this year--- along with our loans outstanding continuing to reprice at higher rates--- helped our Company achieve an increase in the total interest income that it generated by $172,000,$293,000, or 1.8%,1.5%, over the level achieved induring the firstsame quarter oftimeframe last year. Driving the increase in our Company’s total assets inas theof firstJune quarter30, 2026 was the growth that we experienced in our total deposits. ForDuring the quarter,first half of 2026, total deposits grew by $42.6$44.0 million, or 6.8%, to a level of $666.7$686.9 million. Much of this increase in our total deposits came from growth in our lower-cost funding--- consisting of noninterest bearing demand, interest bearing demand and savings--- with balances increasing by $27.4$30.8 millionmillion, or 6.8%, to a level of $474.6$481.9 million (which is 71.2%70.2% of total deposits). In addition, higher-cost time deposits increased by $15.2$13.2 millionmillion, or 6.9%, to a level of $192.0$205.0 million (which is 28.8%29.8% of total deposits). Remarkably, even with this increase in the total deposits of our Company, total interest expense as of MarchJune 31,30, 2026 decreased by ($93,000$380,000), or (2.6%5.1%), and our interest expense to average assets decreased by seventeen basis points (17bps) on a year-over-year basis.basis to a level of 1.62%. This decrease in total interest expense can be attributed to bothour Company’s aforementioned attraction of lower-cost deposits… along with the continued downward repricing of our core deposits,deposits along withand the maturity of a $20.0 million Federal Home Loan Bank (FHLB) Advance duringin the first quarter of this year on which we were paying a rate of 4.39%. With thisthe year-over-year increase in total interest income and decrease in total interest expense, our CompanyUBCP was able to continue the trend of having increasing net interest income and an expanding net interest margin. AsFor the first six months of the most recently ended quarter,2026, net interest income increased by $265,000,$673,000, or 4.2%,5.2%, and the net interest margin increased by twelveseventeen basis points (12bps17bps) to a level of 3.72%,3.82%, both year-over-year. We anticipate thatthe thesetrend positive trends withof our Company’s net interest income and net interest margin willincreasing to continue over the courseremainder of 2026.

Relating to the credit-quality metrics for our Company, our combined delinquency and nonaccrual loan levels have increased somewhat year-over-year from the uncharacteristically and historically low levels that we had maintained for several years… but, they did decline slightly from the levels that we reported at December 31, 2025. At quarter-end, MarchJune 31,30, 2026, our Company’s nonaccrual loans and loans past due thirty-plus days totaled $6.8$6.9 million (or, 1.36%1.4% of gross loans), which was an increase of $4.0$4.7 million year-over-year. On a linked-quarter basis, our level of nonaccrual loans and loans past due thirty-plus days declinedwas relatively stable, increasing by $416,000, or 5.7%, from $7.2 million.$115,000. Regarding these metrics increasing on a year-over-year basis--- we had one commercial loan relationship with an outstanding balance of approximately $4.2 million go from being current last year to being classified as nonaccrual during the first quarter of 2026. This single relationship, which is presently not impaired,relationship accounts for an overwhelming majority of the year-over-year increase in our nonaccrual loans. On the flip-side, our loans past due thirty plus days decreasedremained byrelatively ($560,000)steady year-over-year toat a level of $344,000$531,000 or 0.07%0.11% of gross loans. Accordingly, we believe that our overall credit quality is extremely sound and this single relationship is not indicative of aan systemicincreasing increaselevel of credit risk within our loan portfolio. Further highlighting the overall quality and soundness of our loan portfolio, our Company had net loans charged off (excluding overdrafts) of ($16,000$7,000) in the first quartersix months of thisthe year,current year--- which on an annualized basis is (0.01%)zero percent of average loansloans--- and in-lineis withlower boththan the previous year and in-line with peer. In addition, our Company remains very well capitalized by regulatory standards with regulatory capital (stockholders’ equity plus accumulated other comprehensive loss) of $75.3$76.0 millionmillion, or 8.8%8.7% of average assets, which is an increase of $2.0$1.8 million, or 2.7%,2.5%, year-over-year.

With aour committed and long-term focus of growing our balance sheet in a profitable fashion by investing in the infrastructure of our Company, we are very pleased with the financial results that we achieved in the firstcurrent quarteryear endingas Marchof 31,June 30, 2026. In addition, we are very satisfied with the progress that we are making on the execution of our plan relating to our investment in infrastructural improvements that will help ensure our relevancy for many years to come and help us achieve our vision of becoming a community financial institution with assets of $1.0 billion or greater in the very near term. As I amhave verypreviously happy to report thatmentioned, we opened our newest banking center,center… a regional hub… in the appealing market of Wheeling, West Virginia, on December 9, 2025. As ofJune the30, end of the first quarter,2026, this office has alreadybeen very well received by this vibrant market and has exceeded our first-yearperformance forecastexpectations forduring loanthe growthfirst andsix ismonths roughlyof two-thirdsoperation. A lot of the waygrowth in our depository base can be attributed to achievingthis ournew first-year forecast for deposit growth… all within the first three months of operation!office. We firmly believe that within five years, this new banking center will be a top performer for United Bancorp, Inc. (UBCP).

Relating to other infrastructural investments that we have undertaken within the past year or two, our Company’s Unified Mortgage Division continues to contribute meaningfully to fee income. As we continuefocus toon scalefurther scaling this function with the addition of mortgage loan originatorsoriginators--- andand, withconsidering the positive operating leverage that presently exitsexists within this developing division…division--- we strongly believe that Unified Mortgage will continue to produce increasingly positive results and become more lucrative for our Company. Unified Mortgage is definitely becoming a known entity amongst the realtors within the markets that we serve. We also continue to invest in and develop our Treasury Management capabilities that help our small business customers with cash management, merchant services and payments. This function not only generates fee income for United Bancorp, Inc. (UBCP); but, also is a key driver of low or no cost deposits and strengthens relationship depth with our commercial customers. No doubt, both of these areas contributed to the increasing levels of noninterest income that we generated during the first quarterhalf of this year--- with the latter also contributing to the growth in our low-cost deposits, which helped lead to the increase in deposit totals and decrease in our interest expense level as of MarchJune 31,30, 2026.

Over the course of 2025 and into the current year, we have and continue to make a tremendous investment in technology. With our enhanced technological product offering, we now have more customers than ever utilizing our consumer and commercial online and mobile platforms and benefitting from these advanced solutions that we offer--offer… which has and will continue to lead to more relationship building and revenue generating opportunities for UBCP. Importantly, we have begun developing and are soon to implement an AI solution designed to help us better serve customers by answering inquiries more efficiently and effectively… guiding customers to the best financial solutions and supporting a more modern, customer-centric approach to delivery. To further supplement this aforementioned AI solution, we are presently in the process of implementing a system specializing in omnichannel account opening, that will allow our Company to fully digitize the account opening process through online, mobile and in-branch platforms---platforms… enabling customers, both business and consumer, to open all deposit accounts and most services--- bothservices in person and virtually. These enhanced systems will be housed in our soon-to-open Unified Center (which is located in St. Clairsville, Ohio) and will help support our CustomerUnified Care Center that will also be housed at this facility. The CustomerUnified Care Center will centralize the customer service function of our Company with team members that are highly skilled and more capable of providing a complete and satisfying “Unified Experience” to customers from any technology platform… via a live video interface. In addition, the Unified Customer Care Center will have a “sales oriented” function, which is anticipated to lead to additional business for our Company by routing inbound banking inquiries and requests from any banking channel to our CustomerUnified Care Center, for “in person” consultations with our skilled team members. By having a centralized customer support function staffed with skilled sales and service professionals who are truly “subject matter experts,” we believe that we will be able to more effectively and efficiently attract, develop and retain customer relationships with more productive on-boarding and cross-selling practices--- which is anticipated to lead to a higher level of customer satisfaction and overall profitability for UBCP. We anticipate that all of these new technology and support functions will be fully implemented by year-end and believe that the Unified Customer Care Center has the potential to develop into a bona-fide “digital bank” for our Company, which will more readily support our growth and profitability objectives in the coming years!

As always, our primary focus is protecting the investment of our shareholders in our Company and rewarding them in a balanced fashion by growing the value of their investment and paying an attractive cash dividend. In these areas, our shareholders have been nicely rewarded. In the firstsecond quarter of this year, UBCP, once again,UBCP paid both a regular cash dividend and a special cash dividend to our valued owners. With these first quarter payouts, the regular cash dividend increased year-over-year by $0.01, or 5.5%, toat a level of $0.1925.$0.195, Inan addition,increase of $0.01, or 5.4%, over the specialregular cash dividend paid in the firstsecond quarter wasof $0.175.the Onprevious year. Year-to-date, our Company paid total cash dividends of $.5625, which includes a combinedspecial basis, the totalcash dividend paymentof to$0.1750 our shareholderspaid in the first quarter of this year totaled $0.3675 and was paid on March 20th.quarter. At thesethe currentsecond quarter dividend payout levels,level, the forward yield produced by our regular cash dividend is 5.1%4.9% and, inclusive of the special dividend, the forward yield is 6.2%,6.0%, considering our quarter-ending fair market value as of MarchJune 31,30, 2026 of $15.21.$15.88. On a year-over-year basis, the fair market value of our Company’s stock increased by $1.79$1.38 or 13.3%.9.5%.

As you can see, we are currently heavily investing in the infrastructure of our Company to set the stage for future growth and ensure that UBCP remains relevant in the ever-more competitive financial services industry. We firmly believe that within the next twelve to twenty-four months, we will see thea solid return on these investments that we have made and are currently makingimplementing to improve our operations and delivery. Obviously, such expenditures do have a dilutive impact on the earnings that we produce in the short-term. But, even with this reality, we are very happy with the present performance of our Company. We are grateful that we have produced increasing earnings and have grown our balance sheet in the first quartersix months of 2026. OverIn the coursesecond half of 2026, we anticipate these positive trends will continue. We are truly excited about UBCP’s direction and the potential that it brings. With an ongoing focus on continual process improvement, product development and delivery, we strongly believe that the future for our Company is exceedingly bright.

The Company’s focus as a community bank is to meet the credit needs of the markets it serves. At MarchJune 31,30, 2026, gross loans were $500.3$495.7 million, compared to $491.6 million at December 31, 2025, an increase of $8.8$4.2 million after offsetting repayments for the period. The overall increase in the loan portfolio was comprised of a $11.4$7.5 million increase in commercial and commercial real estate loans and a $2.3$2.6 million decrease in residential real estate lending and a $316,000$790,000 decrease in installmentconsumer loans since December 31, 2025.

Commercial and commercial real estate loans comprised 81.2% of total loans at MarchJune 31,30, 2026, compared to 80.4% at December 31, 2025. Commercial and commercial real estate loans have increased $11.4$7.5 million, or approximately 2.9%1.9% since December 31, 2025. This segment of the loan portfolio includes originated loans in 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.

Consumer loans represented 1.3%1.2% of total loans at MarchJune 31,30, 2026 and 1.4% at December 31, 2025. Some of the consumer loans carry somewhat more risk than real estate lending; however, it also provides for higher yields. Consumer loans have decreased $316,000,$790,000, or 4.58%,11.4%, since December 31, 2025. 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 17.5%17.6% of total loans at MarchJune 31,30, 2026 and 18.2% at December 31, 2025, representing a decrease of $2.3$2.6 million,million or 2.55%2.9% since December 31, 2025.

The allowance for credit losses totaled $4.3$4.4 million at MarchJune 31,30, 2026, which represented 0.85%0.88% 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 credit losses is adequate to absorb credit losses over the life of the loan portfolio. Net loan (recoveries) charge-offs (exclusive of overdrafts net charge-offs of $24,000$55,000) for the threesix months ended MarchJune 31,30, 2026 were approximately $17,000.$7,000. Net loans charged off (exclusive of overdrafts net charge-offs $25,000$50,000) was $28,000$122,000 for the threesix months ended MarchJune 31,30, 2025.

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 MarchJune 31,30, 2026 increased approximately $2.1$6.8 million from December 31, 2025 totals.

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 certificates of deposit greater than $250,000. For the period ended MarchJune 31,30, 2026, total core deposits (interest and non interest bearing accounts and savings) increased approximately $25.3$22.3 million, or 3.9%4.9% from December 31, 2025 totals. The Company’s savings accounts decreasedincreased $1.6$6.6 million or 1.3%5.3% from December 31, 2025 totals. The Company’s interest-bearing and non-interest bearing demand deposits increased $13.4$15.8 million while certificates of deposit under $250,000 increased by $7.1$16.5 million.

Certificates of deposit greater than $250,000 are not considered part of core deposits, and as such, are used to balance rate sensitivity as a tool of funds management. At MarchJune 31,30, 2026, certificates of deposit greater than $250,000 increased $3.2$6.8 million or 7.8%,16.3%, from December 31, 2025 totals.

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 repurchase agreements increaseddecreased approximately $6.2 million$15,000 from December 31, 2025 totals. At MarchJune 31,30, 2026, the Company has $55 million of fixed rate advances that mature over the next 1 to 2 years. Refer to footnote 10 for further information.

Results of Operations for the Three Months Ended MarchJune 31,30, 2026 and 2025

The reported diluted earnings per share was $0.36 for the quarter ended June 30, 2026 compared to $0.33 for the quarter ended MarchJune 31, 2026 compared to $0.32 for the quarter ended March 31,30, 2025, an increase of 3.1%.9.1%.

Net interest income increased $264,000$409,000 or 4.2%6.2% for the three months ended MarchJune 31,30, 2026 compared to the same period in 2025. This increase was mainly due to our variable rate loans repricing upward.

The Company had a provision for credit losses of $30,000 and $96,000$126,000 for the three months ended MarchJune 31,30, 2026 andas 2025,compared respectively.to a provision for credit losses of $206,000 for same period in 2025.

Noninterest income of the Company increased $144,000$227,000 year-over-year.quarter-over-quarter. This increase was in part due to an increase in earnings on bank-owned life insurance of $232,000$225,000 for the three months ended MarchJune 31,30, 2026 as compared to the three months ended MarchJune 31,30, 2025.

The benefitreported fordiluted federalearnings incomeper taxesshare was $160,000$0.69 for the threesix months ended MarchJune 31,30, 2026.2026 Thecompared Companyto had a federal income tax benefit of $26,000$0.65 for the threesix months ended MarchJune 31,30, 2025.

Internal capital growth, through the retention of earnings, is the primary means of maintaining capital adequacy for the Company. Stockholders’ equity totaled $67.5$72.1 million at MarchJune 31,30, 2026, compared to $70.5 million at December 31, 2025, a $3.0$1.6 million decrease.increase. Total stockholders’ equity in relation to total assets was 7.86%8.21% at MarchJune 31,30, 2026 and 8.22% at December 31, 2025. The Company’s Articles of Incorporation 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.

CurrentUnder regulationsthe requirefinal 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.